prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: The Commercial Space Launch Act Amendments of 1988 established the foundation for the current U S  policy to potentially provide federal payment for a portion of claims by third parties for injury, damage, or loss that results from a commercial launch or reentry accident  A stated goal of the act was to provide a competitive environment for the U S  commercial space launch industry  The act also provided for, among other things, government protection against some losses—referred to as indemnification—while still minimizing the cost to taxpayers  All FAA- licensed commercial launches and reentries by U S  companies, whether unmanned or manned and from the United States or overseas, are covered by federal indemnification for third-party damages that result from the launch or reentry  According to agency officials, in 2016 FAA issued five active licenses, which had an average third-party MPL of about $51 million and ranged from $10 million to $99 million  The amount of insurance coverage that FAA requires launch companies to purchase—the MPL value—is intended to reflect the greatest dollar amount of loss to third parties and the federal government for bodily injury and property damage that can be reasonably expected to result from a launch or reentry accident  FAA calculates separate MPL values for potential damages to third parties and the federal government  For each launch license that it issues, FAA determines MPL values for third parties with the intent of estimating the greatest dollar amount of losses that reasonably could be expected from a launch or reentry accident, which have no less than a 1 in 10 million chance of occurring  For damages to the federal government, FAA determines MPL values with the intent of estimating the greatest dollar amount of losses that reasonably could be expected from a launch or reentry accident, which have no less than a 1 in 100,000 chance of occurring  According to FAA, the agency defines these probability thresholds to estimate the federal government’s exposure to losses above the MPL  Agency officials said that the current probability thresholds are set such that losses are very unlikely to exceed launch companies’ private insurance and become potential costs for the government under CSLCA  FAA’s process for determining the MPL value for a launch or reentry license generally includes three elements: 1  Number of casualties  Estimating the number of third-party casualties involves adding the number of direct and secondary casualties that could result from a launch accident  Direct casualty estimates include serious injuries and deaths  Secondary casualties include those resulting from fires and collapsing buildings  2  Cost of casualties  FAA uses $3 million as an estimate of the average loss per casualty, which is multiplied by the number of estimated casualties  3  Property damage  FAA applies a predetermined factor—which it recently changed from 50 percent to 25 percent—to the estimated cost of casualties to derive estimated losses from property damage  The total MPL is equal to the estimated cost of casualties plus property damage  FAA has revised two components of its MPL methodology since our 2012 report  For example, in April 2016, the agency adopted a new method for estimating the number of casualties, known as the risk profile method  This method uses different tools to simulate a range of possible scenarios to create a distribution of potential casualty numbers and the simulated probability of different levels of casualty numbers  The risk profile method replaced FAA’s “overlay method,” which was a method it had used since the early 1990s which the agency said did not work well for launches of small launch vehicles in remote areas, or for reentries  In addition, FAA reduced the factor it uses to estimate losses due to property damage, based on tests of a new process for estimating such losses that showed the previous factor was too high  We have previously reviewed FAA’s MPL methodology in 2012 and 2017  In 2012 we examined the U S  government’s indemnification policy, the federal government’s potential costs for indemnification, and the effects of ending indemnification on the competitiveness of U S  launch companies, among other aspects of FAA’s MPL methodology  In 2017 we examined the extent to which FAA had revised its MPL methodology since our 2012 report to address previously cited weaknesses and the potential effect of any changes to that methodology on financial liabilities for the federal government  The findings and recommendations of those reports, including any unaddressed weaknesses, are discussed later in this report  CSLCA required FAA to evaluate its MPL methodology incorporating three requirements, but the agency’s report did not fully address these requirements  First, the act required FAA to ensure a balance of risk between launch companies and the federal government  However, agency officials told us that they did not re-evaluate the probability thresholds—which are used to divide the risk of loss between launch companies and the federal government—as part of evaluating its MPL methodology when implementing the risk profile method due to resource constraints  Second, the act required FAA to consider the cost impact of implementing an updated MPL methodology, but the agency did not evaluate the impact of implementing its revised methodology on the direct costs to launch companies (insurance premiums) and to the federal government (indemnification liability)  Third, the act required FAA to consult with the commercial space sector and insurance providers in evaluating its MPL, but they did not consult such parties in response to the act  Without fully addressing CSLCA’s mandated requirements, FAA cannot ensure that the federal government is not exposed to greater liability costs than intended or that launch companies are not required to purchase more insurance coverage than necessary  In its report, FAA states that implementing an updated MPL methodology in April 2016—the risk profile method—helps ensure that the federal government is not exposed to greater liability costs than intended and that launch companies are not required to purchase more insurance coverage than necessary, as required under CSLCA  Further, agency officials told us that their updated methodology is technically more valid and improves their ability to avoid overestimating MPL values (which can cause launch companies to purchase more insurance coverage than necessary) or significantly underestimating MPL values (which can expose the federal government to greater costs than intended)  While an improved model may provide a more realistic calculation of the MPL, by changing the resulting estimates it can also change the balance between the federal government’s exposure to liability costs and the amount of insurance launch companies are required to purchase  For example, if the more realistic results produced by the revised methodology increased the MPL estimates, this would increase insurance costs for the launch companies and reduce the federal government’s exposure, thereby shifting the balance of costs between the two and suggesting a reevaluation of the thresholds  In addition, FAA officials told us that they had not reevaluated the probability thresholds upon implementing the revised MPL methodology, although defining these thresholds is their primary mechanism for adjusting the balance of risk between launch companies and the federal government  Agency officials acknowledged that an examination of the thresholds’ continued appropriateness would be warranted in the future  However, they told us that changing the probability thresholds would require significant effort because it would require them to change federal regulations and that resources are currently allocated to other rulemaking priorities  Nevertheless, without evaluating the appropriateness of the probability threshold as part of the mandated evaluation of the MPL methodology, FAA cannot ensure that the federal government is not exposed to greater liability costs than intended or that launch companies are not required to purchase more insurance coverage than necessary  CSLCA also required FAA to consider the cost impact on both the commercial space launch industry and the federal government of implementing an updated MPL methodology  In its report to Congress, the agency discussed indirect costs to launch applicants and the federal government  For example, FAA discussed indirect data burden costs on launch company applicants and FAA analysts associated with the agency’s risk profile method implementation  The report states that the risk profile method requires more data from a launch applicant than the previous method, but that the added burden is minimal because the information is similar to the type of information required by FAA for a risk analysis  Agency officials also said that the risk profile method requires more of an FAA analyst’s time than the overlay method, but that the added burden is minimal because the work done by FAA on risk analysis provides much of the foundation for an MPL analysis  However, FAA’s report did not include an evaluation of the direct costs to launch companies and the federal government of implementing an updated MPL methodology  The report identifies the direct cost to the launch industry as insurance premiums, and the direct cost to the federal government include potential indemnification payments  Agency officials also told us that the agency does not track commercial space launch insurance costs, and that they do not have meaningful insights on insurance premiums paid by commercial launch companies  FAA officials told us that they only have a general notion of insurance premiums because the industry is reluctant to share such information  FAA officials also told us that, outside of the work done for the report, they have not evaluated the economic implications for launch companies of implementing an updated MPL methodology  Without evaluating direct costs to both the launch companies and the federal government, FAA will be limited in its ability to consider the impact of the cost to both the industry and the federal government of implementing an updated methodology  Although CSLCA required FAA to consult with the commercial space sector and insurance providers in evaluating its MPL methodology for the mandated report, it obtained limited input  For example, FAA officials told us that they obtained input from their Commercial Space Transportation Advisory Committee (COMSTAC) in April 2016 about what to include in their report to Congress, but did not consult with the commercial space sector and insurance providers to evaluate their MPL methodology in response to CSLCA  FAA officials also said that, to respond to CSLCA’s consultation requirement, they did not think they needed to repeat the consultations they took in 2013  In January 2013, the agency solicited input from COMSTAC’s Business/Legal Working Group about how to best conduct a review of FAA’s methodology for calculating MPL, in response to our July 2012 report  FAA also briefed the Business/Legal Working Group in May 2013 to solicit input on MPL methodologies, including the risk profile method  In the January 2013 meeting, a COMSTAC member suggested several contractors for a study by outside experts of the complete MPL methodology, and FAA subsequently hired one of these contractors to develop the risk profile method that it implemented in April 2016  However, the agency did not solicit input from COMSTAC about its risk profile methodology prior to its April 2016 implementation or following CSLCA’s November 2015 mandated evaluation  As a result, FAA lacks input on the effect of its revised MPL methodology on launch companies and the federal government, making it difficult to evaluate the balance of risk between the two  Our 2012 report identified concerns with all three components of FAA’s MPL methodology: estimating the number of casualties, estimating the cost of casualties, and deriving estimated property damage costs from estimated casualty costs  In that report we recommended that the agency reassess its methodology, including the reasonableness of several key elements  As noted in our 2017 report, FAA has since made improvements to its methodology  However, it still has not yet updated the cost of a casualty  In addition, in our 2017 report we also noted that there are instances where deriving estimated property damage from estimated casualty costs is inappropriate  As of November 2017, FAA does not have guidance to identify such instances or to guide decisions on which tools to use in developing the MPL estimate  FAA has taken steps designed to improve two of three elements of its MPL methodology, including revising its methodology for estimating the number of potential casualties for a given launch and changing the factor it uses to derive estimated property damage from estimated casualties  However, the agency has not updated the third element, the amount it uses for the cost of an individual casualty, leaving a previously identified weakness unaddressed  Our 2012 report raised concerns with each of the three components of FAA’s MPL calculation methodology  First, we found that FAA’s method for estimating the number of casualties involved use of a single loss scenario instead of applying the insurance industry’s standard practice of catastrophe modeling, and that the agency’s method might significantly understate the number of potential casualties  Catastrophe modeling, unlike the single-loss approach, generally estimates losses by using various tools to simulate tens of thousands of scenarios to create a distribution of potential losses and the simulated probability of different levels of loss  Second, we reported that FAA had been using an outdated and likely understated figure of $3 million to estimate the cost of a single casualty—including injury or death—which Office of Commercial Space Transportation officials said has not been updated since they began using it in 1988  Third, we reported that the agency’s approach of estimating potential property damage by adding a flat 50 percent to the estimated casualty damage could lead to estimates that were too high in some cases  Given these weaknesses, we recommended that FAA reassess its MPL methodology, including assessing the reasonableness of the cost-of- casualty amount and other assumptions used  Because the agency took actions to assess its MPL methodology, we closed the recommendation as implemented  In March 2017 we reported that FAA had taken steps to address weaknesses in two of these three areas  Specifically, we reported that FAA’s adoption of the risk profile method in April 2016 had improved its estimates of the number of potential casualties associated with a particular license launch  In addition, we reported that the agency had revised the factor it uses to estimate losses from property damage in the MPL calculation from 50 percent to 25 percent  This change has resulted in property damage estimates that FAA officials believe are still conservative but more realistic than previous estimates  However, in our March 2017 report we also determined that FAA had not yet addressed weaknesses in the cost-of-casualty amount we had previously identified; despite the conclusion by a contractor it had hired to study the cost-of-casualty that it was too low  Agency officials told us that they had not addressed this weakness because of other priorities  Given the significance of the cost-of-casualty amount to the MPL calculations, we recommended that FAA prioritize the development of a plan to address the identified weakness in the cost-of-casualty amount, including setting time frames for action, and update the amount based on current information  In October 2017, FAA officials told us that they had not yet updated the cost-of-casualty because they have continued to prioritize completing other work with their limited resources, such as reviewing launch applications and fulfilling other safety responsibilities  As a result, our recommendation remains open  FAA officials told us that they have identified potential steps to update the cost-of-casualty amount, including seeking public input on whether and how to revise the amount, but that they do not expect to make a decision on whether to make any changes to the cost-of-casualty amount until June 30, 2018, at the earliest  FAA officials told us that in order to prioritize the development of a plan to address the identified weakness in the cost-of-casualty amount they will need to consult with both the commercial space and insurance industries about the necessity and implications of any potential increase in the cost-of-casualty amount  Agency officials said that they plan to do such consultations through COMSTAC  However, because COMSTAC was just reestablished in June 2017 after not having been active since November 2016 and new members had not been approved as of October 2017, the anticipated decision date of June 2018 could be further delayed  As we reported in March 2017, an understated cost-of-casualty amount can lead to an inaccurate loss calculation, which in turn understates the amount of insurance a launch company must obtain  This could increase the potential exposure to the federal government, as the insurance amount would be less than the potential losses associated with the launch activity and the property would be inadequately protected  Because of this potential exposure, we maintain that addressing this weakness is a priority  As noted above, in our 2012 report we raised concerns about the first element of FAA’s MPL methodology, which is estimating the number of potential casualties  FAA officials said that they have implemented two tools for estimating the number of potential casualties, and that each tool requires a different level of resources and is more appropriate for different launch scenarios  The Range Risk Analysis Tool creates physics-based simulations of possible accidents using launch vehicle data, such as launch trajectory and types of failures, and assigns each simulated accident a probability of occurrence based on the failure rates of the different elements of the launch vehicle  According to agency officials, the Range Risk Analysis Tool is a comprehensive, high-fidelity tool and is the most appropriate tool for coastal launch sites, which are often located in heavily populated areas, and is labor intensive  The Risk Estimator Sub- orbital and Orbital Launch Vehicle and Entry tool, which in contrast to the Range Risk Analysis Tool, is a medium-fidelity tool that can be used for low-risk launches, such as launch sites located in very sparsely populated areas and reentry operations that do not need the use of a high-fidelity tool  According to FAA, this tool significantly reduces the time required to estimate the risk from launch and reentry vehicle operations  In our 2017 report, we also reiterated that there are cases where the third element of FAA’s methodology, deriving estimated property damage from estimated casualties, could lead to misleading MPL calculations  Specifically, in March 2017 we reported that estimating losses from property damage as a percentage of losses from casualties could lead to overestimates  For example, FAA’s contractor found that, if a launch accident affected a residential area, the agency’s practice of estimating property damage based on casualties would likely overstate property damages because residential structures have relatively low values compared to losses from casualties  We also reported in March 2017 that in some accidents the number of casualties may be low but property losses could still be very large, in which case FAA’s estimating property losses based on casualties would likely understate potential property damage  For example, a launch vehicle could strike an unoccupied structure that is very expensive, such as a neighboring launch complex  Agency officials said that while deriving property losses from casualty losses is a simpler method that may be an effective use of limited FAA resources, it could be inappropriate in scenarios where the number of casualties might be low but property losses could still be very large  In October 2017, agency officials said that FAA had not developed guidance for determining, for a given launch license, which of the available tools would be most appropriate to estimate the number of potential casualties, and whether it would be more appropriate to estimate property losses separately rather than derive them from estimated casualties  While FAA officials said they believe their current decision process is adequate and that they do not need more formal guidance at this time, they also told us that they were in the process of developing internal guidance on the most appropriate tool to use for future launches  The officials said that they did not have a projected completion date for the guidance, primarily because the agency has other priorities and resource limitations  As noted earlier, these priorities include reviewing commercial space launch license applications and managing program safety  Federal internal control standards state that, as part of an entity’s risk assessment component, management should identify, analyze, and respond to risks to achieving objectives  For example, the standards state that management should design control activities in response to the entity’s objectives and risks to achieve an effective internal control system  Without such guidance, FAA could face challenges in ensuring that it is using the most appropriate method to calculate an MPL for a given launch and is making the most efficient use of its resources  Such guidance could become more important as the number of commercial space launches increases, potentially creating greater demands on its resources  We have previously reported that the commercial space launch industry has experienced significant growth in the number and complexity of launches in the past half-decade  FAA has also reported that its licensed launches have increased 60 percent and industry revenue has increased 471 percent since 2012  FAA’s MPL methodology is critical in balancing the encouragement of the U S  commercial space industry with the need to manage the federal government’s risk exposure because it determines how much risk each party will bear for third-party damages resulting from potential space launch accidents  However, despite changes to the methodology, the probability threshold that the agency uses to achieve this balance of risk has been the same since the 1990s, and has not been reviewed for appropriateness  In addition, while FAA evaluated the effect of its MPL methodology on the indirect costs of launch companies and the federal government, it did not similarly evaluate direct costs  Further, although FAA has obtained input from some stakeholders on certain aspects of its MPL methodology, it has not consulted with launch providers and insurance companies to evaluate effects on key potential costs to launch companies and the federal government, as required under CSLCA  FAA officials told us that resource issues and pursuing other priorities have prevented them from taking these actions  However, the longstanding nature of these issues, as well as their importance in determining the federal government’s financial exposure, makes their completion a priority  FAA has also begun improving other aspects of its MPL process, but important actions remain incomplete  For example, the cost of a casualty, a key component of the methodology, has not been updated since 1988  While FAA has identified potential steps to update this amount, it has not implemented these steps and our March 2017 recommendation to prioritize the updating of this amount remains open  Further, agency officials said they have begun to develop internal guidance on how to determine which methodological tools should be used for a given launch, but are not sure when this process will be completed  These are important steps to help ensure the validity of the MPL methodology and the results obtained for each launch, which in turn determine the balance between the amount of insurance launch companies are required to purchase and the potential financial exposure for the federal government  We are making the following four recommendations to FAA: The FAA Administrator should fulfill the CSLCA mandate to include ensuring a balance of risk between the federal government and launch companies as part of FAA’s MPL methodology evaluation by reexamining the current probability thresholds  (Recommendation 1) The FAA Administrator should fulfill the CSLCA mandate to analyze the cost impact of implementing its revised MPL methodology by evaluating the impact on the direct costs of launch companies and the federal government  (Recommendation 2) The FAA Administrator should fulfill the CSLCA mandate to evaluate its MPL methodology in consultation with the commercial space sector and insurance providers by consulting with those entities on the cost impact of its revised MPL methodology, including an updated cost-of-casualty amount, on the launch industry and the federal government  (Recommendation 3) The FAA Administrator should establish an estimated completion date for developing and implementing a plan to establish guidance on the most appropriate MPL methodologies and tools to use for each launch  (Recommendation 4) We provided a draft of this report to the Department of Transportation for their review and comment  In its comments, reproduced in appendix I, the Department of Transportation concurred with our recommendations  The Department of Transportation also provided technical comments, which we incorporated as appropriate  We are sending copies of this report to interested congressional committees and the Secretary of the Department of Transportation  In addition, this report will be available at no charge on GAO’s website at http://www gao gov  If you or your staff have any questions or would like to discuss this work, please contact Alicia Puente Cackley at (202) 512-8678 or cackleya@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  Individuals making key contributions to this report are listed in appendix II  In addition to the contact named above, Patrick Ward (Assistant Director), Jessica Artis, Isidro Gomez (Analyst in Charge), Courtney La Fountain, Maureen Luna-Long, Jessica Sandler, Jennifer Schwartz, Joseph Silvestri, and Shana Wallace made key contributions to this report 


Report 2: Cross-border data flows underlie today's globally connected world and are essential to conducting international trade and commerce  Data flows enable companies to transmit information for online communication, track global supply chains, share research, and provide cross-border services  One study estimates that digital commerce relying on data flows drives 22% of global economic output, and that global GDP will increase by another $2 trillion by 2020 due to advances in emerging technologies  However, while cross-border data flows increase productivity and enable innovation, they also raise concerns around the security and privacy of the information being transmitted  Cross-border data flows are central to trade and trade negotiations as organizations rely on the transmission of information to use cloud services, and to send nonpersonal corporate data as well as personal data to partners, subsidiaries, and customers  U S  policymakers are considering various policy options to address online privacy, some of which could affect cross-border data flows  For example, new consumer rights to control their personal data may impact how companies can use such data  To enable international data flows and trade, the United States has aimed to eliminate trade barriers and establish enforceable international rules and best practices that allow policymakers to achieve public policy objectives, including promoting online security and privacy  Building consensus for international rules and norms on data flows and privacy has become increasingly important as recent incidents have heightened the public's awareness of the risk of personal data stored online  For example, the 2018 Cambridge Analytica scandal drew attention because the firm reportedly acquired and used data on more than 87 million Facebook accounts in an effort to influence voters in the 2016 U S  presidential election and the UK referendum on continued European Union (EU) membership ("Brexit")  In addition, security concerns have been raised about data breaches, such as those that exposed the personal data of half a million Google users or 500 million Marriot hotel customers  Organizations value consumers' personal online data for a variety of reasons  For example, companies may seek to facilitate business transactions, analyze marketing information, detect disease patterns from medical histories, discover fraudulent payments, improve proprietary algorithms, or develop competitive innovations  Some analysts compare data to oil or gold, but unlike those valuable substances, data can be reused, analyzed, shared, and combined with other information; it is not a scarce resource  However, personal data is considered personal private property  Individuals often want to control who accesses their data and how it is used  Experts suggest that data may therefore be considered both a benefit and a liability that organizations hold  Data has value, but an organization takes on risk by collecting personal data; they become responsible for protecting users' privacy and not misusing the information  Data privacy concerns may become more urgent as the amount of online information organizations access and collect, and the level of global data flows, continue to expand  Countries vary in their policies and laws on these issues  The United States has traditionally supported open data flows and has regulated privacy at a sectoral level to cover data, such as health records, rather than create a comprehensive policy  U S  trade policy has sought to balance the goals of consumer privacy, security, and open commerce, including eliminating trade barriers and opening markets  Other countries are developing data privacy policies that affect international trade as some governments or groups seek to limit data flows outside of an organization or across national borders for a number of reasons  Blocking international data flows may impede the ability of a firm to do business or of an individual to conduct a transaction, creating a form of trade protectionism  Research demonstrates not only the economic gains from digital trade and international data flows, but also the real economic costs of restrictions on such flows  For many policymakers, the crux of the issue is: How can governments protect individual privacy in the least trade-restrictive way possible? The question is similar to concerns raised about ensuring cybersecurity while allowing the free flow of data  In recent years, Congress has examined multiple issues related to cross-border data flows and online privacy  In the 115 th Congress, congressional committees held hearings on these topics, introduced multiple bills, and conducted oversight over federal laws on related issues such as data breach notification  Members are introducing new bills and holding hearings in the 116 th Congress  Congress may consider the proposed U S -Mexico-Canada Agreement (USMCA) and examine the digital trade chapter as an example of how to address the issues through trade agreements  In most circumstances, a consumer expects both privacy and security when conducting an online transaction  However, users' expectations and values may vary and there is no globally accepted standard or definition of data privacy in the online world  In addressing online privacy, Congress may need to define personal data and differentiate between sensitive and nonsensitive personal data  In general, data privacy can be defined by an individual's ability to prevent access to personally identifiable information (PII)  According to the U S  Office of Management and Budget (OMB) guidance to federal agencies, PII refers to information that can be used to distinguish or trace an individual's identity, either alone or when combined with other information that is linked or linkable to a specific individual  Since electronic data can be readily shared and combined, some data not traditionally considered PII may have become more sensitive  For example, the OMB definition does not specifically mention data on location tracking, purchase history, o r preferences, but these digital data points can be tracked by a device such as a mobile phone or laptop that an individual carries or logs into  The EU definition of PII attempts to capture the breadth of data available in the online world: "personal data" means any information relating to an identified or identifiable natural person ('data subject'); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person  Policymakers may consider differentiating between sensitive and nonsensitive personal data  For example, sensitive personal data could include ethnic origin, political or religious affiliation, biometric data, health data, sexual orientation, precise geolocation data, etc  "Cross-border data flows" refers to the movement or transfer of information between computer servers across national borders  Cross-border data flows are part of, and integral to, digital trade and facilitate the movement of goods, services, people, and finance  A 2017 analysis estimated that global flows of goods, services, finance, and people increased world gross domestic product (GDP) by at least 10% in the past decade, adding $8 trillion between 2005 and 2015  Effective and sustainable digital trade relies on data flows that permit commerce and communication but that also ensure privacy and security, protect intellectual property, and build trust and confidence  Impeding cross-border data flows, including through some privacy regulations, may decrease efficiency and reduce other benefits of digital trade, resulting in the fracturing, or so-called balkanization, of the internet  In addressing online privacy, some policymakers focus on limiting access to online information by restricting the flow of data beyond a country's borders  Such limits may also act as protectionist measures  Online privacy policies may create barriers to digital trade, or damage trust in the underlying digital economy  For example, measures to limit cross-border data flows could block companies from using cloud computing to aggregate and analyze global data, or from gaining economies of scale, constrain e-commerce by limiting international online payments, hinder global supply chains seeking to use blockchain to track products or manage supply chains, customs documentation, or electronic payments, impede the trading of crypto-currency, or limit the use of advanced technology like artificial intelligence  According to the World Trade Organization (WTO), one of the most significant overall impacts of the growth of digital technologies is in transforming international trade  Technology can lower the costs of trade, change the types of goods and services that are traded, and may even change the factors defining a country's comparative advantage  The extent of the impact of digital technologies on trade, however, depends in large part on open cross-border data flows  One study of U S  companies found that data localization rules (i e , requiring organizations to store data on local servers) were the most-cited digital trade barrier  Some governments advocate privacy or security policies that require data localization and limit cross-border data flows  However, many industry stakeholders argue that blocking cross-border data flows and storing data domestically does not make such data more secure or private  Many experts argue that policymakers should limit cross-border data flows in the least trade-restrictive manner possible and also ensure security and privacy  These objectives are not easily reconciled  Moreover, although an overlap exists between data protection and privacy, the two are not equivalent  Cybersecurity measures are essential to protect data (e g , against intrusions or theft by hackers)  However, they may not be sufficient to protect privacy  For example, if an organization shares user data with a third party, it may be doing so securely, but not in a way that protects users' privacy or aligns with consumer expectations  Similarly, breach notification requirements are not the same as proactive privacy protection measures  At the same time, policies that protect a consumer's privacy can align with security policies  Laws can limit law enforcement's access to information except in certain circumstances  Keeping user information anonymous may enable firms to analyze data while protecting individuals' identities  Some see an inherent conflict between online security, privacy, and trade; others believe that policies protecting all three can be coherent and consistent  The U S  government has traditionally sought to balance these objectives  Some stakeholders note, however, that current U S  policy has been inadequate in protecting online privacy and that change is needed  In some cases in the past, Congress has acted to address privacy concerns in particular sectors; for example, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 led to health privacy standards regulations  The Trump Administration has begun an effort to devise an overarching data privacy policy (see " Defining the U S  Approach ") and many Members of Congress are also considering possible approaches  There are no comprehensive multilateral rules specifically about privacy or cross-border data flows  However, the United States and other countries have begun to address these issues in negotiating new and updated trade agreements, and through international economic forums and organizations such as the Asia-Pacific Economic Cooperation (APEC) forum and the Organisation for Economic Co-operation and Development (OECD)  The World Trade Organization (WTO) General Agreement on Trade in Services (GATS) entered into force in January 1995, predating the current reach of the internet and the explosive growth of global data flows  Many digital products and services that did not exist when the agreements were negotiated are not covered  On the other hand, privacy is explicitly addressed within GATS as an exception to allow countries to take measures that do not conform with the agreement in order to protect "the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts," as long as those measures are not arbitrary or a disguised trade restriction  Efforts to update the multilateral agreement and discussions for new digital trade rules under the WTO Electronic Commerce Work Program stalled in 2017  Given the lack of progress on multilateral rules, some have suggested that the WTO should identify best practices or guidelines for digital trade rules that could lay the foundation for a future multilateral WTO agreement  In December 2017, a group of more than 70 WTO members, including the United States, agreed to "initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce " Overall U S  objectives include allowing the free flow of information for international trade and cross-border data flows, "subject to reasonable safeguards like the protection of consumer data when it is exported," but do not specifically address privacy  The group formally launched the e-commerce initiative in January 2019  The official joint statement lists the United States and EU as participants, and also several developing countries such as China and Brazil  India stated it will not join, preferring to maintain its flexibility to favor domestic firms, limit foreign market access, and raise revenue in the future  The statement did not define the scope of any potential agreement  After the meeting, the EU noted data localization measures among the potential new rules to be discussed when negotiations officially launch in March 2019  The U S  Trade Representative's (USTR's) statement emphasized the need for a high-standard agreement that includes enforceable obligations  Although some experts note that harmonization or mutual recognition is unlikely given divergent legal systems, privacy regimes, and norms of the parties, a common system of rules to allow for cross-border data flows while ensuring privacy protection is reportedly under discussion  Personal privacy has received increasing focus with the growth of digital trade encouraging global cooperation  The United States has contributed to developing international guidelines or principles related to privacy and cross-border data flows, although none are legally binding  The OECD 1980 Privacy Guidelines established the first international set of privacy principles emphasizing data protection as a condition for the free flow of personal data across borders  These OECD guidelines were intended to assist countries with drawing up national data privacy policies  The guidelines were updated in 2013, focusing on national level implementation based on a risk management approach and improving interoperability between national privacy strategies  The updated guidelines identify specific principles for countries to take into account in establishing national policies  The guidelines are to be reviewed and updated again in 2019  Building on the OECD principles and prior G-20 work, the 2018 G-20 Digital Economy Ministerial Declaration identified principles to "facilitate an inclusive and whole-of-government approach to the use of information and communication technology (ICT) and assist governments in reshaping their capacities and strategies, while respecting the applicable frameworks of different countries, including with regards to privacy and data protection " Japan is to host the 2019 G-20 and plans to focus on data governance, offering a forum to address potential global standards on privacy and cross-border data flows  APEC is a regional forum for economic cooperation whose initiatives on privacy and cross-border data flows have influenced members' domestic policies  APEC's 21 members, including the United States, agreed to the 2005 APEC Privacy Framework , based on the OECD guidelines  The framework identifies a set of principles and implementation guidelines to provide members with a flexible approach to regulate privacy at a national level  Once the OECD publishes updated guidelines in 2019, APEC members may revise the framework and principles to reflect the updated guidelines  The APEC Cross-Border Privacy Rules (CBPR), endorsed by APEC Leaders in 2011, is a privacy code of conduct, based on the framework  The CBPR system establishes a set of principles for governments and businesses to follow to protect personal data and allow for cross-border data flows between CBPR members  They aim to balance information privacy with business needs and commercial interests, and facilitate digital trade to spur economic growth in the region  Rather than creating a new set of international regulations, the APEC framework and CBPR system identify best practices that each APEC member can tailor to its domestic legal system and allow for interoperability between countries  The scope and implementation mechanisms under CBPR can vary according to each member country's laws and regulations, providing flexibility for governments to design national privacy approaches  To become a member of the CBPR, a government must 1  Be a member of APEC; 2  Establish a regulator with authority to sign the Cross-Border Privacy Enforcement Arrangement (CPEA); 3  Map national laws to the published APEC guidelines, which set baseline standards; and 4  Establish an accountability agent empowered to audit and review a company's practices, and enforce privacy rules and laws  If a government joins the CBPR system, every domestic organization is not required to also join; however, becoming a member of CBPR may benefit an organization engaged in international trade by indicating to customers and partners that the organization values and protects data privacy  With certified enrollment in CBPR, organizations can transfer personal information between participating economies (e g , Mexico to Singapore) and be assured of compliance with the legal regimes in both places  To become a CBPR member, an individual organization must develop and implement data privacy policies consistent with the APEC Privacy Framework and complete a questionnaire  The third party accountability agent is responsible for assessing an organization's application, ongoing monitoring of compliance, investigating any complaints, and taking enforcement actions as necessary  Domestic enforcement authorities in each member country serve as a backstop for dispute resolution if an accountability agent cannot resolve a particular issue  All CBPR member governments must join the CPEA to ensure cooperation and collaboration between the designated national enforcement authorities  In the United States, the Federal Trade Commission (FTC) is the regulator and enforcement authority  TrustArc is the only accountability agent, but many expect the U S  Department of Commerce to recognize additional agents soon  As of this writing, TrustArc lists about 20 U S  firms that are APEC CBPR certified  The CBPR grows in significance as the number of participating economies and organizations increases  The U S  ambassador to APEC aims to have "as many APEC economies as possible as soon as possible to join the system " Currently, the United States, Japan, Mexico, Canada, South Korea, Singapore, Taiwan, and Australia are CBPR members; the Philippines is in the process of joining  Russia, on the other hand, stated it has no plans to join  Although APEC initiatives are regionally focused, they can provide a basis to scale up to larger global efforts because they reflect economies at different stages of development and include industry participation  Due to its voluntary nature, APEC has served as a testbed for identifying best practices, standards, and principles and for creating frameworks that can lead to binding commitments in plurilateral or larger multilateral agreements (see " Data Flows and Privacy in U S  Trade Agreements ")  Expanding CBPR beyond APEC could represent the next step toward consistent international rules and disciplines on data flows and privacy  Countries vary in their privacy policies and laws, reflecting differing priorities, cultures, and legal structures  According to one index, China is the most restrictive digital trade country among 64 countries surveyed, followed by Russia, India, Indonesia, and Vietnam (see Figure 1 )  The United States ranks 22 in the index, less restrictive than Brazil or France but more restrictive than Canada or Australia  The relatively high U S  score largely reflects financial sector restrictions  The "restrictions on data" category covers data policies such as privacy and security measures; this category is included in the composite index  Looking specifically at the 64 countries' data policies, Russia is the most restrictive country, followed by Turkey and China  Russia's policies include data localization, retention, and transfer requirements, among others  Turkey's comprehensive Data Protection Law also establishes requirements in these areas  In contrast, the United States ranks 50 for data policy restrictions  Two of the top U S  trading partners (the EU and China) have established their data policies from different perspectives  The EU's policies are driven by privacy concerns; China's policies are based on security justifications  Both are setting examples that other countries, especially those with (or seeking) closer trading ties to China or the EU, are emulating; thus, these policies have affected U S  firms seeking to do business in those other countries as well  The EU considers the privacy of communications and the protection of personal data to be fundamental human rights, which are codified in EU law  Differences between the United States and EU in their approaches to data protection and data privacy laws have long been sticking points in U S -EU economic and security relations  The EU and United States negotiated the U S -EU Privacy Shield to allow for the transatlantic transfer of personal data by certified organizations  The bilateral agreement established a voluntary program with commitments and obligations for companies, limitations on law enforcement access, and transparency requirements  U S  companies that participate in the program must still comply with all of the obligations under EU law (see below) if they process personal data of EU persons  The Privacy Shield is overseen and enforced by EU federal and U S  agencies, including the Department of Commerce and the FTC, and is reviewed by both parties annually  The EU's General Data Protection Regulation (GDPR), effective May 2018, establishes rules for EU members, with extraterritorial implications  The GDPR is a comprehensive privacy regime that builds on previous EU data protection rules  It grants new rights to individuals to control personal data and creates specific new data protection requirements  The GDPR applies to (1) all businesses and organizations with an EU establishment that process (i e , perform operations on) personal data of individuals in the EU, regardless of where the actual processing of the data takes place; and (2) entities outside the EU that offer goods or services (for payment or for free) to individuals in the EU or monitor the behavior of individuals in the EU  While the GDPR is directly applicable at the EU member state level, individual countries are responsible for establishing some national-level rules and policies as well as enforcement authorities, and some are still in the process of doing so  As a result, some U S  stakeholders have voiced concerns about a lack of clarity and inadequate country compliance guidelines  Many U S  firms doing business in the EU have made and are making changes to comply with the GDPR, such as revising and clarifying user terms of agreement and asking for explicit consent  For some U S  companies, it may be easier and cheaper to apply GDPR protections to all users worldwide rather than to maintain different policies for different users  Large firms may have the resources to hire consultants and lawyers to guide implementation and compliance; it may be harder and costlier for small and mid-sized enterprises to comply, possibly deterring them from entering the EU market and creating a de facto trade barrier  Since the GDPR went into effect on May 25, 2018, some U S  businesses, including some newspaper websites and digital advertising firms, have opted to exit the EU market given the complexities of complying with the GDPR and the threat of potential enforcement actions  European Data Protection Authorities (DPAs) have received a range of GDPR complaints and initiated several GDPR enforcement actions in the fall of 2018  In January 2019, the French DPA issued the largest penalty to date for a data privacy breach  The agency imposed a €50 million (approximately $57 million) fine on Google for the "lack of transparency" regarding how the search engine processes user data  Analysts contend that the high fine may set a benchmark and signal for future enforcement, raising concerns among some firms doing business in the EU  Under the GDPR, a few options exist to transfer personal data in or out of the EU and ensure that privacy is maintained  1  An organization may use specific Binding Corporate Rules (BCRs) or Model Contracts approved by the EU; 2  An organization may comply with domestic privacy regimes of a country that has obtained a mutual adequacy decision from the EU, which means that the EU has deemed that a country's laws and regulations provide an adequate level of data protection; currently, fewer than 15 jurisdictions are deemed adequate by the EU; or 3  A U S -based organization may enroll in the bilateral U S -EU Privacy Shield program for transatlantic transfer of personal data  The GDPR legal text seems to envision a fourth way, such as a certification scheme to transfer data, that the EU has yet to elaborate  A certification option(s) could create a less burdensome means of compliance for U S  and other non-EU organizations to transfer personal data to or from the EU in the future  This could be an opportunity for the United States to work with the EU on creating a common system, perhaps even setting a global standard  Some experts contend that the GDPR may effectively set new global data privacy standards, since many companies and organizations are striving for GDPR compliance to avoid being shut out of the EU market, fined, or otherwise penalized, or in case other countries introduce rules that imitate the GDPR  The EU is actively promoting the GDPR and some countries, such as Argentina, are imitating all or parts of the GDPR in their own privacy regulatory and legislative efforts or as part of broader trade negotiations with the EU  In general, the EU does not include cross-border data flows or privacy in free trade agreements  However, alongside trade negotiations with Japan, the EU and Japan agreed to recognize each other's data protection systems as "equivalent," allowing for the free flow of data between the EU and Japan and serving as a first step in adopting an adequacy decision  Under the agreement, Japan committed to implementing additional measures to address the handling of the personal data of EU persons on top of Japan's own privacy regime  China's trade and internet policies reflect state direction and industrial policy, limiting the free flow of information and individual privacy  For example, the requirement for all internet traffic to pass through a national firewall can impede the cross-border transmission of data  China's 2015 counterterrorism law requires telecommunications operators and internet service providers to provide assistance to the government, which could include sharing individuals' data  Citing national security concerns, China's Internet Sovereignty policies, Cybersecurity Law, and Personal Information Security Specification impose strict requirements on companies, such as storing data domestically; limiting the ability to access, use, or transfer data internationally; and mandating security assessments that provide Chinese authorities access to proprietary information  In 2014, China announced a new social credit system, a centralized big-data-enabled system for monitoring and shaping businesses' and citizens' behavior that serves as a self-enforcing regulatory mechanism  According to the government, China aims to make individuals more "sincere" and "trustworthy," while obtaining reliable data on the creditworthiness of businesses and individuals  An individual's score would determine the level of government services and opportunities he or she could receive  China seeks to have all its citizens subject to the social credit system by 2020, forcing some U S  businesses who do business in China, such as airlines, to participate  As of 2018, multiple government agencies and financial institutions contribute data to the platform  Pilot projects are underway in some provinces to apply various rewards and punishments in response to data collected  The lack of control an individual may have and the exposure of what some consider private data is controversial among observers in and out of China  Some countries, such as Vietnam, are following China's approach in creating cybersecurity policies that limit data flows and require local data storage and possible access by government authorities  Some U S  firms and other multinational companies are considering exiting the Vietnamese market rather than complying, while some analysts suggest that Vietnam's law may not be in compliance with its recent commitments in trade agreements (see below)  India has also cited security as the rationale for its draft Personal Data Protection Bill, which would establish broad data localization requirements and limit cross-border transfer of some data  Unlike the EU, these countries do not specify mechanisms to allow for cross-border data flows  U S  officials have raised concerns with both Vietnam's and India's localization requirements  The EU's emphasis on privacy protection and China's focus on national security (and the countries that emulate their policies) have led these countries to create data-focused policies that restrict international trade and commerce  The United States has traditionally sought a balanced approach between trade, privacy, and security  U S  data flow policy priorities are articulated in USTR's Digital 2 Dozen report, first developed under the Obama Administration, and the White House's 2017 National Security Strategy  Both Administrations emphasize the need for protection of privacy, the free flow of data across borders, and an interoperable internet  These documents establish the U S  position that the free flow of data is not inconsistent with privacy protection  Recent free trade agreements translate the U S  position into binding international commitments  The United States has taken a data-specific approach to regulating data privacy, with laws protecting specific information, such as healthcare or financial data  The FTC enforces consumer protection laws and requires that consumers be notified of and consent to how their data will be used, but the FTC does not have the mandate or resources to enforce broad online privacy protections  There is growing interest among some Members of Congress and in the Administration for a more holistic U S  data privacy policy  The United States has played an important role in international discussions on privacy and data flows, such as in the OECD, G-20, and APEC, and has included provisions on these subjects in recent free trade agreements  Congress noted the importance of digital trade and the internet as a trading platform in setting the current U S  trade negotiating objectives in the June 2015 Trade Promotion Authority (TPA) legislation ( P L  114-26 )  TPA includes a specific principal U S  trade negotiating objective on "digital trade in goods and services and cross-border data flows " According to TPA, a trade agreement should ensure that governments "refrain from implementing trade-related measures that impede digital trade in goods and services, restrict cross-border data flows, or require local storage or processing of data " However, TPA also recognizes that sometimes measures are necessary to achieve legitimate policy objectives and aims for such regulations to be the least trade restrictive, nondiscriminatory, and transparent  Comprehensive and Progressive Agreement for Trans‐Pacific Partnership (CPTPP /TPP-11 )   The CPTPP is a recently concluded trade agreement among 11 Asia-Pacific countries  The CPTPP is based on the proposed Trans-Pacific Partnership (TPP) agreement negotiated by the Obama Administration and from which President Trump withdrew the United States in January 2017  The electronic commerce chapter in TPP, left unchanged in CPTPP, contains the strongest binding trade agreement commitments on digital trade in force globally  CPTPP includes provisions on cross-border data flows and personal information protection  The text specifically states that the parties "shall allow the cross-border transfer of information " The agreement allows restrictive measures for legitimate public policy purposes if they are not discriminatory or disguised trade barriers  The agreement also prohibits localization requirements for computing facilities, with similar exceptions  On privacy, the CPTPP requires parties to have a legal framework in place to protect personal information and to have consumer protection laws that cover online commerce  It encourages interoperability between data privacy regimes and encourages cooperation between consumer protection authorities  United States-Mexico-Canada Agreement (USMCA)  The released text for the proposed USMCA aims to revise and update the trilateral North American Free Trade Agreement (NAFTA), and illustrates the Trump Administration's approach  The USMCA chapter 19 on digital trade includes articles on consumer protection, personal information protection, cross-border transfer of information by electronic means, and cybersecurity, among other topics  Building on the TPP, the agreement seeks to balance the legitimate objectives by requiring parties to have a legal framework to protect personal information, have consumer protection laws for online commercial activities, and not prohibit or restrict cross-border transfer of information  While the agreement does not prescribe specific rules or measures that a party must take to protect privacy, it goes further than the TPP (or CPTPP) provisions and provides guidance to inform a country's privacy regime  In particular, the USMCA explicitly refers to the APEC Privacy Framework and OECD Guidelines as relevant and identifies key principles  In general, the proposed USMCA requires that parties not restrict cross-border data flows  Governments are allowed to do so to achieve a legitimate public policy objective (e g , privacy, national security), provided the measure is not arbitrary, discriminatory, a disguised trade barrier, or greater than necessary to achieve the particular objective  In this way, the parties seek to balance the free flow of data for commerce and communication with protecting privacy and security  The agreement specifically states that the parties may take different legal approaches to protect personal data and also recognizes APEC CBPR as a "valid mechanism to facilitate cross-border information transfer while protecting personal information " The agreement aims to increase cooperation between the United States, Mexico, and Canada on a number of digital trade issues, including exchanging information on personal information protection and enforcement experiences; strengthening collaboration on cybersecurity issues; and promoting the APEC CBPR and global interoperability of national privacy regimes  The governments also commit to encourage private-sector self-regulation models and promote cooperation to enforce privacy laws  While the agreement is only between three parties, the provisions are written broadly to encompass global efforts  Some stakeholders look at USMCA as the basis for potential future trade agreements (such as with the UK)  Cross-border data flows will likely be a key issue in future U S -EU trade negotiations  The United States has articulated a clear position on data privacy in trade agreements; however, there is no single U S  data privacy policy  Nevertheless, the Trump Administration is seeking to define an overarching U S  policy on data privacy  The Trump Administration's ongoing three-track process is being managed by the Department of Commerce (Commerce) in consultation with the White House  Different bureaus in Commerce are tasked with different aspects of the process, as follows  1  The National Institutes of Standards and Technology (NIST) is developing a privacy framework  Similar to its cybersecurity framework, NIST aims to create a voluntary framework as a tool for organizations to adopt to identify, assess, manage, and communicate about privacy risks  By classifying specific privacy outcomes and potential approaches, the framework is intended to enable organizations to create and adapt privacy strategies, innovate, and manage privacy risks within diverse environments  As part of its transparent approach, NIST is currently consulting with public- and private-sector stakeholders through various forms of outreach to collect feedback and aims to have a draft framework before the end of 2019  2  The National Telecommunications and Information Administration (NTIA) is developing a set of privacy principles to guide a domestic legal and policy approach  The NITA sought public comment on a proposed set of "user-centric privacy outcomes" and a set of high-level goals  3  The International Trade Administration (ITA) engages with foreign governments and international organizations such as APEC  ITA is focusing on the international interoperability aspects of potential U S  privacy policy  ITA's role is to ensure that the NIST and NTIA approaches are consistent with U S  international policy objectives, including TPA, and principles, such as the OECD framework and APEC CBPRs  Like the EU and China, Commerce is seeking input through a public- and private-sector consultation process  However, unlike the EU or China, Commerce is expecting to create a voluntary privacy framework  Some observers question whether the Commerce approach is sufficient to result in strong privacy protections if it is not backed up by congressional action and federal legislation  Some suggest that Congress could lead a whole-of-government approach through new federal legislation  In the 115 th Congress, then-House Committee on Energy and Commerce Ranking Member Frank Pallone, Jr  requested that the Government Accountability Office (GAO) examine issues related to federal oversight of internet privacy  The January 2019 GAO report concluded that now is "an appropriate time for Congress to consider comprehensive Internet privacy " GAO stated that "Congress should consider developing comprehensive legislation on Internet privacy that would enhance consumer protections and provide flexibility to address a rapidly evolving Internet environment  Issues that should be considered include what authorities agencies should have in order to oversee Internet privacy, including appropriate rulemaking authority " Recognizing the importance of protecting open data flows amid growing concerns about online privacy, some stakeholders seek to influence U S  policies on these issues  In addition to submitting comments in response to NTIA and NIST requests and participating in their forums, multiple organizations issued their own sets of principles or guidelines, some referencing the EU GDPR  The U S  Chamber of Commerce has also published model privacy legislation for Congress to consider  Though they vary in emphasis, these proposals share common themes: transparency on what data is being collected and how it is being used; user control, including the ability to opt out of sharing at least some information and to access and correct personal data collected; data security measures, like data breach notification requirements; and enforcement by the FTC; FTC commissioners also voiced support for the agency as the appropriate federal enforcer for consumer privacy  But these groups also differ in some areas, such as whether, or to what extent, to include certain aspects included in the GDPR, such as the right to deletion (so-called "right to be forgotten"), requirements for data minimization, or extraterritorial reach  There is not consensus on whether the FTC should be given rule-making authority or additional resources, the enforcement role of states, or if an independent data protection commission is needed similar to EU DPAs  Consistent with U S  trade policy, industry groups generally point out the need to be flexible, encourage private-sector innovation, establish sector- and technology-neutral rules, create international interoperability between privacy regimes, and facilitate cross-border data flows  Private-sector stakeholders generally want to avoid what they regard as overregulation or high compliance burdens  These groups emphasize risk management and a harm-based approach, which they state keeps an organization's costs proportional to the consumer harm prevented  On the other hand, some consumer advocates point to a need for baseline obligations to protect against discrimination, disinformation, or other harm  In general, consumer advocates believe that any comprehensive federal privacy policy should complement, and not supplant, sector-specific privacy legislation or state-level legislation  Finding a global consensus on how to balance open data flows and privacy protection may be key to maintaining trust in the digital environment and advancing international trade  One study found that over 120 countries have laws related to personal data protection  Divergent national privacy approaches raise the costs of doing business and make it harder for governments to collaborate and share data, whether for scientific research, defense, or law enforcement  A system for global interoperability in a least trade-restrictive and nondiscriminatory way between different national systems could help minimize costs and allow entities in different jurisdictions with varying online privacy regimes to share data via cross-border data flows  Such a system could help avoid fragmentation of the internet between European, Chinese, and American spheres, a danger that some analysts have warned against  For example, Figure 2 suggests the potential of an interoperability system that allows data to flow freely between GDPR- and CBPR-certified economies  The OECD guidelines, G-20 principles, APEC CBPR, CPTPP, and USMCA provisions demonstrate an evolving understanding on how to balance cross-border data flows, security, and privacy, to create interoperable policies that can be tailored by countries and avoid fragmentation or the potential exclusion of other countries or regulatory systems  The various trade agreements and initiatives with differing sets of parties may ultimately pave the way for a broader multilateral understanding and eventually lead to more enforceable binding commitments founded on the key WTO principles of nondiscrimination, least trade restrictiveness, and transparency  Congress may consider the trade-related aspects of data flows in trade agreements, including through close examination of these provisions during the congressional debate and consideration of legislation to implement the proposed USMCA  Issues include whether the agreements make progress in meeting TPA's related trade negotiating objectives and if the provisions strike the appropriate balance among public policy objectives  In addition, USTR's specific trade negotiating objectives for future agreements with the EU and Japan include establishing rules to protect cross-border data flows  These future trade negotiations present challenges and provide opportunities for Congress to further engage USTR on the issues and to conduct oversight  Congress may further consider how best to achieve broader consensus on data flows and privacy at the global level  Congress could, for example, conduct additional oversight of current best practice approaches (e g , OECD, APEC) or ongoing negotiations in the WTO on e-commerce to create rules through plurilateral or multilateral agreements  Congress may consider endorsing certain of these efforts to influence international discussions and the engagement of other countries  Congress may want to examine the potential challenges and implications of building a system of interoperability between APEC, CBPR, and the EU GDPR  Related issues are the extent to which the EU is establishing its system as a potential de facto global approach through its trade agreements and other mechanisms, and how U S  and other trade agreements may ultimately provide approaches that could be adopted more globally  Congress may seek to better understand the economic impact of data flows and privacy regimes in other countries related to U S  access to other markets and the extent to which barriers are being put in place that may discriminate against U S  exporters  Congress may examine the lack of reciprocal treatment and limits on U S  firms' access to some foreign markets  Congress may consider the implications of not having a comprehensive national data privacy policy  Will the EU GDPR and China cybersecurity policies become the global norms that other countries follow in the absence of a clear U S  alternative? Congress may enact comprehensive privacy legislation  In considering such action, Congress could investigate and conduct oversight of the Administration's ongoing privacy efforts, including requesting briefings and updates on the NTIA, NIST, and ITA initiatives to provide congressional feedback and direction and ensure they are aligned with U S  trade objectives  Congress may also seek input from other federal agencies  In deliberating a comprehensive U S  policy on personal data privacy, Congress may review the GAO report's findings and conclusions  Congress may also weigh several factors, including: How can U S  trade and domestic policy achieve the appropriate balance to encourage cross-border commerce, economic growth, and innovation, while safeguarding individual privacy and national security? How would a new privacy regime affect U S  consumers and businesses, including large multinationals who must comply with different national privacy regimes and small- and medium-sized enterprises with limited resources and technology expertise? Do U S  agencies have the needed tools to accurately assess the size and scope of cross-border data flows to help analyze the economic impact of different privacy policies, or measure the costs of trade barriers? How should an evolving U S  privacy regime align with U S  trade policy objectives and evolving international standards, such as the OECD Guidelines for privacy and cybersecurity, and should U S  policymakers prioritize interoperability with other international privacy frameworks to avoid further fragmentation of global markets and so-called balkanization of the internet? In addition, there are a host of other policy considerations not directly related to trade 

ground_truth: The federal government shares liability risks with the commercial space launch industry for accidents that result in damages to third parties or federal property. This arrangement requires space launch companies to have a specific amount of insurance to cover these damages. The government is potentially liable for damages above that amount, up to a cap GAO estimated to be $3.1 billion in 2017, subject to appropriations in advance. CSLCA, enacted in 2015, directed the Department of Transportation, of which FAA is a part, to evaluate its MPL methodology and, if necessary, develop a plan to update that methodology. The act also included a provision requiring GAO to assess FAA's evaluation and any actions needed to update the methodology. This report discusses the extent to which (1) FAA's evaluation report addresses the requirements in CSLCA and (2) FAA has addressed previously identified weaknesses in the MPL methodology. GAO reviewed documents and interviewed FAA on its loss methodology evaluation and actions to address weaknesses. The Federal Aviation Administration's (FAA) report evaluating its maximum probable loss (MPL) methodology did not fully address the evaluation and consultation requirements specified by the U.S. Commercial Space Launch Competitiveness Act (CSLCA). Balance of Risk. CSLCA required FAA to include ensuring that the federal government is not exposed to greater indemnification costs and that launch companies are not required to purchase more insurance coverage than necessary as a result of FAA's MPL methodology. FAA said that it ensured this balance by improving its methodology, but it did not reevaluate its probability thresholds after revising its methodology. These thresholds are used to divide the risk of loss between launch companies and the government. Impact on Costs. The act required FAA to consider the costs to both the industry and the federal government of implementing an updated methodology. FAA's report discussed the impact on indirect costs, such as data collection, but did not discuss direct costs: insurance premiums for launch companies and indemnification liability for the federal government. Consultation. The act also required FAA to consult with the commercial space sector and insurance providers in evaluating its MPL methodology in accordance with the preceding requirements. While the agency consulted with some stakeholders, these consultations were limited in scope. FAA officials said they have not been able to take the actions needed to fully satisfy the mandated elements because of issues such as resource limitations and the lack of available data. However, by not resolving these issues, FAA lacks assurance that launch companies are not purchasing more insurance than needed or that the federal government is not being exposed to greater indemnification costs than expected. FAA has addressed two of three previously identified weaknesses in its MPL methodology but has not yet dealt with the remaining weakness. Specifically, the agency has revised its methodology for estimating the number of potential casualties for a launch and changed the factor it uses to derive estimated property damage from estimated casualties. However, FAA has not updated the amount used for the cost of an individual casualty. GAO recommended in a March 2017 report (GAO-17-366) that FAA update this amount. Not doing so could understate the amount of insurance launch companies are required to purchase, exposing the federal government to excess risk. GAO also determined that while FAA has two tools and methods it can use in making its MPL estimates, it does not have guidance on determining which are most appropriate for a given launch scenario. For example, one tool is more comprehensive but also labor intensive to use, while the other is inappropriate for certain launch scenarios and could result in misleading MPL amounts. Officials said they have begun to create such guidance but do not have an estimated completion date. Without such guidance, FAA cannot ensure that the most appropriate MPL methodology is used for each launch. FAA should fully address mandated requirements in evaluating its MPL—probability thresholds, direct costs, and stakeholder consultations— and establish an estimated completion date for developing guidance on tools and methods to use for specific launch scenarios. The Department of Transportation concurred with the recommendations, and provided technical comments.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: U S  foreign aid is the largest component of the international affairs budget, for decades viewed by many as an essential instrument of U S  foreign policy  Each year, the foreign aid budget is the subject of congressional debate over the size, composition, and purpose of the program  The focus of U S  foreign aid policy has been transformed since the terrorist attacks of September 11, 2001  Global development, a major objective of foreign aid, has been cited as a third pillar of U S  national security, along with defense and diplomacy, in the national security strategies of the George W  Bush and Barack Obama Administrations  Although the Trump Administration's National Security Strategy does not explicitly address the status of development vis-à-vis diplomacy and defense, it does note the historic importance of aid in achieving foreign policy goals and supporting U S  national interests  This report addresses a number of the more frequently asked questions regarding the U S  foreign aid program; its objectives, costs, and organization; the role of Congress; and how it compares to those of other aid donors  It attempts not only to present a current snapshot of American foreign assistance, but also to illustrate the extent to which this instrument of U S  foreign policy has evolved over time  Data presented in the report are the most current, consistent, and reliable figures available, generally updated through FY2017  Dollar amounts come from a variety of sources, including the U S  Agency for International Development (USAID) Foreign Aid Explorer database (Explorer) and annual State, Foreign Operations, and Related Programs (SFOPS) appropriations acts  As new data are obtained or additional issues and questions arise, the report will be revised  Foreign aid abbreviations used in this report are listed in Appendix B   In its broadest sense, U S  foreign aid is defined under the Foreign Assistance Act of 1961 (FAA), the primary legislative basis of foreign aid programs, as any tangible or intangible item provided by the United States Government [including "by means of gift, loan, sale, credit, or guaranty"] to a foreign country or international organization under this or any other Act, including but not limited to any training, service, or technical advice, any item of real, personal, or mixed property, any agricultural commodity, United States dollars, and any currencies of any foreign country which are owned by the United States Government     (§634(b)) For many decades, nearly all assistance annually requested by the executive branch and debated and authorized by Congress was ultimately encompassed in the foreign operations appropriations and the international food aid title of the agriculture appropriations  In the U S  federal budget, these traditional foreign aid accounts have been subsumed under the 150 (international affairs) budget function  By the 1990s, however, it became increasingly apparent that the scope of U S  foreign aid was not fully accounted for by the total of the foreign operations and international food aid appropriations  Many U S  departments and agencies had adopted their own assistance programs, funded out of their own budgets and commonly in the form of professional exchanges with counterpart agencies abroad—the Environmental Protection Agency, for example, providing water quality expertise to other governments  These aid efforts, conducted outside the purview of the traditional foreign aid authorizing and appropriations committees, grew more substantial and varied in the mid-1990s  The Department of Defense (DOD) Nunn-Lugar effort provided billions in aid to secure and eliminate nuclear and other weapons, as did Department of Energy activities to control and protect nuclear materials—both aimed largely at the former Soviet Union  Growing participation by DOD in health and humanitarian efforts and expansion of health programs in developing countries by the National Institutes of Health and Centers for Disease Control and Prevention, especially in response to the HIV/AIDS epidemic, followed  During the past 15 years, DOD-funded and implemented aid programs in Iraq and Afghanistan to train and equip foreign forces and win hearts and minds through development efforts were often considerably larger than the traditional military and development assistance programs provided under the foreign operations appropriations  The recent decline in DOD activities in these countries has sharply decreased nontraditional aid funding  In FY2011, nontraditional sources of assistance, at $17 3 billion, represented 35% of total aid obligations  By FY2017, nontraditional aid, at $9 7 billion, represented 19% of total aid, still a significant proportion  While the executive branch has continued to request and Congress to debate most foreign aid within the parameters of the foreign operations legislation, both entities have sought to ascertain a fuller picture of assistance programs through improved data collection and reporting  Significant discrepancies remain between data available for traditional versus nontraditional types of aid and, therefore, the level of analysis applied to each  (See text box , "A Note on Numbers and Sources," below ) Nevertheless, to the extent possible, this report tries to capture the broadest definition of aid throughout  Foreign assistance is predicated on several rationales and supports a great many objectives  The importance and emphasis of various rationales and objectives have changed over time  Throughout the past 70 years, there have been three key rationales for foreign assistance National Security has been the predominant theme of U S  assistance programs  From rebuilding Europe after World War II under the Marshall Plan (1948-1951) and through the Cold War, U S  aid programs were viewed by policymakers as a way to prevent the incursion of communist influence and secure U S  base rights or other support in the anti-Soviet struggle  After the Cold War ended, the focus of foreign aid shifted from global anti-communism to disparate regional issues, such as Middle East peace initiatives, the transition to democracy of eastern Europe and republics of the former Soviet Union, and international illicit drug production and trafficking in the Andes  Without an overarching security rationale, foreign aid budgets decreased in the 1990s  However, since the September 11, 2001, terrorist attacks in the United States, policymakers frequently have cast foreign assistance as a tool in U S  counterterrorism strategy, increasing aid to partner states in counterterrorism efforts and funding the substantial reconstruction programs in Afghanistan and Iraq  As noted, global development has been featured as a key element in U S  national security strategy in both Bush and Obama Administration policy statements  Commercial Interests  Foreign assistance has long been defended as a way to either promote U S  exports by creating new customers for U S  products or by improving the global economic environment in which U S  companies compete  Humanitarian Concerns  Humanitarian concerns drive both short-term assistance in response to crisis and disaster as well as long-term development assistance aimed at reducing poverty, hunger, and other forms of human suffering brought on by more systemic problems  Providing assistance for humanitarian reasons has generally been the aid rationale most broadly supported by the American public and policymakers alike  The objectives of aid generally fit within these rationales  Aid objectives include promoting economic growth and reducing poverty, improving governance, addressing population growth, expanding access to basic education and health care, protecting the environment, promoting stability in conflictive regions, protecting human rights, promoting trade, curbing weapons proliferation, strengthening allies, and addressing drug production and trafficking  The expectation has been that, by meeting these and other aid objectives, the United States will achieve its national security goals as well as ensure a positive global economic environment for American products, and demonstrate benevolent and respectable global leadership  Different types of foreign aid typically support different objectives  But there is also considerable overlap among categories of aid  Multilateral aid serves many of the same objectives as bilateral development assistance, although through different channels  Military assistance, economic security aid—including rule of law and police training—and development assistance programs may support the same U S  political objectives in the Middle East, Afghanistan, and Pakistan  Military assistance and alternative development programs are integrated elements of American counternarcotics efforts in Latin America and elsewhere  Depending on how they are designed, individual assistance projects can also serve multiple purposes  A health project ostensibly directed at alleviating the effects of HIV/AIDS by feeding orphan children may also stimulate grassroots democracy and civil society through support of indigenous NGOs while additionally meeting U S  humanitarian objectives  Microcredit programs that support small business development may help develop local economies while at the same time enabling client entrepreneurs to provide food and education to their children  Water and sanitation improvements both mitigate health threats and stimulate economic growth by saving time previously devoted to water collection, raising school attendance for girls, and facilitating tourism, among other effects  In 2006, in an effort to rationalize the assistance program more clearly, the State Department developed a framework that organizes U S  foreign aid around five strategic objectives, each of which includes a number of program elements, also known as sectors  The five objectives are Peace and Security; Investing in People; Governing Justly and Democratically; Economic Growth; and Humanitarian Assistance  Generally, these objectives and their sectors do not correspond to any one particular budget account in appropriations bills  Annually, the Department of State and USAID develop their foreign operations budget request within this framework, allowing for an objective and program-oriented viewpoint for those who seek it  An effort by the State Department to obtain reporting from all departments and agencies of the U S  government on aid levels categorized by objective and sector is ongoing  USAID's Explorer website (explorer usaid gov) currently provides a more complete picture from all parts of the U S  government (see Table 1 )  The 2006 framework introduced by the Department of State organizes assistance by foreign policy strategic objective and sector  But there are many other ways to categorize foreign aid, one of which is to sort out and classify foreign aid accounts in the U S  budget according to the types of activities they are expected to support, using broad categories such as military, bilateral development, multilateral development, humanitarian assistance, political/strategic, and nonmilitary security activities (see Figure 1 )  This methodology reflects the organization of aid accounts within the SFOPS appropriations but can easily be applied to the international food aid title of the Agriculture appropriations as well as to the DOD and other government agency assistance programs with funding outside traditional foreign aid budget accounts  In FY2017, these many aid accounts provided $49 9 billion in obligated assistance  For FY2017, U S  government departments and agencies obligated about $16 2 billion in bilateral development assistance, or 33% of total foreign aid, primarily through the Development Assistance (DA) and Global Health (Global Health-USAID and Global Health-State) accounts and the administrative accounts that allow USAID to operate (Operating Expenses, Capital Investment Fund, and Office of the Inspector General)  Other bilateral development assistance accounts support the development efforts of distinct institutions, such as the Peace Corps, Inter-American Foundation (IAF), U S -African Development Foundation, Trade and Development Agency, Millennium Challenge Corporation (MCC), and National Endowment for Democracy (NED)  Development assistance programs aim to foster sustainable broad-based economic progress and social stability in developing countries  This aid is managed largely by USAID and is used for long-term projects in a wide range of areas  Many programs share the objective in the State Department framework of "promoting economic growth and prosperity " Agriculture programs focus on reducing poverty and hunger, trade-promotion opportunities for farmers, and sound environmental practices for sustainable agriculture  Private sector development programs include support for business associations and microfinance services  Programs for managing natural resources and protecting the global environment focus on conserving biological diversity; improving the management of land, water, and forests; encouraging clean and efficient energy production and use; and reducing the threat of global climate change  Programs supporting the objective of "governing justly and democratically" include support for promoting rule of law and human rights, good governance, political competition, and civil society  Programs with the objective of "investing in people" include support for basic, secondary, and higher education; improving government ability to provide social services; water and sanitation; and health care  By far the largest portion of bilateral development assistance is devoted to global health  These programs include treatment of HIV/AIDS and other infectious diseases, maternal and child health, family planning and reproductive health programs, and strengthening the government health systems that provide care  Most funding for HIV/AIDS, malaria, and tuberculosis is directed through the State Department's Office of the Global AIDS Coordinator to other agencies, including USAID and the Centers for Disease Control and Prevention  The latter agency and the National Institutes for Health also conduct programs funded by Labor-Health and Human Services (HHS) appropriations  In addition to providing emergency food aid in crisis situations, a portion (about 25% in FY2017) of the Food for Peace (FFP) Title II international food aid program (also referred to as P L  480, named after the 1954 law that authorized it)—funded under the Agriculture appropriations—provides nonemergency food commodities to private voluntary organizations (PVOs) or multilateral organizations, such as the World Food Program, for development-oriented purposes  FFP funds are also used to support the "farmer-to-farmer" program, which sends hundreds of U S  volunteers as technical advisors to train farm and food-related groups throughout the world  In addition, the McGovern-Dole International Food for Education and Child Nutrition Program, a program begun in 2002, provides commodities, technical assistance, and financing for school feeding and child nutrition programs  A share of U S  foreign assistance—4% in FY2017 ($2 1 billion)—is combined with contributions from other donor nations to finance multilateral development projects  Multilateral aid is funded largely through the International Organizations and Programs (IO&P) account and individual accounts for each of the Multilateral Development Banks (MDBs) and global environmental funds  For FY2017, the U S  government obligated $2 1 billion for development activities managed by international organizations and financial institutions, including contributions to the United Nations Children's Fund (UNICEF); the United Nations Development Program (UNDP); and MDBs, such as the World Bank  The U S  share of donor contributions to each of the MDB concessional (subsidized) and nonconcessional (market rate) loan windows varies widely  For the largest MDB, the World Bank, the United States has contributed about 20 5% to the nonconcessional lending window (the International Development Associations [IDA]) and about 17 3% to the nonconcessional lending window (the International Bank for Reconstruction and Development [IBRD])  In determining the U S  share of donor contributions to the various multilateral institutions, the U S  faces the challenge of finding the right balance between the benefits of burden sharing and the constraints of sharing control when determining multilateral priorities  For FY2017, obligations for humanitarian assistance programs amounted to $8 9 billion, 18% of total assistance  Unlike development assistance programs, which are often viewed as long-term efforts that may have the effect of preventing future crises from emerging, humanitarian assistance programs are devoted largely to the immediate alleviation of human suffering in emergencies, both natural and man-made, as well as problems resulting from conflict associated with failed or failing states  The largest portion of humanitarian assistance is managed through the International Disaster Assistance (IDA) account by USAID, which provides relief and rehabilitation efforts to victims of man-made and natural disasters, such as the economic and social dislocations caused by the 2014/2015 Ebola epidemic, and the ongoing crises in Syria, South Sudan, Yemen, and Venezuela  A portion of IDA is used for food assistance through the Emergency Food Security Program  Additional humanitarian assistance goes to programs administered by the State Department and funded under the Migration and Refugee Assistance (MRA) and the Emergency Refugee and Migration Assistance (ERMA) accounts, aimed at addressing the needs of refugees and internally displaced persons  These accounts support a number of refugee relief organizations, including the U N  High Commission for Refugees and the International Committee of the Red Cross  The Department of Defense provides disaster relief under the Overseas Humanitarian, Disaster, and Civic Assistance (OHDACA) account of the DOD appropriations  (For further information on humanitarian programs, see CRS In Focus IF10568, Overview of the Global Humanitarian and Displacement Crisis , by Rhoda Margesson ) The bulk of FFP Title II Agriculture appropriations—$1 3 billion in obligations, about 75% of total Food for Peace Act in FY2017—are used by USAID, mostly to purchase U S  agricultural commodities, for emergency needs, supplementing both refugee and disaster programs  (For more information on food aid programs, see CRS Report R45422, U S  International Food Assistance: An Overview , by Alyssa R  Casey ) A few accounts promote special U S  political and strategic interests  Programs funded through the Economic Support Fund (ESF) account generally aim to promote political and economic stability, often through activities indistinguishable from those provided under regular development programs  However, ESF is also used for direct budget support to foreign governments and to support sovereign loan guarantees  For FY2017, USAID and the State Department obligated $4 8 billion, nearly 10% of total assistance, through this account  For many years, following the 1979 Camp David accords, most ESF funds went to support the Middle East Peace Process—in FY1997, for example, 87% of ESF went to Israel, Egypt, the West Bank and Jordan  Those proportions have declined significantly in recent decades  In FY2007, 22% of ESF funding went to these countries and, in FY2017, 25%  Since the September 2001 terrorist attacks, ESF has largely supported countries of importance in the U S  global counterterrorism strategy  In FY2007, for example, activities is Afghanistan and Pakistan received 17% of ESF funding (25% in FY2017)  Over the years, other accounts have been established to meet specific political or security interests and then were dissolved once the need was met  One example is the Assistance to Eastern Europe and Central Asia (AEECA) account, established in FY2009 to combine two aid programs that met particular strategic political interests arising from the demise of the Soviet empire  The SEED (Support for East European Democracy Act of 1989) and the FREEDOM Support Act (Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act of 1992) programs were designed to help Central Europe and the newly independent states of the former Soviet Union (FSA) achieve democratic systems and free market economies  With funding decreasing as countries in the region graduated from U S  assistance, Congress discontinued use of the AEECA account in the FY2013 appropriations  Increasing requests and appropriations for countries in the former Soviet Union threatened by Russia, however, led to its re-emergence in the FY2017 and succeeding SFOPS appropriations  In the recent past, several DOD-funded nontraditional aid programs directed at Afghanistan also supported development efforts  The Afghanistan Infrastructure Fund and the Business Task Force wound down as the U S  military presence in that country declined; the Commander's Emergency Response Program (CERP) still exists  The latter two programs had earlier iterations as well in Iraq  Several U S  government agencies support programs to address global concerns that are considered threats to U S  security and well-being, such as terrorism, illicit narcotics, crime, and weapons proliferation  In the past two decades, policymakers have given greater weight to these programs  In FY2017, they amounted to $2 9 billion, 6% of total assistance Since the mid-1990s, three U S  agencies—State, DOD, and Energy—have provided funding, technical assistance, and equipment to counter the proliferation of chemical, biological, radiological, and nuclear weapons  Originally aimed at the former Soviet Union under the rubric cooperative threat reduction (CTR), these programs seek to ensure that these weapons are secured and their spread to rogue nations or terrorist groups prevented  In addition to nonproliferation efforts, the Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR) account, managed by the State Department, encompasses civilian anti-terrorism efforts such as detecting and dismantling terrorist financial networks, establishing watch-list systems at border controls, and building developing country anti-terrorism capacities  NADR also funds humanitarian demining programs  The State Department is the main implementer of counternarcotics programs  The State-managed International Narcotics Control and Law Enforcement (INCLE) account supports counternarcotics activities, most notably in Afghanistan, Pakistan, Peru, and Colombia  It also helps develop the judicial systems—assisting judges, lawyers, and legal institutions—of many developing countries, especially in Afghanistan  DOD and USAID also support counternarcotics activities, the former largely by providing training and equipment, the latter by offering alternative crop and employment programs  The United States provides military assistance to U S  friends and allies to help them acquire U S  military equipment and training  At $14 5 billion, military assistance accounted for about 29% of total U S  foreign aid in FY2017  The Department of State administers three programs, with corresponding appropriations accounts that are then implemented by DOD  Foreign Military Financing (FMF) is a grant program that enables governments to receive equipment and associated training from the U S  government or to access equipment directly through U S  commercial channels  Most FMF grants support the security needs of Israel, Egypt, Jordan, Pakistan, and Iraq  The International Military Education and Training program (IMET) offers military training on a grant basis to foreign military officers and personnel  Peacekeeping funds (PKO) are used to support voluntary non-U N  peacekeeping operations as well as training for an African crisis response force  Since 2002, DOD appropriations have supported FMF-like programs, training and equipping security forces in Afghanistan and Iraq  These programs and the accounts that fund them are called the Afghanistan Security Forces Fund (ASFF) and, through FY2012, the Iraq Security Forces Fund (ISFF)  Beginning in FY2015, similar support was provided Iraq under the Iraq Train and Equip Fund  The DOD-funded programs in Afghanistan and Iraq accounted for more than half of total military assistance in FY2017  How and in what form assistance reaches an aid recipient can vary widely, depending on the type of aid program, the objective of the assistance, and the agency responsible for providing the aid  Federal agencies may implement foreign assistance programs using funds appropriated directly to them or funds transferred to them from another agency  For example, significant funding appropriated through State Department and Department of Agriculture accounts is used for programs implemented by USAID (see Figure 2 )  The funding data in this section reflect the agency that implemented the aid, not necessarily the agency to which funds were originally appropriated  For 50 years, USAID has implemented the bulk of the U S  bilateral economic development and humanitarian assistance  It directly implements the Development Assistance, International Disaster Assistance, and Transition Initiatives accounts, as well as a USAID-designated portion of the Global Health account  Jointly with the State Department, USAID co-manages ESF, AEECA, and Democracy Fund programs, which frequently support development activities as a means of promoting U S  political and strategic goals  Based on historical averages, according to USAID, the agency implements more than 90% of ESF, 70% of AEECA, 40% of the Democracy Fund, and about 60% of the Global HIV/AIDS funding appropriated to the State Department  USAID also implements all Food for Peace Act Title II food assistance funded through agriculture appropriations  USAID obligated an estimated $20 55 billion to implement foreign assistance programs and activities in FY2017  The agency's staff in 2018 totaled 9,747 , of which about 67% were working overseas, overseeing the implementation of hundreds of projects undertaken by thousands of private sector contractors, consultants, and nongovernmental organizations  DOD implements all SFOPS-funded military assistance programs—FMF, IMET, PKO, and PCCF—in conjunction with the policy guidance of the Department of State  The Defense Security Cooperation Agency is the primary DOD body responsible for these programs  DOD also carries out an array of state-building activities, funded through defense appropriations legislation, which are usually in the context of training exercises and military operations  These sorts of activities, once the exclusive jurisdiction of civilian aid agencies, include development assistance to Iraq and Afghanistan through the Commander's Emergency Response Program (CERP), the Iraq Relief and Reconstruction Fund, and the Afghanistan Infrastructure Fund, and elsewhere through the Defense Health Program, counterdrug activities, and humanitarian and disaster relief  Training and equipping of Iraqi and Afghan police and military, though similar in nature to some traditional security assistance programs, has been funded and implemented primarily through DOD appropriations, though implementing the Iraq police training program was a State Department responsibility from 2012 until it was phased out in 2013  In FY2017, the Department of Defense implemented an estimated $14 50 billion in foreign assistance programs  The Department of State manages and co-manages a wide range of assistance programs  It is the lead U S  civilian agency on security and refugee related assistance, and has sole responsibility for implementing the International Narcotics and Law Enforcement (INCLE) and Nonproliferation, Antiterror, and Demining (NADR) accounts, the two Migration and Refugee accounts (MRA and ERMA), and the International Organizations and Programs (IO&P) account  State is also home to the Office of the Global AIDS Coordinator (OGAC), which manages the State Department's portion of Global Health funding in support of HIV/AIDS programs, though many of these funds are transferred to and implemented by USAID, the National Institutes of Health, and the Centers for Disease Control and Prevention  In conjunction with USAID, the State Department manages the Economic Support Fund, AEECA assistance to the former communist states, and Democracy Fund accounts  For these accounts, the State Department largely sets the overall policy and direction of funds, while USAID implements the preponderance of programs  In addition, the State Department, through its Bureau of Political-Military Affairs, has policy authority over the Foreign Military Financing (FMF), International Military Education and Training (IMET), and Peacekeeping Operations (PKO) accounts, and, while it was active, the Pakistan Counterinsurgency Capability Fund (PCCF)  These programs are implemented by the Department of Defense  Police training programs have traditionally been the responsibility of the International Narcotics and Law Enforcement (INL) Office in the State Department, though programs in Iraq and Afghanistan were implemented and paid for by the Department of Defense for several years  State is also the organizational home to the Office of U S  Foreign Assistance Resources (formerly the Office of the Director of Foreign Assistance), known as "F," which was created in 2006 to coordinate U S  foreign assistance programs  The office establishes standard program structures and definitions, as well as performance indicators, and collects and reports data on State Department and USAID aid programs  The State Department implemented about $7 66 billion in foreign assistance funding in FY2017, though it has policy authority over a much broader range of assistance funds  The U S  Department of Health and Human Services implements a range of global health programs through its various component institutions  As an implementing partner in the President's Emergency Plan for Aids Relief (PEPFAR), a large portion of HHS foreign assistance activity is related to HIV prevention and treatment, including technical support and preventing mother to child transmission of HIV/AIDS  The Centers for Disease Control and Prevention participates in a broad range of global disease control activity, including rapid outbreak response, global research and surveillance, information technology assistance, and field epidemiology and laboratory training  The National Institutes of Health (NIH) also conduct international health research that is reported as assistance  In FY2017, HHS institutions implemented $2 66 billion in foreign assistance activities  The Department of the Treasury's Under Secretary for International Affairs administers U S  contributions to and participation in the World Bank and other multilateral development institutions  In this case, the agency manages the distribution of funds to the institutions, but does not implement programs  Presidentially appointed U S  executive directors at each of the banks represent the United States' point of view  Treasury also deals with foreign debt reduction issues and programs, including U S  participation in the Highly Indebted Poor Countries (HIPC) initiative, and manages a technical assistance program offering temporary financial advisors to countries implementing major economic reforms and combating terrorist finance activity  For FY2017, the Department of the Treasury managed foreign assistance valued at about $1 85 billion  Created in February 2004, the Millennium Challenge Corporation (MCC) seeks to concentrate significantly higher amounts of U S  resources in a few low- and lower-middle-income countries that have demonstrated a strong commitment to political, economic, and social reforms relative to other developing countries  A significant feature of the MCC effort is that recipient countries formulate, propose, and implement mutually agreed multi-year U S -funded project plans known as compacts  Compacts in the 27 recipient countries selected to date have emphasized construction of infrastructure  The MCC is a U S  government corporation, headed by a chief executive officer who reports to a board of directors chaired by the Secretary of State  The Corporation maintains a relatively small staff of about 300  The MCC obligated about $1 01 billion in FY2017  A number of other government agencies play a role in implementing foreign aid programs  The Peace Corps, an autonomous agency with FY2017 obligations of $445 million, supports about 7,300 volunteers in 65 countries  Peace Corps volunteers work in a wide range of educational, health, and community development projects  The Trade and Development Agency (TDA), which obligated $58 million in FY2017, finances trade missions and feasibility studies for private sector projects likely to generate U S  exports  The Overseas Private Investment Corporation (OPIC) provides political risk insurance to U S  companies investing in developing countries and finances projects through loans and guarantees  Its insurance activities have been self-sustaining, but credit reform rules require a relatively small appropriation to back up U S  guarantees and for administrative expenses  The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), signed into law in October 2018 ( P L  115-254 ), authorized consolidation of OPIC and USAID's Development Credit Authority into a new U S  International Development Finance Corporation (IDFC), which is expected to become operational in fall 2019  For FY2017, as for most prior years, OPIC receipts exceeded appropriations, resulting in a net gain to the Treasury  The Inter-American Foundation and the African Development Foundation, obligating $25


Report 2: 8 million and $20 2 million, respectively, in FY2017, finance small-scale enterprise and grassroots self-help activities aimed at assisting poor people  Most U S  assistance is now provided as a grant (gift) rather than a loan, so as not to increase the heavy debt burden carried by many developing countries  However, the forms a grant may take are diverse  The most common type of U S  development aid is project-based assistance (77% in FY2017), in which aid is channeled through an implementing partner to complete a project  Aid is also provided in the form of core contribution to international organizations such as the United Nations, technical assistance, and direct budget support (cash transfer) to governments  A portion of aid money is also spent on administrative costs ( Figure 3 )  Within these categories, aid may take many forms, as described below  Although it is the exception rather than the rule, some countries receive aid in the form of a cash grant to the government  Dollars provided in this way support a government's balance-of-payments situation, enabling it to purchase more U S  goods, service its debt, or devote more domestic revenues to developmental or other purposes  Cash transfers have been made as a reward to countries that have supported the United States' counterterrorism operations (Turkey and Jordan in FY2004), to provide political and strategic support (both Egypt and Israel annually for decades after the 1979 Camp David Peace Accord), and in exchange for undertaking difficult political and economic reforms  Assistance may be provided in the form of food commodities, weapons systems, or equipment such as generators or computers  Food aid may be provided directly to meet humanitarian needs or to encourage attendance at a maternal/child health care program  Weapons supplied under the military assistance program may include training in their use  Equipment and commodities provided under development assistance are usually integrated with other forms of aid to meet objectives in a particular social or economic sector  For instance, textbooks have been provided in both Afghanistan and Iraq as part of a broader effort to reform the educational sector and train teachers  Computers may be offered in conjunction with training and expertise to fledgling microcredit institutions  Since PEPFAR was first authorized in 2004, antiretroviral drugs (ARVs) provided to individuals living with HIV/AIDS have been a significant component of commodity-based assistance  Although once a significant portion of U S  assistance programs, construction of economic infrastructure—roads, irrigation systems, electric power facilities, etc —was rarely provided after the 1970s  Because of the substantial expense of these projects, they were to be found only in large assistance programs, such as that for Egypt in the 1980s and 1990s, where the United States constructed major urban water and sanitation systems  The aid programs in Iraq and Afghanistan supported the building of schools, health clinics, roads, power plants, and irrigation systems  In Iraq alone, more than $10 billion went to economic infrastructure  Economic infrastructure is now also supported by U S  assistance in a wider range of developing countries through the Millennium Challenge Corporation  In this case, recipient countries design their own assistance programs, most of which, to date, include an infrastructure component  Transfer of knowledge and skills is a significant part of most assistance programs  The International Military Education and Training Program (IMET) provides training to officers of the military forces of allied and friendly nations  Tens of thousands of citizens of aid recipient countries receive short-term technical training or longer-term degree training annually under USAID programs  More than one-quarter of Peace Corps volunteers are English, math, and science teachers  Other aid programs provide law enforcement personnel with anti-narcotics or anti-terrorism training  Many assistance programs provide expert advice to government and private sector organizations  The Department of the Treasury, USAID, and U S -funded multilateral banks all place specialists in host government ministries to make recommendations on policy reforms in a wide variety of sectors  USAID has often placed experts in private sector business and civic organizations to help strengthen them in their formative years or while indigenous staff are being trained  While most of these experts are U S  nationals, in Russia, USAID funded the development of locally staffed political and economic think tanks to offer policy options to that government  USAID, the Inter-American Foundation, and the African Development Foundation often provide aid in the form of small grants directly to local organizations to foster economic and social development and to encourage civic engagement in their communities  Grants are sometimes provided to microcredit organizations, such village-level women's savings groups, which in turn provide loans to microentrepreneurs  Small grants may also address specific community needs  Recent IAF grants, for example, have supported organizations that help resettle Salvadoran migrants deported from the United States and youth programs in Central America aimed at gang prevention  Under the Foreign Assistance Act of 1961, the President may determine the terms and conditions under which most forms of assistance are provided  In general, the financial condition of a country—its ability to meet repayment obligations—has been an important criterion of the decision to provide a loan or grant  Some programs, such as humanitarian and disaster relief programs, were designed from the beginning to be entirely grant activities  During the past two decades, nearly all foreign aid—military as well as economic—has been provided in grant form  While loans represented 32% of total military and economic assistance between 1962 and 1988, this figure declined substantially beginning in the mid-1980s, until by FY2001, loans represented less than 1% of total aid appropriations  The de-emphasis on loan programs came largely in response to the debt problems of developing countries  Both Congress and the executive branch have generally supported the view that foreign aid should not add to the already existing debt burden carried by these countries  In the FY2019 budget request, the Trump Administration encouraged the use of loans over grants when providing military assistance (Foreign Military Financing), but Congress did not include language in support of that proposal in the enacted FY2019 appropriation ( P L  116-6 )  Although a small proportion of total current aid, there are significant USAID-managed programs that guarantee loans, meaning the U S  government agrees to pay a portion of the amount owed in the case of a default on a loan  A Development Credit Authority (DCA) loan guarantee, in which risk is shared with a private sector bank, can be used to increase access to finance in support of any development sector  The DCA is to be transferred from USAID in 2019 to the new IDFC, established by the BUILD Act of 2018 ( P L  115-254 ), to enhance U S  development finance capacity  Under the Israeli Loan Guarantee Program, the United States has guaranteed repayment of loans made by commercial sources to support the costs of immigrants settling in Israel from other countries and may issue guarantees to support economic recovery  USAID has also provided loan guarantees in recent years to improve the terms or amounts of financing from international capital markets for Ukraine and Jordan  In these cases, assistance funds representing a fraction of the guarantee amount are provided to cover possible default  Between 1946 and 2016, the United States loaned $112 7 billion in foreign economic and military aid to foreign governments, and while most foreign aid is now provided through grants, $9 18 billion in loans to foreign governments remained outstanding at the end of FY2016  For nearly three decades, Section 620q of the Foreign Assistance Act (the Brooke amendment) has prohibited new assistance to the government of any country that falls more than one year past due in servicing its debt obligations to the United States, though the President may waive application of this prohibition if he determines it is in the national interest  The United States has also forgiven debts owed by foreign governments and encouraged, with mixed success, other foreign aid donors and international financial institutions to do likewise  In some cases, the decision to forgive foreign aid debts has been based largely on economic grounds as another means to support development efforts by heavily indebted, but reform-minded, countries  The United States has been one of the strongest supporters of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI)  These initiatives, which began in the late 1990s, include participation of the World Bank, the International Monetary Fund, and other international financial institutions in a comprehensive debt workout framework for the world's poorest and most debt-strapped nations  The largest and most hotly debated debt forgiveness actions have been implemented for much broader foreign policy reasons with a more strategic purpose  Poland, during its transition from a communist system and centrally planned economy (1990—$2 46 billion); Egypt, for making peace with Israel and helping maintain the Arab coalition during the Persian Gulf War (1990—$7 billion); and Jordan, after signing a peace accord with Israel (1994—$700 million), are examples  Similarly, the United States forgave about $4 1 billion in outstanding Saddam Hussein-era Iraqi debt in November 2004 and helped negotiate an 80% reduction in Iraq's debt to creditor nations later that month  Most development and humanitarian assistance activities are not directly implemented by U S  government personnel but by private sector entities, such as individual personal service contractors, consulting firms, universities, private voluntary organizations (PVOs), or public international organizations (PIOs)  Generally speaking, U S  government foreign service and civil servants determine the direction and priorities of the aid program, allocate funds while keeping within legislative requirements, ensure that appropriate projects are in place to meet aid objectives, select implementers, and monitor the implementation of those projects for effectiveness and financial accountability  Both USAID and the State Department have promoted the use of public-private partnerships, in which private entities such as corporations and foundations are contributing partners, not paid implementers, in situations where business interests and development objectives coincide  In FY2017, the United States provided some form of bilateral foreign assistance to more than 150 countries  Aid is concentrated heavily in certain countries, reflecting the priorities and interests of United States foreign policy at the time  Table 2 identifies the top 15 recipients of U S  foreign assistance for FY1997, FY2007 and FY2017  As shown in the table above, there are both similarities and sharp differences among country aid recipients for the three periods  The most consistent thread connecting the top aid recipients over the past two decades has been continuing U S  strategic interests in the Middle East, with large programs maintained for Israel and Egypt and, for Iraq, following the 2003 invasion  Two key countries in the U S  counterterrorism strategy, Afghanistan and Pakistan, made their first appearances on the list in FY2002 and continued to be among the top recipients in FY2017  In FY1997, one sub-Saharan African country appeared among leading aid recipients; in FY2017, 7 of the 15 are sub-Saharan African  Many are focus countries under the PEPFAR initiative to address the HIV/AIDS epidemic; South Sudan receives support as a newly independent country with multiple humanitarian and development needs  In FY1997, three countries from Eastern Europe and the former Soviet Union made the list, as many from the region had for much of the 1990s, representing the effort to transform the former communist nations to democratic societies and market-oriented economies  None of those countries appear in the FY2017 list  In FY1997, four Latin American countries make the list; no countries from the region appear in FY2017  On a regional basis, the Middle East/North Africa (MENA) region has received the largest share of U S  foreign assistance for many decades  Although economic aid to the region's top two recipients, Israel and Egypt, began to decline in the late 1990s, the dominant share of bilateral U S  assistance consumed by the MENA region was maintained in FY2005 by the war in Iraq  Despite the continued importance of the region, its share slipped substantially by FY2017 as the effort to train and equip Iraqi forces diminished  Since September 11, 2001, South and Central Asia has emerged as a significant target of U S  assistance, rising from a roughly 3% share 20 years ago to 16% in FY2007 and 15% in FY2017, largely because of aid to Afghanistan and Pakistan  Similarly, the share represented by African nations has increased from 10% and 19%, respectively, in FY1997 and FY2007, to 25% in FY2017, largely due to the HIV/AIDS initiative that funnels resources mostly to African countries and to a range of other efforts to address the region's development challenges  Meanwhile, the share of aid to Europe/Eurasia, which greatly surpassed that of Africa in FY1997, has declined significantly in the past decade, to about 4% in FY2017, with the graduation of many East European aid recipients and the termination of programs in Russia  The Ukraine was responsible for about one third of aid to that region in FY2017  East Asia/Pacific has remained at a low level during the past two decades, while Latin America's share has risen and fallen based on U S  interest in Colombia and a few Central American countries as aid has shifted to regions of more pressing strategic interest (see Figure 4 )  There are several methods commonly used for measuring the amount of federal spending on foreign assistance  Amounts can be expressed in terms of budget authority (funds appropriated by Congress), obligations (amounts contractually committed), outlays or disbursements (money actually spent)  Assistance levels are also sometimes measured as a percentage of the total federal budget, as a percentage of total discretionary budget authority (excluding mandatory and entitlement programs), or as a percentage of the gross domestic product (GDP) (for an indication of the national wealth allocated to foreign aid)  By nearly all of these measures, foreign aid resources fell gradually on average over several decades since the historical high levels of the late 1940s and early 1950s ( Appendix A )  This downward trend was sporadically interrupted, largely due to major foreign policy initiatives such as the Alliance for Progress for Latin America beginning in 1961, the infusion of funds to implement the Camp David Middle East Peace Accords in 1979, and an increase in military assistance to Egypt, Turkey, Greece and others in the mid-1980s  The lowest point in U S  foreign aid spending since World War II came in 1997, when foreign assistance obligations fell to just above $20 billion (in 2017 dollar terms)  ( Figure 5 ) While foreign aid consistently represented just over 1% of U S  annual gross domestic product in the decade following World War II, it fell gradually to between 0 2% and 0 4% for most years in the past three decades  Foreign assistance spending has comprised, on average, around 3% of discretionary budget authority and just over 1% of total budget authority each year since 1977, though the percentages have sometimes varied considerably from year to year  Foreign aid dropped from 5% of discretionary budget authority in 1979 to 2 4% in 2001, before rising sharply in conjunction with U S  activities in Afghanistan and Iraq starting in 2003  As a portion of total budget authority, foreign assistance reached 2 5% in 1979, but has hovered below 1 5% since 1987  In 2017, foreign assistance was estimated to account for 4 1% of discretionary budget authority and 1 2% of total budget authority ( Figure 6 ; Appendix A )  As previously discussed, since the September 11, 2001, terrorist attacks, foreign aid funding has been closely tied to U S  counterterrorism strategy, particularly in Iraq, Afghanistan, and Pakistan  Bush and Obama Administration global health initiatives, the creation of the Millennium Challenge Corporation, and growth in counter-narcotics activities have driven funding increases as well  The Budget Control Act of 2011, and the drawdown of U S  military forces in Iraq, and to some degree Afghanistan, led to a notable dip in aid obligations in FY2013, but aid levels have risen again with efforts to address the crisis in Syria, counter-ISIL activities, and humanitarian aid  The use of the Overseas Contingency Operations (OCO, discussed below) designation has enabled this growth despite the BCA limitations  Figure 7 shows how trends in foreign aid funding in recent decades can be attributed to specific foreign policy events and presidential initiatives  The Obama Administration's FY2012 international affairs budget proposed that the overseas contingency operations (OCO) designation, which had been applied since 2009 to war-related Defense appropriations, including to DOD assistance programs such as ISFF, ASFF and CERP, be extended to include "extraordinary, but temporary, costs of the Department of State and USAID in the front line states of Iraq, Afghanistan and Pakistan " Congress not only adopted the OCO designation in the FY2012 SFOPS appropriations legislation, but expanded it to include funding for additional accounts and countries  In every fiscal year since, a portion of certain foreign assistance accounts—primarily ESF, FMF, IDA, MRA and INCLE—has been appropriated with the OCO designation  The OCO designation is significant because the Budget Control Act of 2011 (BCA), which set annual caps on discretionary funding from FY2013 through FY2021, specified that funds designated as OCO do not count toward the discretionary spending limits established by the act  OCO designation makes it possible to prevent war-related funding from crowding out core international affairs activities within the budget allocation  The OCO approach is reminiscent of the use of supplemental international affairs appropriations for the first decade after the September 11, 2001, terrorist attacks  Congress appropriated significant emergency supplemental funds for foreign operations and Defense assistance programs every year from FY2002 through FY2010 for activities in Iraq, Afghanistan, and elsewhere, which were not counted toward subcommittee budget allocations  Since the OCO designation was first applied to foreign operations in FY2012, supplemental appropriations for foreign aid have declined significantly  In the FY2019 and FY2020 budget requests, the Trump Administration did not request OCO funding within the international affairs budget, but did request OCO funding for the Department of Defense, including for DOD aid accounts  Congress used the OCO designation for both DOD and State/USAID accounts in the FY2019 appropriation, P L  116-6 , but a smaller portion of aid was designated as OCO compared to FY2018  It remains to be seen whether this is the beginning of a downward trend in OCO use for foreign aid  Congress historically sought to enhance the domestic benefits of foreign aid by requiring that most U S  foreign aid be used to procure U S  goods and services  The conditioning of aid on the procurement of goods and services from the donor-country is sometimes called "tied aid," and while quite common for much of the history of modern foreign assistance, has become increasingly disfavored in the international community  Studies have shown that tying aid increases the costs of goods and services by 15%-30% on average, and up to 40% for food aid, reducing the overall effectiveness of aid flows  The United States joined other donor nations in committing to reduce tied aid in the Paris Declaration on Aid Effectiveness in March 2005, and the portion of tied aid from all donors fell from 70% of total bilateral development assistance in 1985 to an average of 12% in 2016  However, an estimated 32% of U S  bilateral development assistance was tied in 2016, the highest percentage among major donors, perhaps reflecting the perception of policymakers that maintaining public and political support for foreign aid programs requires ensuring direct economic benefit to the United States  About 67% of U S  foreign assistance funds in FY2017 were obligated to U S -based entities  A considerable amount of U S  foreign assistance funds remain in the United States, through domestic procurement or the use of U S  implementers, but the portion differs by program and is hard to identify with any accuracy  For some types of aid, the legislative requirements or program design make it relatively easy to determine how much aid is spent on U S  goods or services, while for others, this is more difficult to determine  USAID  Most USAID funding (Development Assistance, Global Health, Economic Support Fund) is implemented through contracts, grants, and cooperative agreements with implementing partners  While many implementing partner organizations are based in the United States and employ U S  citizens, there is little information available about what portion of the funds used for program implementation are used for goods and services provided by American firms  Procurement reform efforts initiated by USAID in 2010 have aimed to increase procurement and implementation by host country entities as a means to enhance country ownership, build local capacity, and improve sustainability of aid programs  Food assistance commodities, until recently, were purchased wholly in the United States, and generally required by law to be shipped by U S  carriers, suggesting that the vast majority of food aid expenditures are made in the United States  Starting in FY2009, a small portion of food assistance was authorized to be purchased locally and regionally to meet urgent food needs more quickly  Successive Administrations and several Members of Congress have proposed greater flexibility in the food aid program, potentially increasing aid efficiency but reducing the portion of funds flowing to U S  farmers and shippers  To date, these proposals have been largely unsuccessful  Foreign Military Financing , with the exception of certain assistance allocated to Israel, is used exclusively to procure U S  military equipment and training  Millennium Challenge Corporation  The MCC bases its procurement regulations on those established by the World Bank, which calls for an open and competitive process, with no preference given to donor country suppliers  Between FY2011 and FY2017, the MCC awarded roughly 15% of the value of compact contracts to U S  firms  Multilateral development aid  Multilateral aid funds are mixed with funds from other nations and the bulk of the program is financed with borrowed funds rather than direct government contributions  Information on the U S  share of procurement financed by MDBs is unavailable  In addition to the direct benefits derived from aid dollars used for American goods and services, many argue that the foreign aid program brings significant indirect financial benefits to the United States  For example, analysts maintain that provision of military equipment through the military assistance program and food commodities through the Food for Peace program helps to develop future, strictly commercial, markets for those products  More broadly, as countries develop economically, they are in a position to purchase more goods from abroad and the United States benefits as a trade partner  Since an increasing majority of global consumers are outside of the United States, some business leaders assert that establishing strong economic and trade ties in the developing world, using foreign assistance as a tool, is key to U S  economic and job growth  Since World War II, with the exception of several years between 1989 and 2001, during which Japan ranked first among aid donors, the United States has led the developed countries in net disbursements of economic aid, or "Official Development Assistance (ODA)" as defined by the Organization for Economic Cooperation and Development's (OECD) Development Assistance Committee (DAC)  In 2017, the most recent year for which data are available, the United States disbursed $34 12 billion in ODA, or about 24% of the $144 71 billion in total net ODA disbursements by DAC donors that year  Germany ranked second at $24 16 billion, the United Kingdom followed at $18 59 billion, Japan ranked fourth at $11 85 billion, and France rounded out the top donors with $11 03 billion in 2017 (see Figure 8 )  While the top five donors have not varied for more than a decade, there have been shifts lower down the ranking  For example, Turkey has become a much more prominent ODA donor in recent years (ranked 6 th in 2017, with $9 08 billion in ODA, compared to 21 st in 2006), reflecting large amounts of humanitarian aid to assist Syrian refugees  Even as it leads in dollar amounts of aid flows to developing countries, the United States often ranks low when aid is calculated as a percentage of gross national income (GNI)  This calculation is often cited in the context of international donor forums, as a level of 0 7% GNI was established as a target for donors in the 2000 U N  Millennium Development Goals  In 2017, the United States ranked at the bottom among major donors at 0 18% of GNI, slightly lower than Portugal and Spain (0 18% and 0 19%, respectively)  The United Arab Emirates, which has significantly increased its reported ODA in recent years, ranked first among top donors at 1 03% of GNI, followed by Sweden at 1 02% and Luxembourg at 1 00%  There has also been an increase in ODA from non-DAC countries  Between 2000 and 2014, China spent $81 1 billion in ODA, more than tripling its ODA commitments during this period  While reported Chinese ODA is still relatively small compared to that of major donor countries, policymakers are paying increasing attention to growing Chinese investments in developing countries that do not meet the ODA definition  China has touted its "Belt and Road" initiative as an effort to boost development and connectivity across as many as 125 countries to create "strategic propellers" for its own development  However, China has provided little official aggregate information on the initiative, including on the number of projects, countries involved, the terms of financing, and metrics for success  Numerous congressional authorizing committees and appropriations subcommittees maintain responsibility for U S  foreign assistance  Several committees have responsibility for authorizing legislation establishing programs and policy and for conducting oversight of foreign aid programs  In the Senate, the Committee on Foreign Relations, and in the House, the Committee on Foreign Affairs, have primary jurisdiction over bilateral development assistance, political/strategic and other economic security assistance, military assistance, and international organizations  Food aid, primarily the responsibility of the Agriculture Committees in both bodies, is periodically shared with the Foreign Affairs Committee in the House  U S  contributions to multilateral development banks are within the jurisdiction of the Senate Foreign Relations Committee and the House Financial Services Committee  The large nontraditional aid programs funded by DOD, such as Nunn-Lugar Cooperative Threat Reduction programs and the military aid programs in Afghanistan and Iraq, come under the jurisdiction of the Armed Services Committees  Some global health assistance, such as research and other activities done by the Centers for Disease Control and Prevention, may fall under the jurisdiction of the House Energy and Commerce and Senate HELP committees  Traditionally, most foreign aid appropriations fall under the jurisdiction of the SFOPS Subcommittees, with food assistance appropriated by the Agriculture Subcommittees  As noted earlier, however, certain military, global health, and other activities that have been reported as foreign aid have been appropriated through other subcommittees in recent years, including the Defense and the Labor, Health and Human Services, Education and Related Agencies subcommittees  (For current information on SFOPS Appropriations legislation, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by Susan B  Epstein, Marian L  Lawson, and Cory R  Gill ) The most significant permanent foreign aid authorization laws are the Foreign Assistance Act of 1961, covering most bilateral economic and security assistance programs (P L  87-195; 22 U S C  2151); the Arms Export Control Act (1976), authorizing military sales and financing (P L  90-629; 22 U S C  2751); the Agricultural Trade Development and Assistance Act of 1954 (P L  480), covering food aid (P L  83-480; 7 U S C  1691); and the Bretton Woods Agreement Act (1945), authorizing U S  participation in multilateral development banks (P L  79-171; 22 U S C  286)  In the past, Congress usually scheduled debates every two years on omnibus foreign aid legislation that amended these permanent authorization measures  Congress has not enacted into law a comprehensive foreign assistance authorization measure since 1985, although foreign aid authorizing bills have passed the House or Senate, or both, on numerous occasions  Foreign aid bills have frequently stalled at some point in the debate because of controversial issues, a tight legislative calendar, or executive-legislative foreign policy disputes  In contrast, DOD assistance is authorized in annual National Defense Authorization legislation  In lieu of approving a broad State Department/USAID authorization bill, Congress has on occasion authorized major foreign assistance initiatives for specific regions, countries, or aid sectors in stand-alone legislation or within an appropriation bill  Among these are the SEED Act of 1989 ( P L  101-179 ; 22 U S C  5401); the FREEDOM Support Act of 1992 ( P L  102-511 ; 22 U S C  5801); the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( P L  108-25 ; 22 U S C  7601); the Tom Lantos and Henry J  Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008 ( P L  110-293 ); the Millennium Challenge Act of 2003 (Division D, Title VI of P L  108-199 ); the Enhanced Partnership With Pakistan Act of 2009 ( P L  111-73 ; 22 U S C  8401); the Global Food Security Act of 2016 ( P L  114-195 ; 22 U S C  9306), and the BUILD Act ( P L  115-254 )  In the absence of regular enactment of foreign aid authorization bills, appropriation measures considered annually within the SFOPS spending bill have assumed greater significance for Congress in influencing U S  foreign aid policy  Not only do appropriations bills set spending levels each year for nearly every foreign assistance account, SFOPS appropriations also incorporate new policy initiatives that would otherwise be debated and enacted as part of authorizing legislation  Appendix A  Data Table Appendix B  Common Foreign Assistance Abbreviations

ground_truth: "Cross-border data flows" refers to the movement or transfer of information between computer servers across national borders. Such data flows enable people to transmit information for online communication, track global supply chains, share research, provide cross-border services, and support technological innovation. Ensuring open cross-border data flows has been an objective of Congress in recent trade agreements and in broader U.S. international trade policy. The free flow of personal data, however, has raised security and privacy concerns. U.S. trade policy has traditionally sought to balance the need for cross-border data flows, which often include personal data, with online privacy and security. Some stakeholders, including some Members of Congress, believe that U.S. policy should better protect personal data privacy and security, and have introduced legislation to set a national policy. Other policymakers and analysts are concerned about increasing foreign barriers to U.S. digital trade, including data flows. Recent incidents of private information being shared or exposed have heightened public awareness of the risks posed to personal data stored online. Consumers' personal online data is valued by organizations for a variety of reasons, such as analyzing marketing information and easing the efficiency of transactions. Concerns are likely to grow as the amount of online data organizations collect and the level of global data flows expand. As Congress assesses policy options, it may further explore the link between cross-border data flows, online privacy, and trade policy; the trade implications of a comprehensive data privacy policy; and the U.S. role in establishing best practices and binding trade rules that seek to balance public policy priorities. There is no globally accepted standard or definition of data privacy in the online world, and there are no comprehensive binding multilateral rules specifically about cross-border data flows and privacy. Several international organizations, including the Organisation for Economic Co-operation and Development (OECD), G-20, and Asia-Pacific Economic Cooperation (APEC) forum, have sought to develop best practice guidelines or principles related to privacy and cross-border data flows, although none are legally binding. U.S. and other recent trade agreements are establishing new enforceable trade rules and disciplines. Countries vary in their data policies and laws; some focus on limiting access to online information by restricting the flow of data beyond a country's borders, aiming to protect domestic interests (e.g., constituents' privacy). However, these policies can also act as protectionist measures. The EU and China, two top U.S. trading partners, have established prescriptive rules on cross-border data flows and personal data from different perspectives. The EU General Data Protection Regulation (GDPR) is driven by privacy concerns; China is focused on security. Their policies affect U.S. firms seeking to do business in those regions, as well as in other markets that emulate the EU and Chinese approaches. Unlike the EU or China, the United States does not broadly restrict cross-border data flows and has traditionally regulated privacy at a sectoral level to cover data, such as health records. U.S. trade policy has sought to balance the goals of consumer privacy, security, and open commerce. The proposed United States-Mexico-Canada Agreement (USMCA) represents the Trump Administration's first attempt to include negotiated trade rules and disciplines on privacy, cross-border data flows, and security in a trade agreement. While the United States and other countries work to define their respective national privacy strategies, many stakeholders seek a more global approach that would allow interoperability between differing national regimes to facilitate and remove discriminatory trade barriers to cross-border data flows; this could offer an opportunity for the United States to lead the global conversation. Although Congress has examined issues surrounding online privacy and has considered multiple bills, there is not yet consensus on a comprehensive U.S. online data privacy policy. Congress may weigh in as the Administration seeks to define U.S. policy on data privacy and engages in international negotiations on cross-border data flows.