GAO

United States General Accounting Office

Report to the Chairman, Committee on 

Ways and Means, House of 

Representatives

March 2000 INTERNATIONAL 

TRADE

Strategy Needed to 

Better Monitor and 

Enforce Trade 

Agreements

GAO/NSIAD-00-76

Page 1 GAO/NSIAD-00-76 International Trade

Contents

Letter 3

Appendixes Appendix I: Executive Branch, Congressional, and Private Sector 

Structures for Monitoring and Enforcing Trade Agreements 30

Appendix II: Key Federal Monitoring and Enforcement Activities 42

Appendix III: Key Reporting Mechanisms Related to Trade Agreement 

Monitoring and Enforcement 48

Appendix IV: Staffing at Three Key Agencies Responsible for Trade 

Agreement Monitoring and Enforcement 51

Appendix V: Objectives, Scope, and Methodology 59

Appendix VI: Comments From the Office of the U.S. Trade 

Representative 63

Appendix VII: Comments From the Department of Commerce 68

Appendix VIII: Comments From the Department of Agriculture 71

Appendix IX: GAO Contacts and Staff Acknowledgments 75

Tables Table 1: Trade Policy Staff Committee Subcommittees and Task

Forces 35

Table 2: Private Sector Advisory Committees 40

Table 3: Key Reporting Mechanisms Used in Monitoring and 

Enforcing Trade Agreements 48

Table 4: Agencies and Units Selected by GAO for Detailed Analysis 60

Table 5: Representative Monitoring or Enforcement Examples 

Selected by Government Units 61

Figures Figure 1: U.S. Merchandise Export Growth as Compared to Gross

Domestic Product Growth, 1970-98 6

Figure 2: Share of 1998 U.S. Merchandise Exports to Trade Agreement 

Partners 7

Figure 3: Agencies That Participate in Federal Trade Agreement 

Monitoring and Enforcement Efforts 9

Figure 4: Cumulative Number of USTR-negotiated Trade Agreements, 

1984-98 13

Figure 5: USTR Authorized and Actual Staff Levels, Fiscal 

Years 1995-99 52
Contents

Page 2 GAO/NSIAD-00-76 International Trade

Figure 6: Operating Units’ Authorized and Actual Staffing in the 

International Trade Administration’s Market Access and 

Compliance Division, Fiscal Years 1992-99 54

Figure 7: Authorized Staff Allowance by Region in the International

Trade Administration’s Market Access and Compliance Division, 

Fiscal Years 1992-99 55

Figure 8: Authorized and Actual Staffing in the International Trade 

Administration’s Trade Development (Industry) Division, Fiscal 

Years 1992-99 56

Figure 9: Foreign Agricultural Service Staff Years Allocated to Market 

Access Program Area, Fiscal Years 1995-2000 58

Abbreviations

GDP gross domestic product

NAFTA North American Free Trade Agreement

USTR U.S. Trade Representative

WTO World Trade Organization
Page 3 GAO/NSIAD-00-76 International Trade

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-284600 Letr

March 14, 2000

The Honorable Bill Archer

Chairman, Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

The United States has entered into over 400 trade-related agreements since 

the early 1980s, most of which were intended to liberalize trade and 

increase U.S. companies’ access to foreign markets.1

 Over half of these 

agreements were signed between 1992 and 1998. Included among them are 

the far-reaching 1994 World Trade Organization agreements, which cover 

about $1.4 trillion in annual U.S. trade with 135 countries, as well as 

significant bilateral agreements with key trading partners such as Japan 

and China. The Office of the U.S. Trade Representative and other federal 

agencies routinely monitor foreign compliance with trade agreements to 

maximize the benefits to the U.S. economy that such agreements were 

intended to provide. The Office of the U.S. Trade Representative also takes 

actions to enforce and defend U.S. trade agreement rights when necessary. 

Federal monitoring and enforcement efforts help inspire public confidence 

that trade agreements are beneficial to the United States. 

Because of Congress’ interest in determining whether U.S. agencies have 

the capacity to monitor and enforce trade agreements, you asked us to 

assess U.S. government efforts in this regard. As agreed with your office, 

this report (1) identifies the federal structure for monitoring and enforcing 

trade agreements; (2) describes the increasing complexity of the federal 

monitoring and enforcement task and key activities that federal agencies 

must perform; and (3) assesses whether the Office of the U.S. Trade 

Representative, the Department of Commerce, and the Department of 

Agriculture have the capacity to handle their monitoring and enforcement 

workload, that is, whether their human capital (staff) resources and 

support mechanisms enable them to perform needed monitoring and 

enforcement activities. To meet our objectives, we examined the 

monitoring and enforcement activities of nine offices at the Office of the 

1

For further information on U.S. trade agreements, see International Trade: Improvements 

Needed to Track and Archive Trade Agreements (GAO/NSIAD-00-24, Dec. 14, 1999).
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U.S. Trade Representative, the Department of Commerce, and the 

Department of Agriculture. (App. V provides details about our scope and 

methodology.) 

A broad range of activities underpins federal monitoring and enforcement 

efforts, and the distinction between monitoring activities and enforcement 

activities is not clearly defined. In this report, “monitoring” refers to federal 

activities that are undertaken to identify instances where foreign laws, 

regulations, and practices may be inconsistent with trade agreement 

provisions. When such problems are identified, agencies take a variety of 

actions to encourage and obtain foreign compliance with trade agreements. 

“Enforcement” refers to actions taken by the Office of the U.S. Trade 

Representative to compel foreign compliance with trade agreements, such 

as initiating dispute settlement procedures that certain trade agreements 

provide. The Office of the U.S. Trade Representative also defends the 

United States when other countries initiate dispute settlement procedures 

to assert that U.S. laws, regulations, and practices are inconsistent with 

trade agreement provisions.

Results in Brief U.S. government efforts to monitor and enforce trade agreements involve 

at least 17 federal agencies, with the Office of the U.S. Trade 

Representative having primary statutory responsibility. The other agencies’ 

contributions to federal monitoring and enforcement efforts vary according 

to their legal requirements, mission, and expertise, but the Departments of 

Commerce, Agriculture, and State have substantial monitoring and 

enforcement roles. The Office of the U.S. Trade Representative and 

Commerce both created offices in 1996 specifically dedicated to trade 

agreement monitoring and enforcement. At least 13 other federal agencies 

provide policy input or technical expertise to U.S. monitoring and 

enforcement efforts. Several interagency mechanisms exist to coordinate 

the contributions and perspectives of the multiple agencies involved in 

monitoring and enforcement. Private sector input is obtained from 

statutory advisory councils, informal advisory groups, trade associations, 

and private companies.

The task of monitoring and enforcing foreign compliance with trade 

agreements has become more complex as the number of trade agreements 

and trade agreement partners has grown and the issues covered by trade 

agreements have expanded. In the past, trade agreements primarily helped 

to reduce the tariffs charged on merchandise imports. However, current 

trade agreements address more complicated types of import restrictions, 
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such as product standards and food safety regulations, and cover a broader 

range of issues, such as trade-related investment measures or intellectual 

property rights. Federal agencies that monitor and enforce trade 

agreements must be able to perform several key activities; these include 

identifying and prioritizing compliance problems, analyzing information 

about them, and seeking ways to resolve them. 

Although the Office of the U.S. Trade Representative and the Departments 

of Commerce and Agriculture have taken steps to improve their monitoring 

and enforcement efforts, certain capacity weaknesses limit their ability to 

handle the federal monitoring and enforcement workload. Officials at all 

three agencies told us that steadily declining staff levels in recent years 

have adversely impacted the agencies’ monitoring and enforcement 

activities. Agency officials also told us that although the technical 

complexity of trade agreements has been increasing, the expertise needed 

to analyze compliance problems is not always available. For example, 

officials at the Office of the U.S. Trade Representative said that strong 

economic analysis and modeling are needed to develop dispute settlement 

cases before the World Trade Organization, but the agency has a limited 

number of staff with this kind of economic expertise. Despite these human 

capital constraints, interagency discussions were only recently held to 

identify additional resources needed for federal monitoring and 

enforcement activities. However, these discussions did not appear to 

address how agencies will manage the growing monitoring and 

enforcement workload, what skills are needed and available to perform 

this function, or whether federal efforts are targeted at the areas of greatest 

risk. Finally, although private sector information about trade agreement 

compliance problems is essential to federal monitoring and enforcement 

efforts, some agency offices that we examined had better mechanisms than 

others for obtaining comprehensive and balanced input from the private 

sector.

In this report, we recommend that the Office of the U.S. Trade 

Representative and the Departments of Commerce and Agriculture jointly 

develop a strategy to better manage the U.S. government’s growing trade 

agreement monitoring and enforcement workload. 

Background Trade’s influence on the U.S. economy has increased dramatically in the 

past decade. Exports of goods have grown faster than gross domestic 

product (GDP), particularly since 1992 when such exports grew about

1-1/2 times as fast as GDP (see fig. 1). 
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Figure 1: U.S. Merchandise Export Growth as Compared to Gross Domestic Product Growth, 1970-98 

Note: Exports and GDP are presented as index numbers where their value in 1970 equals 100.

Source: GAO calculations based on International Financial Statistics (Washington, D.C.: International 

Monetary Fund, Nov. 1999).

Most of this growing volume of U.S. exports is governed by the terms of 

trade agreements. For example, about 91 percent of U.S. merchandise 

exports in 1998 were to members of the World Trade Organization (WTO)2

and were covered by the terms of multiple WTO agreements.3 Another

6 percent of merchandise exports that year were to countries that are not 

WTO members but with whom the United States has bilateral (country-tocountry) trade agreements that improve U.S. access abroad (see fig. 2).

1600

1400

1200

1000

800

600

400

200

0

Index, 1970= 100

Export

GDP

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

2

The WTO was established on January 1, 1995, as a result of the Uruguay Round of 

Multilateral Trade Negotiations of the General Agreement on Tariffs and Trade. The WTO 

facilitates the implementation, administration, and operation of multiple agreements that 

govern trade among its member countries. It also provides dispute settlement procedures to 

resolve disagreements among its members.

3

About one-third of U.S. merchandise exports in 1998 were to Canada and Mexico and were 

covered by the WTO agreements as well as the North American Free Trade Agreement 

(NAFTA).
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Figure 2: Share of 1998 U.S. Merchandise Exports to Trade Agreement Partners

Note: To avoid “double counting,” in this chart, U.S. exports to WTO members, whether covered by the 

WTO agreements or other bilateral (country-to-country) agreements, are combined under the heading 

“WTO members.” “Bilateral partners” are countries that are not WTO members but with whom the 

United States has bilateral trade agreements. 

Sources: GAO analysis based on U.S. Department of Commerce trade statistics, U.S. Trade 

Representative data on trade agreements, and WTO membership data.

Key bilateral trade agreements, and multilateral agreements like the WTO’s, 

improve U.S. market access abroad by setting ground rules for the 

treatment of U.S. exporters and investors in foreign markets. While they 

vary in content and form, major trade agreements help ensure that U.S. 

exporters and investors will be treated the same as other foreign and 

domestic suppliers, establish the maximum tariff (tax) that will apply to 

U.S. exports, and provide for the gradual lowering or elimination of trade 

barriers.

According to recognized trade experts and responsible agency officials, the 

U.S. government’s monitoring and enforcement efforts are designed to 

attain certain broad goals—ensuring foreign compliance with trade 

agreements, providing credible deterrence, and inspiring confidence.

• Ensuring compliance—Vigorous efforts to monitor and enforce trade 

agreements are necessary to ensure that foreign partners fulfill their 

trade agreement obligations and that U.S. firms fully realize the 

improvements in market access these agreements offer.

• Providing credible deterrence—Federal monitoring and enforcement 

activities also provide a credible deterrent to future trade agreement 

3%

6%

91%

Partners without trade agreements

Bilateral partners

WTO members
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violations and improve the likelihood of full implementation by other 

U.S. trading partners.

• Inspiring confidence—A reliable, well-functioning system for 

monitoring and enforcing trade agreements helps sustain congressional 

and public confidence in the administration’s trade strategy and fosters 

their support for continued trade liberalization. 

U.S. efforts to monitor and enforce trade agreements play a key role in the 

success of U.S. trade policy. These efforts help U.S. companies gain access 

to foreign markets and increase U.S. exports. In addition, through 

challenging and defending trade policies under the WTO dispute settlement 

process, the United States establishes legal precedents that help create a 

fair, predictable, rules-based trading system that is beneficial for U.S. 

companies and industries. 

Multiple Agencies 

Participate in Federal 

Monitoring and 

Enforcement Efforts 

and Rely on Private 

Sector Input

The Office of the U.S. Trade Representative (USTR) has primary statutory 

responsibility for monitoring and enforcing U.S. trade agreements and 

works with at least 16 other federal agencies and the private sector in 

carrying out this responsibility. Among these agencies, Commerce, 

Agriculture, and State make substantial contributions to federal monitoring 

and enforcement efforts, both by performing their own monitoring 

activities and supporting USTR’s efforts. Because of trade agreements’ 

expanding scope and technical complexity, the policy and technical input 

of regulatory or scientific agencies has become increasingly important. A 

statutory interagency structure exists to coordinate the development of 

trade policy, including monitoring and enforcement activities, across 

multiple agencies. Federal agencies also receive essential private sector 

input from multiple federal advisory councils, informal advisory groups, 

trade associations, and private companies.

USTR Has Primary 

Responsibility for Federal 

Monitoring and 

Enforcement Efforts

The vast majority of statutory trade agreement monitoring and 

enforcement responsibility rests with USTR. Commerce and Agriculture 

also have certain statutory monitoring responsibilities for trade 

agreements. State has an important role in monitoring and enforcing trade 

agreements because of its foreign policy expertise. Congress has generally 

not mandated in law the role of other executive branch agencies in 

monitoring or enforcing trade agreements. Thus, based upon their general 

legislative authorities, agencies have exercised their discretion in 

structuring their operations to assist USTR in monitoring and enforcing 
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trade agreements. The agencies that participate in federal trade agreement 

monitoring and enforcement efforts are shown in figure 3.

Figure 3: Agencies That Participate in Federal Trade Agreement Monitoring and Enforcement Efforts

Source: GAO analysis.

USTR is responsible for developing and coordinating U.S. international 

trade and foreign direct investment policy and for leading or directing 

negotiations with other countries on such matters. With respect to 
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monitoring and enforcing trade agreements, USTR is required by law to 

identify any foreign policies and practices that constitute significant 

barriers to U.S. exports of goods and services, particularly those that are 

covered by international agreements to which the United States is a party.4

It is the sole federal agency authorized to initiate actions to enforce U.S. 

rights under bilateral and multilateral trade agreements, at its own 

discretion or as petitioned by private enterprises or individuals.5

 USTR 

receives support from other agencies in its enforcement efforts. In 1996, 

USTR established a Monitoring and Enforcement Unit within its Office of 

General Counsel to help coordinate USTR’s trade agreement monitoring 

and enforcement obligations. 

Among the other most active agencies, Commerce has general operational 

responsibility for the major nonagricultural trade functions of the U.S. 

government. It shares statutory responsibility with USTR for monitoring 

other countries’ compliance with WTO rules on subsidies, but its overall 

monitoring role is broader.6

 In 1996, Commerce created a Trade 

Compliance Center within its International Trade Administration to help 

ensure that U.S. trade agreements are monitored and compliance issues are 

promptly addressed. Agriculture is statutorily responsible for 

implementing, monitoring, and reporting to USTR on any noncompliance 

with the agricultural provisions of the World Trade Organization and the 

North American Free Trade Agreement.7

 The Foreign Agricultural Service 

handles most of these responsibilities on Agriculture’s behalf and monitors 

many bilateral trade agreements as well. State advises USTR on the foreign 

policy implications of any trade-related actions and participates in trade 

negotiations that have a direct and significant impact on foreign policy.

At least 13 other federal agencies are also involved in federal monitoring 

and enforcement efforts, as shown in figure 3. They primarily provide 

technical or policy input that is derived from their particular agency 

mission or areas of expertise. For example, the Treasury advises USTR on 

the financial services aspects of trade agreements, while Labor reviews 

trade agreements that involve labor and workers’ rights issues.

4

19 U.S.C. 2241 (a)(1)(A)(i).

5

19 U.S.C. 2412. 

6

19 U.S.C. 3571.

7

7 U.S.C. 5606, 7 U.S.C. 5674, 19 U.S.C. 3381, and 19 U.S.C. 3391.
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Federal Monitoring and 

Enforcement Efforts Are 

Coordinated Through 

Several Interagency 

Mechanisms

Although no interagency mechanism exists specifically to coordinate 

federal monitoring and enforcement efforts, these issues are addressed 

within several interagency mechanisms that coordinate the formulation 

and implementation of trade policy. The highest-level interagency 

coordination mechanism is the National Economic Council, a cabinet-level 

organization established in 1993 that includes the heads of multiple federal 

agencies.8

 The National Economic Council was created in part to 

coordinate domestic and international economic policy formulation. One 

of its responsibilities is to review significant trade policy issues and help 

ensure overall trade policy coordination.

In addition, Congress created an interagency structure in the Trade 

Expansion Act of 1962, as amended by the Trade Act of 1974, to help ensure 

that the development of trade policy reflects a range of agency perspectives 

and is coordinated throughout the government. This structure includes 

several management- and staff-level committees that are chaired by USTR. 

Trade policy decisions, including those related to trade agreement 

monitoring and enforcement, are generally developed via consensus within 

these interagency structures. Interagency conflicts that arise are addressed 

at progressively higher levels including, when necessary, within the 

National Economic Council.

8

Members of the National Economic Council include the President; the Vice President; the 

Secretaries of State, the Treasury, Agriculture, Commerce, Labor, Housing and Urban 

Development, Transportation, and Energy; the Administrator of the Environmental 

Protection Agency; the Chair of the Council of Economic Advisors; the Director of the 

Office of Management and Budget; the U.S. Trade Representative; the Assistants to the 

President for Economic Policy, Domestic Policy, and Science and Technology Policy; the 

National Security Advisor; and other officials of executive departments and agencies as the 

President may, from time to time, designate. 
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Private Sector Plays a Key 

Role in Monitoring and 

Enforcing Trade 

Agreements

The private sector plays an essential role in federal efforts to monitor and 

enforce trade agreements by providing agencies with information about 

trade agreement compliance problems and supporting federal actions to 

address such problems. In the 1974 Trade Act, Congress created a private 

sector advisory committee system to ensure that U.S. trade policy and 

negotiation objectives reflect U.S. commercial and economic interests. 

Within this system, a wide variety of advisory committees exist that, among 

other things, report on trade agreements that the United States has 

negotiated and enhance communication and information-sharing between 

federal agencies and the private sector related to federal monitoring and 

enforcement efforts.9

 Private sector input is also obtained through 

mechanisms created by the private sector or agencies themselves and 

through direct contact with individual companies or exporters.

Appendix I contains more information about the federal structure for 

monitoring and enforcing trade agreements, the interagency structure for 

coordinating trade policy, the congressional structure for overseeing these 

agencies and activities, and the statutory industry advisory groups.

Monitoring and 

Enforcing Trade 

Agreements Are 

Increasingly Complex 

Tasks

Increases in the number of trade agreements, the number of trade 

agreement partners, and the complexity of topics covered by trade 

agreements have made the task of monitoring and enforcing such 

agreements more challenging for federal agencies in recent years. In the 

past, trade agreements focused primarily on reducing tariff levels for 

merchandise trade. Now they address a broader range of trade barriers, 

such as product standards and food safety measures. They also address 

many new subjects, such as trade in services and trade measures related to 

the protection of intellectual property rights, and provide more specific 

guidance for traditional trade areas, such as trade in agricultural products. 

The size and complexity of the monitoring and enforcement workload are 

expected to continue growing. In order to meet this challenge and achieve 

their monitoring and enforcement goals, federal officials said they must 

perform certain key activities, such as identifying compliance problems 

and developing responses to address them. 

9

Advisory committees are to report after the conclusion of trade agreement negotiations on, 

among other things, the extent to which a trade agreement promotes the economic interests 

of the United States and meets applicable U.S. negotiating objectives. 19 U.S.C. 2155 (e) and 

19 U.S.C. 2902 (4).
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Number, Scope, and 

Complexity of Trade 

Agreements Have Expanded

USTR negotiates most trade agreements on behalf of the United States. 

According to USTR, it has negotiated about 250 enforceable trade 

agreements since 1984, the majority of which increase access for U.S. 

exports to markets overseas.10 Two-thirds entered into force after 1992 (see 

fig. 4).

Figure 4: Cumulative Number of USTR-negotiated Trade Agreements, 1984-98

Source: USTR 1999 Trade Policy Agenda and 1998 Annual Report.

10The actual number of trade agreements currently in force is unknown, although we found 

over 400 agreements that entered into force since 1984. In addition, multiple agencies 

negotiate trade agreements on behalf of the United States. For an explanation of the 

difficulty in identifying and archiving trade agreements, see International Trade: 

Improvements Needed to Track and Archive Trade Agreements.

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

0

50

100

150

200

250

300

Cumlative total
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Among the agreements USTR has negotiated, several multilateral ones 

have fundamentally changed the nature of trade agreements:

• The Uruguay Round of Multilateral Trade Negotiations (1986-94), 

conducted under the auspices of the General Agreement on Tariffs and 

Trade, led to the creation of the World Trade Organization and its 

binding dispute settlement mechanism; added WTO agreements on 

intellectual property rights, services, agriculture, and textiles to the 

global trade system for the first time; and established rules on a host of 

nontariff barriers to trade, such as product standards. These 

agreements, which entered into force in 1995, currently apply to 135 

nations.

• Three additional WTO agreements entered into force after 1995 that 

cover trade in financial services, basic telecommunications, and 

information technology. 

• NAFTA entered into force in 1994 and provided for the elimination of 

tariffs and other barriers to goods, services, and investment between the 

United States and its two largest trading partners, Canada and Mexico.

Several of these agreements involve very technical subjects, and 

responding to potential violations of these agreements is complex. For 

example, one WTO agreement addresses the impact on agricultural trade of 

members’ laws and regulations that are designed to protect human, animal, 

and plant life and health.11 Responding to potential violations of this 

agreement may require cognizant agencies to demonstrate whether meat 

products can transmit animal diseases to animals or humans or to provide 

data on how much pesticide can be applied to a crop before residues 

exceed an importing country’s limits. If available scientific research is 

incomplete or in conflict, it can be difficult to convince other countries to 

dismantle certain types of trade barriers.

Meanwhile, membership in several key trade agreements has grown, 

expanding the federal monitoring and enforcement workload. For example, 

when the Uruguay Round was launched in 1986, 90 countries were 

members of the General Agreement on Tariffs and Trade, the organizational 

structure that preceded the World Trade Organization. When the WTO 

agreements were signed in 1994, the number of WTO members had 

expanded to 123, and 12 additional countries have joined the WTO since 

11WTO Agreement on the Application of Sanitary and Phytosanitary Measures.
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then. Similarly, 19 countries have joined the WTO Information Technology 

Agreement since it was concluded in 1996.

Finally, while these far-reaching agreements have substantially increased 

U.S. trade agreement rights, they have also increased U.S. trade agreement 

obligations to other nations. As a result, the defense of U.S. laws and 

practices is a growing focus of federal monitoring and enforcement efforts. 

This has affected USTR’s workload, in particular, because it is responsible 

for advocating and defending U.S. trade agreement rights and obligations 

within the WTO. As of November 1999, the United States had filed

49 complaints against other countries under WTO dispute settlement 

procedures, and 35 complaints had been filed against the United States by 

other countries. 

Further Increases in 

Monitoring and 

Enforcement Workload Are 

Expected 

The U.S. government’s monitoring and enforcement workload is expected 

to continue growing, for the following reasons:

• Several important WTO agreements that gave developing countries a 

longer period of time than developed countries to come into compliance 

with the agreements’ provisions are now in effect. For example, while 

key provisions of the WTO agreements on intellectual property rights, 

trade-related investment measures, customs valuation, and subsidies 

took effect for most developing countries on January 1, 2000, they had 

taken effect for developed countries with the advent of the WTO on 

January 1, 1995.12

• WTO membership is likely to increase. Thirty one more countries are 

seeking to join the WTO, including China, the U.S.’ 12th largest export 

market in 1998. 

• WTO members are already committed to negotiate further liberalization 

in the agriculture and services sectors beginning in early 2000, and a 

new round of broader WTO negotiations may be launched.

Key Steps in Monitoring and 

Enforcing Trade 

Agreements

Officials at the agencies we examined—USTR, Commerce, and 

Agriculture—described several key steps that they perform in monitoring 

and enforcing trade agreements. These steps include identifying 

compliance problems, setting priorities, gathering and analyzing 

12The Agreement on Trade-Related Aspects of Intellectual Property Rights became 

obligatory for developed countries one year later, on January 1, 1996.
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information, developing and implementing responses, and taking actions to 

enforce agreements. (App. II contains more information about key federal 

monitoring and enforcement activities.)

Because the number and scope of trade agreements are so broad, agency 

officials indicated that their primary purpose in monitoring trade 

agreements is to identify important trade agreement compliance problems 

rather than monitor compliance with all aspects of all trade agreements. 

Several trade experts and private sector representatives that we spoke with 

said this was a sensible approach, since federal monitoring resources are 

limited. Officials in the offices we examined described their efforts to 

identify compliance problems as both reactive and proactive. For example, 

they said that such problems are frequently identified by the private sector, 

but staff in several offices indicated they are trying to identify more 

compliance problems on their own by routinely reviewing compliance with 

certain trade agreements and initiating contact with private sector 

representatives. Agency officials indicated that some agreements are 

routinely monitored, such as those with built-in monitoring mechanisms, 

while others receive little or no monitoring, particularly if private sector 

interest in the agreement is lacking. This more targeted approach still 

produces a substantial workload, requiring agencies to continually 

prioritize their monitoring and enforcement efforts and balance them with 

their other trade responsibilities. The offices we examined apply certain 

common criteria in setting their priorities and determining which 

compliance problems to focus on, including the amount of U.S. trade 

involved, the trade principles at stake, and any reporting or other deadlines 

they faced.

Agencies gather and analyze a wide range of information about compliance 

problems, including foreign trade agreement commitments, foreign market 

data, and scientific research or technical data. They attempt to resolve 

compliance problems through various methods and levels of 

communication with foreign governments, ranging from phone calls to 

visits by high-level U.S. officials. Their objective is to resolve problems 

quickly and at the lowest government level possible. However, when 

foreign governments are not responsive to U.S. efforts, USTR may seek to 

enforce U.S. trade agreement rights through available mechanisms, such as 

the WTO dispute settlement process.

In addition to these key activities, several federal agencies, including USTR 

and Commerce, are required to report to Congress each year on various 

trade and economic issues. Some of these reports focus on the 
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implementation and results of specific trade agreements, while others are 

more broad. For example, USTR prepares multiple reports on other 

countries’ trade practices. (App. III contains more information on the 

trade-related reporting requirements for USTR and other agencies.)

Despite Improvements, 

Capacity Weaknesses 

Hinder Federal 

Monitoring and 

Enforcement Efforts 

USTR, Commerce, and Agriculture have taken various steps to improve 

their ability to monitor and enforce trade agreements. For example, 

Commerce and Agriculture have implemented measures to improve their 

ability to identify compliance problems and to enhance coordination within 

their departments, while USTR has improved its capacity to enforce U.S. 

trade agreement rights. However, other capacity weaknesses have 

negatively affected these agencies’ monitoring and enforcement efforts. 

First, officials at all three agencies said that steady declines in staff 

resources have limited the agencies’ monitoring and enforcement activities 

and the level of support they provide each other. Second, agency officials 

said that gaps in staff expertise have hindered their efforts to analyze and 

respond to compliance problems. Third, the agencies have only recently 

worked together to determine what resources the U.S. government needs 

to monitor and enforce its trade agreements, but they have not addressed 

whether the skills needed are currently available or whether federal efforts 

are targeted at the areas of greatest risk. Finally, we observed that the three 

agencies’ ability to obtain comprehensive and balanced input from the 

private sector is uneven.

Key Federal Agencies Have 

Taken Steps to Enhance 

Monitoring, Coordination, 

and Enforcement Capacities

USTR, Commerce, and Agriculture have made several changes to improve 

their capacity to perform key monitoring and enforcement activities. First, 

we found that the nine USTR, Commerce, and Agriculture offices we 

examined had good capacity to identify potential trade agreement 

compliance problems (app. V identifies the nine offices we studied). 

Commerce and Agriculture had both taken steps to further improve their 

performance in this area. For example, Commerce’s Trade Compliance 

Center had developed an internet web site where users, particularly

small- and medium-sized companies, can enter information about problems 

concerning trade agreement implementation or market access.13 It also had 

established “compliance liaisons” at over 70 trade and labor associations to 

13We reported on Commerce’s internet web site in International Trade: Improvements 

Needed to Track and Archive Trade Agreements . The web site can be found on the internet 

at http://www.mac.doc.gov/tcc.
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create a reporting channel for compliance problems, according to 

Commerce officials. In addition, Commerce and Agriculture had developed 

instructions for their staff posted overseas to emphasize the role that these 

staff play in identifying and reporting to their headquarters on compliance 

problems. Through their reliance on multiple sources of information and 

reporting mechanisms, staff in the offices we examined believed that they 

were able to identify most of the important compliance issues affecting 

U.S. interests.

Second, USTR, Commerce, and Agriculture have also taken steps to 

improve the coordination of agency efforts to monitor and enforce trade 

agreements. For example, in 1995, the Foreign Agricultural Service 

established weekly meetings to coordinate the efforts of multiple 

Agriculture agencies to address compliance problems under the WTO 

Agreement on the Application of Sanitary and Phytosanitary Measures, 

which addresses the impact of countries’ health and food safety measures 

on agricultural trade. In 1998, USTR created a steering committee that 

included representatives of multiple trade and regulatory agencies to better 

coordinate U.S. efforts to monitor and enforce this agreement.14 Finally, in 

1998, Commerce’s Trade Compliance Center established a system to 

designate which staff from multiple Commerce offices were responsible for 

monitoring various trade agreements. The Center also held biweekly 

meetings of managers from various Commerce offices to share information 

on identified compliance problems and department efforts to address 

them. 

Third, USTR took steps to enhance its ability to enforce trade agreements. 

USTR officials said that the workload associated with enforcing U.S. trade 

rights through the WTO dispute settlement system has increased 

dramatically. For example, the United States was involved in 22 new WTO 

dispute settlement cases in 1996, which was 7 times as many cases as it had 

handled in the previous 5 years. USTR determined that its existing legal 

resources were insufficient to handle this increased workload and, in fiscal 

year 1998, added seven lawyers and two legal technicians to its Monitoring 

and Enforcement Unit. Several USTR officials said these additional staff 

enhanced U.S. enforcement efforts.

14We reported on U.S. efforts to address other countries’ health and food safety measures 

that restrict U.S. exports in Agricultural Exports: U.S. Needs a More Integrated Approach to 

Address Sanitary/Phytosanitary Issues (GAO/NSIAD-98-32, Dec. 11. 1997).
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Insufficient Numbers of 

Staff Have Hindered Key 

Agencies’ Monitoring and 

Enforcement Efforts

Despite having taken steps to improve their ability to identify trade 

agreement compliance problems, coordinate with each other, and enforce 

U.S. trade agreement rights, officials in the USTR, Commerce, and 

Agriculture offices we examined frequently identified insufficient staff 

resources—either in their own office or agency or in other agencies—as a 

hindrance to their monitoring and enforcement efforts. Managers in all of 

the offices we examined said that human capital is the most important 

resource they have for monitoring and enforcing trade agreements.15

However, USTR, Commerce, and Agriculture have faced flat or declining 

budgets and staff numbers in the past 5 years at the same time that the 

federal trade agreement monitoring and enforcement workload has been 

growing. For example, the number of USTR staff dropped from 168 in fiscal 

year 1994 to 159 in fiscal year 1996 but rose back to 169 in fiscal year 1999. 

Although USTR requested and sometimes received authorization to 

increase its staff level during this time, in some years its appropriated funds 

did not allow it to meet authorized staff levels. 

At all three agencies, officials in some offices said that their staff levels 

have adversely affected their ability to monitor and enforce trade 

agreements. In an environment of flat or declining resources, agency 

decisions to create new monitoring and enforcement offices precluded the 

agencies from adequately staffing other offices that also had important 

monitoring responsibilities. (App. IV provides data on staff levels at USTR, 

Commerce, and Agriculture.)

USTR, Commerce, and Agriculture officials identified several situations in 

which insufficient staff numbers had adversely affected their monitoring 

and enforcement efforts. 

• Officials in USTR’s Office of WTO and Multilateral Affairs told us that 

their individual workload is so great that they are routinely unable to 

perform certain parts of their monitoring job. One official in this office 

said he often does not have enough time to provide monitoring guidance 

to posts overseas or return phone calls. Another official in this office 

said he does not have enough time to read all of the reports that WTO 

member countries submit to the WTO on their compliance with the 

agreement he monitors. 

15“Human capital” refers to an agency’s workforce, including its technical and program skills 

and institutional memory.
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• Commerce officials identified several trade issues that it could not 

address because it did not have enough staff with the right expertise to 

handle the issues. These included European barriers affecting U.S. 

providers of gas and electricity components and weather service 

products, various Southeast Asian standards and testing and 

certification procedures, and Japanese barriers on recreational boat and 

engine products. Commerce reported that U.S. exports could grow by 

hundreds of millions of dollars if these issues were resolved. 

• Agriculture officials told us that the Foreign Agricultural Service 

receives an increasing number of requests from its overseas posts for 

training visits by headquarters staff with knowledge about the use of 

biotechnology in agricultural products. Although the United States faces 

a growing number of biotechnology-related trade problems, these 

requests are routinely denied because of staff and budget constraints.

Many agency and private sector officials we spoke with believed that 

USTR, in particular, had insufficient staff resources to handle its growing 

monitoring and enforcement workload. For example, one private sector 

official noted that USTR has one person handling customs issues compared 

to five full-time staff working on this issue for the European Union. Despite 

increased resource levels in USTR’s Monitoring and Enforcement Unit, 

some private sector officials stated their belief that USTR staff levels limit 

the number of dispute settlement cases that USTR can handle at any given 

time and have prevented it from initiating certain dispute settlement cases 

that private sector officials thought should go forward. 

USTR and Agriculture officials also stated that insufficient staff at other 

agencies limits the extent to which other agencies have supported their 

monitoring and enforcement efforts. Several USTR officials said that the 

overall amount and quality of trade policy support and participation in 

interagency trade policy committees by other agencies has diminished, in 

part because of limited or declining agency resources and turnover. As a 

result, these officials said that USTR has had to take on more operational 

tasks and does not always have the breadth of perspectives or information 

it needs to respond to compliance problems. 

• Several USTR officials observed that declining resources have reduced 

the overall level of support they get from Commerce, which is the 

agency that has provided USTR with the most assistance in the past. 

These officials said that Commerce used to provide USTR with more 

foreign market data and industry information, perform more analysis of 
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compliance problems, and do more preparatory work for meetings with 

foreign officials.

• An official in USTR’s Office of WTO and Multilateral Affairs who 

monitors three different WTO agreements that came into force in 1995 

told us he has gotten very little support from Commerce to address 

compliance problems under two of these agreements. 

• Officials in USTR’s Office of Japan told us that USTR, Commerce, State, 

and the Treasury divided responsibilities for monitoring 31 U.S.-Japan 

trade agreements among the four agencies, but these agencies often 

have not been able to support USTR’s efforts to monitor the agreements 

as they did in the past. 

• Several Foreign Agricultural Service officials said the agency faces 

ongoing challenges in getting the technical support it needs from 

regulatory agencies inside and outside of the Agriculture Department to 

address certain types of compliance problems, in part because the 

regulatory agencies do not have resources available for the task.

According to agency officials, budget constraints at USTR, Commerce, and 

Agriculture have not only affected staff levels but have also limited the 

funds available for necessary travel and training expenses. In addition, the 

demand and cost for translation services have been rising. These 

constraints have impacted the agencies’ monitoring and enforcement 

efforts.

• To manage the effect of flat budgets in fiscal years 1999-2000, the 

Foreign Agricultural Service imposed a 40-percent cut in training and 

travel funds. The Director of the Foreign Agricultural Service’s Europe, 

Africa, and Middle East Division said that because of reduced travel 

funds, he can only send one staff person at a time to the European 

Union to negotiate the resolution of multiple compliance issues. This 

one U.S. official, whose expertise is typically focused in a certain area, 

faces several experienced European Union officials, a situation that, 

agency and private sector officials observed, makes it difficult for the 

United States to obtain favorable resolutions to compliance problems. 

• Similarly, officials in Commerce’s International Trade Administration 

Office of Latin America and the Caribbean said the office has had 

insufficient travel funds for several years to send its staff to the Latin 

American countries it covers. This situation has affected the office’s 

ability to make the kind of contacts in the foreign governments and the 

private sector that would facilitate the resolution of compliance issues. 

Private sector officials told us that constraints on the office’s travel 
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limited its ability to address intellectual property rights problems in this 

region.

• Because of high staff turnover rates, agency officials said educating new 

staff about how to do their job is very important, but certain agencies 

lack sufficient training funds. Some agency officials also said that staff 

do not have access to the kind of computer tools they need. For 

example, the Foreign Agricultural Service’s Multilateral Trade 

Negotiations Division, which submits and reviews multiple WTO reports 

throughout the year, lacks appropriate software for communicating with 

the WTO, slowing U.S. response times.

Limited Availability of Staff 

Expertise Impedes Federal 

Agencies’ Ability to Analyze 

and Respond to Compliance 

Problems

The growing complexity of trade agreements has made it increasingly 

important for federal agencies to have certain types of staff expertise to 

properly analyze and implement responses to compliance problems. USTR, 

Commerce, and Agriculture officials in the offices we examined told us that 

addressing such problems requires federal agencies to have access to 

country, industry, and functional expertise and to perform a mixture of 

economic, technical, and legal analysis. However, because most of these 

offices did not have the capability to do all types of analysis themselves, 

they required input from other offices and agencies. Based on the types of 

problems these officials identified, we found that the three agencies’ ability 

to do legal analysis of compliance problems is strong, but their ability to 

perform needed economic and technical analysis is not always assured. 

Officials in the offices we examined often stated that they had difficulty 

obtaining needed analytical support from other offices within their own 

agency or in other agencies. 

• Officials in USTR’s Monitoring and Enforcement Unit and Office of 

Economic Affairs told us that economic analysis is increasingly 

important, particularly for developing arguments in WTO dispute 

settlement cases, but USTR has limited capacity to perform such 

analysis. The Office of Economic Affairs only has two economists on 

staff and limited capacity to draw on resources elsewhere but has been 

heavily involved in several major WTO cases. These two staff worked 

for 8 months on the U.S. complaints about European Union measures 

affecting beef and banana imports that were simultaneously being 

reviewed by the WTO. During this time, the office had to turn down 

multiple requests from other USTR offices for economic assistance.

• USTR officials told us that they held discussions several times with 

officials from Commerce’s Trade Compliance Center to emphasize their 

need for assistance with economic analysis. However, the Deputy 
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Assistant Secretary that oversees the Trade Compliance Center told us 

that while he understood USTR’s needs, Commerce does not have 

enough staff with the right expertise to be able to provide this 

assistance.

• In 1997, the United States negotiated several mutual recognition 

agreements with the European Union, making it easier for exporting 

companies to comply with testing and certification requirements. U.S. 

industry estimates the agreements will reduce market entry costs by 

$500 million per year, but Commerce is unable to ensure implementation 

of these complex agreements because it does not have enough staff with 

the appropriate technical expertise to examine the issue.

Several agency officials told us they sometimes rely on the private sector 

for expertise and analysis to address compliance problems. However, this 

situation raises several concerns. First, during our recent study of U.S. 

government efforts to monitor and enforce bilateral agreements with Japan 

concerning insurance, USTR officials told us that neither USTR nor the U.S. 

government possessed the technical capabilities to independently verify 

private sector information and analysis about Japan’s compliance with 

certain aspects of the agreements.16 Second, several private sector officials 

told us they need to provide agencies with this kind of assistance to ensure 

their issues receive agencies’ attention. However, not all private sector 

groups have these capabilities.

Overall Strategic Planning 

for Federal Monitoring and 

Enforcement Efforts Is 

Insufficient

Despite the resource constraints they face and their dependence on each 

other for support, USTR, Commerce, and Agriculture have not engaged in 

integrated, comprehensive strategic planning for overall federal efforts. 

The Government Performance and Results Act of 1993 (Results Act)17

requires federal agencies to engage in a results-oriented strategic planning 

process. Executive branch implementing guidance for the Results Act 

requires that when multiple agencies are responsible for federal programs 

contributing to the same or similar outcomes, agency planning should be 

closely coordinated to ensure that goals are consistent and that program 

efforts are mutually reinforcing. Sound management principles suggest that 

16International Trade: Implementation and Monitoring of the U.S.-Japan Insurance 

Agreements (GAO/NSIAD-99-209, Sept. 24, 1999).

17P.L. 103-62 (Aug. 3, 1993).
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high-performance organizations should employ risk-management 

techniques to target their efforts toward areas most at risk.

As the Results Act requires, USTR, Commerce, and Agriculture each 

developed 5-year strategic plans for fiscal years 1997-2002, and annual 

performance plans. The agencies’ strategic plans all contain goals related 

to trade agreement monitoring and enforcement, and USTR and 

Agriculture indicated in their strategic or annual plans that their ability to 

monitor and enforce trade agreements would depend, in part, on the level 

of support they receive from other agencies. However, the agencies 

continue to face problems in obtaining this support. Although USTR is the 

lead trade agency and was intended to coordinate federal trade efforts, the 

multiple agencies responsible for monitoring and helping USTR enforce 

trade agreements typically estimate their resource and budget needs 

independently, and USTR has no input into other agencies’ budget requests, 

according to USTR officials. Moreover, even though all three agencies face 

growing monitoring and enforcement workloads and declining resources, 

some agency officials told us that until very recently no high-level 

discussions had occurred to discuss the full scope of the federal monitoring 

and enforcement workload and how responsible agencies will manage it. 

USTR, Commerce, and Agriculture officials cited some examples of 

coordinated planning for monitoring and enforcement, however. For 

example, officials from USTR’s Monitoring and Enforcement Unit and 

Commerce’s Trade Compliance Center developed a joint memo to the 

National Economic Council in 1997 to define the roles each would play in 

monitoring and enforcing trade agreements, and Commerce reports that its 

staff routinely discuss compliance problems and resolution strategies with 

their USTR counterparts. Also, Foreign Agricultural Service officials said 

that their monitoring and enforcement efforts are closely integrated with 

USTR, in part because more than half of the staff in USTR’s Office of 

Agricultural Affairs are on detail from various Agriculture agencies.

On February 7, 2000, shortly after our audit work was completed, the 

President submitted his budget proposal for fiscal year 2001. The budget 

proposal requested $22 million to fund an interagency trade compliance 

initiative and bolster monitoring and enforcement resources at USTR, 

Commerce, Agriculture, and State. While the funds have not been approved 

yet by Congress, the initiative appears to be a first step in moving toward 

more coordinated planning of federal monitoring and enforcement efforts. 

However, interagency discussions on this initiative did not appear to 

include a thorough assessment of what skills are needed and available to 
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monitor and enforce trade agreements or whether current efforts are 

targeted at the areas of greatest risk.

Agencies’ Ability to Obtain 

Private Sector Input Is 

Uneven

The offices we examined identified several challenges in working with the 

private sector, including balancing divergent private sector interests and 

agreeing upon the nature and timing of U.S. actions to address compliance 

problems. Some offices that we examined were better able than others to 

obtain comprehensive private sector input and unified private sector 

positions. For example, officials in the Foreign Agricultural Service’s Dairy, 

Livestock, and Poultry Division said they work closely with the Meat 

Industry Trade Policy Council, an industry-created coalition of trade 

associations that tries to work out differences among its members before 

presenting industry positions to the U.S. government. Private sector groups 

with an interest in intellectual property rights have formed a similar 

coalition. 

However, other offices faced more difficulty in determining overall 

industry positions. Officials in Commerce’s Office of Automotive Affairs 

said that positions in the automotive industry often vary between 

companies. Also, the office often has to make multiple contacts within a 

company because perspectives vary among headquarters, foreign 

subsidiaries, and Washington representative offices. Other offices, such as 

USTR’s Office of Japan and Commerce’s Office of Latin America and the 

Caribbean, had more difficulty obtaining private sector input. In some 

cases, this was because the trade agreements they monitored affected a 

broad range of private sector interests. In other cases, the offices had to 

contact individual companies to obtain private sector input because the 

issues were not adequately covered by existing trade associations or 

advisory councils. Several agency officials said that obtaining objective and 

balanced input and determining the overall U.S. national interest are 

especially difficult in situations where the private sector is divided over a 

compliance problem or when a problem affects only one or two companies.

The offices we examined identified other challenges they faced in getting 

private sector input. For example, lack of consensus within the private 

sector or between the private sector and the government can stall U.S. 

efforts to move forward. This consensus is affected when the private sector 

wants to move more quickly or slowly than the government, when 

companies or industries have divided interests, when companies want to 

protect their business data or fear foreign retribution to U.S. actions, and 

when they want the government to do something it cannot do. Officials said 
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that decisions about the U.S. responses to compliance problems in these 

cases may be made at higher levels within federal agencies or the U.S. 

government.

Conclusions The creation of the World Trade Organization and its vast array of trade 

agreements has caused dramatic increases to the trade agreement 

monitoring and enforcement workloads at USTR, Commerce, and 

Agriculture. However, these agencies’ ability to monitor and enforce U.S. 

trade agreements is limited because they sometimes lack sufficient 

numbers of experienced staff with the right expertise; they do not always 

get needed analytical or other types of support from other agencies; and 

they sometimes have difficulty obtaining balanced, comprehensive input 

from the private sector. Moreover, even though these agencies each face 

similar challenges, they have not engaged in sustained discussions to 

identify the full scope of the federal monitoring and enforcement workload, 

the number and types of resources needed across the federal government 

to perform it, the availability of these resources within the government, the 

roles of individual agencies, and the resources each agency will devote to 

the task. Because of these weaknesses, USTR, Commerce, and Agriculture 

are unable to effectively assess, analyze, and respond to all of the trade 

agreement compliance problems that they or the private sector identify. 

These deficiencies prevent the U.S. government from maximizing the 

intended benefits of its trade agreements and thoroughly achieving its 

monitoring and enforcement goals.

Based on our work, we believe that a thorough examination of the current 

and future trade agreement monitoring and enforcement workload is 

necessary. Such an assessment could help identify areas in which capacity 

is currently lacking, as well as areas in which capacity needs to be 

developed to handle future increases in the federal monitoring and 

enforcement workload. Current monitoring and enforcement tasks may not 

be allocated in a way that best uses the agencies’ relative strengths and 

capacities. In light of the recent trade compliance budget initiative, these 

steps are particularly important to ensure that any additional funds are 

properly allocated. Also, given the importance of timely and active private 

sector support for U.S. monitoring and enforcement efforts, the 

mechanisms for obtaining private sector input may not ensure that federal 

agencies obtain complete and balanced information on trade agreement 

compliance problems.
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Recommendation In order to improve U.S. capacity to monitor and enforce trade agreements, 

we recommend that the U.S. Trade Representative, the Secretary of 

Commerce, and the Secretary of Agriculture, in consultation with other 

relevant agencies, develop a strategy for how the U.S. government will 

manage its growing trade agreement monitoring and enforcement 

workload. This strategy should (1) assess the human capital skills needed 

and available to monitor and enforce U.S. trade agreements now and in the 

future and determine how any gaps can be addressed, (2) consider whether 

the current workload is targeted toward the highest risks and properly 

allocated among key agencies, and (3) assess whether the mechanisms for 

obtaining private sector input provide full and balanced coverage of 

existing and future trade issues.

Agency Comments and 

Our Evaluation

We received written comments on a draft of this report from the U.S. Trade 

Representative and the Departments of Commerce and Agriculture (see 

apps. VI to VIII). The agencies also provided technical comments, which we 

incorporated in the report as appropriate.

The U.S. Trade Representative agreed with our assessment that, to improve 

U.S. capacity to monitor and enforce trade agreements, the executive 

branch must employ a more integrated approach rather than have each 

agency independently address its capacity in this area. It stated that the 

administration had followed such an approach in preparing its budget for 

fiscal year 2001, which included an additional $22 million for trade 

agreement monitoring and compliance. The U.S. Trade Representative also 

stated its belief that our report did not adequately recognize the extent to 

which the U.S. Trade Representative had engaged in joint strategic planning 

related to trade agreement monitoring and enforcement. In developing its 

strategic plan under the Government Performance and Results Act, the U.S. 

Trade Representative said that it had received comments from, and 

provided comments to, other agencies. We reviewed the comments that the 

U.S. Trade Representative provided to other agencies in 1997 and modified 

our report accordingly, but we continue to believe that our 

recommendation is appropriate because neither the administration’s fiscal 

year 2001 budget initiative for trade agreement compliance nor the U.S. 

Trade Representative’s efforts to coordinate with other agencies in 

developing its strategic plan constitute the kind of comprehensive and 

sustained strategic planning for federal efforts to monitor and enforce 

trade agreements that we believe is necessary. In particular, the U.S. Trade 

Representative did not provide any evidence to show that either of these 
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efforts involved a thorough interagency assessment of the human capital 

skills needed and available to handle current and future trade agreement 

monitoring and enforcement activities.

The U.S. Trade Representative also indicated that we misunderstood its 

statements in our assessment that steadily declining staff levels at the U.S. 

Trade Representative, Commerce, and Agriculture had adversely affected 

these agencies’ monitoring and enforcement activities. It said that the U.S. 

Trade Representative was not referring to its own staff levels but was 

instead expressing concern about declining staff levels at other agencies 

that support the U.S. Trade Representative’s monitoring and enforcement 

efforts. We agree that the U.S. Representative officials were particularly 

concerned about their ability to obtain support from other agencies, but we 

also consistently heard from U.S. Trade Representative staff that they were 

stretched too thinly to handle their own monitoring and enforcement 

workload. Moreover, we note that the administration is requesting 25 

additional staff for the U.S. Trade Representative in fiscal year 2001, at least 

half of which are to be allocated to trade agreement compliance. 

Commerce and Agriculture generally agreed with our report and its 

recommendation. Commerce characterized our report as helpful and said it 

plans to implement our recommendation to better develop its strategy for 

managing the compliance workload. Commerce also mentioned the 

President’s recent compliance initiative contained in his fiscal year 2001 

budget request. Agriculture said that it supported the report’s conclusions 

and recommendation and noted that it intends to work with the U.S. Trade 

Representative to improve interagency coordination of federal monitoring 

and enforcement efforts through existing interagency coordination 

structures.

We are sending copies of this report to appropriate congressional 

committees. We are also sending copies of this report to the Honorable 

Charlene Barshefsky, U.S. Trade Representative; the Honorable Madeleine 

K. Albright, Secretary of State; the Honorable William M. Daley, Secretary 

of Commerce; and the Honorable Dan Glickman, Secretary of Agriculture. 

Copies will also be made available to others upon request.
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If you or your staff have any questions about this report, please contact me 

on (202) 512-4128. Other GAO contacts and staff acknowledgments are 

listed in appendix IX. 

Sincerely yours,

Susan S. Westin

Associate Director

International Relations and Trade Issues
Page 30 GAO/NSIAD-00-76 International Trade

Appendix I

Executive Branch, Congressional, and Private 

Sector Structures for Monitoring and 

Enforcing Trade Agreements ApendxiI

At least 17 federal agencies, led by the Office of the U.S. Trade 

Representative (USTR), are involved in U.S. government efforts to monitor 

and enforce trade agreements. USTR and the Departments of Agriculture, 

Commerce, and State have relatively broad roles and responsibilities with 

respect to trade agreement monitoring and enforcement, while other 

agencies play more specialized roles. Federal monitoring and enforcement 

efforts are coordinated through an interagency mechanism comprised of 

several management- and staff-level committees and subcommittees. The 

congressional structure for funding and overseeing federal monitoring and 

enforcement activities is also complex because it involves multiple 

committees of jurisdiction. In addition to the executive branch and 

congressional structures, multiple private sector advisory committees exist 

to provide federal agencies with policy and technical advice on trade 

matters, including trade agreement monitoring and enforcement.

Federal Structure for 

Monitoring and 

Enforcing Trade 

Agreements Includes 

Multiple Agencies

Among the multiple agencies involved in monitoring and enforcing U.S. 

trade agreements, some have a mandate that specifically focuses on trade, 

including USTR and the Departments of Agriculture, Commerce, and State. 

Other agencies’ missions are closely related to trade issues, such as the 

Department of the Treasury, or the agencies have a particular expertise that 

is sometimes relevant to trade, such as the Food and Drug Administration 

or the Environmental Protection Agency.
Appendix I

Executive Branch, Congressional, and 

Private Sector Structures for Monitoring and 

Enforcing Trade Agreements

Page 31 GAO/NSIAD-00-76 International Trade

USTR USTR is the primary agency responsible for developing and coordinating 

U.S. international trade, commodity, and direct investment policy and 

leading or directing negotiations with other countries on such matters. As 

part of its overall mission, and as derived from certain key trade statutes, 

USTR is also the primary agency responsible for monitoring and enforcing 

U.S. trade agreements. For example, USTR is statutorily required to 

annually identify foreign policies and practices that constitute significant 

barriers to U.S. exports of goods and services and particularly consider 

whether any identified policies or practices are covered by international 

agreements to which the United States is a party. Further, USTR is required 

to refer to the appropriate agency any unfair trade practice that it considers 

to be inconsistent with the provision of any trade agreement and that may 

have a significant adverse impact on U.S. commerce.1

 Finally, USTR is 

authorized to initiate actions to enforce U.S. rights under bilateral and 

multilateral trade agreements, at its own discretion or as petitioned by 

private enterprises or individuals.2

 Among its other responsibilities, USTR 

chairs the interagency organization that oversees the multiple interagency 

committees that have been formed for coordinating trade policy.

Staff in several USTR offices carry out the agency’s monitoring and 

enforcement responsibilities. USTR’s organizational structure includes 

geographic, industry, multilateral affairs, and general support offices, 

including legal and economic functions. In 1996, USTR established the 

Monitoring and Enforcement Unit within its Office of General Counsel to 

help coordinate the implementation of USTR’s statutory obligations to 

monitor and enforce trade agreements. The Monitoring and Enforcement 

Unit is devoted exclusively to monitoring all U.S. trade agreements and 

implementing U.S. trade laws, determining compliance by foreign 

governments, and pursuing litigation actions necessary to defend U.S. 

rights under those agreements and laws. The Monitoring and Enforcement 

Unit focuses on enforcing trade agreements, handling USTR’s docket of 

World Trade Organization (WTO) and North American Free Trade 

Agreement (NAFTA) dispute settlement cases, among other things. 

Commerce Department Commerce has general responsibility for major nonagricultural trade 

functions of the U.S. government, including monitoring and taking certain 

1

19 U.S.C. 2171 and 19 U.S.C. 2241.

2

19 U.S.C. 2412. 
Appendix I

Executive Branch, Congressional, and 

Private Sector Structures for Monitoring and 

Enforcing Trade Agreements

Page 32 GAO/NSIAD-00-76 International Trade

steps to secure compliance with trade agreements and ensuring that U.S. 

companies have access to foreign markets. Commerce’s monitoring role is 

largely derived from its membership in the interagency trade policy 

committees and from a 1979 executive branch reorganization plan rather 

than from any specific statutory mandate.3

 However, Commerce is 

statutorily responsible, along with the U.S. International Trade 

Commission, for administering U.S. unfair trade laws.4

 These laws require 

Commerce to assess whether imports have benefited from foreign 

subsidies or have been sold at less than fair market value in the United 

States. Commerce also shares statutory responsibility with USTR for 

monitoring violations of WTO rules concerning member countries’ subsidy 

practices.5

Commerce’s trade activities are carried out primarily by its International 

Trade Administration, which is organized like USTR into geographic and 

industry offices. In 1996, the International Trade Administration created a 

Trade Compliance Center to help ensure that U.S. trade agreements are 

properly monitored and compliance issues are promptly addressed. The 

Trade Compliance Center helps coordinate Commerce’s monitoring 

activities. Among its activities, it maintains a data base to give U.S. 

exporters access to information about trade agreements and invites 

companies to notify it about problems in complying with trade 

agreements.6

 The International Trade Administration’s monitoring and 

enforcement efforts are assisted by staff in its U.S. and Foreign 

Commercial Service that are stationed in certain U.S. embassies and 

consulates,7

 and by Commerce’s Office of General Counsel. 

3

44 Fed. Reg. 69273, December 3, 1979 (19 U.S.C. 2171, notes).

4

19 U.S.C. 1677.

5

19 U.S.C. 3571.

6

We reported on Commerce’s efforts to create this data base in International Trade: 

Improvements Needed to Track and Archive Trade Agreements (GAO/NSIAD-00-24, Dec. 14, 

1999). The data base can be found on the internet at http://www.mac.doc.gov/tcc. 

7

The U.S. and Foreign Commercial Service is a global network located in more than 220 

cities worldwide that assists U.S. exporters by promoting and protecting U.S. business 

interests abroad. In the United States, the service operates a hub-and-spoke network of 92 

Export Assistance Centers, which offer companies a comprehensive range of export 

facilitation services in one location.
Appendix I

Executive Branch, Congressional, and 

Private Sector Structures for Monitoring and 

Enforcing Trade Agreements

Page 33 GAO/NSIAD-00-76 International Trade

Agriculture Department The Department of Agriculture provides technical assistance to USTR on 

matters pertaining to agricultural trade, including international 

negotiations on agricultural trade agreements. Agriculture is statutorily 

responsible for implementing and monitoring the agricultural provisions of 

the World Trade Organization and NAFTA.8

 Agriculture is required to report 

to USTR and specified congressional committees on any lack of 

compliance with WTO provisions that adversely affects U.S. agricultural 

trade.9

The Foreign Agricultural Service handles the Department of Agriculture’s 

trade activities and works with USTR and State on international 

agricultural trade issues. The Foreign Agricultural Service’s mission is to 

open, expand, and maintain global market opportunities for U.S. 

agricultural products. In its efforts to address problems with trade 

agreement compliance, it coordinates regularly with other Department of 

Agriculture agencies that have certain technical expertise and with the 

Department of Agriculture’s Office of General Counsel. Its organizational 

structure includes country desks, agricultural commodity offices, and 

multilateral affairs offices. Since 1995, the Foreign Agricultural Service has 

steadily enhanced its ability to address an increasingly prominent form of 

trade barrier—other countries’ health and food safety measures that may 

restrict imports of agricultural products. Its monitoring and enforcement 

activities are greatly aided by its staff that cover agricultural issues in 130 

countries from 64 U.S. diplomatic posts.

State Department The Department of State advises USTR on the foreign policy implications 

of any trade-related actions and participates in trade negotiations that have 

a direct and significant impact on foreign policy. Although not explicitly 

responsible for monitoring and enforcing trade agreements, State 

nevertheless plays an important role in this area.10 State’s Bureau of 

Economic and Business Affairs has overall responsibility for formulating 

and implementing policy regarding foreign economic matters. In addition, 

through State’s extensive network of embassies, consulates, and other 

8

7 U.S.C. 5606, 7 U.S.C. 5674, 19 U.S.C. 3381, and 19 U.S.C. 3391.

9

7 U.S.C. 5606.

10Reorganization Plan No. 3 of 1979 (44 Fed. Reg. 69273, sec. 7, Sept. 25, 1979), as amended 

(19 U.S.C. 2171, notes). This plan emphasizes the importance of State’s foreign policy 

expertise to trade policy.
Appendix I

Executive Branch, Congressional, and 

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Enforcing Trade Agreements

Page 34 GAO/NSIAD-00-76 International Trade

overseas missions, State economic officers—through their in-country 

contacts with U.S. businesses and foreign government officials—provide 

instrumental assistance in monitoring and enforcing trade agreements.

Other Agencies In addition to these 4 agencies, at least 13 other federal agencies are also 

involved in the monitoring and enforcement of trade agreements. These 

agencies generally play more specialized roles by providing technical or 

policy input that is derived from their particular agency mission or areas of 

expertise. For example, the Department of the Treasury, whose mission is 

to promote a prosperous and stable U.S. and world economy, is responsible 

for developing policies on international monetary affairs, trade and 

investment, international debt strategy, and U.S. participation in 

international financial institutions. The Treasury advises USTR on the 

financial services aspects of trade agreements. Similarly, the Department of 

Labor advises USTR on any labor and workers’ rights issues that are 

associated with trade agreements.

As trade agreements have grown more technical, these specialized 

agencies’ input has become increasingly important for analyzing and 

resolving trade compliance issues. For example, the Foreign Agricultural 

Service relies on several regulatory agencies, such as the Department of 

Health and Human Services’ Food and Drug Administration, to help it 

address other countries’ health and food safety measures that affect U.S. 

exports; these agencies have the expertise to understand and evaluate the 

scientific bases of other countries’ measures.11

Among these 13 agencies, the U.S. International Trade Commission plays a 

unique role due to its broad investigative powers in monitoring trade data 

and trade agreements. The Commission is an independent fact-finding 

agency whose activities include gathering, analyzing, and reporting on 

trade developments and the operation of trade agreements. The 

Commission must investigate and make reports to USTR and to Congress 

whenever requested, thus enhancing executive branch efforts to monitor 

and enforce trade agreements.12

11We reported on U.S. efforts to address other countries’ health and food safety measures 

that restrict U.S. exports in Agricultural Exports: U.S. Needs a More Integrated Approach to 

Address Sanitary/Phytosanitary Issues (GAO/NSIAD-98-32, Dec. 11, 1997).

12Section 332 of the Tariff Act of 1930 (19 U.S.C. 1332 (a), (b), and (g)).
Appendix I

Executive Branch, Congressional, and 

Private Sector Structures for Monitoring and 

Enforcing Trade Agreements

Page 35 GAO/NSIAD-00-76 International Trade

Statutory Interagency 

Coordination Structure 

Is Comprised of 

Multiple Committees, 

Subcommittees, and 

Task Forces

Congress created an interagency structure in the Trade Expansion Act of 

1962, as amended by the Trade Act of 1974,13 to help ensure that the 

development of trade policy reflects a range of agency perspectives and is 

coordinated throughout the government. This structure, called the Trade 

Policy Committee, is chaired by USTR and includes the Secretaries of 

State, Agriculture, Commerce, the Treasury, and Labor.14 The Trade Policy 

Committee has two subordinate bodies—the Trade Policy Review Group (a 

management-level committee) and the Trade Policy Staff Committee (a 

senior staff-level committee subordinate to the management level 

committee). These subordinate committees include all the agencies that 

are members of the Trade Policy Committee, and a wide range of other 

agencies as well.

Among these multiple interagency coordination mechanisms, the Trade 

Policy Staff Committee is the most active. This committee operates 

primarily through a network of subcommittees and task forces. These units 

are chaired by USTR staff and are composed of staff from a wide range of 

federal agencies. USTR assigns responsibilities for issue analysis to 

members of the appropriate staff subcommittee or task force. Since trade 

issues cut across both geographic and functional lines, subcommittees 

have been formed to deal with both regional and industry-specific issues. In 

addition, several specialized task forces have been formed to deal with 

specific trade issues. Table 1 shows the breadth of topics covered by Trade 

Policy Staff Committee subcommittees.

Table 1: Trade Policy Staff Committee Subcommittees and Task Forces

1319 U.S.C. 1872.

14 The Trade Policy Committee was established by Executive Order 11846, on March 25, 

1975.

Name of subcommittee or task 

force

Geographic

subcommittee

Functional

subcommittee Task force

Africa X

Andean Countries X

ASEAN X

Australia/New Zealand X

Continued
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Name of subcommittee or task 

force

Geographic

subcommittee

Functional

subcommittee Task force

Canada X

Caribbean/CBI X

Central America X

China X

Eastern/Central Europe X

European Union X

European Union Transatlantic 

Economic Partnership X

Free Trade Area of the Americas X

India X

Israel X

Japan X

LDC Trade Issues X

Mexico X

Middle East X

North Africa X

Russia X

Sub-Saharan Africa X

South Asia X

Southern Cone X

Taiwan X

Aerospace Trade Issues X

Aeronautical Equipment X

Agriculture X

Antidumping X

Barter and Countertrade X

Business and Professional 

Services X

Chemical Trade X

Commodity Agreements X

Congressional Liaison X

Customs (Including Harmonized 

System and Customs Valuation 

Code) X

Economic Analysis X

Energy Issues X

European Union MRAs X

Continued from Previous Page
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Name of subcommittee or task 

force

Geographic

subcommittee

Functional

subcommittee Task force

EU Transatlantic Economic 

Partnership X

Export Financing X

Fisheries X

Generalized System of 

Preferences X

Government Procurement Code X

High Technology Trade Issues X

Import Licensing X

Information Systems X

Intellectual Property X

Intergovernmental Relations X

Investment X

Non-Tariff Barriers X

OECD Trade Issues X

Preferential Trading 

Arrangements X

Pre-Shipment Inspections X

Rules of Origin X

Safeguards X

Section 301a X

Section 337b X

Semiconductors X

Services X

Shipbuilding X

Space Industries Trade X

Standards X

Steel X

Subsidies X

Tariffs X

Basic Telecom X

Trade and Competition X

Trade and the Environment X

Trade and Labor Standards X

Trade and Technology X

Trade Policy Issues Related to 

International Finance X

Continued from Previous Page
Appendix I

Executive Branch, Congressional, and 

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Enforcing Trade Agreements

Page 38 GAO/NSIAD-00-76 International Trade

Legend

ASEAN = Association of Southeast Asian Nations

CBI = Caribbean Basin Initiative

EU = European Union

LDC = Least Developed Country

MRA = Mutual Recognition Agreement

OECD = Organization for Economic Cooperation and Development

UNCTAD = United Nations Conference on Trade and Development

a

The Section 301 subcommittee addresses unfair trade practices.

b

The Section 337 subcommittee addresses intellectual property rights violations.

Source: USTR.

Funding and Oversight 

of Federal Monitoring 

and Enforcement 

Efforts Exercised by 

Multiple Congressional 

Committees

Numerous committees and subcommittees of the U.S. Senate and House of 

Representatives have jurisdiction over the agencies that participate in 

federal monitoring and enforcement efforts. These Committees typically 

have responsibilities along budgetary, agency, or subject area lines. For 

example, the Senate Committee on Appropriations allocates jurisdiction 

for federal funding to various subcommittees. USTR, Commerce, and State 

are all covered by one subcommittee, and Agriculture is covered by 

another. In addition, at least five other Senate committees (Agriculture, 

Nutrition and Forestry; Banking, Housing and Urban Affairs; Finance; 

Foreign Relations; and Commerce, Science and Transportation) have 

subject area jurisdiction over certain trade matters. The situation is similar 

in the House of Representatives, where at least seven committees have 

funding or subject area jurisdiction over trade issues and responsible 

Name of subcommittee or task 

force

Geographic

subcommittee

Functional

subcommittee Task force

UNCTAD Trade Issues X

Wood Products X

WTO Dispute Settlement X

WTO Sanitary and Phytosanitary 

Measures X

WTO Regional Trade 

Agreements X

Driftnet Fishing Sanctions X

Russian Space Launch X

Trade With Guam X

Softwood Lumber X

Tobacco Import Licensing X

Wheat Gluten X

WTO Telecom Services X

Continued from Previous Page
Appendix I

Executive Branch, Congressional, and 

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Enforcing Trade Agreements

Page 39 GAO/NSIAD-00-76 International Trade

agencies (Agriculture; Appropriations; Banking and Financial Services; 

Commerce; International Relations; Small Business; and Ways and Means).

Congress Created 

Multiple Private Sector 

Advisory Committees

In the Trade Act of 1974, Congress created a private sector advisory 

committee system to ensure that U.S. trade policy and negotiation 

objectives reflect U.S. commercial and economic interests.15 Congress 

expanded and enhanced the role of this system in three subsequent acts. 

Numerous advisory committees grew from these acts that provide 

information and advice both prior to entering into trade agreement 

negotiations and on other matters relating to U.S. trade policy.16 The 

committee with the broadest representation is the President’s Advisory 

Committee for Trade Policy and Negotiations, whose 45 members are 

appointed by the President. This committee considers trade policy issues in 

the context of the overall national interest. The advisory system is also 

composed of committees with more specific representation and 

responsibility. These include 6 additional policy advisory committees and 

26 specific committees designed to provide technical advice. These 

technical committees focus on industry-specific sectors; agricultural 

commodities; or, in the case of the functional committees, cross-sectoral 

issues. (See table 2.) In total, the advisory system has about 1,000 members. 

These committees, most of which meet on a fairly regular basis, enhance 

communication and information-sharing between the federal government 

and the private sector about federal monitoring and enforcement efforts.

15Section 185 of the Trade Act of 1974 (19 U.S.C. 2155).

16Pursuant to section 135 (c) (1) and (2) of the Trade Act of 1974, as amended 

(19 U.S.C. 2155), 17 Industrial Sector Advisory Committees, 4 Industrial Functional Advisory 

Committees, and 5 Agricultural Technical Advisory Committees were established.
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Enforcing Trade Agreements

Page 40 GAO/NSIAD-00-76 International Trade

Table 2: Private Sector Advisory Committees

Name of committee

Policy

Advisory

Committees

Industry Sector/

Agriculture

Technical Advisory

Committees

Industry

Functional

Committees

Trade Policy and Negotiations X

Intergovernmental Policy X

Africa Trade X

Agricultural Policy X

Labor X

Defense Policy X

Trade and Environment X

Aerospace Equipment X

Capital Goods X

Chemicals and Allied Products X

Consumer Goods X

Electronics and Instrumentation X

Energy X

Ferrous Ores and Metals X

Footwear, Leather, Leather 

Products X

Building Products and Other 

Materials X

Lumber and Wood Products X

Nonferrous Ores and Metals X

Paper and Paper Products X

Services X

Small and Minority Business X

Textiles and Apparel X

Transportation, Construction, 

Mining, and Agricultural 

Equipment X

Wholesaling and Retailing X

Trade in Fruits and Vegetables X

Trade in Sweeteners X

Trade in Animal and Animal 

Products X

Trade in Grain, Feed, and 

Oilseeds X

Continued
Appendix I

Executive Branch, Congressional, and 

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Enforcing Trade Agreements

Page 41 GAO/NSIAD-00-76 International Trade

Source: USTR, Commerce, and Agriculture data.

Other nongovernmental advisory mechanisms also provide government 

agencies with advice on trade-related matters. These mechanisms, which 

often include the participation of trade associations, can provide agencies 

with information about foreign noncompliance with trade agreements and 

help in developing strategies to address such instances. For example, the 

Meat Industry Trade Policy Council, a coalition of meat and agricultural 

groups that aims to create export opportunities for the U.S. meat and 

poultry industry, advocates on behalf of its members before USTR, 

Agriculture, and Commerce. As part of this effort, the Council notifies 

these agencies of foreign practices that disrupt the flow of trade, including 

those that may violate trade agreements. 

Name of committee

Policy

Advisory

Committees

Industry Sector/

Agriculture

Technical Advisory

Committees

Industry

Functional

Committees

Trade in Tobacco, Cotton, and 

Peanuts X

Customs X

Standards X

Intellectual Property Rights X

Electronic Commerce X

Continued from Previous Page
Page 42 GAO/NSIAD-00-76 International Trade

Appendix II

Key Federal Monitoring and Enforcement 

Activities ApendxiI

The task of monitoring and enforcing foreign compliance with trade 

agreements has become more complex as the number of trade agreements 

and trade agreement partners has grown and the issues covered by trade 

agreements have expanded. Responsible units, including those at USTR, 

Commerce, and Agriculture that we examined, perform a number of key 

activities to monitor and enforce trade agreements. These activities include 

identifying compliance problems, prioritizing the unit’s workload, analyzing 

information about selected compliance problems, seeking ways to resolve 

such problems including taking enforcement action, and coordinating with 

other agencies and the private sector.

Identifying Problems USTR, Commerce, and Agriculture use several sources of information to 

identify potential compliance problems. Most of the offices we examined at 

these agencies said that the private sector was the most important source 

of information for the compliance problems they work on. This is because 

the private sector is closer to the market than the government and is 

usually in the best position to identify potential problems. Agency staff 

working in U.S. embassies were another prominent source of information 

because of their ability to monitor developments in the country where they 

are posted and to interact with local government and private sector 

officials. Commerce and Agriculture generally relied on their own staff 

posted overseas, while USTR generally relied on other agencies’ staff, 

particularly State Department staff posted overseas.

Some of the offices we examined had other unique sources of information 

for identifying compliance problems. For example, officials in USTR’s 

Office of WTO and Multilateral Affairs and the Foreign Agricultural 

Service’s Multilateral Trade Negotiations Division said they had identified 

certain compliance problems because of their responsibility for reviewing 

information that WTO members are required to report under certain WTO 

agreements. Many WTO agreements, including those on agriculture, import 

licensing, and subsidies, require countries to provide information to the 

WTO at least yearly about their current and proposed practices related to 

implementing the agreement. In addition, USTR’s Monitoring and 

Enforcement Unit monitors all WTO dispute settlement actions between 

foreign governments to determine whether the compliance issues involved 

are relevant to the United States.

One compliance case we examined illustrates how compliance issues may 

be identified. In 1990, the United States and Korea entered into a bilateral 

agreement in which Korea promised to import steadily increasing levels of 
Appendix II

Key Federal Monitoring and Enforcement 

Activities

Page 43 GAO/NSIAD-00-76 International Trade

U.S. beef each year. During 1997 and 1998, the Foreign Agricultural 

Service’s Dairy, Livestock, and Poultry Division was closely watching 

Korea’s compliance with the agreement because of difficulties Korea was 

experiencing as a result of the Asian financial crisis. Working with Foreign 

Agricultural Service staff in Korea and interested private sector parties, the 

division determined that Korea had failed to import the agreed-upon 

amounts of beef in 1997 and 1998. The division did so by comparing import 

data to the annual import commitments contained in the agreement. 

Setting Priorities All of the offices we examined faced a substantial trade agreement 

monitoring and enforcement workload, in addition to their other 

responsibilities, such as trade agreement negotiation or market 

development activities. As a result, managers and staff in these offices had 

to prioritize among the multiple trade agreements and compliance issues 

needing their attention. We found certain common criteria that all of the 

offices applied in setting priorities and determining which compliance 

issues they should address, including the amount of U.S. trade and the 

trade principles at stake and any deadlines the offices faced. 

The USTR, Commerce, and Agriculture offices we examined generally tried 

to maximize the impact of their monitoring and enforcement efforts by 

giving priority to compliance issues that affect a high dollar value of U.S. 

trade.1

 However, several U.S. and private sector officials stated that doing 

so raises questions about whether compliance issues that affect a small 

value of trade get sufficient attention from the government. By making 

trade principles another monitoring and enforcement priority, agencies 

help ensure that any compliance issue that has important trade policy 

implications also gets addressed. For example, USTR and the Foreign 

Agricultural Service put significant effort into addressing Hungary’s failure 

to comply with certain export subsidy limits in the WTO Agreement on 

Agriculture, even though the United States generally does not compete 

with Hungary in export markets. These agencies addressed the issue 

primarily to preserve the integrity of the agreement and to prevent other 

countries from following Hungary’s example. 

Notwithstanding their efforts to prioritize according to these criteria, 

managers and staff in the offices we examined said that upcoming 

1

Commerce’s Trade Compliance Center places a high priority on serving as a resource for 

small- and medium-sized exporters.
Appendix II

Key Federal Monitoring and Enforcement 

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Page 44 GAO/NSIAD-00-76 International Trade

deadlines were an equally and sometimes more influential factor in setting 

priorities. Several staff described setting their own priorities based 

primarily on which deadline had to be met next. Deadlines can flow from 

such things as congressional reporting requirements; WTO reporting 

requirements; preparing for and attending various meetings, either among 

U.S. agencies, with foreign officials, or as required by certain trade 

agreements or international organizations; and the specific time lines 

required to pursue formal dispute settlement cases.

Gathering and 

Analyzing Information

Once agencies have identified potential compliance problems, they must be 

able to gather and analyze a wide range of information about these 

problems. For example, staff in the offices we examined said they need 

information to document foreign governments’ commitments, such as 

copies of trade agreements and information about any formal or informal 

commitments foreign governments made to the United States. They also 

reported needing information on what the foreign government or private 

sector actors are doing that caused the allegation of noncompliance. This 

includes documentation of a foreign government’s current or proposed 

laws and regulations; documentation on foreign practices that may be 

inconsistent with trade obligations; and various trade and foreign market 

data, such as prices, distribution of market share, and foreign product 

consumption trends. Staff said they also need information about U.S. and 

foreign industry practices and procedures in order to fully understand how 

best to address an issue. Finally, information about any political 

dimensions of the foreign government’s action or position is often useful.

Once the offices have gathered all necessary and available information, 

they begin an analytical process that may require a wide range of expertise 

and, therefore, may require input from other offices or agencies. The type 

and amount of analysis that is done depend on the nature of the case and 

how elaborate U.S. efforts to address the case become. In several 

compliance cases we examined, economic analysis was done to assess how 

economic problems in the foreign country led to the compliance problem 

and what impact the compliance problem had on U.S. trade. In other cases, 

legal analysis was done to assess relevant trade agreement provisions and 

commitments made by the foreign government and to determine whether 

the compliance issue violated those provisions. As trade agreements 

become more complex, technical analysis is increasingly done to compare 

the U.S. and foreign approach to relevant regulatory or scientific issues. 

For example, in one compliance case we examined, USTR argued that 

Japanese requirements that each U.S. apple variety be tested for certain 
Appendix II

Key Federal Monitoring and Enforcement 

Activities

Page 45 GAO/NSIAD-00-76 International Trade

pests before Japanese officials would approve the varieties for import were 

not based on sound scientific evidence. In addition, strategic or policy 

analysis is done to weigh various response options available to the United 

States and the appropriate timing of such a response. 

Developing Responses The process of developing and implementing responses to compliance 

problems is a collaborative effort between the federal government and the 

private sector, the overall goal of which is to resolve compliance problems 

quickly in the most commercially beneficial way for the private sector. 

During this process, responsible agencies weigh other agencies’ 

perspectives and private sector interests to develop the most appropriate 

U.S. response. Their success in resolving compliance problems depends on 

a number of factors, some of which they do not control. These include 

(1) the nature of the compliance problem itself; (2) the degree of private 

sector support and commitment to resolving the problem; (3) the level of 

resources that multiple agencies can and will devote to resolving the 

problem; (4) the extent to which the United States can bring to bear 

sufficient leverage and the foreign government’s willingness to respond to 

the problem; and (5) the available means to enforce compliance, which is 

tied to the specific terms of the agreement and whether any consultative or 

legal recourse mechanisms are available.

The USTR, Commerce, and Agriculture offices we examined described 

using various methods and levels of communication with foreign 

governments in their attempts to resolve compliance problems. For 

example, one common method is to have U.S. embassy staff deliver a 

demarche, or formal message, to relevant foreign agency officials that 

outlines the U.S. position regarding the compliance problem. Another 

common method is to discuss the problem in meetings of the WTO 

committees that oversee the implementation of individual agreements. For 

example, in one compliance case we examined, the United States raised 

concerns about a proposed Swiss agricultural regulation in two WTO 

committees overseeing two different agricultural agreements and 

successfully persuaded Switzerland to modify its regulation. 

Compliance issues cannot be resolved as quickly when the issue itself is 

complex, agreement terms are vague or subject to interpretation, or the 

foreign government is unresponsive to U.S. resolution efforts. Under such 

circumstances, U.S. efforts enter a protracted phase in which agencies look 

for opportunities to raise the issue at appropriate and increasingly higher 

levels within the foreign government. For example, in one compliance case 
Appendix II

Key Federal Monitoring and Enforcement 

Activities

Page 46 GAO/NSIAD-00-76 International Trade

we examined, USTR officials learned that Peru planned to request a 

precedent-setting extension of time to meet its obligations to the United 

States under the WTO agreement on customs valuation. USTR officials in 

Washington and overseas coordinated their efforts to raise the issue with 

four different Peruvian officials in four separate forums and locations on 

the same day. The approach persuaded Peru to work with USTR to resolve 

the problem.

Because of differences in their legislative authority, USTR, Commerce, and 

Agriculture play different roles in the resolution process. Offices from all 

three agencies may take the lead in addressing an issue in the early stages, 

but USTR is the only agency authorized to invoke dispute settlement 

procedures on behalf of the United States. Therefore, its involvement 

conveys the seriousness of the U.S. government’s commitment to resolve 

an issue.

Taking Enforcement 

Action

In some cases, the U.S. government must make a decision about invoking 

dispute settlement procedures where provided by trade agreements or 

about taking other actions under U.S. trade law, such as increasing tariff 

levels on foreign imports. According to U.S. and private sector officials, 

initiating dispute settlement procedures requires considerable time and 

effort by both the government and the private sector. For example, officials 

in USTR’s Monitoring and Enforcement Unit told us that a substantial 

amount of evidence may be required to prove one’s case in dispute 

settlement proceedings. They also told us that the process can be

time-consuming—two prominent WTO dispute settlement cases the United 

States initiated against the European Union, on European Union import 

measures for hormone-treated beef and bananas, were each pending in the 

WTO’s dispute settlement system for about 3 years. Finally, USTR officials 

told us that, from the U.S. government’s perspective, the outcome of WTO 

dispute settlement cases can have positive and negative impacts on the 

global trading system. Therefore, USTR’s Monitoring and Enforcement Unit 

closely monitors developments in many WTO cases, whether or not the 

United States is a participant. For these reasons, decisions to proceed with 

dispute settlement are always vetted through an interagency process that 

considers how such actions affect a broad range of U.S. interests.
Appendix II

Key Federal Monitoring and Enforcement 

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Page 47 GAO/NSIAD-00-76 International Trade

Coordination With 

Other Agencies and the 

Private Sector

Many agency officials noted that interagency coordination is necessary and 

beneficial throughout this process for obtaining a breadth of agency 

perspectives and expertise, developing cohesive U.S. positions to address 

compliance issues, leveraging available resources, and bringing the full 

weight of the U.S. government to bear in seeking resolutions to problems. 

Staff in the offices we examined regarded interagency coordination as an 

inherent aspect of federal monitoring and enforcement efforts, although it 

was recognized that the quality of such coordination was sometimes 

uneven because it is very dependent on the level of commitment by other 

agencies. In some areas, like within Agriculture or between USTR and 

certain parts of Commerce and State, coordination appears to be active and 

effective. However, because the overall amount and quality of participation 

by other agencies in interagency trade policy committees have diminished 

in recent years, USTR officials report that they do not always have the 

breadth of perspectives or information needed to develop or advance U.S. 

positions. As a result, USTR is less able to perform its role of weighing 

different agency perspectives to determine the overall U.S. national interest 

in trade policy matters.

The offices we examined also regarded private sector support as crucial to 

the success of their monitoring and enforcement efforts. Officials said the 

private sector knows the market and has contacts, information, expertise, 

and other resources the U.S. government lacks. It takes a pragmatic point 

of view toward resolving problems and can be a source of creative 

strategies. The private sector can also marshal political backing in the 

United States and abroad, increasing U.S. leverage for resolving 

compliance issues.
Page 48 GAO/NSIAD-00-76 International Trade

Appendix III

Key Reporting Mechanisms Related to Trade 

Agreement Monitoring and Enforcement ApendxiI

U.S. agencies are required by domestic law to prepare a variety of 

trade-related reports that assist them in their efforts to monitor and enforce 

trade agreements. Since these are monitoring tools, preparation of some of 

the reports requires agencies to review the operation or implementation of 

certain trade agreements. In addition, some of the reports provide 

information necessary for U.S. agencies to consider in taking enforcement 

action. The reporting requirements range from supplying comprehensive 

coverage of a wide array of trade issues, industries, or geographic sectors 

to providing a narrow focus on specific issues or areas. Table 3 provides 

more detailed information on many of the key reporting mechanisms.

Table 3: Key Reporting Mechanisms Used in Monitoring and Enforcing Trade Agreements

Lead responsible 

agency Reporting mechanisms

Frequency of 

report Description

USTR Annual Report on the Trade 

Agreements Program

(19 U.S.C. § 2213)

Annual This report provides information on the operation of the trade 

agreements program and the provisions of import relief and 

adjustment assistance to workers and firms. In part, the report 

covers areas such as new trade negotiations, changes in trade 

agreements, and the results of actions to remove foreign trade 

restrictions against U.S. exports and eliminate foreign practices 

that discriminate against U.S. service industries.

USTR Trade Policy Agenda 

(19 U.S.C. § 2213)

Annual The report is a statement of U.S. trade policy objectives and any 

actions proposed to achieve those objectives, including proposed 

legislation and progress made during the preceding year in 

achieving prior objectives.

USTR National Trade Estimate 

(NTE) Report on Foreign 

Trade Barriers (19 U.S.C. 

§ 2241)

Annual The report identifies and estimates the impact of acts, policies, or 

practices of foreign countries that constitute significant barriers to 

U.S. exports of goods and services, property protected by 

intellectual property rights, foreign direct investment, and U.S. 

electronic commerce. The NTE also notes any action taken to 

reduce or eliminate barriers described in the reports.

USTR Report on the World Trade 

Organization (19 U.S.C. 

§ 3534)

Annual Report on the activities and work programs of the WTO in the 

preceding year, including any efforts by USTR to implement 

recommendations in a WTO dispute settlement report that was 

adverse to the United States.

USTR Identification of Trade 

Expansion Priorities (Super 

301) (19 U.S.C. § 2420 note 

containing Executive Order 

13116)

Annual Section 310 of the Trade Act of 1974, as amended, is commonly 

referred to as “Super 301.” In the Super 301 report, USTR 

annually reviews U.S. trade expansion priorities to identify in a 

report those foreign country practices, which, if eliminated, would 

most likely increase U.S. exports. 

Continued
Appendix III

Key Reporting Mechanisms Related to Trade 

Agreement Monitoring and Enforcement

Page 49 GAO/NSIAD-00-76 International Trade

Lead responsible 

agency Reporting mechanisms

Frequency of 

report Description

USTR Special 301 Review 

(19 U.S.C. § 2242) 

At least annually Section 182 of the Trade Act of 1974, as amended, is commonly 

referred to as “Special 301.” This section requires USTR to 

identify those countries that deny adequate and effective 

protection for intellectual property rights, or fair and equitable 

market access for U.S. persons that rely on intellectual property 

protection. USTR shall only designate as “priority foreign 

countries” those that have the most onerous or egregious 

practices and whose practices have the greatest adverse impact 

on the relevant U.S. products.

USTR Annual Review of 

Telecommunications Trade 

Agreements (19 U.S.C. 

§ 3106)

Annual This report reviews the operation and effectiveness of U.S. 

telecommunications trade agreements and determines whether 

any act or policy of a foreign country that has entered into a 

telecommunications-related agreement with the United States is 

either not in compliance with the terms of the agreement, or 

denies, within the context of the agreement, mutually 

advantageous market opportunities to telecommunications 

products and services of U.S. firms in that country.

USTR Annual Report on 

Discrimination in Foreign 

Government Procurement 

(19 U.S.C. § 2420 note 

containing Executive Order 

13116)

Annual This report identifies foreign countries that are signatories to the 

WTO Government Procurement Agreement, NAFTA, or other 

agreements relating to government procurement and that are in 

violation of their obligations under these agreements. The report 

also identifies those countries that maintain a significant and 

persistent pattern of discrimination in government procurement 

against U.S. goods and services that results in identifiable harm to 

U.S. businesses and whose goods and services are purchased in 

significant amounts by the U.S. government.

USTR Study on the Operation and 

Effect of NAFTA (19 U.S.C. § 

3462)

Once in 1997 A comprehensive assessment of the net effect of NAFTA in areas 

such as the U.S. economy, labor and environmental conditions in 

Mexico, and pollution levels in the region of the U.S.-Mexican 

border.

USTR Study on Trade With Mexico 

in Automobiles and 

Automobile Parts (19 U.S.C. 

§ 3463)

Annual from 

1995 through 

1999

Annual review of the effectiveness of NAFTA provisions with 

respect to increasing U.S. exports of motor vehicles and motor 

vehicle parts to Mexico.

USTR and 

Commerce 

Annual Report on Subsidies 

(19 U.S.C. § 3571)

Annual This report describes the subsidy practices of major trading 

partners of the United States, and the monitoring and 

enforcement activities on the part of USTR and Commerce 

relating to these subsidy practices throughout the previous year. 

Commerce and the 

Trade Promotion 

Coordination 

Committee

National Export Strategy 

(15 U.S.C. § 4727)

Annual This report presents a U.S. governmentwide strategic plan that, in 

part, establishes priorities for federal activities supporting U.S. 

exports, evaluates current export programs to bring them in line 

with these priorities, and puts forth plans to eliminate overlap 

between programs.

U.S. International 

Trade Commission

The Year in Trade: Annual 

Report on the Operation of 

the Trade Agreements 

Program (19 U.S.C. § 2213)

At least annually This report provides Congress with factual information on the 

operation of the trade agreement program.

Continued from Previous Page
Appendix III

Key Reporting Mechanisms Related to Trade 

Agreement Monitoring and Enforcement

Page 50 GAO/NSIAD-00-76 International Trade

Source: GAO analysis.

Lead responsible 

agency Reporting mechanisms

Frequency of 

report Description

State Country Economic Policy and 

Trade Reports (15 U.S.C. 

§ 4711)

Annual This report outlines the economic policy and trade practices of 

each country with which the United States has an economic or 

trade relationship, including acts, policies, and practices that 

constitute significant barriers to U.S. exports or foreign direct 

investment.

Treasury National Treatment Study

(22 U.S.C. § 5352) 

Every 4 years This report provides Congress with information regarding financial 

institutions from foreign countries that offer services in the United 

States, the types of services being offered by these companies, 

the extent to which foreign countries deny equal treatment to U.S. 

banking and securities concerns, and the efforts taken by the U.S. 

government to eliminate discriminatory practices.

Continued from Previous Page
Page 51 GAO/NSIAD-00-76 International Trade

Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement ApendxiIV

Despite the significant increase in the federal monitoring and enforcement 

workload that occurred in 1995 when the comprehensive World Trade 

Organization agreements took effect, overall staff levels at USTR and 

within responsible Commerce and Agriculture agencies or divisions have 

been flat or declining since that time, with the exception of 10 new 

positions for monitoring and enforcement added to USTR’s budget in fiscal 

year 1998. Appropriations also did not always keep pace with authorized 

staffing levels. As a result, all three agencies had to pay for annual 

increases in salary and other costs by making unwanted staff cuts. USTR, 

meanwhile, has faced substantial staff turnover. Decisions to create 

dedicated monitoring and enforcement offices made in this environment 

resulted in a shift, not an increase, of resources. Some of these resources 

came from offices that have important monitoring responsibilities of their 

own. USTR staffing was increased in fiscal year 1998, but our work at 

USTR, Commerce, and Agriculture shows that some key agency offices are 

still struggling to overcome weakness that stem from inadequate resources 

of their own and at other agencies.

Staff Constraints 

Impair U.S. 

Compliance Efforts

Managers in all of the offices we examined said staff availability and 

expertise are the most important resources they need to monitor and 

enforce trade agreements and quickly and comprehensively address 

compliance problems. Our work at USTR, Commerce, and Agriculture 

shows that some agency offices generally have the amount and type of staff 

resources they need to monitor and enforce trade agreements, while others 

face resource challenges. Private sector representatives said that USTR, 

Commerce, and Agriculture were responsive to industry concerns and 

dedicated to resolving compliance problems but noted that the agencies’ 

capacity to do so is limited.

Most staff with monitoring responsibilities also perform other functions, 

such as negotiating trade agreements or developing foreign market 

opportunities. Because agencies could not provide separate data, we 

analyzed data on staffing in the agencies or portions of agencies that have 

primary responsibility for trade agreement monitoring and enforcement.

USTR’s Resources 

Have Been Flat and 

Attrition High

Actual staffing at USTR, which is the agency with the most extensive 

statutory monitoring and enforcement responsibilities, was relatively flat 

from fiscal years 1995 to 1998, before rising in fiscal year 1999, as shown in 
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 52 GAO/NSIAD-00-76 International Trade

figure 5. Moreover, because its appropriation did not keep pace with rising 

costs, USTR was unable to hire as many staff as it was authorized.

Figure 5: USTR Authorized and Actual Staff Levels, Fiscal Years 1995-99

Legend

FTE = Full time equivalent

Source: USTR data.

USTR’s actual staff levels reached a low point of 155 at the beginning of 

fiscal year 1998. For fiscal year 1998, USTR was authorized to hire 

14 additional staff, and it added 7 lawyers to the Monitoring and 

Enforcement Unit to handle WTO dispute settlement cases. USTR’s Japan 

Office staff also increased from 3 to 5, including one detailee from the 

Department of State. However, other important USTR offices shrank in 

size. For example, staffing in the Office of WTO and Multilateral Affairs, 

which is responsible for monitoring most WTO agreements, went from 

10 slots in fiscal year 1996 to 9 slots in fiscal year 1999. Staffing in the 

Western Hemisphere unit, which monitors the North American Free Trade 

Agreement, declined from 13 slots in fiscal year 1995 to 9 in fiscal

year 1999. In addition, about 14 percent of USTR’s staff separated from the 

agency in each of the last 5 fiscal years (fiscal years 1995-99). Such 

0

30

60

90

120

150

180

1995 1996 1997 1998 1999

Actual FTEs

Authorized FTEs
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 53 GAO/NSIAD-00-76 International Trade

turnover can be particularly problematic because of USTR’s tendency to 

have only one staff member covering a given trade topic. In part to bolster 

its ability to monitor and enforce trade agreements, USTR requested seven 

additional positions for fiscal year 2000, but no increases were authorized.

Some officials pointed out that USTR was designed to be a small, 

policy-focused agency and said it is not well equipped to perform 

resource-intensive activities, like trade agreement monitoring. In five of the 

six particular cases we examined, private sector officials said that USTR’s 

staff levels had hindered efforts to resolve their compliance concerns. In 

the sixth case, industry provided extensive data analysis and other support 

to mitigate USTR’s limited capacity. USTR staffing also affected other 

agencies’ efforts. For example, in one case we examined, the U.S. company 

tried unsuccessfully for over a year to get USTR to address its concerns 

about a possible trade agreement violation by Korea that was blocking its 

exports. A company official stated that the company finally persuaded one 

of its Senators to ask Commerce about the issue at a congressional trade 

hearing, which investigated the problem and satisfactorily resolved it 

within a month.

Commerce Staffing 

Has Declined

Commerce provides support to USTR and has important monitoring 

responsibilities of its own. Its monitoring and enforcement workload has 

grown, both because of the increase in the number of U.S. trade 

agreements and because of a rise in the number of small- and medium-sized 

exporters that rely on Commerce for assistance in resolving market access 

concerns. The two divisions with the most export-related trade agreement 

monitoring responsibilities—Market Access and Compliance, and Trade 

Development— both experienced declining staff levels since fiscal year 

1992.1

 Authorized staff allowances in the Market Access and Compliance 

division’s operating units fell steadily, from 220 in fiscal year in 1992 to 141 

in fiscal year 1999, as shown in figure 6. The Market Access and 

Compliance division houses the Trade Compliance Center. After the 

Center’s creation in 1996, Congress directed Commerce to allocate it 25 

staff.2

 However, because Commerce did not receive an overall increase in 

1

The International Trade Administration’s Import Administration Division monitors the 

implementation of certain trade agreements, notably those that address other countries’ 

subsidy and dumping practices.

2

Upon Commerce’s request, this “earmark” was removed in fiscal year 1999.
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 54 GAO/NSIAD-00-76 International Trade

funds for the Market Access and Compliance division, other offices in this 

division decreased in size, as shown in figure 7. For example, the Japan 

office that monitors 18 U.S. trade agreements with Japan declined from 17 

staff in fiscal year 1992 to 8 in fiscal year 1999. The unit responsible for 

monitoring NAFTA shrank from 33 to 13 during the same time period. The 

office that monitors trade with China had 5 positions in fiscal 1999, down 

from 10 in fiscal year 1994 and 7 in fiscal year 1992.

Figure 6: Operating Units’ Authorized and Actual Staffing in the International Trade 

Administration’s Market Access and Compliance Division, Fiscal Years 1992-99

Legend

FTE = Full time equivalent

Source: Commerce Department data

0

25

50

75

100

125

150

175

200

225

250

1992

1993

1994

1995

1996

1997

1998

1999

Authorized FTEs

Actual FTEs
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 55 GAO/NSIAD-00-76 International Trade

Figure 7: Authorized Staff Allowance by Region in the International Trade 

Administration’s Market Access and Compliance Division, Fiscal Years 1992-99

Legend

FTE = Full time equivalent

Source: Commerce Department data.

Overall actual staffing in Commerce’s Trade Development division, which is 

responsible for monitoring over 100 U.S. trade agreements on sectors such 

as aerospace, telecommunications, services, and textiles, fell by about 

9 percent between fiscal years 1994 and 1999, as shown in figure 8. 

However, some offices experienced larger staffing declines. The Office of 

Automotive Affairs, which monitors bilateral agreements with Japan and 

Korea and NAFTA’s automotive chapter, declined from 24 in fiscal year 1994 

to 16 in fiscal year 1999, or by about one-third. Moreover, some Commerce 

staff are responsible for monitoring multiple trade agreements, in addition 

0

50

100

150

200

Western Hemisphere

Japan

Europe

Asia/Pacific

Africa/Near East

Authorized FTEs

1992 1993 1994 1995 1996 1997 1998 1999
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 56 GAO/NSIAD-00-76 International Trade

to having other trade responsibilities, and may not be able to routinely 

monitor all of the trade agreements for which they are responsible. For 

example, the Commerce official responsible for monitoring several 

insurance agreements with Japan also covers insurance matters in other 

major markets, such as China, as well as several multilateral agreements on 

financial services. 

Figure 8: Authorized and Actual Staffing in the International Trade Administration’s 

Trade Development (Industry) Division, Fiscal Years 1992-99

Legend

FTE = Full time equivalent

Source: Commerce Department data.

This loss of resources has been debilitating for country desks and has 

meant that some issues brought to the agency’s attention are not addressed 

fully or quickly. For example, two cases involving Japanese government 

1992 1993 1994 1995 1996 1997 1998 1999

Actual FTEs

Authorized FTEs

0

100

200

300

400

500
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 57 GAO/NSIAD-00-76 International Trade

procurement are not being worked on full-time because of a lack of staff 

with appropriate expertise. Commerce is also less able to support USTR in 

its enforcement work. For example, the Commerce staff person assigned to 

support USTR in the customs area is also working on WTO accessions, the 

preshipment inspection agreement, and a dispute with Mexico over 

artificially high duty assessments. Commerce requested 20 additional staff 

positions in its fiscal year 2000 budget proposal for the Market Access and 

Compliance division, but Congress did not fund 12 of them.

Agriculture’s Tight 

Budgets Resulted in 

Decreasing Staff Levels 

and Cuts in Travel, 

Training, and 

Equipment

Agriculture plays an important role in trade agreement monitoring and 

enforcement. It routinely examines notifications made under WTO and 

NAFTA provisions on agriculture, analyzes trade trends, and identifies 

potential compliance problems. In cases such as Russia’s threatened ban 

on U.S. poultry, Agriculture was instrumental in analyzing trade and food 

safety issues and supporting policymakers at Agriculture and other 

departments. Agriculture also works with USTR on formal dispute 

settlement cases. It provided extensive support in WTO cases on the 

European Union’s ban on hormone-treated beef and Japanese testing 

requirements for individual varieties of fruit.

Most of Agriculture’s trade responsibilities are handled by the Foreign 

Agricultural Service. The Foreign Agricultural Service’s trade agreement 

monitoring activities are part of its “market access” program area.3

 The 

staff resources devoted to this program area are shown in figure 9.

Over the last 5 years, the Foreign Agricultural Service has faced flat staff 

levels and operating budgets that did not completely cover rising salary 

costs. In fiscal year 1999, 50 vacant positions were eliminated across the 

agency, and agency officials expect to eliminate about 30 more positions to 

help absorb budget cuts for fiscal year 2000. Agency officials said the cuts 

3

Under the market access program area, the Foreign Agricultural Service initiates, directs, 

and coordinates the Agriculture Department’s formulation of trade policies and programs 

with the goal of maintaining and expanding world markets for U.S. agricultural products. 

This program area should not be confused with the Market Access Program, which is 

funded by Agriculture’s Commodity Credit Corporation to help finance the overseas 

marketing activities of various groups, including private companies that qualify as small 

businesses under the Small Business Act (The 1996 Farm Act, P.L. 104-127). The Foreign 

Agricultural Service funds the salaries and administrative expenses for the Market Access 

Program, but the Commodity Credit Corporation receives funds for the program under 

separate budget authority (7 C.F.R. 2.16 and 7 U.S.C. 5641).
Appendix IV

Staffing at Three Key Agencies Responsible 

for Trade Agreement Monitoring and 

Enforcement

Page 58 GAO/NSIAD-00-76 International Trade

in their operating budget will force them to close several overseas offices, 

cut back the agency’s performance of certain activities, and further reduce 

the funds spent on travel, training, and equipment. The agency currently 

faces increased responsibilities for WTO negotiations on agriculture, and 

officials said they requested additional staff resources in fiscal year 2001 to 

undertake this task.

Figure 9: Foreign Agricultural Service Staff Years Allocated to Market Access 

Program Area, Fiscal Years 1995-2000

a

1999 and 2000 are estimates.

Note: Disparities in staff year data between fiscal years 1995 and 1998 are due in part to changes in 

the way the Foreign Agricultural Service defined its various program areas for the 1993 Government 

Performance and Results Act and estimated program area staff allocations. Since fiscal year 1999, the 

definition of the market access program area has remained relatively unchanged.

Source: Foreign Agricultural Service data.

About 10 percent of the Foreign Agricultural Service’s foreign service staff 

rotate to new positions within the agency each year, with implications for 

trade agreement monitoring and enforcement. Some officials said that 

building relationships with a constantly changing workforce can be 

difficult, and noted that it takes staff about a year to come up to speed on 

their newly assigned areas. On the other hand, others felt that the agency’s 

overall expertise is enhanced as a result of staff rotation.

0

50

100

150

200

250

1995 1996 1997 1998 1999a 2000a

Staff years
Page 59 GAO/NSIAD-00-76 International Trade

Appendix V

Objectives, Scope, and Methodology ApendxiV

The Chairman of the House Committee on Ways and Means asked us to 

(1) identify the federal structure for monitoring and enforcing trade 

agreements; (2) describe the increasing complexity of the federal 

monitoring and enforcement task and key activities that federal agencies 

must perform; and (3) assess whether the Office of the U.S. Trade 

Representative, the Department of Commerce, and the Department of 

Agriculture have the capacity to handle their monitoring and enforcement 

workload, that is, whether their staff resources and support mechanisms 

enable them to perform needed monitoring and enforcement activities.

To identify the federal structure for trade agreement monitoring and 

enforcement, we first reviewed the relevant legal authorities to determine 

the extent to which there is a legal framework for this function. We also 

reviewed documentation and interviewed officials at the National 

Economic Council and six key agencies identified by statute as most 

responsible for administering trade policy: USTR and the Departments of 

Agriculture, Commerce, Labor, State, and the Treasury. We obtained 

information from officials at these agencies on their specific monitoring 

and enforcement responsibilities, their agency’s structure for conducting 

the activities, and their procedures for coordinating with other trade 

agencies. 

In order to obtain more detailed information about the federal 

government’s monitoring and enforcement activities, we first selected three 

offices within each of USTR, Commerce, and Agriculture as units of 

analysis. At Commerce and Agriculture, we chose units that perform either 

a coordinating function or represent a geographic location or a commodity 

or industry. At USTR, we selected the unit responsible for enforcement, as 

well as the unit that handles WTO issues and a geographic unit. The units 

are listed in table 4.
Appendix V

Objectives, Scope, and Methodology

Page 60 GAO/NSIAD-00-76 International Trade

Table 4: Agencies and Units Selected by GAO for Detailed Analysis

Source: GAO analysis.

To describe the increasing complexity of the federal monitoring and 

enforcement task and key activities that federal agencies must perform, we 

reviewed agency records and conducted structured interviews with both 

managers and staff from our selected units. We asked them to discuss their 

monitoring and enforcement activities, how they set goals and priorities, 

how they allocate resources and coordinate with other government units, 

and how they interact with the private sector, among other topics. In 

addition, we conducted structured interviews with experts in trade policy 

to gain their perspective on monitoring and enforcement issues.

To assess whether USTR, Commerce, and Agriculture have the capacity to 

handle their current and future monitoring and enforcement workload, we 

asked the managers from each of our selected units to choose examples of 

trade agreement compliance issues that they believed were representative 

of their unit’s monitoring or enforcement activities (see table 5 for the list 

of examples). We then conducted structured interviews with staff 

Agency Unit Unit’s orientation

U.S. Trade Representative

• ⋅Monitoring and 

Enforcement Unit

Coordination of monitoring 

and enforcement

• ⋅Office of Japan Geographic

• ⋅Office of WTO and 

Multilateral Affairs

WTO issues

Department of Commerce

• ⋅Trade Compliance Center Coordination of monitoring 

• ⋅Office of Latin 

America/Caribbean

Geographic

• ⋅Office of Automotive 

Affairs

Industry issues

Department of Agriculture

• ⋅Multilateral Trade 

Negotiations Division

Coordination of agriculture 

trade policy

• ⋅Europe, Africa, and Middle 

East Division

Geographic

• ⋅Dairy, Livestock, and 

Poultry Division

Commodity issues
Appendix V

Objectives, Scope, and Methodology

Page 61 GAO/NSIAD-00-76 International Trade

responsible for managing the example. In addition, we interviewed 

knowledgeable private sector representatives affected by the example to 

gain their perspectives on how the government responded to the issue. We 

also reviewed budget, planning, and other documents from each agency to 

contrast their recent resource allocations with their anticipated future 

workload.

Table 5: Representative Monitoring or Enforcement Examples Selected by Government Units 

Legend

EU = European Union

TRIPS = Trade-related Intellectual Property Rights

Source: GAO analysis.

Unit Unit-selected example Nature of issue

U.S. Trade Representative

Monitoring and Enforcement Unit • Japan distilled spirits National treatment and taxation

• WTO TRIPS Agreement Intellectual property

Office of Japan • National Police telecommunications Government procurement

• Japan varietal testing Plant health measures affecting U.S. fruit 

exports

Office of WTO and Multilateral Affairs • Customs valuation Tariff administration

• WTO Subsidies Agreement Government subsidies

Commerce

Trade Compliance Center • Korea washing machines Technical barriers to trade

• Korea Airport Construction Authority Government procurement

Office of Latin America and the Caribbean • Ecuador Dealer’s Act National treatment

• Argentina exclusive marketing rights Intellectual property

Office of Automotive Affairs • Mechanic certification under the

U.S.-Japan Auto Agreement

Nontariff trade barrier

• Korea Auto Agreement Agreement implementation

 Agriculture

Multilateral Trade Negotiations Division • Philippine pork and poultry Tariff rate quota

• Switzerland animal welfare regulations Tariff rate quota and animal health

Europe, Africa, and Middle East Division • EU veterinary equivalency Standards

• EU Canned Fruit Agreement Government subsidies

Dairy, Livestock, and Poultry Division • Russian poultry ban Market access

• Korea Beef Agreement Tariff rate quota
Appendix V

Objectives, Scope, and Methodology

Page 62 GAO/NSIAD-00-76 International Trade

We did our work from June 1998 through February 2000 in accordance with 

generally accepted government auditing standards.
Page 63 GAO/NSIAD-00-76 International Trade

Appendix VI

Comments From the Office of the U.S. Trade 

Representative ApendxiVI

Note: GAO comments 

supplementing those in the 

report text appear at the 

end of this appendix.

See comment 1.
Appendix VI

Comments From the Office of the U.S. Trade 

Representative

Page 64 GAO/NSIAD-00-76 International Trade

See comment 2.

See comment 3.

See comment 4.
Appendix VI

Comments From the Office of the U.S. Trade 

Representative

Page 65 GAO/NSIAD-00-76 International Trade

See comment 5.

See comment 6.
Appendix VI

Comments From the Office of the U.S. Trade 

Representative

Page 66 GAO/NSIAD-00-76 International Trade

The following are GAO’s comments on the Office of the U.S. Trade 

Representative’s letter dated February 22, 2000.

GAO Comments 1. Our report has been revised to include information on the President’s 

recent compliance initiative, which is included in the President’s fiscal 

year 2001 budget request. However, as noted on page 27, we do not 

believe this initiative satisfies our recommendation.

2. We revised our report to reflect this point. However, as discussed on 

page 27, we continue to believe that our recommendation is 

appropriate.

3. We respond to this comment on page 28.

4. We revised the report to clarify that federal agencies perform routine 

monitoring of certain trade agreements, but our evidence shows that 

some trade agreements receive little or no monitoring. We also added 

language to show that many trade experts and private sector 

representatives we spoke with considered this to be a sensible 

approach, given the increased number of U.S. trade agreements and the 

resources available to monitor them.

5. We contacted USTR to clarify its concerns on this point. USTR was 

commenting on our description of a compliance problem in which a 

U.S. company tried unsuccessfully for over a year to get USTR to 

address its concerns about a possible trade agreement violation by 

Korea that was blocking the company’s exports (see p. 53). After the 

company persuaded one of its Senators to ask Commerce about the 

issue at a congressional trade hearing, Commerce investigated the 

problem and satisfactorily resolved it within a month. In its comment, 

USTR draws a distinction between USTR’s role in monitoring trade 

agreements and Commerce’s role in helping U.S. businesses address 

problems that are not related to trade agreements. In explaining USTR’s 

comment, a USTR official told us USTR believes the example is an 

unfair criticism of USTR because the issue was more appropriately 

handled by Commerce. However, because the issue involved a potential 

trade agreement violation, we believe that USTR should have attempted 

to understand and address the company’s concerns. 

6. In the report, we clarified that the statement in question reflects the 

beliefs of the private sector source that made the comment. This 
Appendix VI

Comments From the Office of the U.S. Trade 

Representative

Page 67 GAO/NSIAD-00-76 International Trade

example is included in the report to show that some private sector 

representatives we spoke with had concerns about whether USTR’s 

resources implicitly limit the number of dispute settlement cases that 

USTR can undertake at a given time. We understand that USTR and 

private sector representatives may disagree about whether particular 

compliance problems should be handled through dispute settlement 

proceedings, and we did not attempt to assess the merits of any 

potential dispute settlement case.
Page 68 GAO/NSIAD-00-76 International Trade

Appendix VII

Comments From the Department of 

Commerce ApendxiVI

Note: GAO comments 

supplementing those in the 

report text appear at the 

end of this appendix.

See comment 1.
Appendix VII

Comments From the Department of 

Commerce

Page 69 GAO/NSIAD-00-76 International Trade

See comment 2.

See comment 3.

See comment 4.

See comment 5.
Appendix VII

Comments From the Department of 

Commerce

Page 70 GAO/NSIAD-00-76 International Trade

The following is GAO’s comments on the Department of Commerce’s letter 

dated February 23, 2000.

GAO Comments 1. Our report has been revised to include information on the President’s 

recent compliance initiative, which is included in the President’s fiscal 

year 2001 budget request. However, as noted on page 27, we do not 

believe this initiative satisfies our recommendation.

2. We revised our report to describe more fully the range of monitoring 

and enforcement activities undertaken by federal agencies, as well as 

the nature of support provided by the private sector.

3. We noted in our report that Commerce states its staff routinely discuss 

compliance problems and resolution strategies with their USTR 

counterparts. 

4. Our report already stated our observation that the government’s ability 

to do legal analysis of compliance problems is strong. We revised our 

report to specifically note that Commerce’s Office of General Counsel 

provides legal support to the International Trade Administration.

5. Although we already discussed the Commerce Trade Compliance 

Center’s efforts to assist small- and medium-sized companies through 

an internet site in an earlier section of the report, we modified our 

report to reflect the priority given by the Trade Compliance Center in 

this area. In addition, we have previously commented on the Commerce 

internet site in International Trade: Improvements Needed to Track and 

Archive Trade Agreements (GAO/NSIAD-00-24, Dec. 14, 1999), which is 

also noted in the report.
Page 71 GAO/NSIAD-00-76 International Trade

Appendix VIII

Comments From the Department of 

Agriculture ApendxiVI

Note: GAO comments 

supplementing those in the 

report text appear at the 

end of this appendix.
Appendix VIII

Comments From the Department of 

Agriculture

Page 72 GAO/NSIAD-00-76 International Trade

See comment 1.
Appendix VIII

Comments From the Department of 

Agriculture

Page 73 GAO/NSIAD-00-76 International Trade
Appendix VIII

Comments From the Department of 

Agriculture

Page 74 GAO/NSIAD-00-76 International Trade

The following is GAO’s comment on the Department of Agriculture’s letter 

that we received on February 24, 2000.

GAO Comment 1. Our report has been revised to include information on the President’s 

recent compliance initiative, which is included in the President’s fiscal 

year 2001 budget request. However, as noted on page 27, we do not 

believe this initiative satisfies our recommendation.
Page 75 GAO/NSIAD-00-76 International Trade

Appendix IX

GAO Contacts and Staff Acknowledgments ApendxiIX

GAO Contacts Elizabeth Sirois, (202) 512-8989

Shirley Brothwell, (202) 512-3865

Acknowledgments In addition to those named above, David Artadi, Carlos Evora, Wayne 

Ferris, Kim Frankena, Anthony Moran, Mary Moutsos, and Katharine 

Woodward made key contributions to this report.

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