United States Government Accountability Office

GAO Testimony 

Before the Committee on Small Business 

House of Representatives 

EXPORT PROMOTION

Trade Promotion 

Coordinating Committee’s 

Role Remains Limited 

Statement of Loren Yager, Director 

International Affairs and Trade 

For Release on Delivery

Expected at 2:00 p.m. EDT

Wednesday, April 26, 2006

 

GAO-06-660T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 26, 2006

EXPORT PROMOTION

Trade Promotion Coordinating 

Highlights of GAO-06-660T, a report to the Committee’s Role Remains Limited 

House Committee on Small Business 

In 1992, Congress established the

Trade Promotion Coordinating 

Committee (TPCC) to provide a 

unifying interagency framework to 

coordinate U.S. export promotion 

activities and to develop a 

governmentwide strategic plan. 

TPCC member agencies’ activities 

include providing training, market 

information, advocacy, trade 

finance and other services to U.S. 

companies, especially small- and 

medium-sized businesses. These 

U.S. government agencies together

have $1.5 billion in budget 

authority for export promotion 

programs and activities for fiscal 

year 2006. Each year, the TPCC 

submits to Congress a mandated 

national export strategy, reporting

member agencies’ activities and 

trade promotion budget authority 

and establishing broad priorities. 

The TPCC secretariat, which has

no budget of its own, is housed in

the Commerce Department, which 

chairs the committee. 

In this testimony, which updates 

findings from a 2002 report, GAO 

(1) reports on trends in TPCC 

member agencies’ budget authority; 

(2) assesses TPCC’s coordination 

of trade promotion and its national 

export strategies; and (3) discusses 

small- and medium-sized

businesses’ participation in trade

promotion activities. 

TPCC’s national export strategies for fiscal years 2002-2006 show that 

agencies’ trade promotion-related budget authority dropped by about one 

third. This resulted mainly from budget changes at the Department of 

Agriculture and Ex-Im Bank, which account for more than half of U.S. trade 

promotion budget authority. At the same time, budget authority for two 

other key agencies, the Departments of Commerce and State, remained 

relatively steady. However, the effect of these trends on the agencies’ trade

promotion activities is unclear. For example, the decline in Ex-Im Bank’s 

budget authority did not reduce its ability to provide export financing. 

TPCC member agencies have taken several steps, such as participating in 

interagency training and outreach to exporters, to improve coordination of 

trade promotion efforts. However, coordination challenges persist, for 

example, among the Departments of Commerce, State, and Agriculture 

regarding the allocation of overseas staff for trade promotion activities. In 

addition, as GAO found in 2002, the annual national export strategies have 

several limitations that affect the TPCC’s ability to coordinate trade 

promotion activities. For example, the strategies do not identify or measure 

agencies’ progress toward mutual goals or review their budget allocations. In 

addition, they focus on different topics each year without evaluating 

progress in addressing previous years’ topics. GAO has made similar 

comments in several prior reviews of the TPCC. 

 

A lack of systematic information makes it difficult to assess progress or 

trends in small and medium-sized businesses’ participation in trade 

promotion activities across agencies. TPCC agencies track small-business 

participation in a variety of ways. The national export strategies provide 

only anecdotal information on these businesses’ participation in trade 

promotion activities. 

TPCC Program Budget Authority FY 2006 (Enacted) 

Department or Agency Budget Authority (millions)

Agriculture $769

Commerce 335

Ex-Im Bank 123

State 177

U.S. Trade and Development Agency 50

U.S. Trade Representative 44

Energy 9

Small Business Administration 6

Treasury 3

Labor 0

Source: TPCC, for publication in the 2006 national export strategy. 

Note: TPCC’s other members are the Council of Economic Advisors; the Departments of Defense, 

Interior, and Transportation; the Environmental Protection Agency; the National Security 

Council/National Economic Council; OMB; the U.S. Agency for International Development; and the 

Overseas Private Investment Corporation.

www.gao.gov/cgi-bin/getrpt?GAO-06-660T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Loren Yager, 

(202) 512-4347, yagerl@gao.gov.
Mr. Chairman and Members of the Committee: 

I am pleased to be here today to report on our work on the Trade 

Promotion Coordinating Committee (TPCC). Established by Congress in 

1992, the TPCC’s mission is to provide a unifying framework to coordinate 

U.S. agencies’ export promotion activities and to develop a 

governmentwide strategic plan to carry out those activities.1

 TPCC 

member agencies’ activities include providing training, market

information, advocacy, trade finance and other services to U.S. companies, 

especially small- and medium-sized businesses, seeking to export their 

products. In fiscal year 2006, almost a dozen TPCC member agencies have 

a combined $1.5 billion in budget authority for export promotion programs 

and activities; for fiscal year 2007, these agencies have requested $1.3 

billion in export-related budget authority. The TPCC secretariat has no 

budget of its own. The secretariat, which is housed in the International 

Trade Administration at the Department of Commerce, a key export 

promotion agency, is currently moving from the office of the Under 

Secretary for International Trade to the office of the Assistant Secretary 

for Trade Promotion/Director General for the U.S. and Foreign 

Commercial Service. 

GAO has reviewed the TPCC several times since its inception. In a 2002 

review,2

 GAO found that it had made modest but inconsistent progress in 

coordinating trade promotion activities and that its mandated yearly 

reports to Congress,3

 known as national export strategies, do not identify 

and measure progress toward agency goals in relation to broad federal

priorities. GAO also reviewed agencies’ efforts to involve small and 

medium-sized businesses in their export promotion programs. 

Today, as requested, I will (1) report on trends in the budget authorities of 

TPCC member agencies since 2002 and (2) update some of our 2002 and 

earlier findings regarding the TPCC’s trade promotion coordination and 

national export strategies. In addition, responding to the interest you 

expressed, I will discuss TPCC agencies’ progress in involving small- and 

medium-sized businesses in trade promotion activities. 

 1

 Section 201 of the Export Enhancement Act of 1992 (P.L. 102-429), 15 U.S.C. 4727(a)(1)

and (2). 

2

GAO, Export Promotion: Mixed Progress in Achieving a Governmentwide Strategy, 

GAO-02-850 (Washington, D.C.: September 4, 2002). 

3

15 U.S.C. 4727(f). 

Page 1 GAO-06-660T 
My remarks are based on GAO’s review of TPCC and member agency

documents, including agency strategic plans and budgets and the four 

most recent national export strategies. We also interviewed officials from 

the agencies that have consistently represented the largest share of the 

TPCC’s program budget authority or been involved in recent efforts to 

enhance export-related services for small- and medium-sized businesses—

the Departments of Agriculture, Commerce, and State; the Export-Import 

Bank of the United States (Ex-Im Bank); the Overseas Private Investment 

Corporation (OPIC); and the Small Business Administration (SBA). In 

addition, we spoke with officials at the Office of Management and Budget

(OMB). Although we noted some limitations in the national export 

strategies’ budget data, we found the data sufficiently reliable for our 

purposes. We conducted our work from February through April 2006 in 

accordance with generally accepted government auditing standards. 

As reported in the national export strategies, TPCC agency resources have 

declined or remained unchanged since 2002, but the implications of these 

trends for U.S. trade promotion activities are not clear. Overall, TPCC 

agencies’ trade promotion budget authority for fiscal years 2002-2007 

dropped by more than one-third, primarily as a result of budget decreases 

at two of four agencies that account for most of U.S. trade promotion 

budget authority: funding for three Department of Agriculture program 

areas dropped in fiscal years 2005-2007, and Ex-Im Bank lowered its 

projected costs for providing financing and its appropriations requests. At 

the same time, budget authority for the other two key agencies, the 

Departments of Commerce and State, remained relatively steady. The

effect of these trends on the agencies’ trade promotion activities is 

unclear. For example, the decline in Ex-Im Bank’s budget authority did not 

reduce its ability to provide export financing. Further, according to 

Commerce officials, although the department’s trade promotion authority 

has changed little, recent increases in the cost of security for overseas 

offices—included in the department’s trade promotion budget authority—

diminish the resources available for trade promotion activities. 

Summary 

The TPCC has made some progress in improving coordination, but its 

national export strategies continue to provide limited information on 

agencies’ goals and progress, relative to broad national priorities, to guide

future efforts. TPCC member agencies have taken several steps to improve 

interagency coordination in response to results of market research that the 

TPCC secretariat commissioned. Since 2002, the TPCC initiated several 

efforts such as interagency training, joint outreach to better serve small 

businesses, and improved support for trade promotion activities at U.S. 

Page 2 GAO-06-660T 
embassies overseas. According to agency officials, however, some 

interagency coordination challenges persist, particularly among the 

Departments of Commerce, State, and Agriculture regarding the allocation

of overseas staff for trade promotion activities and agreement on agency 

roles and responsibilities in helping U.S. exporters. In addition, as we 

found in 2002, the TPCC’s annual strategies provide limited information 

regarding U.S. export promotion goals or progress toward achieving those 

goals, thereby constraining the TPCC’s ability to carry out its mandate of 

coordinating federal trade promotion activities. For example, the 

strategies do not identify, or measure progress toward, member agency 

goals in relation to the strategies’ broad federal trade promotion priorities, 

and the agencies have not articulated measurable goals in support of these 

priorities. Moreover, the annual strategies do not review agencies’ 

allocation of resources in relation to the broad priorities, and the TPCC 

has little influence over agencies’ allocation of resources to support their 

goals or its priorities. 

A lack of systematic information makes it difficult to assess progress or 

trends in small and medium-sized businesses’ participation in trade 

promotion activities across agencies. TPCC agencies track small business 

participation in a variety of ways. For example, according to Commerce 

officials at the U.S. and Foreign Commercial Service, the agency tracks the 

number of small and medium-sized business export sales transactions per 

year and is updating its tracking system to allow it to observe transactions 

by client as the transactions develop over time and involve other TPCC 

agencies. In contrast, a Department of Agriculture program tracks other 

indicators, such as the number of small businesses making a first export 

sale. We also note that the national export strategies provide only 

anecdotal information on these businesses’ participation in trade 

promotion activities. Further, TPCC officials said that they do not compile 

information on small- and medium-sized businesses’ participation in 

agency programs and activities. 

As we discussed in our 2002 report, TPCC member agencies perform 

functions that include identifying export opportunities, providing 

financing and insurance, and working to create open markets for U.S. 

exports and investments. Chaired by the Secretary of Commerce, the 

TPCC currently has a staff of three Commerce trade professionals who 

work with other member agency officials on trade promotion initiatives 

and prepare the national export strategy. The TPCC generally meets once 

or twice a year at the head-of-agency level and quarterly or monthly at the

Background 

Page 3 GAO-06-660T 
deputy level (e.g., assistant secretary or under secretary); TPCC member 

agency staff discuss issues frequently but meet on an ad hoc basis. 

The TPCC’s national export strategies include a table showing member 

agencies’ budget authority for trade promotion activities. Since 2000, this 

table has included all or part of the budgets of 11 of the TPCC’s member 

agencies—the Departments of Agriculture, Commerce, Energy, Labor,4

State, and the Treasury; Ex-Im Bank; OPIC;5

 SBA; the U.S. Trade and 

Development Agency; and the U.S. Trade Representative.6

 Although the 

TPCC, together with the agencies, determines which agencies’ budgets are 

included in this table, the agencies themselves decide which of their 

programs or activities constitute trade promotion. However, the tables 

present only the total trade promotion budget authority for each agency

without detailing the programs and activities. The Department of 

Agriculture counts nine programs as trade promotion, along with salaries 

and expenses for its Foreign Agricultural Service.7

 The Commerce 

Department counts three units within its International Trade 

Administration—Trade Promotion and U.S. and Foreign Commercial 

Service, Manufacturing and Services, and Market Access and 

Compliance—and a grant for promoting foreign tourism within the United

States. The State Department considers a portion of its budget to be 

related to trade promotion. This portion includes part of State’s budgets 

for its regional bureaus, some of which have overseas staff in locations 

with no Foreign Commercial Service officers. It also includes State’s 

 4

The table to be published in the 2006 national export strategy shows zero trade promotion 

program budget authority for the Department of Labor for fiscal year 2005 (actual), fiscal 

year 2006 (enacted), and fiscal year 2007 (requested). 

5

OPIC is authorized to spend funds from the fees it collects and the income it earns from 

Treasury securities and generally does not receive a direct appropriation. OPIC’s budget 

authority figure, which is negative, is not included in the total. 

6

The 2005 national export strategy lists eight additional member agencies: the Council of

Economic Advisors; the Departments of Defense, Interior, and Transportation; the

Environmental Protection Agency; the National Security Council/National Economic 

Council; OMB; and the U.S. Agency for International Development. 

7

The Department of Agriculture counts the following nine programs as trade promotion: (1) 

Market Access Program; (2) Foreign Market Development (Cooperator) Program; (3)

Export Enhancement Program and (4) Dairy Export Incentive Program; (5) Public Law 480 

Title I credit and Food for Progress grants; (6) Commodity Credit Corporation export 

credit guarantee programs; (7) Emerging Markets Program; (8) Technical Assistance for 

Specialty Crops Program; and (9) Quality Samples Program. Of these nine programs, the

last three were not included in previous national export strategy budget tables but will be

included in the 2006 table. 

Page 4 GAO-06-660T 
budget for trade capacity building, advocacy, and promotion activities 

performed by, or funded through, department offices such as the Office of 

Commercial and Business Affairs. The national export strategies’ trade 

promotion program budget authority tables also include the entire budgets 

of Ex-Im Bank, OPIC, the U.S. Trade and Development Agency, and the 

U.S. Trade Representative as well as very small amounts of the budgets of

the Departments of Energy, Labor, and the Treasury and SBA. 

To help agencies address barriers to working collaboratively, GAO has 

previously evaluated efforts such as export promotion that cut across 

more than one agency. In an October 2005 review of several joint agency 

efforts that was intended to help agencies address barriers to working 

collaboratively, we identified eight key practices that can help enhance 

and sustain interagency collaboration: 8

• Define and articulate a common outcome—that is, a measurable goal. 

• Establish mutually reinforcing or joint strategies. 

• Identify and address needs by leveraging resources. 

• Agree on roles and responsibilities. 

• Establish compatible policies, procedures, and other means to operate 

across agency boundaries. 

• Develop mechanisms to monitor, evaluate, and report on results. 

• Reinforce agency accountability for collaborative efforts through agency 

plans and reports. 

• Reinforce individual accountability for collaborative efforts through 

performance management systems. 

GAO reported on the need for an export strategy before the creation of the 

TPCC: in 1992, we found significant problems associated with inefficiency, 

overlap, and duplication of U.S. trade promotion efforts.9

 Since its 

 8

GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain

Collaboration among Federal Agencies, GAO-06-15 (October 21, 2005). 

9

GAO, Export Promotion: Federal Programs Lack Organizational and Funding 

Cohesiveness, GAO/NSIAD-92-49 (Washington, D.C.: January 10, 1992). 

Page 5 GAO-06-660T 
inception, we have reviewed the TPCC’s progress in coordinating trade 

promotion several times. For example, in 1994, we recommended that the

TPCC should establish priorities with a well-reasoned and strong 

analytical basis, and in 1996, we commented that the TPCC lacked 

measures of value added by export services and that this limited its ability 

to contribute to the budget process.10 We made similar comments in 1998 

and 2002.11 In our 2002 report, we recommended that the Chairman of the 

TPCC ensure that its national export strategies consistently identify 

specific goals established by the agencies within the strategies’ broad 

priorities; identify allocation of agencies’ resources in support of their 

specific goals; and analyze the progress made in addressing the 

recommendations in the TPCC’s prior annual strategies.12

Since 2002, the budget authority for trade promotion reported in the 

national export strategies has fallen or remained relatively unchanged at 

TPCC member agencies, but the implication of these trends for agencies’ 

trade promotion activities is not clear. The total reported budget authority 

for trade promotion fell by more than one-third between fiscal years 2002 

and 2007, primarily owing to decreased authority for Agriculture and ExIm Bank. At the same time, the trade promotion budget authority for other 

key TPCC agencies remained relatively flat. (See fig. 1.) 

Total Reported TPCC 

Agency Budget 

Authority Has 

Declined but 

Implications are 

Unclear 

 10GAO, Export Promotion: Governmentwide Plan Contributes to Improvements, T-GGD94-35 (October 26, 1993); National Export Strategy, GAO-NSIAD-96-132R (Washington, 

D.C.: March 26, 1996). 

11GAO, Export Promotion: Issues for Assessing the Governmentwide Strategy, T-NSIAD98-105 (February 26, 1998); GAO-02-850. 

12The Chairman of the TPCC generally agreed with our recommendations at the time. 

However, TPCC and OMB officials have no record of the TPCC’s having submitted to OMB 

a subsequent action plan in response to these recommendations, as required by OMB cir. A50 and 31 U.S.C. 720. 

Page 6 GAO-06-660T 
Figure 1: TPCC Agency Budget Authority Related to Trade Promotion, Fiscal Years 

2002–2007 

Note: “Other” includes the Departments of Energy, Labor, and the Treasury; the Small Business 

Administration; the U.S. Trade and Development Agency; and the U.S. Trade Representative. OPIC 

is not included because its budget authority figure is negative: although OPIC is authorized to spend 

funds from the fees it collects and the income it earns from Treasury securities, it generally does not 

receive a direct appropriation. 

The four agencies named in figure 1 account for more than 90 percent of 

TPCC member agencies’ combined budget authority related to trade 

promotion, which ranged from $2.2 billion in fiscal year 2002 to $1.5 billion 

in fiscal year 2006 (enacted) and $1.3 (requested) in fiscal year 2007. The 

Agriculture Department has consistently held the largest share, more than

40 percent over the last 4 years. During this period, Agriculture’s share 

dropped from a high of 63 percent to 44 percent in fiscal year 2007 as 

funding was reduced or eliminated in three program areas: export credit 

guarantee programs, Public Law 480 Title I food assistance, and the 

Page 7 GAO-06-660T 
Market Access Program.13 The budget authorities related to trade 

promotion at the Departments of Commerce and State, while remaining 

relatively steady in dollar terms, rose from 15 to 27 percent and 6 to 15

percent of the total, respectively. Ex-Im Bank’s share of the total dropped 

sharply, from 38 percent in fiscal year 2002 to 4 percent in fiscal year 2004, 

and has remained at less than 10 percent since then. 

It is difficult to determine the effect of these budgetary trends on the 

availability of trade promotion resources. For example: 

• Although Commerce’s trade promotion budget authority has not changed

significantly, its trade promotion activities may nonetheless be affected by

increases in related costs. According to Commerce officials, the 

Commerce budget data includes budget authority for security at overseas

offices. The officials provided us with information showing that security 

costs for these offices have risen by 8 percent since fiscal year 2005,

leaving fewer resources available for trade promotion activities.14

• The decline in Ex-Im Bank’s budget authority, shown in figure 1, did not 

reduce its ability to provide export financing. OMB changed its method for 

determining expected loss rates for U.S. international credits, which took 

effect after fiscal year 2002 and contributed to lower Ex-Im Bank 

projections of subsidy costs and budget needs. Also, Ex-Im Bank had 

accumulated carryovers from prior years, which resulted in its requesting 

zero program appropriations beyond administrative expenses in fiscal year 

2004 and program appropriations of less than $100 million in fiscal years 

2005-2007. 

In addition, reasons for the national export strategies’ inclusion or 

exclusion of agencies’ budget authority as related to trade promotion are 

not always apparent. For example, until fiscal year 2007, Agriculture’s 

trade promotion budget authority reported in the strategies included 

 13The subsidy level for the Department of Agriculture’s export credit guarantee programs

was reduced in July 2005 in response to a World Trade Organization appellate panel ruling.

In addition, the fiscal year 2007 budget proposes no funding for Public Law 480 Title I food

assistance, and the Market Access Program is being cut back as a deficit reduction measure 

and in response to an OMB review. 

14Security costs jumped from 2 percent of the budget authority for Commerce’s Trade 

Promotion/U.S. and Foreign Commercial Service unit (fiscal year 2005, actual) to 10

percent (fiscal year 2007 requested). We did not subtract these costs from the data used for 

figure 1 because Commerce did not do so in the budget authority figures it submitted for 

publication in the 2006 national export strategy. 

Page 8 GAO-06-660T 
Public Law 480 Title I food assistance, although the primary objective of 

this program is to assist developing countries in obtaining needed 

resources, rather than promoting trade. Similarly, since 2000, the 

strategies have excluded the U.S. Agency for International Development 

(USAID) from the program budget authority table, stating that the agency’s

activities “support trade promotion indirectly through broad economic 

growth and reform, unlike other activities that more directly fund trade 

finance or promotion.” However, the 2002 national export strategy 

included USAID in a letter from 10 key TPCC agencies and portions of the 

2002, 2003, and 2004 strategies were devoted to a possible joint USAID–

Ex-Im Bank program to support capital projects in developing countries. 

In addition, the strategies’ budget tables include agencies such as the U.S.

Trade Representative, Treasury, and Labor, which do not directly fund

trade promotion activities.15

Coordination among TPCC agencies has improved, although there is still 

room for improvement. However, the national export strategies continue

to provide little information on which to base future efforts to establish 

consistent, shared, measurable goals and align resources in agencies’ 

export promotion programs to focus on results. 

TPCC’s member agencies have pursued a number of efforts to improve 

coordination of trade promotion activities, responding to 

recommendations in its 2002 national export strategy.16 These 

TPCC Has Taken 

Steps to Improve 

Coordination, but 

Strategies Provide 

Limited Guidance for 

Export Promotion 

Activities 

TPCC Has Made Some 

Progress in Improving 

Coordination 

 15The table also includes budget authority for the U.S. Trade and Development Agency, 

which funds feasibility studies and other activities for U.S. firms seeking to export. It had 

not previously included several Agriculture programs such as the Emerging Markets

Program, which provide similar services for exporters of agricultural products. However, in 

response to questioning from GAO, Agriculture is including these programs in the 2006

strategy’s budget table. 

16As we reported in 2002, these recommendations focused on the need to (1) cross train 

agency personnel so that they are knowledgeable about other agency programs, (2) 

improve exporters’ access to timely and accurate trade information, and (3) expand

outreach and trade education for new-to-export firms. 

Page 9 GAO-06-660T 
recommendations resulted from a 2001-2002 survey of more than 3,000 

small businesses and other research commissioned by the secretariat. 

According to agency officials, these efforts included several successful 

initiatives such as joint training and other activities that leverage resources

from other TPCC agencies. For example: 

• Interagency training. Since 2003, the TPCC has sponsored three annual 

interagency training sessions, attended by a total of 297 people. The 

sessions have included participants and presenters from a variety of 

member agencies, including Agriculture, Commerce, Ex-Im Bank, OPIC, 

SBA, State, the U.S. Trade and Development Agency, and USAID, and 

according to agency officials have fostered greater cooperation through 

the sharing of information.17 In one instance, a State Department official 

recounted how a training session led by a colleague resulted in

collaboration between Commerce and State that (1) improved service to 

companies seeking U.S. visas for their foreign partners and (2) produced a 

list of State Foreign Service contacts who could assist exporters in 

important markets such as Africa, where many countries have no Foreign

Commercial Service presence. 

• Joint outreach. Ex-Im Bank and OPIC have partnered with SBA to 

improve outreach and service to small- and medium-sized businesses. In 

May 2002, Ex-Im Bank and SBA signed a memorandum of cooperation to

increase small businesses’ awareness and use of each agency’s financing

products, and the agencies share the same application form for their 

respective products. In September 2004, the two agencies signed a 

memorandum of understanding that provides for a Ex-Im Bank to coguarantee loans to small-business exporters when SBA has already agreed 

to guarantee its established maximum amount. In addition, on April 5, 

2006, Ex-Im Bank’s acting chairman and president announced a new 

position of Senior Vice President for Small Business and the establishment 

of a Small Business Committee to coordinate, evaluate, and enhance the 

agency’s services to small businesses. In September 2002, OPIC and SBA 

formally integrated their efforts to promote the expansion of U.S. small 

businesses into emerging markets; as part of this effort, each agency is to 

provide training on its programs to the other’s personnel. OPIC and SBA 

have signed a cooperative agreement, SBA has detailed staff to OPIC, and 

OPIC has streamlined its approval process for small business clients. 

 17In our 2005 report on interagency collaboration, we noted that face-to-face interaction 

through activities like interagency training fosters trust, which is a key to enhancing and

sustaining collaborative efforts. See GAO-06-15. 

Page 10 GAO-06-660T 
• Overseas support. In January 2005, State and the Commerce Department’s 

Foreign Commercial Service completed a strategic plan to provide 

coordinated support at embassies with no Foreign Commercial Service 

staff. According to State officials, as a result of this plan, 75 percent of 

State-funded export promotion activities at these embassies are now tied 

directly to regional Foreign Commercial Service offices, up from 25 

percent in 2002. Further, we were told that more of these embassies are 

submitting the commercial guide for their country via a new, Web-based 

process to Commerce’s market research database, which is accessible to

the public via www.Export.gov. State has also linked the embassies 

electronically to domestic U.S. Export Assistance Centers and recently 

developed an electronic commercial diplomacy toolbox for its Foreign 

Service officers in the field that helps them assist U.S. firms seeking to 

export. The toolbox provides links to joint State–Commerce strategic 

planning, interagency training, and Commerce and other TPCC agency

Web sites that provide guidance on export-related issues such as business 

travel and export controls. According to State officials, these resources are 

primarily used by small businesses, which often lack the means to obtain 

such information on their own. 

However, despite this progress, coordination problems persist, according 

to member agency officials. For example, State Department officials said

that concurrent realignments of Agriculture and Commerce overseas staff 

are not being coordinated, a situation that could lead to gaps in country 

coverage and thereby adversely impact U.S. commercial interests. State 

officials also described instances of poor coordination between some 

regional Foreign Commercial Service offices and nearby embassies that 

lack Commercial Service staff. They said that Commerce is working with 

State to improve this situation. For example, Commerce’s regional office

in Johannesburg will host a training program for the 11 embassies in 

southern Africa without Commercial Service officers. Another agency 

official told us that staff from at least two TPCC agencies were not aware 

of how certain other TPCC initiatives or agencies support their own 

agencies’ trade promotion efforts. 

In addition, according to Agriculture officials, Commerce field staff have 

not adhered to roles, responsibilities, and procedures outlined in a January 

2001 agreement between the two agencies and reiterated in a March 2004 

cable. As a result, the officials told us, a joint Agriculture-Commerce effort 

to help U.S. companies export agricultural goods—described in the 2004 

national export strategy as a “huge success”—was never fully 

implemented. Commerce officials acknowledged these issues but told us 

that coordination between the two agencies had improved. Citing a June 

Page 11 GAO-06-660T 
2005 Commerce report, the Agriculture officials noted that both agencies

have formally agreed to increase their joint cooperation. 

As we found in 2002, the TPCC’s annual strategies provide limited 

information regarding agencies’ export promotion goals and progress. In 

addition, the strategies do not review agencies’ budget allocation or 

represent the goals of some key agencies, and the strategies’ focus varies 

yearly. Consequently, the TPCC’s ability to provide in the strategy a plan

for coordinating federal trade promotion activities, as directed by 

Congress, is constrained.

TPCC Strategies Continue 

to Provide Little Guidance 

for Export Promotion 

Activities

• As in 2002, the national export strategies do not identify member agencies’ 

goals or assess their progress toward the TPCC’s broad trade promotion 

priorities. According to agency officials, the TPCC secretariat does not 

systematically collect or compare agency plans and performance measures

to define agency goals and assess progress. In addition, the agencies have

not articulated mutual, measurable goals for trade promotion. Some 

member agency officials noted that their agencies’ plans and performance 

evaluations are prepared independently of the TPCC. Although several 

agencies mention the TPCC in their strategic plans, each agency, as we 

noted in our 2002 report, generally measures the results of its export 

promotion activities according to the extent to which its own mandate 

emphasizes export promotion. 

• Despite the TPCC’s mandate to propose an annual unified trade promotion 

budget,18 the TPCC’s annual strategy does not review member agency 

budgets in relation to their goals and the agencies do not adjust their 

budgets to reflect the national export strategy. As we reported in 2002, the 

TPCC does not have specific authority to direct member agencies’ 

allocation of their resources.19 Agency representatives told us, as they had

during our 2002 review, that they would resist any effort by the TPCC to 

review their budgets; they said that each agency has its own statutory 

requirements and that TPCC agencies’ budgets are appropriated by 

different congressional subcommittees. The agencies submit their 

proposed budgets separately to OMB. TPCC officials told us that the TPCC 

does not recommend budget priorities to OMB, a practice that, as we 

noted in our 2002 report, was last performed in 2000. 

 1815 U.S.C. 4727(c)(4). 

19See GAO-02-850. 

Page 12 GAO-06-660T 
• The national export strategies do not represent the goals of some key 

member agencies. For example, although Agriculture’s Foreign 

Agricultural Service has accounted for about half of TPCC member 

agencies’ combined budget authority over the past 4 years, the 2005 

strategy contains only one notable reference to this agency. In addition, 

the 2005 strategy identifies Brazil as a “spotlight” market, although 

Agriculture does not consider it a high-priority market because it 

competes with the United States in exporting agricultural products. 

Further, the 2005 strategy included very little of the information that the 

Foreign Agricultural Service provided to the TPCC secretariat in 

commenting on a draft of the strategy. However, Agriculture officials told

us that a draft of the 2006 strategy, due out in May, would likely 

incorporate more information about their agency.20 Regarding other 

agencies, recent strategies have focused on China, a market in which 

USAID and OPIC do little or no business. 

• The focus of the national export strategies continues to change from year 

to year with little evaluation of previous efforts’ effectiveness. For 

example, although TPCC officials noted that the national export strategies 

have consistently focused on China, the strategies describe a series of new 

China-related initiatives without following up on the outcome of specific 

activities from one year to the next.21 The exception to this pattern was a 3-

year focus on recommendations from the TPCC’s survey and other client 

research, from 2002 through 2004; however, new areas of focus continued 

to be introduced. For example, the 2003 strategy introduced capacity 

building, Russia, and transportation security. The 2004 strategy highlighted 

China and free trade agreements, as well as coordination in crisis regions 

(primarily Iraq and Afghanistan), which had resulted from the survey and

other information gathering and had been briefly raised in the 2002 and 

2003 strategies. The 2005 strategy covered free trade agreements, China, 

and six “growth markets” (Japan, South Korea, India, Brazil, Russia, and 

the European Union). Some member agency officials commented on the 

ad hoc nature of the national export strategies and the lack of staff-level 

meetings focused on specific issues. 

 20TPCC officials provided us with a partial draft of the 2006 strategy that describes a series

of initiatives by member agencies. 

21For instance, the 2004 strategy identifies five priority sectors in China and the 2005 

strategy also identifies five, but only three of the sectors are discussed in both strategies. 

Regarding one of the overlapping sectors—health care—the 2005 strategy lists a series of 

upcoming trade events but makes no mention of any sales or other business resulting from 

the two China health-care-related trade events described in the 2004 strategy. 

Page 13 GAO-06-660T 
Although available data suggest that TPCC member agencies have 

involved small and medium-sized businesses in trade promotion activities, 

a lack of systematically collected information makes it difficult to assess 

progress or trends. First, member agencies measure small and mediumsized businesses’ participation in trade promotion activities to varying 

extents and using various indicators. For example: 

• Department of Commerce. U.S. and Foreign Commercial Service officials 

stated that they have recorded about 10,000 transaction “successes” a year 

over the past 5 years involving small and medium-sized business export 

sales and that they are currently in the process of updating their client 

management system to enable them to observe a transaction for a given 

client as it develops over time, progressing through interactions with other 

TPCC member agencies such as Ex-Im Bank, SBA, and other agencies. The 

U.S. and Foreign Commercial Service also runs an Advocacy Center, 

which helps U.S. companies compete for specific foreign sales contracts 

on a case-by-case basis. According to information posted on the U.S. 

Government’s export-related website (www.Export.gov), the center has 

helped 28 small and medium-sized enterprises win contracts valued at a 

total of $637 million since June 2002.22 Commerce’s Office of Trade and

Industry Information within its Manufacturing and Services unit compiles 

detailed statistics on small and medium-sized business exports.23

Lack of Systematic 

Data Hampers 

Assessment of Small 

and Medium-Sized 

Businesses’ 

Participation 

• Ex-Im Bank. Ex-Im Bank tracks small business’ participation in its 

programs because Congress requires it to make available a certain 

percentage of its export financing to small businesses. For fiscal years 

2000-2005, Ex-Im Bank reported that slightly less than 20 percent of the 

value of its financing directly benefited small businesses, and in recent 

years it has reported that about 85 percent of its authorized transactions 

directly benefited these clients. However, we recently found flaws in the 

bank’s data and methodology, including shortcomings in its system for 

estimating about one-third of its small business financing annually and

 22The site contained no information showing when this data was posted or when the site 

was last updated.

23For example, the Statistical Handbook released in June 2005 by this office provides 

information on the number of small- and medium-sized exporting companies, firms’ known 

export revenues, and the destination of exports. [See Office of Trade and Industry 

Information, Small & Medium-Sized Exporting Companies: A Statistical Handbook: 

Results from the Exporter Data Base (Washington, D.C.: Department of Commerce, 2005)]. 

Page 14 GAO-06-660T 
conflicting records for the same companies.24

• Department of Agriculture. The Foreign Agricultural Service’s Market 

Development Program tracks a variety of indicators related to small 

businesses, including the number of its activities that support small 

businesses, the number of small businesses making a first export sale, the 

number of small businesses with increased sales of 20 percent or more, 

and the value of small companies’ sales. 

• OPIC. OPIC measures the number of small business projects that result 

from its outreach through a Small Business Center. OPIC’s 2003-2008 

strategic goals include supporting these clients and reducing to 60 days the 

time it takes to process their applications for OPIC assistance. OPIC 

officials stated that the center targets small businesses with annual 

revenues of less than $35 million and that since the center’s establishment 

in 2002, the share of OPIC transactions involving such companies 

increased from 67 percent in 2002 to 80 percent in 2005. 

• Department of State. State does not presently collect data on small and 

medium-sized businesses’ involvement in trade promotion activities. 

However, according to a State Department official who works with small 

businesses, the agency has recently initiated a system to track commercial 

“success stories.” The official said the system, which State anticipates will 

be operational by June 2006, will track requests for help with commercial 

transactions and will also include data on the requesting companies—such 

as their number of employees and annual sales—that will enable State to

identify small- and medium-sized businesses. 

Finally, although 2006 TPCC agency goals include increasing the number 

of small and medium-sized businesses that use member agency programs, 

the TPCC does not collect information from member agencies on these 

businesses’ participation in agency programs and activities, according to

TPCC officials. Moreover, the national export strategies provide anecdotal, 

rather than systematic, reporting on small and medium-sized business 

participation in trade promotion activities. Although the national export 

strategies describe activities such as a cooperative agreement between 

SBA and OPIC, they provide no comprehensive summary of small and 

medium-sized business participation in all member agency activities. 

Further, the strategies do not assess agency reporting on small and 

 24GAO, Export-Import Bank: Changes Would Improve the Reliability of Reporting on

Small Business Financing, GAO-06-351 (Washington, D.C.: March 3, 2006). 

Page 15 GAO-06-660T 
medium-sized enterprise participation during the current year or identify 

trends in such participation. This makes it difficult to assess progress or 

trends in participation across agencies. 

Our review of the TPCC’s efforts shows it has achieved some important 

progress. For example, the TPCC has pursued a number of initiatives to 

improve agency coordination of trade promotion activities. Since our most 

recent report in 2002, the TPCC has completed and implemented a number

of changes as a result of its private sector outreach efforts, including joint 

training and other activities that leverage resources of other TPCC 

member agencies. Although coordination challenges continue, there 

appears to be more discussion among TPCC member agencies and a 

higher level of awareness of the activities of the other agencies. This is a 

noteworthy improvement over the situation that existed in the early 1990s,

when GAO began to evaluate the federal government’s trade promotion 

efforts.25

Despite this progress, the TPCC continues to face challenges in its ability 

to achieve other aspects of its mission of coordinating federal export 

promotion activities. For example, the TPCC’s annual export strategies do

not review or assess agency goals or activities. Moreover, despite its 

mandate to propose a unified federal trade promotion budget, the TPCC 

continues to have little influence over agencies’ allocation of resources for 

trade promotion. GAO has consistently reported on the TPCC’s lack of 

progress in these fundamental objectives. 

Based on our long record of oversight over the TPCC, we believe that it

can continue to make improvements in agency coordination as well as 

lead future outreach efforts to the private sector. In addition, we believe

that the TPCC can do a better job of tracking small and medium-size 

businesses’ participation in a consistent manner. However, we question 

whether the TPCC’s current structure will allow it to overcome the 

challenges associated with assessing agency goals and influencing the

allocation of resources. We also question whether the TPCC’s current 

move into the office of the Assistant Secretary for Trade Promotion within 

the Commerce Department will help it overcome these challenges. As we 

noted in previous reviews of the TPCC, sustained high-level administration

Concluding 

Observations 

 25GAO/NSIAD-92-49. 

Page 16 GAO-06-660T 
involvement is necessary for the TPCC to achieve its fundamental 

objectives.26 

Mr. Chairman, this concludes my prepared remarks. I would be happy to 

address any questions that you may have. 

Loren Yager,

Director, International Affairs and Trade 

 26GAO, Export Promotion: Initial Assessment of Governmentwide Strategic Plan, T-GGD93-48 (Washington, D.C.: Sept. 29, 1993), p. 5; Export Promotion: Governmentwide Plan

Contributes to Improvements, T-GGD-94-35 (Washington, D.C.: Oct. 26, 1993). 

Page 17 GAO-06-660T (320404) 
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