Export Promotion: Trade Agencies Should Enhance Collaboration with State and Local Partners
Published: 2014-05-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The 2010 National Export Initiative calls for the federal government to coordinate more with state and local governments and other public and private partners on export promotion. Recently, the TPCC identified three key initiatives to enhance collaboration among federal, state, and other partners. Congress requested that GAO review federal and state collaboration in export promotion.
This report examines (1) the main characteristics of federal and state export promotion efforts, including their collaboration, and (2) the extent to which the TPCC has advanced collaboration between state and federal efforts. GAO analyzed federal and state documents and data from 2012 and 2013; interviewed officials from federal, state, and other export promotion organizations; and visited federal and state trade offices and other relevant organizations in five states selected as a nongeneralizable sample based on their participation in the TPCC initiatives and other factors.
section_title: What GAO Found
paragraphs: Federal and state governments share a common interest in promoting exports as a tool for economic growth and creating jobs. Both provide similar and overlapping export promotion services to similar clients, but their staffing, budgetary resources, and ways of measuring performance vary. Located across the country, Department of Commerce (Commerce), Small Business Administration (SBA), and state trade offices provide outreach, counseling and training, and trade leads, mostly to small businesses. In some states, state trade offices have more domestic staff than Commerce offices do. However, Commerce provides more overall coverage abroad, with offices in 72 countries, 15 of which have no state trade office representation. In the five states GAO visited, federal and state collaboration on export promotion varied from working closely in the same location to not collaborating at all, depending on unique factors in each state.
The federal interagency Trade Promotion Coordinating Committee (TPCC) has three initiatives designed to advance federal-state collaboration in promoting U.S. exports by strengthening and expanding networks of state and local governments and other partners. Results of these efforts have been limited, however, in part because their implementation has not consistently followed key collaboration practices. In prior work, GAO found that collaboration is generally enhanced by following key practices, such as articulating common outcomes; agreeing on roles and responsibilities; monitoring, evaluating, and reporting on results; and coordinating resource planning. In the states it visited, GAO found weaknesses in the implementation of Export Outreach Teams, a TPCC initiative. For example, in some cases, activities were missing key participants and were inconsistent with the activities' objectives, in part because SBA is not fully monitoring implementation of the teams across its 68 district offices. Similarly, GAO found that TPCC's involvement in a Brookings Institution initiative to engage metropolitan areas in export promotion has unknown implications for federal export promotion efforts and resources because Commerce lacks a means to monitor the initiative's results. Finally, an agreement between Commerce (the TPCC Chair) and a national group representing state trade offices expired without achieving its collaboration objective or enhancing client information sharing so states can share credit with Commerce for helping companies make export sales. According to Commerce, by law, it cannot release its clients' confidential commercial information, and its policy is to make determinations on releasing information case by case, but it does not provide formal guidance to staff on what information sharing is allowable.
section_title: What GAO Recommends
paragraphs: GAO recommends that the TPCC take steps consistent with key practices for collaboration to (1) improve implementation of the Export Outreach Teams to better achieve their intended objectives; (2) enhance TPCC agencies' collaboration on export promotion with nonfederal entities; and (3) enhance federal information sharing with state trade offices, where possible, on Commerce's export promotion activities, for example, by providing formal guidance to staff on allowable information sharing. Commerce and SBA agreed with GAO's recommendations.

section_title: Letter
paragraphs: Given the importance of U.S. exports in supporting economic growth, in  2010, the President announced the National Export Initiative (NEI) aimed  at doubling U.S. exports in the next 5 years. The Office of Management  and Budget (OMB) subsequently identified the NEI’s goal of doubling U.S.  exports as one of 14 interim crosscutting priority goals under the GPRA  Modernization Act. The NEI identifies increased coordination among the  federal government and its nonfederal partners as a priority and a tool for  increasing exports. Congress called for such coordination more than two  decades ago in the Export Enhancement Act of 1992, which directed the  President to establish the interagency Trade Promotion Coordinating  Committee (TPCC) to coordinate U.S. government export promotion and  export financing activities and develop a U.S. government-wide strategic  plan for carrying out such federal programs. The act also called for the  TPCC, chaired by the Secretary of Commerce, to review efforts by the  states to promote U.S. exports and propose ways to develop cooperation  between federal and state efforts.
In light of the federal government’s emphasis on the importance of  promoting U.S. exports, you asked that we review federal and state  collaboration in export promotion, which includes activities undertaken by  government agencies to assist U.S. businesses with the process of  bringing goods and services to market in other countries. This report  examines (1) the main characteristics of federal and state export  promotion efforts, including their collaboration, and (2) the extent to which  the TPCC has advanced collaboration between state and federal efforts  to promote U.S. exports.
To determine the main characteristics of federal and state export  promotion efforts, including their collaboration, we compared their  services, types of clients, and performance measures using information  collected from documents and interviews from the Department of  Commerce’s (Commerce) Commercial Service (CS), the Small Business  Administration (SBA), and state trade offices in five states (Florida,  Minnesota, Oregon, Pennsylvania, and Virginia). We chose these states  based upon the following criteria: presence of relevant Commerce and  SBA officials; participation in export promotion initiatives we were  evaluating; state trade office presence overseas; extent of state-level  export promotion activities according to Commerce officials in  Washington, D.C.; and state trade office staff size (mix of large and  small). We chose these five locations to better understand and test  federal initiatives to advance collaboration with state trade offices at the  local level. This allowed us to assess federal implementation efforts  overall, but these five locations are not representative of the situations in  each of the individual 50 states.
We also analyzed data collected by the State International Development  Organizations (SIDO) in its annual member surveys for 2012 and 2013.  We also determined the extent to which CS and state trade offices share  operational costs and clients. We gained additional insights into how CS  and state trade offices work together in providing their services by  examining 2012 data in Commerce’s Client Tracking System.
To assess the extent to which TPCC has supported collaboration  between federal and state efforts to promote U.S. exports, we focused on  three initiatives identified by TPCC officials. We examined SBA guidelines  for Export Outreach Teams, and the TPCC Interagency Communiqué  about the teams; reviewed the memorandum of agreement (MOA) on the  Metropolitan Export Initiative signed by Commerce and the Brookings  Institution, as well as export plans for four metropolitan areas developed  in the pilot phase of that initiative; and reviewed the memorandum of  intent (MOI) signed by Commerce and SIDO, an agreement outlining  plans to collaborate. We analyzed the information we gathered on the  three initiatives to assess the extent to which their collaboration efforts  were consistent with key practices and considerations for interagency  collaboration identified by previous GAO work. We also interviewed  officials from state trade offices; SBA District Offices; and U.S. Export  Assistance Centers (USEAC) in Florida, Minnesota, Oregon,  Pennsylvania, and Virginia. Where recommended in those states, we  interviewed other entities including trade associations, economic  development organizations, and Small Business Development Centers  (SBDCs). In addition, we interviewed officials from the mayors’ offices in  Miami, Florida; Minneapolis, Minnesota; and Portland, Oregon. In  Washington, D.C., we interviewed officials from the TPCC, Commerce’s  International Trade Administration (ITA), as well as from SIDO, the  National Governors Association, and the Brookings Institution. We took  into account past GAO work on export promotion and related  performance audits by the Commerce Office of Inspector General. We  also reviewed the TPCC authorizing legislation, current and past National  Export Strategies, and the President’s NEI. See appendix I for further  details of our objectives, scope, and methodology.
We conducted this performance audit from February 2013 to May 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe the  evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Export promotion activities include efforts to raise awareness about  exporting and to provide businesses with export counseling, training, and  information on market opportunities; help connecting with potential buyers  abroad; and help obtaining financing. Responsibility for export promotion  is widely dispersed. Many federal and state agencies operate a wide  variety of programs across the country and overseas that are intended, at  least in part, to assist U.S. companies in entering foreign markets, or in  expanding their existing presence in markets abroad.
Some of the 20 TPCC member agencies directly assist small  businesses to export overseas, including Commerce, SBA, the Export- Import Bank, the Departments of State and Agriculture, and the U.S.  Trade Development Agency. This review of export promotion efforts  focuses solely on Commerce and SBA because their activities in this area  are similar to those of state governments.
The TPCC Secretariat is housed in Commerce’s ITA and takes the lead in  coordinating the activities of federal export promotion activities and  implementing the NEI through an annual National Export Strategy. The  ITA also manages CS as part of its Global Markets unit. In most states,  CS is the primary government entity providing federal export promotion  services to non-agricultural businesses. Commerce’s mission includes  strengthening the international economic position of the United States by  facilitating global trade and opening up new markets for U.S. goods and  services. CS’s network of domestic and international trade professionals  seeks to increase exports of goods and services from the United States.  While CS’s mission identifies small businesses as a particular focus of its  export promotion efforts, CS assists companies of all sizes.
SBA’s key roles in export promotion are to conduct outreach and provide  training, counseling, and export financing for small businesses. Within  SBA, the Office of International Trade has primary responsibility for export  promotion efforts. The Office of International Trade field staff are mainly  responsible for providing outreach, training, and technical assistance on  SBA’s export finance programs. In addition, one person in each of SBA’s  68 District Offices is designated as a District International Trade Officer  and provides basic export assistance as a collateral duty. The District  International Trade Officers are managed by a separate SBA office,  SBA’s Office of Field Operations. SBA partially funds SBDCs, which are  located primarily at colleges and universities as a cooperative effort  among SBA, the academic community, the private sector, and state and  local governments. Our January 2013 report on the SBA’s role in export  promotion noted that in addition to providing general business services,  SBDCs may help businesses interested in exporting, particularly those  that are new to exporting and need assistance with preparing their   The report also noted that while most SBDCs  business to export.provide export assistance as one of many business-development  services, some SBDCs meet SBA’s criteria to be designated as  International Trade Centers that focus primarily on providing export  assistance to businesses.
Every state government conducts some export promotion activities. State- level trade functions can be housed in various state government entities,  including governors’ offices, state departments of commerce, and state  departments of economic development. State trade offices often have  both domestic and international staff; while domestic staff generally are  state employees, international staff may work directly for the state trade  office or may work as contractors.
section_title: Federal and State Export Promotion Efforts Have Key Similarities but Vary in Staffing and Budgetary Resources, Performance Metrics, and Extent of Collaboration
paragraphs: The federal government and state trade offices across the country work to  promote exports, offering similar services to similar types of clients,  primarily small businesses. When government agencies and state trade  offices have similar goals, activities, strategies, or beneficiaries, their  programs may overlap. This overlap may be beneficial for clients if federal  and state offices collaborate to better address the demand for export  promotion services. However, gaps in collaboration may result in an  inefficient use of limited resources dedicated to export promotion. We  found that although federal agencies and state trade offices overlap to  varying degrees in their provision of export promotion services, their  staffing levels, resource levels, and metrics for measuring program  effectiveness often differ. Furthermore, we found that although increased  collaboration may increase the efficiency and effectiveness of overlapping  export promotion efforts, the extent of collaboration between federal  agencies and individual state trade offices varies widely.
subsections: section_title: Federal and State Trade Offices Provide Similar Services to Help Small Businesses Export
paragraphs: In seeking to promote exports, the federal government and state trade  offices provide services that overlap to varying degrees. By definition,  overlap occurs when programs have similar goals, engage in similar  activities or strategies to achieve them, or target similar beneficiaries.  Officials at both U.S. Export Assistance Centers (USEAC) and state  trade offices that we visited told us that they are operating at capacity in  terms of resources to meet the demand for their export promotion  services. Consequently, officials at two USEACs and two state trade  offices that we visited viewed the provision of similar services by different  organizations as positive for beneficiaries of these services because the  overlap meant that more resources were available to companies looking  for help exporting. As we previously concluded, however, without  enhanced collaboration, overlap may have a negative effect in that limited  resources may not be used in the most effective and efficient manner.
Furthermore, small business beneficiaries could be confused about how  to access available services and unclear about who could best meet their  needs.
Federal and state efforts to provide export promotion services share the  same goal: to strengthen the economy and create jobs. The President’s  National Export Initiative (NEI) articulates this goal in very specific terms,  aiming to double U.S. exports (based on 2009 export levels) by the end of  2014. Export promotion is also a component of many state strategies for  economic development and job creation. U.S. exports have increased  substantially since 2009, reaching record levels in 2013; nevertheless,  they have fallen short of the levels needed to attain the NEI goal. Figure 1  illustrates progress toward this goal.
Commerce and SBA provide some of the same types of export promotion  services, such as outreach, counseling and training, and trade leads, as  most states do through their state trade offices. For example, as shown in  table 1, we found this to be true in the five states we visited.
In prior work, we established the following definitions for the four types of  export promotion services shown in table 1:
Outreach. Outreach can include any activity in which agencies  generally increase public awareness about exporting, including  seeking to inform businesses or other partners about the export  promotion services offered by the federal government. Both  Commerce and SBA conduct outreach to businesses. For example,  outreach includes Commerce staff attending a trade show and  counseling clients. Similarly, Commerce or SBA staff may conduct  outreach at seminars and training sessions, where they meet  businesses to identify potential clients interested in exporting.
Counseling and training. Counseling is specific to the needs of each  business and can cover a variety of topics relating to international  trade and exporting, such as helping a business identify a target  export market or discussing logistics for shipping exported goods. For  example, Commerce organizes trade missions for U.S. firms that want  to explore and pursue export opportunities by meeting directly with  potential clients in their markets. Commerce often refers businesses  new to exporting to the SBDCs for export training. SBA also provides  counseling and training, primarily through SBDCs.
Trade leads. Trade leads, also known as matchmaking, refers to the  process of connecting businesses with overseas buyers. Commerce  leverages its international network of Commercial Officers to help U.S.  businesses set up appointments with potential buyers abroad and to  notify businesses when foreign buyers are looking to import U.S.  goods, also known as matchmaking. Also, Commerce organizes trade  missions for U.S. firms that want to explore and pursue export  opportunities by meeting directly with potential clients in their markets.  Typically, SBA does not provide trade leads but does hosts or co- sponsors events that link businesses to export management  companies—intermediaries that represent a company’s product  overseas and reduce some of the risks associated with exports by  managing the logistics of the process.
Financing. SBA assists small businesses with export financing  through its Office of International Trade. Of the states we visited,  Florida is the only state that offers export financing; state trade offices  generally refer interested clients to SBA and the Export-Import Bank  for export financing help. While Commerce is not involved in export  financing, its Commercial Officers at USEACs often refer interested  clients to SBA and the Export-Import Bank.
subsections: section_title: Overlap of Federal and State Services
paragraphs: Like the state trade offices in the five states we visited, most of the 28  state trade offices that responded to a 2013 SIDO survey also provide  export promotion outreach, counseling and training, and trade leads.  While not all states provide all services, the survey results showed that  state trade offices provide a range of services such as outreach, which  can include providing marketing materials; counseling and training, which  can include export counseling and export readiness training; and trade  leads, which may result from participation in or coordination of trade  shows.
In our fieldwork, we found that the depth and breadth of services state  trade offices provide vary depending on the availability of resources such  as funding, staff, and overseas capacity. For example, the state of  Florida’s program provides export counseling, educational events, and  international trade leads, including international trade missions and trade  shows. Similarly, the Minnesota Trade Office offers organization of trade  missions, export counseling, training programs on the export process,  including creating an export plan, mitigating risk, and understanding trade  regulations. Virginia also offers a number of export promotion services  including counseling; training; trade missions; an array of services such  as in-country market research provided by an extensive network of  international consultants; and a 2-year business acceleration program for  selected companies whose goal is to increase their export sales.
While Commerce charges fees for certain services, including those that  provide trade leads, some states provide their services for free, subsidize  businesses’ participation in trade missions and trade shows, or both. For  example, the Philadelphia USEAC operated by Commerce provides  export counseling, market research, and trade events for a fee. However,  the Pennsylvania state trade office provides those same services, in  addition to market-entry strategy development and technical support, at  no cost to businesses; moreover, the state trade office awards some  grants to businesses to pay for or partially subsidize some export-related  activities. Because Commerce charges fees, businesses in some states  sometimes opt to seek the same or similar services from the state trade  office rather than from Commerce, according to one state trade office  official. Both Commerce and a state official from one of the states that we  visited noted that perceived quality of service also influences businesses’  decisions in selecting a service provider for export promotion services.
section_title: Overlap of Federal and State Clients
paragraphs: In addition to providing similar services, the federal agencies offering  export promotion services at the state level—Commerce and SBA—and  most state trade offices primarily serve small businesses. According to  Commerce, the majority of its customers are small businesses, although  firms of any size may request its services. SBA, by law, offers services  exclusively to small businesses. In 2012, 97 percent of the over 301,000  identified U.S. exporters that exported were small and medium-sized  exporters. In the 2013 SIDO survey, of the 22 state trade offices that  responded, most states reported that small businesses were their primary  clients. Four of the five state trade offices that we visited told us they  work primarily with small businesses, although three said they also serve  some larger companies.
section_title: Federal and State Export Promotion Efforts Vary in Staff and Budgetary Resources and in Metrics Used to Track Results
subsections: section_title: Domestic Staffing Levels
paragraphs: In most states, federal agencies and state trade offices have different  levels of domestic staff resources available for providing export-related  assistance to companies. As of February 2014, there were 265 domestic  Commerce CS staff in the 108 USEACs located in every state with the  exception of Delaware and Wyoming. SBA also has staff in every state  that provides export services, and partially funds more than 900 SBDCs  across the country. Most states have trade offices that also provide  export-related assistance to businesses. One state trade office reported  only 2 staff while another reported having 28 staff dedicated to  international trade, according to the 2013 SIDO survey. As shown in  figure 2, for the five state trade offices that we visited, staff numbers  ranged from 5 full-time employees statewide to 30; the state export  promotion employees in each state outnumbered the Commerce USEAC  export promotion employees.
Commerce has greater representation abroad than state trade offices.  Commerce has 930 staff in offices in 72 countries abroad. In 15 of these  countries, no state trade office maintains its own representation. An  official from one state explained that Commerce’s presence  internationally is more important for state trade offices than Commerce’s  domestic offices in serving the needs of small businesses. This was  because there is less overlap between states and the federal government  overseas, according to this official, and a number of states do not have a  presence overseas and rely entirely on Commerce for those services.
Nevertheless, many state trade offices have their own international  representatives that provide services to businesses from those states  similar to the services offered by Commerce’s Foreign Commercial  Officers. This representation is provided by either state employees or  contractors hired as service providers, or both, and they provide these  services to a country from offices located in-country or on a regional basis  from offices not located in-country. While 38 state trade offices  collectively have representation in 83 countries abroad, the number of  countries in which individual state trade offices have representation  varies. For example, Pennsylvania operates abroad relatively  independently from Commerce through its own network of overseas  contractors located in 22 countries from which the contractors serve 73  countries. Similarly, Virginia utilizes a combination of its own staff (in 2  countries), and overseas contractors, which constitutes a network that  reaches 57 countries. Conversely, Oregon relies almost exclusively on its  own staff and contractors in 4 countries where it has representation, but it  relies heavily on Commerce in all the countries where it has no formal  representation. Figure 3 shows the top 10 countries in terms of state  trade office representation, with China, Japan, and Mexico having the  most. See appendix II for more details on Commerce’s and the states’  export promotion representation overseas.
In fiscal year 2013, Commerce’s ITA dedicated $267.5 million of its  total budget to export promotion. SBA’s Office of International Trade,  which provides export financing and promotion services to small  businesses, had fiscal year 2013 total program costs of approximately  $9.8 million. Additionally, SBA’s export-related loans amounted to  approximately $1.2 billion in fiscal year 2013. The total amount of  money spent on federal export promotion is unclear because  comparable budget information for federal agencies involved in export  promotion is not readily available, as we found in July 2013.
State governments vary greatly in the budgetary resources they provide  for export promotion. According to the 2013 SIDO survey, among the 14  state trade offices that responded to this question, office annual budgets  ranged from $80,000 to $6.2 million, with 90 percent of the 14 states  having budgets ranging from $420,000 to $1.75 million. The 5 state  trade offices we visited had budgets for export promotion that ranged  from $1.9 million to over $5 million annually for fiscal year 2013. In the  2013 SIDO survey, of the 23 states that responded to this survey  question, over half reported no significant changes in their overall budgets  from the previous year.
section_title: Metrics Used to Measure Performance
paragraphs: Organizations define performance metrics to reflect priorities, measure  achievement, and create incentives for management and staff. Measuring  performance allows organizations to track the progress they are making  toward their goals and gives managers crucial information on which to  base their organizational and management decisions. primarily uses “export successes” to measure performance. When any  Commerce trade-promotion activity successfully assists a U.S. company  to export a product or service, Commerce staff document an export  success that is verified by Commerce management. The total dollar  value of Commerce export successes in each state varies greatly, with,  for example, export successes from Alaska totaling $370,000 in 2012 and  export successes from Washington exceeding $10 billion for that same  year (see fig. 4).
GAO, Entrepreneurial Assistance: Opportunities Exist to Improve Programs’  Collaboration, Data-Tracking, and Performance Management, GAO-13-452T  (Washington, D.C.: Mar. 20, 2013).
section_title: The Extent of Federal and State Collaboration Varies Widely
paragraphs: In the five states we visited, we found that the extent of collaboration  between federal and state trade offices ranged from no collaboration in  one state, to very little collaboration in another, to close collaboration  between federal and state export promotion providers in three states.  According to federal and state officials with whom we spoke, factors  affecting their level of collaboration included physical proximity, level of  communication, and resource levels. In addition, we note that state  offices report to their own executive and legislative bodies, and state  trade offices determine their own priorities and are not obligated to  collaborate with federal agencies.with federal partners in trade promotion primarily interact with Commerce  but also collaborate with SBA, both to varying degrees.
States that do choose to collaborate  Among the five states we visited, we found little to no collaboration with  federal agencies in two states. One state Director described the state’s  relationship with Commerce export promotion staff in his state as cordial  but involving virtually no interaction. In another state, we found minimal  interaction between the state trade office and the state’s USEACs. In both  states, local federal officials agreed that they had a limited relationship  with their state counterparts. Both these state trade offices are well- funded and provide export assistance services through their networks of  in-state trade offices and extensive networks of international offices  staffed by contracted service providers. The Directors of both state trade  offices noted that in most cases they opt not to work with Commerce  because their experience has been that Commerce response times are  slow and that the quality of the service inconsistent. For example, one  state Director said that his state provides export promotion assistance  faster, better, and cheaper than Commerce. However, both states  collaborate with Commerce overseas when their staff or contractors are  not located in a country or are unable to meet the demand for services  from exporters. Both states also minimally collaborate with SBA; one  state refers new-to-export companies to SBDCs for training, while the  other state refers companies that need export financing to SBA.
In contrast, we found that staff in three of the five state trade offices we  visited work closely with Commerce. Officials from these state trade  offices explained that the services their offices provided complement  Commerce’s services, and they cited colocation or proximity of offices  and good communication as factors that facilitate collaboration.
According to Commerce’s client management system, for fiscal year  2012, state trade offices or other state government offices or agencies  are among Commerce’s most frequent partners in achieving export  successes.
In one state, Commerce and state officials characterized their working  relationship as seamless and their services and activities as  complementary. For example, the state organizes trade missions  while Commerce helps with recruiting companies and arranges one- on-one meetings with prospective buyers. Similarly, officials told us  that in some cases the state trade office provides funding to  businesses that is used to purchase Commerce’s services. This state  trade office and Commerce also occasionally provide joint counseling  to some companies, according to state trade office officials.  In another state trade office, located in the same building as  Commerce, the Director believed that a primary factor encouraging  collaboration was that both offices had small staffs whose members  knew each other well. According to state trade office officials, this  state’s trade staff and Commerce’s staff provide joint counseling  services and promote one another’s services to businesses. This  state trade office also collaborates with Commerce and SBA to deliver  export-focused training intended to provide introductory information to  businesses on the exporting process and available federal resources  to nonexporting companies.
A third state trade office described its relationship with Commerce as  complementary and noted that the organizations collaborate on joint  trade missions and activities that bring together businesses interested  in exporting with potential buyers. State trade office officials noted that  Commerce relies on the state for their export education programs and  that the state works mostly with new-to-export companies. This state  trade office refers only companies who require very basic assistance,  such as basic accounting information, to SBDCs. The Director of the  state trade office commented that any duplication in the services  provided by Commerce and her office would not be a concern  because the demand for export assistance in the state was so great.
In two states we visited, SBA grants to state trade offices through the  State Trade and Export Promotion (STEP) program have facilitated  collaboration with Commerce and SBA. In those states, for instance,  Commerce refers their clients to state trade offices for STEP funding. The  state trade offices reported using STEP funds to expand their services or  replace lost state funding and said they were able to provide for export- related activities such as attendance at trade shows and to purchases of  Commerce services. For example, Minnesota’s Trade Office was using  STEP funds to provide matching funds to Minnesota businesses for  export activities and their expenses, including trade missions. As another  example, in partnering with a local SBDC, Florida’s trade office was using  STEP funds to help new-to-export businesses create strategic exporting  plans.
section_title: TPCC Initiatives to Promote Federal- State Collaboration Have Had Limited Results, Due in Part to Inconsistent Use of Key Practices
paragraphs: Three TPCC initiatives utilize networks of state and local governments  and other partners to advance federal-state collaboration in promoting  U.S. exports. These efforts have produced limited results, however, in  part because they have not consistently implemented key collaboration  practices. In prior work, we found that collaboration is enhanced when  collaborating partners follow certain key practices, such as articulating  common outcomes; agreeing on roles and responsibilities; monitoring,  evaluating, and reporting on results; and leveraging resources. In states  we visited, we found weaknesses in the implementation of Export  Outreach Teams, a TPCC initiative that was to be co-led by Commerce  and SBA. Similarly, we found that TPCC’s involvement in a Brookings  Institution effort to engage metropolitan area economic development  groups in export promotion has unknown implications for federal export  promotion efforts and resources. Finally, an agreement between  Commerce (the TPCC Chair) and a national group representing state  trade offices expired without achieving its collaboration objectives and  without Commerce addressing ways for it to share within legal restrictions  more information about its clients with state trade offices.
subsections: section_title: Collaboration Is Enhanced When Participants Follow Key Practices
paragraphs: In prior work, we found that federal agencies face a range of challenges  and barriers when they attempt to work collaboratively. Such challenges  and barriers also exist—and sometimes to an even greater degree— when federal agencies partner with state and local governments,  nonprofit organizations, and the private sector. However, our prior work  has also identified practices that can help to enhance and sustain  collaboration among agencies and thereby maximize performance and  results, and we have recommended that agencies follow them. Among  the key collaboration practices we have identified and recommended in  prior work are the following:
Define and articulate a common outcome.
Identify and address needs by leveraging resources.
Develop a mechanism to monitor, evaluate, and report on results.
Agree on roles and responsibilities.
We have also found that there are key issues to consider when  implementing collaborative mechanisms. These include leveraging  resources, such as human, information technology, physical, and  financial resources to sustain a collaborative effort, and composing  written guidance and agreements documenting how the parties to the  agreement will collaborate and a way to update the guidance and  agreements as needed.
The enhanced federal-state collaboration in export promotion envisioned  in the NEI calls for the implementation of some of these key collaboration  practices. In its 2010 report to the President on the NEI, the Export  Promotion Cabinet identified improved coordination with state  government trade offices as a priority, and called for federal agencies to  make joint planning the standard procedure in all states that have export  promotion programs. The Export Promotion Cabinet also stated that  interagency coordination could be strengthened and that federal-state  partnership could be particularly helpful in identifying potential exporters  to meet the NEI goal. In addition, the subsequent National Export  Strategies highlighted collaboration with state and local governments as a  priority.
section_title: TPCC Has Identified Three Initiatives to Enhance Federal-State Collaboration
paragraphs: In support of the NEI, the TPCC’s two most recent National Export  Strategies made enhancing federal-state collaboration on export  promotion a priority. The 2011 and 2012 strategies called for increasing  collaboration with state export promotion programs and metropolitan  areas. Accordingly, the TPCC identified three initiatives intended to  increase U.S. exports under the NEI and enhance collaboration between  federal and state efforts: (1) Export Outreach Teams, created to increase  local awareness of export promotion resources and facilitate collaboration  among local networks of export promotion service providers; (2)  collaboration with the Brookings Institution to support its Global Cities  Exchange (initially referred to as the Metropolitan Export Initiative), as  part of TPCC efforts to expand export promotion activities in metropolitan  areas; and (3) a memorandum of intent (MOI) with a national organization  that represents state trade offices from across the country, as part of  TPCC efforts to work with national organizations with common interests.  The TPCC highlighted the first two initiatives in its 2011 and 2012  strategies, and TPCC officials told us that the MOI was important to  federal-state collaboration.
section_title: Efforts to Improve Local Networks of Export Promotion Service Providers Have Had Limited Results Due to Implementation Weaknesses
paragraphs: The TPCC promoted Export Outreach Teams as a mechanism for  bringing together the various organizations that provide export promotion  services in a locale to share information with small business service  providers. The Export Promotion Cabinet’s 2010 report to the president  on NEI and the TPCC’s 2011 and 2012 National Export Strategies  discuss the role of these teams in leveraging state and local resources to  help small businesses export successfully. Export Outreach Teams were  originally a pilot program launched by SBA in 2010 as a way to inform  small business service providers about local available export resources  provided by the various federal agencies, state trade offices, and their  partner organizations. Small business service providers include Small  Business Development Centers, Women’s Business Centers, SCORE  offices,chambers of commerce. local economic development agencies, trade associations, and  In 2012, the Export Promotion Cabinet and TPCC issued an interagency  communiqué that expanded SBA’s Export Outreach Teams across the  country. In keeping with a key collaboration practice described above, the  communiqué outlined two main purposes, or common outcomes, for the  Export Outreach Teams:  to increase local small business service providers’ awareness of  available international trade expertise and  to enhance communication and collaboration.
According to the interagency communiqué, Export Outreach Teams were  to serve as a forum for collaboration by including export promotion  agencies from all levels of government—federal, state, and local. As a  first step, the communiqué called for team members, including staff from  Commerce’s CS, SBA, SBDCs, state trade offices, and small business  service providers to participate in workshops with activities meant to  advance the program’s objectives. One of those activities was the  formation of referral protocols that would help to establish roles and  responsibilities and to leverage available resources. These referral  protocols were intended to help ensure that local businesses could find  the right export promotion service provider for their particular needs. The  interagency communiqué stated that Export Outreach Teams were to  hold a workshop by September 30, 2013, and that the teams should  convene quarterly thereafter. Figure 5 shows the expected outcomes,  suggested membership, and planned activities of Export Outreach  Teams.
The interagency communiqué called for both Commerce and SBA to be  co-managers of the Export Outreach Teams, but SBA, whose role in  federal export promotion efforts has grown in recent years, took the lead  in implementing the initiative in its 68 SBA districts across the country.  SBA provided detailed guidance to each District Office on how to conduct  the initial team workshops described in the communiqué. SBA tracked the  dates and numbers of attendees of the initial workshops of the Export  Outreach Teams through 2013 and reported that all but one district held  its initial workshop by the September 30, 2013, deadline. In February  2014, SBA distributed to the District Offices a separate document to track  the Export Outreach Teams’ quarterly meetings; that document requested  information from District Offices about the agencies represented, the  activities planned, and the topics covered at the meetings.
Despite TPCC and SBA efforts to provide guidance on achieving the  objectives of the Export Outreach Teams, we found weaknesses in their  implementation that limit their ability to enhance federal-state  collaboration.
First, the team memberships and activities were inconsistent with the  guidance. In some instances, not all relevant participants were  present at the workshop, while in other instances, the events reported  as Export Outreach Team workshops did not have the purpose of  facilitating interagency collaboration. For example, in one location we  visited, state trade office officials were not aware that the local Export  Outreach Team existed, and at another site, the Export Outreach  Team had not included state trade office representatives in its initial  workshop. According to an SBA document that tracked the attendees  at the first meetings of all Export Outreach Teams, the participants in  the meetings varied widely. Teams reported from 4 to 220 attendees  at their initial workshops,  and some meetings reported as Export  Outreach Team events were larger conferences, presentations to  small businesses, or other events not intended to serve as a forum for  interagency and intergovernmental coordination. Officials at two  locations we visited reported that presentations about SBA’s export  financing programs were Export Outreach Team workshops, and in  one location we visited, the Export Outreach Team workshop was in  fact a presentation to private companies, not the intended meeting to  coordinate local export promotion resources.
Second, we identified and examined two referral protocols developed  by Export Outreach Teams and both lacked important details that  would facilitate the referral process and better communication and  collaboration. Specifically, the protocols were not consistent with the  key collaboration practice of agreeing on roles and responsibilities.  For example, the protocols we examined lacked important details that  would facilitate the referral process such as information about federal,  state, and local agency responsibilities and the circumstances under  which a business would be referred from one agency to another.  Furthermore, SBA officials did not emphasize the importance of the  referral protocols, rather stating that they were a desirable but not a  necessary outcome of the teams. Referral protocols with clear roles  and responsibilities can help federal and state officials determine  when to refer businesses to each other, for assistance, and to avoid  delays and confusion on the part of businesses seeking export  assistance.
SBA recently created a document to track the Export Outreach  Teams’ quarterly meetings and, as of March 2014, plans to use it to  collect, review, and use the information to manage the program.  Without monitoring, evaluating, and reporting on results, SBA does  not know whether the teams are reaching out to and including the  appropriate organizations, such as state trade offices; whether the  teams are meeting regularly as intended; and whether the teams are  exploring ways to foster better collaboration through referral protocols  or other means. Therefore, SBA has lacked pertinent information  needed to make decisions in managing the program, including how to  adjust the program to strengthen local networks of export promotion  service providers so that businesses receive the best possible  assistance. As a result, until the TPCC and SBA collect and review  information on the program, they cannot ascertain the extent to which  Export Outreach Teams are achieving their objectives to increase  awareness of local export resources and enhance collaboration  between federal and state agencies.
section_title: Initiative to Engage Metropolitan Entities Has Unknown Implications for Federal Export Promotion Efforts
paragraphs: TPCC officials sought to enhance collaboration among regional, state,  and local economic development entities to increase their involvement in  export promotion through a Commerce collaboration with the Brookings  Institution’s Global Cities Exchange (hereafter referred to as Global  Cities). Initially launched as the Metropolitan Export Initiative, Global  Cities was established to engage metropolitan area governments and  other local entities in collaboration with federal and state providers to  increase exports and economic growth and to broaden global economic  engagement. The TPCC’s 2011 and 2012 National Export Strategies  describe this initiative as a tool for federal collaboration with state and  local governments, and the TPCC has identified it as a mechanism to  broaden export promotion efforts to include new partners and help reach  the goal of the NEI. According to the 2012 strategy, collaboration with  metropolitan areas is particularly important because metropolitan areas  account for most of the nation’s exports and are home to each region’s  unique concentration of capital, investment, and innovation. According to  the Brookings Institution, Global Cities will increase U.S. exports by  leveraging the knowledge and connections of local economic  development leaders to proactively identify firms and sectors with the  greatest export potential, coordinate fragmented export assistance  providers, and leverage limited resources for maximum benefit. As shown  in figure 6, federal, state, and metropolitan agencies are to combine their  varied missions, functions, and perspectives to achieve the Global Cities  objective of enhancing each metropolitan area’s exports. Other  participating organizations include universities, chambers of commerce,  and regional economic development organizations. In 2011, Global Cities  started in Los Angeles, California; Minneapolis-St. Paul, Minnesota;  Portland, Oregon; and Syracuse, New York. Another 16 locations started  the process as of December 2013. Ultimately, according to the  Brookings Institution, Global Cities is to be implemented in a total of 28  metropolitan areas.
Los Angeles, Minneapolis-St. Paul, Portland, and Syracuse have  completed metropolitan export plans, each of which includes performance  measures. The export component of Global Cities’ performance  measures vary by location and include the value of exports as a  percentage of regional gross domestic product, the increase in the  number of new-to-export firms, the increase in the number of markets to  which local companies export, and the number of new firms entering the  export supply chain. A Brookings Institution representative noted that  measuring performance across the large and diverse group of  organizations involved in Global Cities’ efforts is a challenge and that  Global Cities is hoping to establish coordinated services and develop  success stories with specific companies.
Commerce has provided resources to support Global Cities in the form of  staff time and expertise provided at the local level, as specified in the  memorandum of agreement (MOA) that Commerce signed with the  Brookings Institution in September 2011. Consistent with key practices for  collaboration, the MOA specified how Commerce would participate in the  initiative in terms of roles and responsibilities and what resources  Commerce would devote in four pilot locations. Subsequently,  Commerce made several contributions to the program under the MOA,  including providing data on global demand for U.S. exports in each  metropolitan area. Furthermore, Commerce staff in each of the four pilot  cities provided expertise to help develop metropolitan export plans, which  outline strategies for increasing exports in each location. In some Global  Cities locations—such as Minneapolis-St. Paul, Minnesota; Portland,  Oregon; and Tampa Bay, Florida—Commerce officials have participated  in the planning, development, and implementation of Global Cities  projects, including the development of a document describing local  export-related resources, providing export-related training to economic  development professionals, and assisting with a survey of companies to  understand the perceived challenges they face related to exporting their  goods and services.
The MOA expired in April 2012, and Commerce and the Brookings  Institution do not plan to renew the agreement. However, Commerce will  continue to support Global Cities through its USEACs at the local level as  the program expands to a planned 28 metropolitan areas. A Brookings  Institution representative stated that the MOA was only intended for the  initial stage of the program. Similarly, Commerce officials told us they did  not think it was necessary to renew the agreement with the Brookings  Institution because they consider their role as limited to advising when  requested and helping to inform Global Cities’ participants in new  metropolitan areas about federal export promotion programs and  services. Furthermore, Commerce officials told us that, because the  Global Cities projects are implemented locally and facilitated by the  Brookings Institution nationally, Commerce does not need a process to  track and report on the results of the initiative in each city.
Brookings officials told us that their initiative was meant to increase  interest in exporting, not to create new export promotion service  providers. Thus, to the degree the initiative is successful, it will put new  demands for export promotion services on federal and state export  promotion agencies. Of the 20 currently established Global Cities  locations, 6 are served by a Commerce office of one employee. In  locations we visited, Commerce officials told us that a lack of staff  resources was already a concern, which would make it challenging to  respond to an increase in demand from local businesses for export  promotion services.
As mentioned previously, metropolitan areas participating in Global Cities  plan to track their progress through performance metrics specified in their  metropolitan export plans. However, to date, Commerce has not  requested these data. Therefore, the impact of the initiative is still  uncertain. Commerce has no plans to monitor results, which is  inconsistent with key collaboration practices. With no system in place to  monitor the results of the Global Cities initiative, Commerce lacks  information needed to participate effectively because it cannot anticipate  any increased demand for its export promotion services that the program  may generate, or know when to shift resources to certain metropolitan  areas with a greater potential for enhancing U.S. exports. Moreover,  without such information, Commerce would be unable to identify the most  successful Global Cities efforts and to draw lessons from them that could  be applied more widely to enhance federal, state, and local collaboration  to achieve NEI goals.
section_title: Collaboration with SIDO and Other National Organizations Has Had Limited Results
paragraphs: The third initiative to enhance federal-state collaboration identified by  TPCC officials aimed to improve collaboration with national organizations  that have shared interests in expanding U.S. exports. This initiative  focused on strengthening Commerce’s relationship with the State  International Development Organizations (SIDO), the only national  organization devoted exclusively to supporting international trade  development through state trade offices. TPCC agencies also work with  other national nonprofit organizations, including the National Governors  Association and the U.S. Conference of Mayors. For example, the  National Governors Association is developing a means to track and share  information on trade missions involving state governors. However,  promoting trade is not the primary purpose of these two entities.
SIDO’s mission is to provide a forum for collaboration and sharing best  practices, advocating for states’ international trade and development  issues, and supporting the goals of the NEI through coordination of  federal and state resources. A SIDO official told us that while many states  have good collaborative relationships with federal officials at the local  level, there was less collaboration at the national level in Washington,  D.C. Both Commerce and SIDO were hopeful that a formal agreement  would encourage dialogue and improve collaboration. In September  2011, Commerce and SIDO signed a memorandum of intent (MOI) that  articulated their commitment to work together to develop strategies and  implement activities in three areas.
They agreed to enhance Commerce’s partnership with state trade  offices to coordinate and cooperate in the delivery of critical customer- focused services necessary to assist U.S. companies to successfully  export their products and services and enter new foreign markets.
They agreed to identify opportunities and mechanisms for Commerce  and the states, working through SIDO, to increase awareness among  companies of available services, trade programs, and overseas  events.
They agreed to create a formal consultation process between  Commerce and SIDO to facilitate communication and coordination,  exchange ideas, and identify joint activities to be carried out pursuant  to a future agreement.
The MOI represented a concerted effort on the part of Commerce and  SIDO to improve collaboration consistent with two key collaboration  practices. First, the MOI was a written agreement documenting how SIDO  and Commerce believe collaboration should occur. Second, the MOI  defines the three common outcomes listed above. Nonetheless, the MOI  did not specify roles and responsibilities; provide a mechanism to monitor,  evaluate, and report on results; address how to leverage state and federal  resources; or identify activities to achieve the three outcomes. One  Commerce official commented that there was no commitment embedded  in the agreement, such as a list of specific actions and who would be  responsible for carrying them out. Similarly, one SIDO member  commented that, while the agreement had gotten the parties together, it  was too general to help them move forward and accomplish much. In  contrast, a draft memorandum of understanding (MOU) that had  preceded the MOI, did call for specific actions, such as having Commerce  and SIDO jointly organize a program of multistate trade missions to key  markets worldwide and developing procedures to enable federal and  state trade offices to share credit for successful export promotion efforts.  According to SIDO members and Commerce officials, legal concerns  about vetting such a specific agreement in the short time frames given  prompted them to sign the MOI instead.
Ultimately, the MOI, which was to be renewable annually, expired in  September 2012 with limited results, according to SIDO officials. SIDO  and Commerce officials reported diverging views about progress on  achieving the three common outcomes. Regarding the first activity— coordinating and cooperating in the delivery of critical customer-focused  services—SIDO officials noted a continued lack of joint planning. For  example, several SIDO members had expressed frustration about being  surprised by Commerce’s announcements of new nationwide initiatives,  including those for Export Outreach Teams and the precursor of Global  Cities, the Metropolitan Export Initiative. Regarding the second activity— increasing awareness among companies of available services—SIDO  officials stated that Commerce has not yet instituted a formal mechanism  to notify state trade offices about upcoming events such as trade shows  in time for state offices to assist or participate. Commerce officials, on the  other hand, told us that it resolved this issue by sending SIDO a long list  of TPCC upcoming activities twice a year, as well as regular postings on  Commerce’s export.gov website. Commerce officials pointed out that  states also need to share with Commerce their plans regarding such  events, which they said does not always occur, particularly since the  states started obtaining additional funds through the STEP program. For  example, the governors of Kentucky and Wyoming held a trade show for  their mining equipment companies geared toward sales to China at the  same time as Commerce’s similar efforts. Regarding the third activity,  formal consultation, Commerce and SIDO created a consultation process  through which, at the onset, they met quarterly, according to Commerce  officials. However, according to SIDO officials, the meetings neither  generated any actions nor produced an agreement, as called for in the  MOI. Moreover, a 2013 survey of SIDO members indicated that most  believed that despite the NEI, federal-state collaboration in promotion  exports had not improved in recent years.
According the Commerce and SIDO officials, several factors contributed  to the limited collaboration stemming from the MOI. These officials agreed  that collaboration was a joint responsibility and a SIDO official said that  they had not met with Commerce since April 2013. A SIDO official also  said that recent personnel changes on both sides made it more  challenging to maintain regular consultations. Furthermore, SIDO officials  said that they were now giving more priority to working with SBA and  Congress to maintain funding for STEP. Nevertheless, the MOI’s  consistency with key collaboration practices could have helped to  enhance collaboration. Agreements to collaborate that define common  outcomes but do not identify activities to achieve them or specify roles  and responsibilities lack a roadmap to motivate parties to move forward.  In addition, when such agreements lack a mechanism to monitor,  evaluate, and report on results, they make it more difficult for the partners  in collaboration to hold one another, and themselves, accountable for  fulfilling their commitments.
subsections: section_title: MOI Did Not Address Sharing Client Information
paragraphs: SIDO officials called sharing credit in the tracking of export promotion  successes their number one priority to enhance federal-state  collaboration, which, according to those officials, is why they sought to  address this issue in the MOI. Sharing information is consistent with the  key collaboration practice of leveraging resources, including information  technology, to support a common outcome. However, Commerce pointed  out that it is required by law to restrict the extent to which it can share  information (e.g., clients’ new export markets, export sales, customer  satisfaction, services obtained), including information related to  Commerce’s export successes. State trade office officials in two of the  five states we visited also mentioned sharing client information as  important to federal-state collaboration. For instance, an official from one  state stated that sharing their client lists with Commerce and vice versa  ensured that their customers obtained the best service to meet their  needs. Officials from a third state cited three specific issues related to  sharing client information:
First, they said they had no way of knowing whether their referrals of  clients to Commerce for Gold Key services resulted in export sales,  leading to underreporting of the state trade office’s results and limiting  its ability to justify additional export promotion resources.
Second, they said that it is more difficult to advise companies  effectively without knowing what information the companies may have  already obtained from Commerce.
Third, the officials said that they and Commerce had to distribute  separate evaluation forms after jointly sponsored training events,  resulting in underreporting because participants generally did not want  to fill out two forms.
Commerce USEAC officials in three of the states we visited said that they  were prohibited by law from sharing information on client services with  state trade offices. A USEAC official in one of the three states explained  that Commerce must keep a confidential relationship with clients so that  clients will report to them their export successes, an important  performance measure. A USEAC official in one state noted, however, that  sharing export success information with his state trade office counterpart  made sense because they used similar metrics. The official commented  that the ability to share export successes with the states would encourage  leveraging of resources through joint efforts. In addition, this same  USEAC official reiterated that underreporting occurs because the state  trade office and Commerce must distribute separate evaluation forms to  clients that attend their joint trade shows and trade missions and most  clients will not take the time to complete both forms.
According to an official from Commerce’s Office of General Counsel,  Commerce is legally barred by the federal Trade Secrets Act from  sharing any information that would cause “substantial competitive harm” if  released. The official commented that, as a general rule, companies are  reluctant to release information to the government and that Commerce  must obtain “affirmative permission” from each company in order to share  nonpublic information with the states or other federal agencies. She  stated the company must give permission in advance, in writing, through  some formal process that would have to be captured in a database, with  strict controls. She also stated that sharing client information with the  state trade offices is particularly challenging because, unlike information  Commerce shares with other federal agencies, information that  Commerce discloses to a state government is automatically considered  releasable to the public under the Freedom of Information Act. However,  she noted that Commerce officials can share any information already  publicly available, or information that would clearly not cause substantial  competitive harm. She stated that examples of such publicly available  information would include a press release about a company attending a  trade mission or information in a company’s annual report. Finally, the  official reiterated that Commerce can share any information with the  states if a company gives formal written permission in advance.
Commerce officials from ITA stated that they are now exploring ways for  clients to voluntarily give permission for CS to release their information   They noted that CS currently lacks but warned of several challenges. the technical capability to record a client’s advance permission to share  their proprietary information, except in the case of fee-based services. In  this regard, a Commerce official estimated that 15 percent of CS services  are fee based. Finally, a Commerce official suggested that Commerce  could aggregate the value of export successes by state. However, this  would not indicate whether the state actually contributed to the export,  thus preventing the state from documenting and sharing credit.
Commerce has circulated guidance in the form of a slide presentation  about the need to protect confidential commercial information consistent  with limitations on disclosure in the Trade Secrets Act and the Privacy  Act, which officials said they sent to CS offices. According to an official  from Commerce’s Office of General Counsel, Commerce had provided no  official general guidance to its employees on what client information may  be shared with other federal agencies, the states, or both, and in what  situations. Instead, this official stated that Commerce lawyers assess  information-sharing requests on a case-by-case basis and offer informal  guidance. She noted that currently Commerce has no way to obtain  formal permission from companies with regard to sharing information.  However, without some formal, general guidance from Commerce on the  types of information that can be shared consistent with legal restrictions,  and without some effort by Commerce to obtain permission from its  clients to share their information, federal and state export promotion  providers have less opportunity to leverage resources, such as sharing  clients and credit for export successes, and thus, less incentive to  collaborate.
section_title: Conclusions
paragraphs: Federal and state governments share an interest in helping small  businesses export in order to promote economic development and create  good-paying jobs. Given the overlap of federal and state export promotion  efforts and the current environment of constrained government resources,  enhancing federal-state collaboration is important to help ensure that  export promotion programs operate as efficiently and effectively as  possible. It is also important for minimizing any potential barriers to small  businesses seeking export promotion assistance. Nevertheless,  collaboration is a two-way street, and the nature and extent of the federal  and state relationship varies widely by state, depending on the unique  factors in each state. The three recent TPCC initiatives to improve federal  collaboration with states at the national and local levels recognize the  varying nature of the collaborative relationship. Unfortunately, the federal  initiatives have had limited success and only partially incorporated key  collaboration practices. We found weaknesses in the implementation of  Export Outreach Teams that limit their ability to achieve their objectives  and enhance federal-state collaboration. Collaborative agreements with  partners on the other two initiatives have expired with unknown or limited  results. Nevertheless, these initiatives have demonstrated that fruitful  opportunities exist to improve local networks of export promotion service  providers, to expand activities to better include metropolitan area  economic development agencies, and to work with national organizations  representing state and local governments. Renewed effort by the TPCC  agencies to implement these initiatives with greater attention to key  collaboration practices can help improve the support available to small  businesses hoping to export, as well as bolster, federal efforts to achieve  national export goals.
section_title: Recommendations for Executive Action
paragraphs: To improve federal-state collaboration in providing export promotion  services in accordance with the National Export Initiative, and the Export  Enhancement Act of 1992, we recommend that the Secretary of  Commerce, as Chair of the TPCC, take the following three actions:  Improve implementation of the Export Outreach Teams to better  achieve their intended outcomes. This could include taking steps,  including better monitoring, to ensure that key local participants are  invited, that meetings are held as expected, and that the Export  Outreach Teams seek to both increase awareness of available export  resources and enhance interagency and intergovernmental  collaboration.
Take steps consistent with key practices for collaboration to enhance  TPCC agencies’ partnering on export promotion with nonfederal  entities, such as SIDO and Global Cities. This could include  reassessing and strengthening the TPCC’s intergovernmental  partnerships by clarifying expected outcomes, defining roles and  responsibilities, monitoring results, and planning resource needs.
Take steps consistent with key practices to enhance, where possible,  federal information sharing with state trade offices on Commerce’s  export promotion activities. This could include more formal guidance  to Commerce staff regarding the circumstances, in light of legal  restrictions, in which information can be shared with state trade offices  and other nonfederal entities, and exploring ways for clients to give  permission to release information useful to such nonfederal entities.
section_title: Agency Comments
paragraphs: We provided a draft of this report to Commerce and SBA for review and  comment. In its written comments on the draft, which are reprinted in  appendix III, Commerce concurred with our overall assessment that  collaboration can be enhanced through strategic management.  Commerce stated in its letter that our analysis was helpful in pointing out  areas where TPCC agencies can enhance their relationship with state  and local government partners. Commerce also noted that while our  analysis of the status of federal cooperation with state trade promotion  entities raises important issues, to make broader program decisions,  Commerce would need to obtain input from a wider variety of state trade  promotion entities beyond the five state programs that were the focus of  our fieldwork. Commerce stated its intention to obtain comprehensive  data on the overall federal relationship with state trade promotion entities  and that once it obtained that additional data it would work to identify and  implement strategies to enhance TPCC agencies’ collaboration with state  entities on trade promotion. Commerce also described steps that are  ongoing or planned to address each of our three recommendations.
Consistent with our recommendation on Export Outreach Teams,  Commerce noted that it will help SBA implement its reform plan to  improve the Export Outreach Teams, including defining representative  entities at the local level that should be included in the teams.
Commerce also noted that it is working with the Brookings Institution  on raising awareness of best practices under the Global Cities  Exchange program and working with Brookings and participating cities  to assess the program’s impact. Commerce stated its intention to  monitor the impacts of Global Cities through data collected by the  Census Bureau on the number of exporters in metropolitan areas.
Finally, Commerce noted that it has begun transmitting to SIDO  information on federal activities, such as trade missions, earlier in the  planning cycle; is working with SIDO to further analyze what makes  for good federal-state cooperation; and plans to hold quarterly calls  with state trade promotion entities on mutually agreed-on topics.
Commerce also stated in its letter that our analysis of the Export  Outreach Teams paralleled that of SBA in its review of the new program;  and that SBA is taking a number of steps that align with our  recommendation, such as defining representative entities at the local  level that should be included in the Export Outreach Teams.
In addition, on May 1, 2014, the SBA Deputy Associate Administrator for  International Trade provided us with comments in an e-mail on the draft,  stating that our analysis and conclusions regarding its implementation of  Export Outreach Teams were largely accurate and that SBA will allow the  implementation process to unfold over the next year, after which it will  review and assess any need for improvements, in line with our  recommendations. SBA also clarified that the Export Outreach Teams  were a TPCC initiative co-led by Commerce and SBA, as reflected in the  mandate in the original TPCC Communiqué; we incorporated this change.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 14 days from the  report date. At that time, we will send copies to the Secretary of  Commerce, the SBA Administrator, and other interested parties or  congressional committees. In addition, the report will be available at no  charge on the GAO Website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-8612 or at gianopoulosk@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found   on the last page of this report. GAO staff who made key contributions to  this report are listed in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: In this report, we examine (1) the main characteristics of federal and state  export promotion efforts, including their collaboration, and (2) the extent  to which the Trade Promotion Coordinating Committee (TPCC) has  advanced collaboration between state and federal efforts to promote U.S.  exports.
While some of the 20 TPCC member agencies directly assist small  businesses to export overseas, this review focuses solely on the  Department of Commerce (Commerce) and the Small Business  Administration (SBA). This is because the other TPCC agencies generally  provide export promotion services comparable to those that state trade  offices provide. We conducted our work in Washington, D.C., and  through fieldwork in five states: Florida, Minnesota, Oregon,  Pennsylvania, and Virginia. We chose these states based upon the  following criteria: presence of a District International Trade officer, SBA  District Office, and Commerce U.S. Export Assistance Center in the  metropolitan areas we planned to visit; initiation of Export Outreach  Teams; state trade office presence overseas; participation in Global Cities  Exchange; extent of collaboration with federal export promotion providers  according to Commerce officials in Washington, D.C.; and state trade  office staff size (mix of large and small). We chose these locations to  better understand and test federal initiatives to advance collaboration with  state trade offices at the local level; these five locations allowed us to  assess federal implementation efforts overall but are not representative of  the situations in each of the individual 50 states.
To determine the main characteristics of federal and state export  promotion efforts, we compared their sizes, services, types of clients, and  performance measures using information collected from interviews and  site visits to offices of Commerce’s Commercial Service (CS) and state  trade offices in five states (Florida, Minnesota, Oregon, Pennsylvania,  and Virginia). State trade office Directors and their staff provided detailed  information regarding their office locations, staffing numbers, services  provided, clients served, annual budgets, and the metrics used to  measure their programs for fiscal years 2012 and 2013. To assess the  reliability of these data, we created a standard set of questions that was  sent to each of the five states. We cross-checked these data with similar  fields in the SIDO 2012 and 2013 survey data. We also collected  information on SBA services, clients, and resources from documents and  interviews with SBA officials. We analyzed data collected by the State  International Development Organizations (SIDO) in its annual member  surveys for 2012 and 2013. To assess the reliability of the survey data  from SIDO, we interviewed the SIDO representative responsible for  developing and implementing the survey, performed a formal review of  the survey questionnaire for methodological quality, and performed data  testing. All variables from the survey in this report were determined to be  sufficiently reliable for the purposes of this engagement. To calculate  export successes and partnerships with state trade offices associated  with export successes, we analyzed data from the Commerce’s Client  Tracking System (CTS).specialists and local office management, tracks fee-based and non-fee- based activities. CTS is the principal database used for tracking “export  successes”—the primary performance measure for CS. We conducted  analysis of CTS data for fiscal year 2012 that identified export successes  by state and types of partnerships. On the basis of interviews with  knowledgeable agency officials and our assessment of the data for  missing data, outliers, and obvious errors, we concluded that all data  elements we assessed in the export successes data provided to us by  Commerce were sufficiently reliable for the purpose of this report. To  determine the extent of federal and state collaboration on export   CTS, an operational database used by field  promotion, we met with cognizant officials from CS and state trade offices  in the five states we visited. We compiled information from state trade  office websites on their international presence abroad. If information was  not readily available, we contacted staff in the state trade offices by e-mail  or telephone for information about their overseas presence. We cross- checked these data with similar fields in the SIDO survey data. U.S. trade  data prepared by the U.S. Bureau of Economic Analysis are used in the  report to illustrate the progress toward the National Export Initiative (NEI)  goal of doubling 2009 export levels by 2015.
To address the extent to which the TPCC has supported collaboration  between federal and state efforts to promote U.S. exports, we reviewed  the Export Enhancement Act of 1992, which directed the President to  establish the TPCC; Executive Order 12870 (Sept. 30, 1993) that  established the TPCC in accordance with the 1992 act; and Executive  Order 13534 (Mar. 11, 2010) announcing the NEI, as well as the 2011  and 2012 editions of the TPCC’s annual National Export Strategy reports  to Congress. We also asked the TPCC to identify their main efforts to  collaborate with state and local agencies that have a role in export  promotion. They identified three initiatives: Export Outreach Teams, the  Global Cities Exchange (initially referred to as the Metropolitan Export  Initiative), and the memorandum of understanding (MOU) between  Commerce and SIDO. To evaluate the three initiatives, we interviewed  staff of the TPCC Secretariat, which is housed in Commerce, as well as  cognizant Commerce and SBA officials at headquarters. We analyzed the  documents that provide a framework and guidance for the administration  of Export Outreach Teams, as well as documents that describe the Global  Cities Exchange and Commerce’s relationship with the Brookings  Institution and SIDO. These documents include a TPCC interagency  communiqué formalizing the Export Outreach Teams and the subsequent  program guidance issued by SBA, data collected about the first Export  Outreach Team meetings, formal agreements between Commerce and  the Brookings Institution and between Commerce and SIDO, and  documents from the Brookings Institution that describe the goals of the  Global Cities Exchange. We also interviewed representatives from the  Brookings Institution and SIDO to obtain their perspectives and discuss  relevant ongoing changes to their programs and other efforts. In  reviewing the Commerce-SIDO MOU, we reviewed the Trade Secrets Act  and pertinent legal opinions regarding the act’s applicability, and we  consulted with a representative of Commerce’s Office of General Counsel  regarding that office’s views on how the act affects Commerce’s ability to  share information with other federal, state, and local agencies. Finally, we  met with a number of national organizations that represent the interests of  local government entities to obtain their perspectives and ascertain their  roles in promoting U.S. exports. The organizations we contacted include  the National Governors Association, United States Conference of Mayors,  National Association of Counties, and the National League of Cities.
We also reviewed GAO’s guidance regarding good practices for  coordinating and managing multiagency initiatives as described in other  GAO reports, including those discussing implementation of the  Government Performance and Results Act (GPRA) of 1993 and the  GPRA Modernization Act of 2010. In states we visited, we interviewed  staff at state trade offices, federal officials from Commerce and the SBA  District Offices. On the basis of recommendations from federal or state  officials in those states, we met with other local entities, including trade  associations, economic development organizations, Small Business  Development Centers (SBDCs), representatives from District Export  Councils, local chambers of commerce, and the mayor’s offices in Miami,  Florida; Minneapolis, Minnesota; and Portland, Oregon, to obtain  information about local approaches to interagency collaboration and  about implementation of the three TPCC initiatives. We then discussed  what we found on our site visits with officials from TPCC, Commerce, and  SBA in headquarters to obtain their input.
We conducted this performance audit from February 2013 to May 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Commerce and State Trade Office Representation Overseas
paragraphs: Figure 7 identifies countries in which the Department of Commerce  (Commerce) and state trade offices have representation overseas.  Commerce representation consists of U.S. Commercial Service staff  located in offices overseas. State trade office representation includes  state employees located in offices in-country and contractors hired as  service providers who provide services to a country from offices located  in-country, or on a regional basis from offices not located in-country, or  both.
section_title: Appendix III: Comments from the Department of Commerce
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Contact
paragraphs: Kimberly Gianopoulos, (202) 512-8612, or gianopoulosk@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Adam Cowles (Assistant  Director), Qahira El’Amin, Nina Pfeiffer, and Cristina Ruggiero made key  contributions to this report. Gezahegne Bekele, David Dayton, David  Dornisch, Etana Finkler, and Ernie Jackson provided technical  assistance.