Commerce, Justice, Science and Related Agencies (CJS) FY2018 Appropriations: Trade-Related Agencies 
Released: 2018-05-03T00:00:00

Introduction

This report tracks and provides an overview of actions taken by the Administration and Congress to provide FY2018 appropriations for the International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the Office of the United States Trade Representative (USTR). The three trade-related agencies are funded through the annual Commerce, Justice, Science, and Related Agencies (CJS) appropriations act. This report also provides an overview of the enacted FY2017 appropriations for the three trade-related agencies. Historical funding for the trade-related agencies is provided in the Appendix .

FY2017 and FY2018 Appropriations for Trade-Related Agencies

The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) provided a total of $636.5 million for the trade-related agencies. The ITA received $483.0 million in direct appropriations, while the USITC received $91.5 million, and USTR received a total of $62.0 million, $15 million of which was derived from the Trade Enforcement Trust Fund. See the Appendix for aggregated budget authority tables for FY2007-FY2017.

The Administration's FY2018 Budget Request

The President submitted his FY2018 budget request to Congress on May 23, 2017. As shown in Table 1 , for FY2018, the Administration proposed budget cuts, compared to the FY2017-enacted appropriation, for all three agencies. It requested $442.5 million (-$40.5 million, -8.4%) in direct funding for ITA, $87.6 million (-$3.9 million, -4.3%) for USITC, and $57.6 million (-$4.4 million, -7.1%) for USTR.

Congressional Action: FY2018 Appropriations

In September 2017, the Senate and House passed the Continuing Appropriations Act, 2018, and Supplemental Appropriations for Disaster Relief Requirements Act, 2017 ( H.R. 601 ; P.L. 115-56 ). The act provided continuous government funding (continuing resolution, or CR) at the FY2017 level, reduced by 0.6791%, through December 8, 2017. The date was extended by subsequent continuing resolutions, through March 23, 2018.

House Action

The House Appropriations Committee reported its CJS proposal in July 2017 ( H.R. 3267 ). The House incorporated H.R. 3267 into Division C of the Consolidated Appropriations bill, H.R. 3354 , which passed the House on September 14, 2017. H.R. 3354 recommended a total of $627.5 million for the three CJS trade-related agencies. It included $467.0 million for the ITA in direct appropriations, $92.5 million for USITC, and $68.0 million for USTR, of which $15 million would be derived from the Trade Enforcement Trust Fund.

Senate Action

The Senate reported S. 1662 on July 27, 2017, but did not consider the proposal on the floor. It included a total of $631.1 million for the three CJS trade-related agencies. It included $482.0 million for the ITA in direct appropriations, $91.5 million for USITC, and $57.6 million for USTR, of which $10 million would be derived from the Trade Enforcement Trust Fund.

Consolidated Appropriations Act, 2018

The government continued to operate for the first six months of the fiscal year under continuing resolutions.

On March 23, 2018, Congress passed and the President signed the Consolidated Appropriations Act, 2018 ( P.L. 115-141 , H.R. 1625 ). The act provides $482.0 million for ITA, $93.7 million for USTIC, and a total of $72.6 million for USTR, of which $15 million is to be drawn from the Trade Enforcement Trust Fund. The FY2018 appropriations for the three CJS trade-related agencies is $648.3 million, an amount 1.9% greater than the FY2017 appropriation, and 10.3% more than the Administration's request.

International Trade Administration (ITA)

ITA is a part of the Department of Commerce, whose mission is to promote "job creation, economic growth, sustainable development and improved standards of living ... by working in partnership with businesses, universities, communities and ... workers." ITA's mission is to improve U.S. prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring compliance with trade laws and agreements. ITA provides export promotion services, works to ensure compliance with trade agreements, administers trade remedies such as antidumping and countervailing duties, and provides analytical support for ongoing trade negotiations.

ITA went through a major organizational change in October 2013 in which it consolidated four organizational units into three more functionally aligned units, which include (1) Global Markets; (2) Industry and Analysis; and (3) Enforcement and Compliance. ITA also has a fourth organizational unit, the Executive and Administrative Directorate, which is responsible for providing policy leadership, information technology support, and administration services for all of ITA. Table A-1 shows budget amounts for ITA by unit between FY2007 and FY2018.

For FY2018, the Administration requested $442.5 million for ITA in direct funding, with an additional $13.0 million in user fees, for a total of $455.5 million in authorized spending. The request in direct funding represents a $40.5 million decrease (-8.4%) from the FY2017 enacted amount ($483.0 million).

House-passed H.R. 3354 proposed $467.0 million for ITA in direct appropriations, and an additional $13.0 million in user fees, for a total of $480.0 million in authorized spending. It represents a 3.3% decrease ($16.0 million) from the FY2017 enacted amount, and 5.5% ($24.5 million) more than the Administration's request.

The Senate bill, S. 1662 , proposed $482.0 million for the ITA in direct appropriations, and an additional $13.0 million in user fees, for a total of $495.0 million in authorized spending. The Senate proposal represents a 0.2% decrease (-$1.0 million) from the FY2017 enacted amount, and is $39.5 million more (8.9%) than the Administration's budget request.

The FY2018 Consolidated Appropriations Act provides $482.0 million for ITA in direct appropriations, and an additional $13.0 million in user fees, for a total of $495.0 million in authorized spending. It represents a 0.2% decrease ($1.0 million) from the FY2017 enacted amount, and 8.9% ($39.5 million) more than the Administration's request.

Global Markets and Foreign Commercial Service (USFCS)

ITA's Global Markets (GM) and U.S. Foreign Commercial Services (USFCS) unit combines country and regional experts, both overseas and domestically, and oversees specific trade promotion programs to provide U.S. firms with country-specific export promotion services and market access advocacy. The unit also promotes the United States as an investment destination. It is designed to advance U.S. commercial interests by engaging with foreign governments and U.S. businesses, identifying and resolving market barriers, and leading efforts that advocate for U.S. firms with foreign governments. It also promotes U.S. exports by developing and implementing policies and programs to increase market access in foreign countries for U.S. goods and services and by providing various types of direct assistance to U.S. firms, especially small and medium-sized enterprises.

For FY2018, the Administration requested $283.8 million for ITA's Global Markets and USFCS unit, a decrease of $50.6 million (-19.5%) from the FY2017 amounts. ITA's FY2018 budget request outlined its plans to reduce the number of Global Market and USFCS staff internationally and domestically and to close an estimated 35 overseas offices and 10 domestic offices.

The CJS committee reports from both the House and Senate Appropriations Committees expressed support for the Global Markets and USFCS unit and did not recommend reduction in staff or offices.

The House Appropriations Committee's report recommended $309.0 million in funding for Global Markets, and noted that the committee "does not adopt the proposal to reduce U.S. and Foreign Commercial Service staff or close overseas offices or U.S. Export Assistance Centers." It would have provided $25.2 million more (8.9%) than the Administration's budget request.

The Senate committee report accompanying S. 1662 did not provide a specific budget amount; however, it "directs ITA to fund USFCS, and its core mission of export promotion, at the highest possible level in fiscal year 2018, and at no less than the amount provided in fiscal year 2017. At this funding level, the committee did not anticipate the closure of any foreign or domestic USFCS offices." The committee also directed ITA to provide a budget breakdown for the Global Markets unit in future budget requests.

The FY2018 Consolidated Appropriations Act does not provide an exact funding level for Global Markets and USFCS, however the explanatory statement accompanying the FY2018 Consolidated Appropriations Act states that the "agreement provides ... no less than the fiscal year 2017 amount for Global Markets."

Industry and Analysis

ITA's Industry and Analysis unit brings together ITA's industry, trade, and economic experts to advance the competitiveness of U.S. industries through the development and execution of international trade and investment policies, export promotion strategies, and investment promotion. It develops economic and international policy analysis to improve market access for U.S. businesses and designs and implements trade and investment promotion programs. The unit serves as the primary liaison between U.S. industries and the federal government on trade and investment promotion. It administers programs that support small and medium-sized enterprises, such as the Market Development Cooperator Program.

For FY2018, ITA requested $49.7 million for the Industry and Analysis unit, a decrease of $11.8 million (-19.1%) from the FY2017 amount.

The House Appropriations Committee recommended $49.3 million to ITA's Industry and Analysis, which is 0.8% less than the Administration's budget request.

The Senate Appropriations Committee did not outline specific funding for Industry and Analysis.

The FY2018 Consolidated Appropriations Act does not outline a specific line-item for Industry and Analysis.

Enforcement and Compliance

The mission of ITA's Enforcement and Compliance unit is to enforce U.S. trade laws and ensure compliance with negotiated international trade agreements. It is responsible for enforcing U.S. antidumping and countervailing duty (AD/CVD) laws; overseeing a variety of programs and policies regarding the enforcement and administration of U.S. trade remedy laws and assisting U.S. industry and businesses with unfair trade matters; and administering the Foreign Trade Zone program and other U.S. import programs.

For FY2018, ITA requests $88.5 million for Enforcement and Compliance, an increase of $5.0 million (6.0%) over the FY2017 enacted amount.

Both the House and Senate Appropriations Committees encourage ITA to make enforcement and compliance of AD/CVD a priority.

The House Appropriations Committee recommended $88.5 million for Enforcement and Compliance, the same as the Administration's request.

The Senate bill proposed $2.0 million above FY2017 enacted amount for Enforcement and Compliance, for a total of $87.3 million. This proposal is $1.2 million less (-1.4%) than the Administration's request.

The explanatory statement accompanying the FY2018 Consolidated Appropriations Act explains that the House and Senate agreement provides $87.5 million for Enforcement and Compliance, which is $1 million less (-1.1%) than the Administration's request.

U.S. International Trade Commission (USITC)

USITC is an independent federal agency with broad investigative responsibilities on matters related to international trade. The mission of the agency is to "(1) administer U.S. trade remedy laws within its mandate in a fair and objective manner; (2) provide the President, USTR, and Congress with independent analysis, information, and support on matters of tariffs, international trade, and U.S. competitiveness; and (3) maintain the Harmonized Tariff Schedule of the United States." USITC investigates the effects of dumped and subsidized imports on domestic industries, conducts global safeguard investigations, and adjudicates disputes involving imported goods that allegedly infringe U.S. intellectual property rights. USITC also serves as a federal resource for trade data and other trade policy information. It provides such information and analysis to Congress, the President, and USTR to facilitate the development of U.S. trade policy. USITC also makes most of this information available to the public to promote understanding of competitiveness, international trade issues, and the role that international trade plays in the U.S. economy.

The Administration requested $87.6 million for the USITC for FY2018, an amount that is $3.9 million less (-4.2%) than the FY2017 enacted amount of $91.5 million.

House-passed H.R. 3354 proposed $92.5 million for USITC in direct appropriations. It represents a 1.1% increase from the FY2017 enacted amount of $97.5 million, and is 5.6% more ($4.9 million) than the Administration's request.

The Senate bill, S. 1662 , proposed $91.5 million for USITC in direct appropriations, the same as the FY2017 enacted amount, and $3.9 million more (4.4%) than the Administration's request.

The FY2018 Consolidated Appropriations Act provides $93.7 million for USITC in direct appropriations. It represents a 2.4% increase from the FY2017 enacted amount of $91.5 million, and is 6.9% more ($6.1 million) than the Administration's request.

Office of the U.S. Trade Representative (USTR)

USTR, located in the Executive Office of the President, is responsible for developing and coordinating U.S. international trade and direct investment policies. USTR is the President's chief negotiator for international trade agreements, including commodity and direct investment negotiations. It negotiates directly with foreign governments to create trade agreements, resolve disputes, and participate in global trade policy organizations such as the World Trade Organization. It also meets with business groups, policymakers, and public interest groups on trade policy issues.

In 2015, in order to provide funding to monitor and enforce trade agreements and to support trade capacity-building assistance for partner countries, Congress established the Trade Enforcement Trust Fund. Funding is available to USTR and other federal agencies, on the advice of the Trade Policy Committee, to

enforce the provisions of and commitments and obligations under the WTO Agreements and free trade agreements (FTA); monitor and ensure the full implementation by foreign countries of the provisions of and commitments and obligations under free trade agreements; investigate and respond to petitions under Section 302 of the Trade Act of 1974; and support capacity-building assistance to help partner countries meet their FTA obligations and commitments.

The Administration requested $57.6 million for USTR for FY2018, a decrease of $4.4 million (-7.1%) compared to the FY2017 enacted amount of $62.0 million. The Administration's budget did not request any funds from the Trust Fund.

House-passed H.R. 3354 proposed a total of $68.0 million for USTR, a 9.7% increase from the FY2017 enacted amount, and 18.1% more ($10.4 million) than the Administration's request. Of the proposed $68.0 million, $15 million would be drawn from the Trade Enforcement Trust Fund.

The Senate bill, S. 1662 , proposed a total of $57.6 million for USTR, a 7.1% decrease from the FY2017 enacted amount and the same as the Administration's budget request. Of the proposed $57.6 million, $10 million would be drawn from the Trade Enforcement Trust Fund.

The FY2018 Consolidated Appropriations Act provides a total of $72.6 million for USTR, a 17.1% increase from the FY2017 enacted amount, and 26.0% more ($15.0 million) than the Administration's request. The FY2018 appropriated amount includes $15 million, which is to be drawn from the Trade Enforcement Trust Fund.

Selected Trade-Related Programs and Activities

Over the past decade, Congress has provided funding for specific trade-related programs, including China trade enforcement and compliance activities; trade promotion and attracting foreign direct investment to the United States through ITA's SelectUSA program; and the Interagency Trade Enforcement Center (ITEC), established in 2012 and superseded by the Interagency Center on Trade Implementation, Monitoring, and Enforcement (ICTIME) in 2016.

China Trade Enforcement and Compliance Activities

Since 2004, Congress has dedicated some of ITA's funding to AD/CVD enforcement and compliance activities with respect to China and other nonmarket economies. ITA's Office of China Compliance was established by the Consolidated Appropriations Act of 2004 ( P.L. 108-199 ). Its primary role has been to enforce U.S. AD/CVD laws and to develop and implement other policies and programs aimed at countering unfair foreign trade practices in China. ITA's China Countervailing Duty Group was established in FY2009 to accommodate the workload that resulted from the application of countervailing duty law to imports from nonmarket economy countries.

The Administration did not request specific funding for China trade enforcement efforts for FY2018.

Both the House-passed H.R. 3354 and the Senate bill S. 1662 proposed $16.4 million for China AD/CVD enforcement and compliance activities, which is equal to the FY2017 enacted amount.

The FY2018 Consolidated Appropriations Act provides $16.4 million for China AD/CVD enforcement and compliance activities, which is equal to the FY2017 enacted amount and the Administration's request.

SelectUSA Program

Created in 2011, SelectUSA is part of ITA's Global Markets and USFCS unit. It coordinates investment-related resources across more than 20 federal agencies to promote the United States as an investment market and to address investor climate concerns that may impede investment in the United States. It serves as an information resource for international investors and advocates for U.S. cities, states, and regions.

The Administration requested $8.1 million for ITA for FY2018 to continue the SelectUSA program, a decrease of $1.9 million (-19.0%) from the FY2017 funding amount of $10.0 million. The House Appropriations Committee proposed defunding SelectUSA in FY2018.

The Senate Appropriations Committee proposed "up to $10 million" in funding for SelectUSA, and recommends that the agency update its protocol to ensure that SelectUSA activities do not benefit state-owned enterprises from investing in the United States.

While the enacted Consolidated Appropriations Act of 2018 does not provide a line-item entry for SelectUSA, the explanatory statement accompanying the act states that "the agreement adopts the Senate report language regarding SelectUSA." The Senate Appropriations Committee proposed "up to $10 million" in funding for SelectUSA, and recommended that the agency update its protocol to ensure that SelectUSA activities do not benefit state-owned enterprises from investing in the United States.

Interagency Trade Enforcement Center (ITEC)/Implementation, Monitoring, and Enforcement (ICTIME)

The purpose of the Interagency Trade Enforcement Center (ITEC) is to advance U.S. foreign trade policy through strengthened and coordinated enforcement of U.S. trade rights under international trade agreements and enforcement of U.S. trade laws. In 2016, the ITEC was succeeded by the Interagency Center on Trade Implementation, Monitoring, and Enforcement (ICTIME), which Congress established through the Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. 114-125 ) .

The goal of the ICTIME is to take a "whole-of-government" approach to monitoring and enforcing U.S. trade rights around the world by using expertise from across the federal government. Lead by a Director designated by USTR, ICTIME investigates potential disputes under the auspices of the World Trade Organization, inspects potential disputes pursuant to bilateral and regional trade agreements to which the United States is a party, and carries out the functions of USTR with respect to the monitoring and enforcement of trade agreements to which the United States is a party. USTR and ITA work closely within the ICTIME to identify issues and develop information in areas of economic importance to U.S. industries. The ITEC received its funding through ITA; funding for the ICTIME is now appropriated through USTR.

The FY2018 budget request for the ICTIME was $13.6 million, an increase of $1.5 million over the FY2017 funding amount.

The report to accompany the House bill was silent as to funding for ICTIME.

The Senate proposal, S. 1662 , would have provided $57.6 million in funding for USTR. In addition, the Senate Appropriations Committee recommends that USTR fully support the ICTIME in FY2018.

The FY2018 Consolidated Appropriations Act does not provide an exact funding level for ICTIME.

Appendix. Budget Authority Tables