The Urge to Merge: Why Combining USTR with Other Trade Agencies is a Bad Idea

Feb 22, 2012

I was pleased to speak on a panel at the American Enterprise Institute this morning on the administration’s proposal to merge the Commerce Department, Office of the U.S. Trade Representative, Small Business Administration, Export-Import Bank, Overseas Private Investment Corporation and U.S. Trade and Development Agency.

That proposal, issued by the White House on Friday, January 13, quickly drew criticism from lawmakers and the U.S. business and agriculture communities.

In late January, the Chamber was one of 86 business associations signing a letter to the president expressing concern about the proposal.

At the heart of these concerns lies the high regard that lawmakers and business share for the Office of the U.S. Trade Representative. Our letter called USTR “extremely efficient, focused and effective.”

Against this backdrop of somewhat unusual high praise for a government agency, there are at least two major concerns about moving USTR — concern about moving it out of the Executive Office of the President, and concern about moving it into a larger, yet-to-be-named agency.

Further, the trade liberalization mandate of USTR, which is tasked with negotiating market-opening trade agreements, is quite different from the trade promotion functions of the other five agencies proposed for inclusion in a new, merged trade agency.

The Obama administration has shown enthusiasm for trade promotion, as seen in its National Export Initiative and its commitment of new resources for the Commerce Department’s International Trade Administration and the Export-Import Bank.

However, the administration has proven hesitant on the trade liberalization front. See my full remarks for further details.

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