by | Nov 17, 2010 | Exports, Trade Policy

Billing beneficiaries for trade promotion could save $1.6 billion through 2014

Charge the beneficiaries for the cost of the International Trade Administration’s trade promotion activities — that’s Number 36 in the list of ideas for government cost-cutting from the National Commission on Fiscal Responsibility and Reform, the bipartisan commission created by President Obama to identify policies that will achieve fiscal sustainability for the U.S.

Here’s the proposal, verbatim, from the Fiscal Commission’s $200 Billion in Illustrative Savings:

“The International Trade Administration (ITA) of the Department of Commerce oversees a trade development program that monitors the competitiveness of U.S. industries and operates the U.S. and Foreign Commercial Services to promote exports. Currently ITA’s mission is to create prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements. The President’s FY2011 budget request for the ITA was $534.3 million, a 20 percent increase from the FY2010 request. This increase includes an additional $78.5 million to support ITA’s export promotion efforts. Services provided by ITA’s U.S. Commercial Services and other Divisions directly providing assistance to U.S. Companies should be financed by beneficiaries of this assistance. While the agency charges fees for those services, its fees do not cover the costs of all its activities. Additionally, it is argued that the benefits of trade promotion activities are passed on to foreigners in the form of decreased export costs. According to a study by the Office of Management and Budget (OMB), businesses can receive similar services from state, local, and private-sector entities. The CBO option to eliminate ITA’s promotion activities or charge the program’s beneficiaries saves $267 million in 2010 and $1.6 billion through 2014.”

Steve Craven at Business Beyond the Reef, a blog we follow (and where we picked up this story), counterpoises this with the administration’s talk of doubling U.S. exports … and offers a graph that shows the relative lack of federal investment in building exports compared with such trading partners as Spain and the U.K. You can see the graph and read Steve’s commentary here:

We’d add that when the Trade Promotion Coordinating Committee invited public comment on National Export Initiative policies, many companies recommended making the most effective of ITA’s export promotion programs, such as trade missions and the Gold Key Service, more accessible and more affordable for small businesses. See What They Said in August.

Related Posts:

Global Trade Data: Tracing the Supply Chains that Deliver a Cold Beer on St. Patrick’s Day

Global Trade Data Confirms Seasonal Shift in How we are Stocking up for the Year-End Holidays

Global Shipping Crisis: Managing Supply Chain Risk More Complicated as U.S. Imports Hit Record High