Question

Among the most visible and important elements of U.S. international economic policy is trade policy. What are the primary goals of American trade policy, and what are some of the main organizations and agreements that help America achieve this goal?

Answer 1

At the nexus of foreign and domestic policy, U.S. trade
policy comprises a distinct set of goals that shape U.S.
participation in the global economy and relations with
trading partners. It also affects the U.S. economy as a
whole, specific sectors, firms, and workers, and the overall
standard of living of Americans. Cross-cutting in nature,
U.S. trade policy has many “voices” and is controversial at
times. Historically, it has focused on supporting economic
growth and jobs through more open and rules-based trade
by negotiating and enforcing reciprocal trade agreements
and other measures, while offering relief to specific
segments of the U.S. economy affected by import
competition and “unfair” foreign trade practices. It also
aims to promote trade and investment, while regulating
these flows for national security, health, safety, and other
reasons. Other goals are to support economic development
in developing countries and expand U.S. influence abroad.
The Constitution gives Congress primacy over trade policy,
specifically the power to levy tariffs and regulate foreign
commerce. By contrast, the President lacks specific
authority over trade, but has power over foreign affairs. The role of the executive branch in trade stems from the
President’s power to negotiate treaties with other nations,
and legislative grants of authority to adjust tariff rates and implement trade policy. The Office of the U.S. Trade
Representative (USTR) and many other agencies conduct
U.S. trade and international economic functions under
various statutory and administrative authorities. USTR-led
systems to coordinate U.S. trade policy among the agencies
and obtain input from public and private stakeholders aim
to balance diverse interests to reach a unified U.S.
government “voice” on trade matters. This architecture has evolved over time to reflect changes in international trade, the U.S. economic position, and other factors. Periodic proposals on trade reorganization, as well as newer debates over the balance of power on trade, have rekindled congressional interest in examining U.S. trade functions.

Key Trade Agencies

1. Office of US Trade Representative( USTR)

USTR is the President’s principal advisor on trade policy,

chief U.S. trade negotiator, and head of the interagency

trade policy coordinating process. USTR also administers

U.S. law to combat “unfair” foreign trade practices (e.g.,

“Section 301”), and trade preference programs for

developing countries. A Cabinet-level official in the

Executive Office of the President, the U.S. Trade

Representative is also historically a “creature of Congress.”

In creating and elevating USTR, Congress sought an

“honest broker” to balance competing interests between

U.S. domestic and foreign policy, among the range of trade-

related agencies, and the many domestic stakeholders.

Congress also wanted to address concerns that trade policy interests were being overlooked under the State Department’s historical lead.

2. Department of Commerce

Commerce conducts many non-agricultural trade functions.

 The International Trade Administration (ITA), supported

by U.S. and foreign commercial service officers, provides

market research, business connections, and other services

to promote U.S. exports and attract foreign investment. It

also conducts antidumping and countervailing duty (AD/

CVD) investigations to address potential adverse effects

on U.S. industry of “unfair” foreign trade practices, and

monitors foreign compliance with U.S. trade agreements.

 The Bureau of Industry and Security (BIS) administers

licensing and enforcement functions for dual-use exports.

It also investigates whether certain imports harm, or

threaten to harm, national security (“Section 232”).

 The Economic Development Administration (EDA)

manages Trade Adjustment Assistance (TAA) for firms,

(to adjust to import competition and trade liberalization).

 The Bureau of Economic Analysis (BEA) and Census

Bureau collect and analyze trade data.

3. US Department of Agriculture

USDA aims to promote and regulate U.S. agricultural trade, weighing in on agriculture issues in U.S. trade negotiations.

 The Animal and Plant Health Inspection Service

(APHIS) works to prevent plant and animal pests and

diseases from entering U.S. borders.

 The Food Safety and Inspection Service (FSIS) regulates

U.S. meat, poultry, and egg products, including imports.

 The Foreign Agricultural Service (FAS) administers U.S.

agricultural export financing and assistance, U.S. quotas

against agricultural imports, and TAA for farmers.

4. US Department of State

State oversees U.S. trade and economic relationships through its bureaus and embassies. State and USTR jointly administer the U.S. Bilateral Investment Treaty program.

5. US Department of Treasury

The Secretary of the Treasury is the President’s chief international economic policy advisor. For U.S. trade agreements, Treasury leads negotiations on currency provisions, and on financial services with USTR. It leads U.S. participation in the G-20 and G-7 forums, manages the Committee on Foreign Investment in the United States (CFIUS) to examine potential inbound investment for national security implications, and administers U.S. sanctions via the Office of Foreign Assets Control (OFAC).

6. US Department of Health and Human services

HHS weighs in on trade policy issues that can affect public health, such as food products (not regulated by USDA), cosmetics, drugs, and medical devices. HHS’s Food and Drug Administration (FDA) regulates products produced domestically and abroad for safety, security, and efficacy.

7. US Department of Labor

DOL provides U.S. representation in international negotiations before the International Labor Organization (ILO), monitors compliance with the labor chapters of U.S. trade agreements, tracks eligibility for certain trade preferences, and administers the TAA program for workers.

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