oversight

International Trade: Improvements Needed to Track and Archive Trade Agreements

Published by the Government Accountability Office on 1999-12-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Chairman, Committee on
                  Ways and Means, House of
                  Representatives


December 1999
                  INTERNATIONAL
                  TRADE

                  Improvements Needed
                  to Track and Archive
                  Trade Agreements




GAO/NSIAD-00-24
Contents



Letter                                                                                 3


Appendixes   Appendix I:   U.S. Trade Representative, State, and Commerce
               Central Archives of Trade Agreements                                   26
             Appendix II:   Objectives, Scope, and Methodology                        32
             Appendix III: Comments From the Department of State                      34
             Appendix IV: Comments From the Department of Commerce                    35
             Appendix V:    GAO Contacts and Staff Acknowledgments                    38


Tables       Table 1: Trade Agreements That Entered Into Force During
               1984-98, Based on USTR, Commerce, and State Archives                   10


Figures      Figure 1: U.S. Export Growth as Compared to Gross Domestic
               Product Growth, 1970-97                                                 7
             Figure 2: The Commerce, USTR, and State Department Archives
               Do Not Contain All Trade Agreements                                    11
             Figure 3: Department of Commerce's Internet Site Page for
               Accessing Trade Agreements and Related Information                     18




             Abbreviations

             GDP       gross domestic product
             TCC       Trade Compliance Center
             USTR      U.S. Trade Representative



             Page 1                                   GAO/NSIAD-00-24 International Trade
Page 2   GAO/NSIAD-00-24 International Trade
United States General Accounting Office                                                  National Security and
Washington, D.C. 20548                                                            International Affairs Division



                                    B-284062                                                                         Leter




                                    December 14, 1999

                                    The Honorable Bill Archer
                                    Chairman, Committee on Ways and Means
                                    House of Representatives

                                    Dear Mr. Chairman:

                                    International trade has become increasingly important to the U.S. economy.
                                    Since 1990, U.S. exports have increased about 70 percent, to almost
                                    $700 billion a year. In recent decades, the United States has led the world in
                                    the effort to create a system of open trade under accepted rules, in which
                                    reduction of trade barriers such as tariffs and import quotas would help
                                    provide greater market access for U.S. goods and services. The current
                                    administration has sought to build on previous efforts by negotiating
                                    several hundred separate trade agreements since 1992 aimed at opening
                                    markets and creating wider economic opportunities for Americans. Most of
                                    these agreements were negotiated by the Office of the U.S. Trade
                                    Representative, which is part of the Office of the President and is
                                    statutorily responsible for developing and coordinating U.S. international
                                    trade policy. The rest were negotiated by the Departments of State,
                                    Commerce, and other federal agencies. Congress has expressed interest in
                                    how the executive branch monitors and enforces these agreements. One
                                    key component of this process is the method the executive branch uses to
                                    track its agreements. Another is the means by which the executive branch
                                    fosters increased public awareness of the agreements and the
                                    opportunities that they provide.

                                    As you requested, we examined (1) the number of trade agreements the
                                    United States is party to, (2) the way in which the executive branch notifies
                                    Congress when trade agreements are entered into, and (3) the extent to
                                    which the public has ready access to information from government sources
                                    about trade agreements.

                                    Trade agreements are negotiated understandings between two or more
                                    countries that generally address the terms of trade. There is no universal
                                    definition of a trade agreement, because agreements can take many forms
                                    and serve different purposes.




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                   Appendix II describes our specific scope and methodology.



Results in Brief   The number of trade agreements to which the United States is currently a
                   party is uncertain. Officials at key agencies were unable to provide a
                   definitive count of all U.S. trade agreements that are currently in force,
                   despite the fact that the Office of the U.S. Trade Representative, State, and
                   Commerce have created separate archives containing many agreements.
                   We identified 441 different trade agreements that entered into force from
                   1984 through 1998 among the three archives, but were not able to
                   determine the total number of U.S. trade agreements currently in force.
                   This is because (1) agency archives serve different purposes, (2) a
                   governmentwide definition of what constitutes a “trade agreement” does
                   not exist, and (3) there are record-keeping weaknesses and inconsistencies
                   in the archives. The most comprehensive of these archives, which belongs
                   to Commerce, was intended to include all agreements but contains only
                   about two-thirds of the total number of agreements that we identified by
                   examining all three sources. Commerce’s archive is incomplete because
                   federal agencies have not worked together to establish criteria for
                   identifying agreements to be included, and no interagency procedure has
                   been instituted for forwarding such trade agreements to Commerce.

                   Congress is notified when trade agreements are entered into through two
                   formal mechanisms. First, the Office of the U.S. Trade Representative’s
                   annual report, distributed to each Member of Congress, includes a list (but
                   not the text) of substantive trade agreements that it has negotiated since
                   1984 and that afford increased foreign market access to the United States.1
                   Other agreements negotiated by the Office of the U.S. Trade
                   Representative, such as those that only regulate imports into the United
                   States, are not included. Second, as required by law,2 State sends Congress3
                   a copy of any agreement that State determines is an “international
                   agreement” based on criteria that State defines and applies. For example,
                   State requires an international agreement to contain commitments that are
                   judged significant and legally binding, among other criteria. Many trade

                   1
                    The Office of the U.S. Trade Representative prepares its annual report to meet a statutory
                   requirement. The list of trade agreements, however, is not required by law.
                   2
                    1 U.S.C. 112b, commonly known as the “Case-Zablocki Act,” and the accompanying
                   regulations, 22 C.F.R. 181.1-181.8.
                   3
                   State officially notifies the President of the Senate and the Speaker of the House.




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agreements do not qualify as international agreements under State’s
criteria. Other federal agencies are required to forward to State those
agreements they negotiate, including trade agreements, that might fall
within the criteria that State has established. However, Congress may not
have received the texts of some trade agreements negotiated by the Office
of the U.S. Trade Representative that do meet the criteria because the
agency has not transmitted copies of all of its negotiated agreements to
State. Neither agency has records documenting whether the Office of the
U.S. Trade Representative transmitted and State reviewed all trade
agreements negotiated by the Office of the U.S. Trade Representative that
might fall within State’s criteria. Recently, the Office of the U.S. Trade
Representative established new procedures to improve its transmittal of
new agreements to State for review.

Although federal agencies have provided the public with greater access to
information about trade agreements in recent years, government sources
available to the public are not always complete and accurate. Commerce’s
trade agreements archive, publicly available on the internet since early
1998, is the government’s principal vehicle for providing access to trade
agreements. However, Commerce cannot guarantee the texts’ accuracy or
completeness, and the archive does not include all trade agreements. State
makes copies of its agreements available in two principal ways: through the
Government Printing Office and through Freedom of Information Act
requests. However, due to State funding limitations, the Government
Printing Office is only now printing texts of agreements signed in 1994, and
commercial publishers that obtain the agreements from State require the
public to pay for copies of the agreements. The Office of the U.S. Trade
Representative does not routinely make copies of its agreements directly
available to the public. Although the Office of the U.S. Trade
Representative has provided the text of many agreements to Commerce for
inclusion in Commerce’s archive, our analysis indicates that nearly
30 percent of the agreements are not in Commerce’s data base. Commerce
officials explained that many of these agreements are not in their archive
because they had either expired or were superseded by other agreements.

In this report, we are making recommendations to the Secretary of
Commerce and the U.S. Trade Representative to improve the accuracy and
completeness of trade agreement data bases. In addition, we are making
recommendations to the U.S. Trade Representative and the Secretary of
State to comply with the requirement for notifying Congress about
international agreements that meet the provisions of the Case-Zablocki Act.




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Background   The Constitution grants Congress the authority to regulate commerce with
             foreign nations. In practice, Congress has long delegated authority for
             proclaiming reciprocal tariff reductions with U.S. trading partners to the
             President and has encouraged the President to enter into certain trade
             agreements that meet congressionally mandated objectives. The Office of
             the U.S. Trade Representative (USTR) leads or directs negotiations with
             other countries on many trade matters. Other federal agencies also
             negotiate certain kinds of trade agreements. For example, the Department
             of Commerce negotiates textile import agreements with other countries,
             and the Department of Agriculture negotiates various trade-related
             agriculture provisions. Trade policy is managed at the working level by the
             Trade Policy Staff Committee, an interagency group with representation at
             the senior civil servant level, administered and chaired by USTR. Policy
             decisions are generally developed via interagency consensus; interagency
             conflicts are resolved at progressively higher levels within the executive
             branch. The committee also monitors the trade agreements program.

             Trade has become more important to the U.S. economy; since the late
             1980s, the rate of growth for U.S. exports has increasingly exceeded the
             overall U.S. economic growth rate (see fig. 1). Almost all U.S. trade is
             governed by trade agreements that employ specific language, terms, and
             objectives to promote U.S. trade and to reduce barriers to the export of
             U.S. products. For example, key trade agreements aim to improve U.S.
             market access abroad by setting ground rules for the treatment of U.S.
             exports and investments in foreign markets, establishing the maximum
             tariff that will apply to U.S. exports, and providing for the gradual lowering
             or elimination of such tariffs and other barriers over time.




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Figure 1: U.S. Export Growth as Compared to Gross Domestic Product Growth, 1970-97




                                        Note: Exports and the gross domestic product (GDP) are presented as index numbers where their
                                        value in 1970 equals 100.
                                        Source: GAO calculations based on International Financial Statistics. (Washington, D.C.: International
                                        Monetary Fund, Jan. 1999).


                                        Trade agreements vary considerably both in content and in form,
                                        depending on their purpose. They may be generally categorized in a
                                        number of ways. For example, agreements can be categorized by the
                                        number of signatories. Most trade agreements that the United States is
                                        party to are bilateral. However, regional agreements such as the North




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                         American Free Trade Agreement4 and multilateral agreements such as
                         those under the World Trade Organization5 govern a greater percentage of
                         U.S. trade than the generally narrower bilateral agreements. In addition,
                         trade agreements can be categorized by the content of their provisions.
                         For example, some agreements cover specific industries or sectors such as
                         agriculture, automobiles, and telecommunications. Other agreements focus
                         more on technical or scientific issues affecting trade, such as establishing
                         standards to control the health and safety of agricultural products. Also,
                         some agreements focus primarily on opening foreign markets to the United
                         States, while others deal largely with regulating the importation of various
                         products into the United States. Finally, agreements can also be
                         categorized by whether or not they are binding. Some binding
                         agreements, such as the World Trade Organization agreements and the
                         North American Free Trade Agreement, have enforceable dispute
                         settlement provisions to resolve trade disagreements. Most other trade
                         agreements do not contain such provisions.6



Trade Agreement          We were unable to determine the total number of trade agreements
                         currently in force for several reasons. First, USTR, State, and Commerce,
Archives Do Not          the main trade agencies, could not provide us with a definitive count of the
Contain All U.S. Trade   number of trade agreements. While each maintains an archive that contains
                         trade agreements,7 the archives serve different purposes, and there is no
Agreements Currently     standard definition of what constitutes a trade agreement. Second,
in Force                 Commerce’s archive is intended to contain all trade agreements, but does
                         not. Finally, we found that the three archives in combination are inadequate
                         for the purpose of identifying the total number of in-force trade agreements
                         due to inconsistencies and record-keeping weaknesses.




                         4
                          The North American Free Trade Agreement is a comprehensive free trade agreement
                         between the United States, Canada, and Mexico that went into effect on January 1, 1994.
                         5
                          The World Trade Organization, which was established in 1995, was created as a permanent
                         organization to oversee implementation of the Uruguay Round agreements, to provide a
                         forum for multilateral trade negotiations, and to settle disputes.
                         6
                          Regardless of whether trade agreements contain dispute settlement procedures, U.S. trade
                         law may be used to enforce U.S. rights under bilateral and multilateral trade agreements.
                         7
                          As discussed, the Commerce and USTR archives include only trade agreements whereas
                         the State archive also includes other types of international agreements.




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Archives Serve Different   USTR, Commerce, and State officials could not provide us with a definitive
Purposes                   count of the number of trade agreements currently in force. Agency
                           officials said a standard definition of what constitutes a trade agreement
                           does not exist either in federal law or in interagency practice. The agencies
                           provided us with data from each of their archives. However, the three
                           archives were created for different purposes and, as a result, do not always
                           contain the same agreements. USTR’s central archive, initiated in 1996, is
                           for internal use and is intended to include all trade agreements negotiated
                           by USTR; agreements negotiated by other agencies are not included.8 The
                           State Department’s archive is designed to capture all international
                           agreements negotiated by federal agencies (not just trade agreements) that
                           meet certain legal criteria such as those that are significant and intended to
                           be legally binding. According to State and USTR officials, many trade
                           agreements do not meet State’s criteria and thus are not included in State’s
                           archive. The Commerce Department’s archive, made available to the public
                           over the internet in early 1998, was designed to contain all trade
                           agreements negotiated by federal agencies but is not complete. (See app. I
                           for more information about each archive.)


Commerce Archive Is Not    Commerce’s archive does not contain all trade agreements as originally
Comprehensive              planned.9 Commerce officials told us they used one or more of the
                           following criteria to create their data base: (1) the parties are national
                           governments and agencies or intergovernmental organizations, (2) the
                           parties intended their undertaking to be binding, (3) the agreement affects
                           or might affect international trade, and/or (4) one or more parties is a
                           recognized territory outside the United States. To assess the archive’s
                           completeness, we compared the names and dates of agreements in all three




                           8
                            The central archive was established within the Monitoring and Enforcement Unit office. As
                           discussed in appendix I, the archive includes both substantive and procedural agreements.
                           Most of our analysis on USTR-negotiated trade agreements in this report focuses on
                           substantive agreements that afford increased foreign market access to the United States.
                           9
                            Congress acknowledged Commerce’s intent to establish a comprehensive data base of
                           trade agreements in the Conference Report to the Omnibus Consolidated Appropriations
                           Act, 1997 (H.R. Rep. No. 104-863, 104th Cong., 2d Sess.). The Conference Report
                           accompanying Commerce’s appropriations legislation approved a reorganization of
                           Commerce that established a trade compliance office to compile and utilize a
                           comprehensive data base of trade agreements.




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archives that entered into force during 1984-98.10 Commerce had only 283
of these agreements in its archive (see table 1). We found only 71 percent of
USTR’s agreements (that is, 180 of 252) and only 53 percent of State’s
archived trade agreements (that is, 112-210) in the Commerce archive (see
fig. 2).



Table 1: Trade Agreements That Entered Into Force During 1984-98, Based on USTR,
Commerce, and State Archives
Period when
agreements entered                                                        Total (without double
into force                      USTRa        Commerce           Stateb               counting)c
1984-88                              19                16           64                             73
1989-93                              97                87           71                            142
1994-98                             136               177           75                            223
Date not providedd                    0                 3           0                               3
Total                               252               283         210                             441


a
 Figures for USTR are based on USTR’s list of substantive agreements designed to increase U.S.
access to foreign markets or reduce foreign trade barriers.
b
 Agreements in State’s archive were counted as a trade agreement if State categorized them as a
trade agreement or if a particular type of agreement was included in USTR’s archive.
c
 When more than one agency included the same agreement in its archive, the agreement was counted
only once.
d
 Three of the agreements in Commerce’s archive did not include information on when the agreement
was signed or entered into force. Since the agreements did not match agreements in USTR or State
archives, the latter could not be used to determine when the agreements entered into force.
Source: GAO analysis of USTR, Commerce, and State archive records.




10
  We selected 1984 as a sample boundary because USTR’s archive generally does not contain
information prior to 1984. Appendix II explains our methodology in greater detail.




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Figure 2: The Commerce, USTR, and State Department Archives Do Not Contain All
Trade Agreements




a
 USTR substantive trade agreements that afford increased access to foreign markets or reduce foreign
barriers and other trade-distorting practices.
Source: GAO analysis of Commerce, State, and USTR archives.


Commerce’s archive is not complete because federal agencies have not
come together to establish agreed criteria for identifying all trade
agreements negotiated by federal agencies, and no procedure has been
established to secure the regular participation of agencies in forwarding
trade agreements to Commerce. In 1997 Commerce proposed to USTR that
an interagency group be created for these purposes, but USTR did not
believe that such a formal process was necessary. In addition, agency
officials have expressed conflicting views about the scope of the
Commerce archive. For example, according to Commerce officials
currently responsible for maintaining the data base, the archive is being
used primarily to display trade agreements that Commerce is directly
responsible for monitoring and enforcing. However, senior Commerce
officials have indicated that the archive is supposed to be a comprehensive



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                            data base of all trade agreements. USTR officials told us that their
                            understanding was that Commerce intended to include anything that could
                            be called a trade agreement regardless of which U.S. government agency
                            entered into the agreement on behalf of the United States. Commerce
                            officials expressed surprise at this characterization, noting that USTR has
                            not automatically forwarded the texts of new trade agreements to
                            Commerce for inclusion in the archive.


Archives Have               We were unable to identify the total number of trade agreements currently
Record-keeping Weaknesses   in force from the three archives because of a number of record-keeping
                            weaknesses and inconsistencies. First, USTR’s central archive does not
                            include agreements still in force that it negotiated prior to 1984 except for
                            agreements that resulted from the 1967 Kennedy Round and 1979 Tokyo
                            Round of multilateral trade negotiations under the General Agreement on
                            Tariffs and Trade.11 Second, USTR’s archive does not include all
                            enforceable agreements that USTR negotiated since 1984. For example,
                            four of six agreements between 1984 and 1997 with Japan on the Nippon
                            Telegraph and Telephone telecommunications procurement are not
                            reflected in USTR’s archive. A USTR official told us that he believes USTR
                            has included in its archive most of the enforceable agreements going back
                            to 1984. Third, USTR and Commerce had not systematically updated their
                            archives to remove agreements that had expired or had been effectively
                            superseded by another agreement, although Commerce reports it has
                            recently begun to do so.12 Fourth, Commerce’s archive contains some, but
                            not all, trade agreements that are negotiated by agencies other than USTR,
                            such as those establishing safety standards affecting U.S. agricultural
                            commodity exports to specific countries. USTR includes in its central
                            archive of trade agreements only such technical agreements that it has
                            negotiated.




                            11
                             The General Agreement on Tariffs and Trade, which entered into force in 1948, was created
                            as a multilateral framework agreement to govern trade practices among member countries.
                            As an organization, the General Agreement on Tariffs and Trade officially ended on
                            December 31, 1995, after the creation of the World Trade Organization.
                            12
                             In contrast, once a year State publishes a document that lists all of the international
                            agreements that are in force at the beginning of the year. The list includes a title that briefly
                            describes each agreement and the dates the agreement was signed, entered into force, and
                            became effective (if different from the date it entered into force).




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                        We also observed a number of problems in all three agencies’ archives that
                        suggest their records are not fully complete or accurate. For example,
                        USTR’s March 1999 list of agreements and Commerce’s archive omitted an
                        important automobile agreement that USTR concluded with Korea in
                        October 1998. Commerce’s archive includes a 1995 Korean automotive
                        agreement, along with a copy of a USTR press release dated September
                        1998. However, the press release is actually one that was issued by USTR in
                        1995 when the agreement for that year was concluded. Similarly, the
                        Commerce archive listing for the Latvia Bilateral Investment Treaty
                        displays the text of an agreement with references to Moldova instead,
                        including a place for signature by a representative of Moldova. Moreover,
                        the text of the agreement is unfinished in some places, and the document is
                        followed by copies of letters that were exchanged between representatives
                        of the United States and Moldova. Finally, State’s list of in-force agreements
                        at the beginning of 1998 did not include several agreements that had
                        entered into force several years earlier but did include several agreements
                        that had already expired, such as a voluntary restraint agreement on
                        machine tools with Japan.



Congress Is Notified    There are two principal means by which the administration formally
                        notifies Congress about the conclusion of trade agreements. First, USTR
About Many, but Not     sends Congress an annual report with a list of the names and dates of
All, Trade Agreements   substantive trade agreements entered into by the United States since 1984
                        that afford increased U.S. access to foreign markets or reduce foreign
                        market barriers and other trade-distorting policies and practices. (USTR
                        separately lists those agreements that have entered into force and those
                        that have not.) The list, which was created in response to congressional
                        interest, does not include substantive agreements that deal only with
                        imports into the United States. It also does not include agreements
                        negotiated by other agencies. According to USTR officials, the agreements
                        noted in the annual report are the agreements that USTR monitors for
                        compliance purposes. The USTR list contains a date for each agreement
                        that typically represents either the date the agreement was signed by one or
                        both of the parties or the date it entered into force. USTR does not indicate
                        which type of date is reported. (For some agreements, several years
                        intervene between the time an agreement is signed and the time it enters
                        into force.) USTR’s list also does not identify which of the agreements have
                        expired. Although USTR does not routinely provide Congress with the texts
                        of the agreements it negotiates, it routinely consults with congressional
                        committees in the course of negotiations, according to USTR officials.




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Moreover, any Member of Congress can receive a copy of any agreement by
requesting it.

Second, as required by law, State sends Congress a copy of international
agreements, including trade agreements, that meet certain criteria within
60 days of the agreement’s entering into force. As directed by the
Case-Zablocki Act and implementing regulations, State defines and applies
criteria for deciding which agreements qualify as an “international
agreement.” (State’s Office of Treaty Affairs performs this function.) To
constitute an international agreement under the act, each of the following
criteria, among others, must be met:

• There must be two or more parties (unilateral commitments do not
  qualify).
• The parties must be a state, a state agency, or an intergovernmental
  organization, and they must intend their undertaking to be legally
  binding. Agreements intended to have political or moral weight but not
  be legally binding do not qualify.
• The commitments must be considered significant. Minor or trivial
  undertakings, even if couched in legal language and form, are not
  considered as international agreements under the criteria.
• The language that sets forth the undertaking needs to be specific and
  must include objective criteria for determining enforceability.

According to USTR and State officials, many USTR-negotiated agreements
do not meet these criteria and thus are not provided to Congress by State.
The officials could not provide an estimate of the number, however,
because neither agency keeps records for this purpose and because, as
discussed later, not all of USTR’s agreements have been reviewed by State.

USTR officials told us that agencies also use a variety of other mechanisms
to keep Congress informed of both trade negotiations and new agreements.
These include informal briefings and consultations with congressional
trade committees and interested members and staff, as well as
participation in congressional hearings and responses to congressional
requests for information.13



13
 For example, USTR discusses the results of some of the trade agreements it has negotiated
during the past few years and the progress made in efforts to negotiate certain new
agreements in its annual report and its annual national trade estimate report.




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Not All Agreements     Congress may not have received all of the agreements and accompanying
Provided to Congress   documents, as required by law. Federal agencies that have negotiated an
                       international agreement that might fall within the criteria established in
                       State’s Case-Zablocki implementing regulations are required to transmit the
                       text of the agreement to State within 20 days of the signing of the
                       agreement. Once the agreement is received, State’s Office of Treaty Affairs
                       reviews the document, using its criteria, and determines whether it is an
                       international agreement. If so, Treaty Affairs transmits the text of the
                       agreement to the President of the Senate and the Speaker of the House no
                       later than 60 days after the agreement enters into force.14 However, in
                       spring 1999 officials in Treaty Affairs told us that they believed many
                       USTR-negotiated trade agreements had never been transmitted to State for
                       review. According to the State officials, they had previously raised this
                       issue with USTR on several occasions.

                       Record-keeping weaknesses at both USTR and State prevented us from
                       determining whether USTR agreements that were subject to congressional
                       notification requirements but that were not in State’s archive had been
                       transmitted to State. (As previously indicated, State’s archive of in-force
                       agreements at the end of 1998 did not include 149 of the 252 agreements
                       that were in USTR’s archive.) USTR officials told us that prior to July 1999,
                       responsibility within USTR for reviewing and forwarding such agreements
                       was highly decentralized and that USTR had not kept systematic records of
                       which agreements had been sent to State. Because of this and because of
                       high staff turnover, USTR officials said they could not be certain that all
                       relevant agreements had been reviewed and that all reportable agreements
                       had been forwarded to State. State officials advised us that they do not
                       keep a record of agreements received and that once they determine that an
                       agreement is not an international agreement under their criteria, State does
                       not systematically retain copies of such agreements. Thus, State could not
                       tell us whether it had previously received or reviewed USTR agreements
                       that were not in its archive.

                       In mid-July 1999, while our review was underway, USTR established a new
                       system for collecting newly concluded USTR trade agreements and
                       transmitting them to State. Overall control of the system is now centralized
                       in one office, and a record is being kept of each agreement transmitted to


                       14
                        In recent years, State has not always met the 60-day transmittal requirement because some
                       agencies have been late in forwarding completed agreements to Treaty Affairs. Eighteen
                       agreements were reported late in 1995, 13 in 1996, 11 in 1997, and 6 in 1998.




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                             State. USTR officials told us that they intend to transmit to State all
                             agreements USTR concludes. (Unlike previous practice, USTR will not first
                             review an agreement to assess whether the agreement might possibly be
                             considered an international agreement under State’s criteria.) In October
                             1999, State’s Treaty Affairs Office told us that the office had received the
                             texts of six agreements through USTR’s new system. The office had
                             determined that one of the agreements had qualified for inclusion in its
                             archive, four did not qualify, and one was still being reviewed.

                             USTR’s new procedures do not address previously negotiated USTR
                             agreements that may not have been transmitted to State. During our review,
                             USTR provided State, in May 1999, with a list of the names and dates of
                             about 250 substantive agreements that USTR had negotiated since 1984 and
                             requested Treaty Affairs to advise USTR of any agreements it would like to
                             review as a possible international agreement under the criteria. In October
                             1999, State told us that it needed to examine the text of any agreements on
                             this list that were not already in State’s archive in order to apply its criteria.
                             As of late November 1999, State’s Treaty Affairs Office had not provided us
                             with data on the number of agreements (not already in its archive) it had
                             reviewed to determine if they qualified as an international agreement under
                             the act.



Many, but Not All,           While federal officials note that improvements in public access to trade
                             agreement texts have occurred during the past 2 years, the public does not
Trade Agreements Are         have comprehensive and ready access to all trade agreements. Commerce
Made Available to the        and State make copies of the texts of most agreements they have in their
                             archives available to the public. USTR does not routinely provide copies to
Public                       the public.


Commerce’s Archive Is        Commerce’s internet-accessible trade agreement data base was created
Useful But Has Limitations   specifically to provide the public with a government source for trade
                             agreement information. The data base, which Commerce began compiling
                             in 1996, went online in mid-February 1998. According to Commerce, the
                             archive is intended for use by U.S. businesses; trade lawyers and
                             practitioners; federal, state, and municipal government trade policy
                             officials; and the general public. The data base allows users to review the
                             texts of agreements and to access, on the same site, commercial
                             information about market conditions and market access barriers in foreign




                             Page 16                                         GAO/NSIAD-00-24 International Trade
B-284062




countries.15 (See fig. 3.) The data base has a number of useful features, such
as enabling users to search by title, country, and keyword. In addition, the
web site allows U.S. companies to file complaints electronically when they
have problems gaining access to foreign markets or believe trade
agreements are being violated. (An electronic form is provided that enables
users to ask questions about trade agreement implementation and
commitments and report possible violations of trade agreements.)
Commerce guarantees an initial response to any query or complaint about a
trade agreement within 10 days. According to Commerce officials, the web
site service is especially helpful to small- and medium-sized firms that do
not have Washington offices and cannot afford to hire Washington lawyers.




15
  Country information includes commercial guides, country reports on economic policy and
trade practices, national trade estimate reports, and trade policy review summaries.
According to the Under Secretary of Commerce for International Trade, Commerce is also
working on writing plain language, “how-to” guides that will tell firms how to use trade
agreements to expand exports, how to know if they are being treated unfairly, and where to
go for help.




Page 17                                             GAO/NSIAD-00-24 International Trade
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Figure 3: Department of Commerce’s Internet Site Page for Accessing Trade
Agreements and Related Information




Source: Department of Commerce.




Page 18                                        GAO/NSIAD-00-24 International Trade
                            B-284062




                            Although the creation of the data base has considerably expanded public
                            access to the content of trade agreements, users may not be aware of the
                            data base’s limitations. First, the site does not inform users that the data
                            base does not include all trade agreements nor explain the basis by which
                            agreements were selected for the archive. Second, Commerce does not
                            guarantee the accuracy or completeness of the agreements—Commerce
                            uses a disclaimer that the text is for general reference purposes only.16
                            Commerce officials noted that since they do not retain possession of the
                            original copy of most agreements, they are not in a position to provide such
                            a guarantee. We observed, while examining all the agreements in the data
                            base, that some agreements did not contain the complete texts of the
                            agreements. Further, the text of one agreement that we reviewed was for a
                            different country than that listed in the table of contents. When the data
                            base was initially being developed, Commerce recommended to USTR that
                            a formal mechanism be put in place to guarantee the authenticity of
                            agreements. The proposal was not implemented. According to a USTR
                            official, the agency concluded it would not be cost-effective to do so; if
                            users needed such assurances, they could contact USTR on a case-by-case
                            basis. Third, the contents page does not include information on the dates
                            that the agreement was signed and entered into force or which agency or
                            agencies negotiated the agreement. Consequently, to secure this
                            information, one must review the text of each agreement. Fourth, the data
                            base does not tell the user if an agreement has expired or been effectively
                            replaced by more recent agreements.


How Agreements in State’s   State makes copies of its agreements available to nongovernmental users
Archive of International    by two means, according to State officials. First, State arranges for
                            publication of its agreements by the Government Printing Office.17 An
Agreements Are Made
                            agreement is initially printed as a pamphlet in the series titled Treaties and
Available                   Other International Acts Series. This publication is recognized by statute as
                            legal proof of the text’s authenticity for domestic law purposes, and State
                            takes steps to ensure that the printed text is a verbatim reproduction of the
                            authentic text in all of the agreement’s languages, except for multilateral
                            agreements concluded within international organizations. Subsequently,


                            16
                               “Completeness” refers to both the text of an agreement and any accompanying documents
                            (such as agreed minutes, side letters, or exchanges of notes).
                            17
                             Under 22 C.F.R. 181.8(a)(1) through (9), the Secretary of State may determine that the
                            publication of certain categories of agreements is not required, if certain legal criteria are
                            met, such as that the agreements are of a limited or specialized nature or are classified.




                            Page 19                                                 GAO/NSIAD-00-24 International Trade
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the agreement is published in the publication titled United States Treaties
and Other International Agreements. Both publications are sent to
qualifying federal depository libraries. However, due to budget constraints,
State has not prepared agreements for publishing until several years after
their negotiation. In June 1999, depository libraries were receiving the
pamphlet version of agreements that had been signed in June 1994. State
officials confirmed that these were the most recently published
agreements.

Second, when State sends a copy of an agreement to Congress, State
simultaneously makes copies available to interested parties through its
Freedom of Information Act office. According to a State official, several
publishing firms regularly secure copies of these agreements as they
become available and subsequently make them available for purchase in
one of several forms. For example, Oceana Publications, Inc., a publisher
of international legal materials, makes texts of the agreements available
both online and by CD ROM. According to Oceana, online users can search
for agreements and review and print texts for as little as $37.50 for each
15 minutes. Oceana charges $500 per year to obtain quarterly updates of
the full text of treaties and agreements that the United States has signed
since January 1990. According to Oceana, this service makes treaties
accessible within 90 days of receipt by the Senate. Lexis-Nexis, a provider
of legal, government, and other information, makes copies of the
agreements available online to subscribers to its service. Lexis-Nexis
obtains the agreements from Oceana via a licensing arrangement.
According to a Lexis-Nexis spokesperson, the agreements that it posts are
at least several years old.

If an agreement is deemed by State to be highly important, State also sends
the agreement to the American Society of International Law and
encourages it to publish the agreement in International Legal Materials.
The Director of State’s Treaty Affairs Office told us that State has plans to
make the texts of its agreements available to the public at no charge via the
Government Printing Office’s internet site. Agreements would be posted
shortly after they are sent to Congress. The Director said the Government
Printing Office has agreed to do this but that he does not know when
service will begin.

State has several other ways for the public to obtain summary information
on trade agreements included in its archive of international agreements.
State publishes a book, Treaties in Force, that lists the names and dates of
treaties and other international agreements of the United States on record



Page 20                                      GAO/NSIAD-00-24 International Trade
                          B-284062




                          in the Department of State on the first day of the year, as well as the
                          principal subject matter of agreements. The publication can be viewed or
                          downloaded from State’s web site. (The January 1, 1999, publication was
                          made available in early October 1999. At that time, the report had not yet
                          been printed by the Government Printing Office.) Agreements that are
                          judged to address primarily trade matters are classified under subject
                          headings such as “commerce,” “trade,” or “trade and commerce.” We found
                          that most USTR-negotiated agreements that were included in State’s 1999
                          publication of Treaties in Force were classified under one of the trade
                          headings. However, some USTR agreements were classified differently by
                          State. For example, State classified bilateral investment treaties under the
                          subject of “investment” and intellectual property agreements under the
                          heading “intellectual property.” Consequently, the public cannot rely solely
                          on State’s subject headings to identify all trade agreements in its archive.

                          Another source for information about international agreements is State’s
                          online listing of agreements called Current Treaty Actions. This source lists
                          the names and dates of agreements that were either signed and/or entered
                          into force recently. Agreements are listed by year and within each year by
                          the month when they are listed in the source. However, the source does not
                          categorize agreements by subject and does not include a search capability.
                          In addition, there is generally a 2-month lag between when an agreement is
                          signed or enters into force and when it is listed in Current Treaty Actions.
                          Information in Current Treaty Actions also appears in the printed as well as
                          the online version of the State Department publication Dispatch, which is a
                          monthly magazine providing major speeches and congressional testimony
                          from the Department.

                          Treaties in Force, Current Treaty Actions, and Dispatch do not describe the
                          Case-Zablocki Act criteria used to select agreements for inclusion in the
                          publications. In addition, the latter two publications do not provide any
                          direct information on how users can access copies of the agreements.


USTR Generally Does Not   USTR’s trade agreement archive is not open to the public, since it was
Provide the Public With   created to serve the internal needs of the agency. USTR principally makes
                          its trade agreements available to the public via Commerce’s data base,
Direct Access to Trade
                          according to USTR officials. However, we observed in our review of the
Agreements                USTR and Commerce archives that about 30 percent of USTR’s agreements
                          were not found in Commerce’s archive. USTR publishes a list of its
                          substantive trade agreements (since 1984) in its annual report and typically
                          issues a press release upon the conclusion of negotiations. USTR’s internet



                          Page 21                                      GAO/NSIAD-00-24 International Trade
                  B-284062




                  site also contains facsimile copies of a small number of recent trade
                  agreements. USTR officials also explained that if the public requests a copy
                  of a trade agreement from USTR directly, they will usually be directed to
                  the Commerce trade data base. If the information is not otherwise
                  available, however, USTR will provide a copy upon request.



Conclusions       Fully securing the benefits of trade liberalization depends, in part, on the
                  ability of both private businesses and the public to quickly and easily
                  access the terms and conditions of the numerous trade agreements to
                  which the United States is a party. However, such access does not currently
                  exist. Commerce’s archive is the largest of the three archives maintained by
                  State, Commerce, and the U.S. Trade Representative in terms of the
                  number of trade agreements it contains and is the most accessible to the
                  public. However, the archive is incomplete because it does not contain at
                  least 158 agreements that we identified in the USTR and State archives. In
                  addition, Commerce does not apply consistent criteria in determining what
                  agreements to include in the archive, some texts in the archive contain
                  factual errors, and none of the texts can be considered authoritative. As a
                  result, private businesses may not be taking full advantage of the benefits
                  secured by trade agreements because they are not aware of them, or may
                  be misinformed about the terms of those agreements.

                  In addition, the U.S. Trade Representative and State do not know whether
                  USTR has transmitted all of its trade agreements to State that should be
                  reported for State’s archive of treaties and other international agreements.
                  As a result, State may not have transmitted the text of certain trade
                  agreements to Congress as required by law. Lack of information on the
                  terms and conditions of these agreements could impede Congress’
                  oversight efforts to determine whether trade agreements are being fully
                  implemented.



Recommendations   In order to improve the accuracy and completeness of its trade agreement
                  archive, we recommend that the Secretary of Commerce

                  • clarify that the archive is intended to contain all trade agreements;
                  • establish, in consultation with USTR, State, the U.S. Department of
                    Agriculture, and other appropriate federal agencies, clear criteria for the
                    types of agreements to be included;




                  Page 22                                      GAO/NSIAD-00-24 International Trade
                      B-284062




                      • develop procedures, in consultation with other federal agencies that
                        negotiate trade agreements, to ensure that these agencies regularly
                        forward trade agreements to Commerce; and
                      • describe at its internet site the criteria used in determining which
                        agreements are included in the archive and procedures by which users
                        can obtain authenticated copies of the agreements.

                      We also recommend that the U.S. Trade Representative, as chair of the
                      Trade Policy Staff Committee, ask the group to consider how its member
                      agencies can assist Commerce’s efforts to obtain accurate and timely
                      information on trade agreements concluded by those agencies.

                      To comply with the statutory requirement that Congress receive copies of
                      all agreements that qualify as international agreements, we recommend
                      that the Office of the U.S. Trade Representative transmit to State’s Office of
                      Treaty Affairs the text of each substantive trade agreement that it has
                      negotiated that is currently in force and that does not appear in State’s
                      present record of in-force international agreements. We also recommend
                      that the Secretary of State direct the Office of Treaty Affairs to review each
                      of these agreements to determine whether the agreement is an
                      international agreement under State’s criteria and, if so, notify Congress of
                      such agreements no later than 60 days after receiving them.



Agency Comments and   We requested comments on a draft of this report from the Departments of
                      Commerce and State and from USTR. State and Commerce provided
Our Evaluation        written comments, which are reprinted in appendix III and appendix IV.
                      State’s letter did not raise any issues concerning the report. We obtained
                      oral comments from USTR officials, including the Deputy General Counsel.
                      Commerce, State, and USTR also provided technical comments, which we
                      incorporated as appropriate.

                      Commerce characterized the report as very helpful and said it would
                      consider our recommendations carefully. While Commerce agreed that our
                      count of 158 agreements not found in the Commerce data base was
                      accurate, they explained that more than half of these agreements had either
                      expired or had been superseded by other agreements. Commerce noted its
                      data base is designed to include agreements that are currently in force.
                      Commerce also stated that some of the remaining agreements were not
                      included in its data base because they did not meet its criteria for trade
                      agreements or had not been loaded into Commerce’s data base at the time
                      of our review. Commerce acknowledged that it had overlooked about two



                      Page 23                                      GAO/NSIAD-00-24 International Trade
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dozen agreements that should have been included in its data base. We
modified our report to reflect that many of the 158 agreements that were
not included in Commerce’s data base had either expired or were
superseded. However, Commerce’s acknowledgment that it had overlooked
some agreements and that it may use different criteria from State and
USTR for defining trade agreements supports our conclusion that
improvements are needed to eliminate record-keeping weaknesses and
establish, in consultation with other agencies, clear criteria for the types of
agreements to be included in Commerce’s data base.

USTR officials said that overall they found the report to be balanced and
fair. However, USTR expressed concern about our recommendation that
USTR, as chair of the Trade Policy Staff Committee, lead an interagency
effort to assist Commerce in obtaining accurate information on trade
agreements from other agencies. USTR officials said that agreements
negotiated by other agencies are generally addressed outside the Trade
Policy Staff Committee and that the Committee has no authority to direct
other agencies to provide agreements to Commerce. They noted that the
process would not work very well unless an agency with more overarching
responsibility, such as the National Economic Council or the Office of
Management and Budget, issued a directive. We continue to believe,
however, that our recommendation is appropriate since one of USTR’s
functions, as chair of the Trade Policy Staff Committee, is to monitor and
administer the trade agreements program.18 Moreover, legislation regarding
the Committee states it should draw upon the resources of its member
agencies to the maximum extent practicable.19 If the Committee is not
successful in securing voluntary cooperation from its member agencies, it
should consider working with the National Economic Council or the Office
of Management and Budget to develop a more formal mechanism for
obtaining the needed trade agreements information.


We are sending copies of this report to appropriate congressional
committees. We are also sending copies of this report to the Honorable
Madeleine K. Albright, Secretary of State; the Honorable William M. Daley,



18
 USTR’s responsibilities as chair of this committee are enumerated in Executive
Order 12188, January 2, 1980, signed by President Jimmy Carter.
19
     19 U.S.C. 1872(c).




Page 24                                             GAO/NSIAD-00-24 International Trade
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Secretary of Commerce; and the Honorable Charlene Barshefsky,
U.S. Trade Representative. Copies will also be made available to others
upon request.

If you or your staff have any questions about this report, please contact me
on (202) 512-3655. Key GAO contacts and staff acknowledgments are listed
in appendix V.

Sincerely yours,




Susan S. Westin, Associate Director
International Relations and Trade Issues




Page 25                                     GAO/NSIAD-00-24 International Trade
Appendix I

U.S. Trade Representative, State, and                                                                 Appendx
                                                                                                            ies




Commerce Central Archives of Trade
Agreements                                                                                             Appendx
                                                                                                             Ii




                     The U.S. Trade Representative (USTR) and the Departments of State and
                     Commerce each maintain a central archive containing a large number of
                     U.S. trade agreements. However, the three archives were created for
                     different purposes and only partially overlap. In this appendix, we describe
                     the three archives and their contents.



USTR’s Trade         USTR began establishing a central archive of its trade agreements in early
                     1996, at the same time that it was creating a central office for monitoring
Agreements Archive   and enforcing trade agreements. According to USTR officials, up to that
                     point institutional memory and record-keeping regarding trade agreements
                     had not been very good. Given the increasing number of trade agreements
                     negotiated in recent years and the general, growing interest in monitoring
                     and enforcing trade agreements, USTR considered it important to improve
                     record-keeping.

                     According to USTR officials, the central archive, which was set up for
                     USTR’s internal purposes, is a work in progress. The first goal was to make
                     sure that the archive contained all agreements negotiated by the Clinton
                     administration. According to the officials, this objective has been met. The
                     second goal was to capture all agreements going back to 1984; USTR
                     maintains that goal is probably about 90 percent realized. Although USTR
                     was established in 1962, its central archive does not include U.S.
                     trade-related agreements it negotiated prior to 1984, nor those negotiated
                     by other U.S. government agencies, with the exception of 40 bilateral
                     friendship, commerce, and navigation treaties concluded between 1815 and
                     1968 and two major multilateral trade agreements concluded in 1967 and
                     1979, respectively. The archive includes (1) agreements that have entered
                     into force, (2) agreements that have not yet entered into force because one
                     or more of the parties have not taken necessary actions to approve them,
                     and (3) agreements that previously entered into force but have since
                     expired.

                     USTR does not employ a formal definition of a trade agreement in deciding
                     whether to include an agreement in its archive. According to a USTR
                     official, since all of USTR’s work is related to trade and all agreements in its
                     archive are USTR-concluded agreements, any agreement in its archive is
                     necessarily considered a trade agreement.

                     USTR’s central archive includes substantive trade agreements, procedural
                     agreements, and declarations. Substantive agreements are those that
                     include commitments on matters of substance that USTR considers to be



                     Page 26                                        GAO/NSIAD-00-24 International Trade
Appendix I
U.S. Trade Representative, State, and
Commerce Central Archives of Trade
Agreements




enforceable. Procedural agreements, such as trade and investment
framework agreements, typically establish bilateral or other nonbinding
consultation mechanisms. According to a USTR official, declarations
usually occur in the context of large ministerial meetings regarding the
negotiation or implementation of trade agreements and are issued at the
conclusion of the meetings. Declarations sometimes include substantive
undertakings but more often are process oriented and take stock of
countries’ positions at the time the document is issued. Procedural
agreements and declarations are important, the official said, because they
often help move countries toward concluding substantive agreements.

USTR maintains three principal lists of the trade agreements that are
contained in its central archive. The first, or master list, refers to all USTR
agreements that have been collected to date, including substantive,
procedural, and declaration agreements generally going back to 1984. The
most recent updated list available to us in August 1999 was for the period
ending May 29, 1998. The second list includes all agreements negotiated by
the Clinton administration. In September 1999, USTR provided us with a
copy that included all agreements from January 1, 1993, through July 1,
1999. The third list is restricted to substantive agreements that have
entered into force since 1984 that afford increased foreign market access or
reduce foreign barriers and other trade-distorting policies and practices.
This list is reported to Congress each year as part of USTR’s annual report.

We compared the three lists of agreements and found some
inconsistencies. For example, we found that the master list of agreements
did not include 16 agreements included in USTR’s list of substantive
agreements entered into between 1984 and May 29, 1998. Our analysis also
suggested that many procedural agreements and declarations that were
concluded between 1984 and 1992 may not be included in the total archive.
USTR officials confirmed that the total archive is incomplete and that
archiving procedural agreements and declarations negotiated prior to 1993
has not been an agency priority.




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                      Appendix I
                      U.S. Trade Representative, State, and
                      Commerce Central Archives of Trade
                      Agreements




Trade Agreements in   By law1 the Secretary of State is required to archive and publish all treaties
                      and all international agreements other than treaties (called “executive
State Department’s    agreements”)2 to which the United States is a party that are concluded
Archive of            during each calendar year. State does so in the publication Treaties and
                      Other International Acts Series. In addition, under the Case-Zablocki Act,
International         the Secretary of State is required to transmit to Congress the text of any
Agreements            executive agreement as soon as practicable after such agreement has
                      entered into force but no later than 60 days thereafter. Federal agencies
                      that enter into an executive agreement on behalf of the United States are
                      required to transmit the text of such an agreement to the State Department
                      not later than 20 days after the agreement is signed. Federal agencies are
                      also required to consult with the Secretary of State prior to signing or
                      concluding an international agreement.3

                      The State Department is afforded some discretion in deciding what
                      constitutes an international agreement to be published and notified to
                      Congress. As a result, not all trade and other agreements are included in
                      State’s archive. According to State Department regulations, some of the key
                      criteria that it uses in deciding whether an agreement is an international
                      agreement (within the meaning of the previously cited laws) are the
                      following:




                      1
                      U.S.C. 112a.
                      2
                       There are two procedures under the Constitution through which the United States enters
                      into international agreements. Any international agreement whose entry into force requires
                      advice and consent from the U.S. Senate is a “treaty.” In addition to a treaty, the term
                      “executive agreement” is used to refer to international agreements concluded by the
                      executive branch (a) pursuant to or in accordance with existing legislation or a prior treaty,
                      (b) subject to congressional approval or implementation, and/or (c) under and in
                      accordance with the President’s Constitutional powers.
                      3
                       In situations where an interagency committee has been established for the purpose of
                      approving agreements, the consultation requirement may be satisfied if the Secretary of
                      State or her designee has been consulted in his or her capacity as a member of the
                      committee. See 22 C.F.R. 181.4(g).




                      Page 28                                                GAO/NSIAD-00-24 International Trade
                     Appendix I
                     U.S. Trade Representative, State, and
                     Commerce Central Archives of Trade
                     Agreements




                     • Identity and intention of the parties. A party to an international
                       agreement must be a state, a state agency, or an intergovernmental
                       organization. The parties must intend their undertaking to be legally
                       binding,4 and not merely of political or personal effect. Documents
                       intended to have political or moral weight, but not intended to be legally
                       binding, are not considered international agreements.
                     • Significance of the arrangement. Minor or trivial undertakings, even if
                       couched in legal language and form, are not considered international
                       agreements. In deciding what level of significance must be reached
                       before a particular arrangement becomes an international agreement,
                       the entire context of the transaction and the expectations and intent of
                       the parties must be taken into account.
                     • Specificity, including objective criteria for determining enforceability .
                       International agreements require precision and specificity in the
                       language setting forth the undertakings of the parties. Undertakings
                       couched in vague or very general terms containing no objective criteria
                       for determining enforceability or performance are not normally
                       considered international agreements. However, the intent of the parties
                       is the key factor in assessing whether agreements are enforceable.
                     • Necessity for two or more parties. While unilateral commitments on
                       occasion may be legally binding, they do not constitute international
                       agreements. Care should be taken to examine whether a particular
                       undertaking is truly unilateral in nature or is part of larger bilateral or
                       multilateral undertakings.5



Department of        Commerce began creating a trade agreement archive in 1996 along with the
                     establishment of the Trade Compliance Center (TCC). According to a
Commerce’s Trade     former Commerce official, TCC was established because the U.S.
Agreements Archive   government had engaged in a continuing process of negotiating new trade
                     agreements but had not focused on monitoring and enforcing them. At that
                     time, the location of even the most basic trade agreements and the number
                     of existing trade agreements were unknown, the official said. According to
                     the Director of TCC, the original intent of TCC was to assemble all


                     4
                      USTR officials advised us that USTR’s standard for what is “legally binding” with regard to
                     agreements that USTR negotiates may not be equivalent to the standard the State
                     Department uses in considering whether an agreement should be considered enforceable
                     for purposes of the Case-Zablocki Act.
                     5
                     See 22 C.F.R. 181.2(1)-(4).




                     Page 29                                               GAO/NSIAD-00-24 International Trade
Appendix I
U.S. Trade Representative, State, and
Commerce Central Archives of Trade
Agreements




U.S.-negotiated trade agreements in one place and make them accessible to
the public via the internet. To create this archive, TCC began with USTR’s
1995 list of all USTR trade-related agreements and USTR’s sub-list of
substantive agreements that focus on increasing access to foreign markets.
TCC then sought to obtain copies of these agreements from USTR. TCC
obtained additional trade agreements from other Commerce Department
offices. The documents were converted into an electronic and searchable
format via a scanning process.

In June 1997, TCC proposed to USTR that the two agencies convene an
interagency group to conduct a coordinated search for international trade
agreement texts and accompanying papers. Under the proposal, the group
would have employed a working definition of a trade agreement, and a
process would have been agreed upon for certifying that a copy of any
agreement provided to the TCC data base was an exact copy of the signed
original. TCC also proposed that Commerce and USTR develop a schedule
for locating, authenticating, and delivering the trade agreements to TCC
and that the group meet monthly to assess progress. However, USTR
officials did not believe such a formal process was necessary, and no action
was taken to implement it. Instead, according to USTR officials, USTR
agreed to certify the authenticity of trade agreements on a case-by-case
basis and began to informally provide newly negotiated trade agreements
to TCC for inclusion in its data base.

According to TCC officials, trade agreements are included in its data base if
the documents meet one or more of the following criteria: (1) the parties
are national governments and agencies or intergovernmental organizations,
(2) the parties intended their undertaking to be binding, (3) the agreement
affects or might affect international trade, and/or (4) one or more parties is
a recognized territory outside the United States. The officials said that
these criteria represent the TCC’s working level definition of a trade
agreement and do not represent either an official Commerce or U.S.
government definition. They noted that applying the definition involves
making judgments.

According to TCC officials, TCC updates its archive by (1) reviewing the
list of USTR trade agreements published in successive annual reports,
(2) consulting with USTR and other Commerce Department staff,
(3) reading press releases, (4) perusing trade-related web sites, and
(5) interacting with parties in the private sector. The Commerce archive
was made accessible to the public in February 1998 via a Commerce
Department web site on the internet.



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Appendix I
U.S. Trade Representative, State, and
Commerce Central Archives of Trade
Agreements




TCC officials admit that the contents of their data base are not
comprehensive and that they are still trying to determine what types of
agreements should be included in the data base. During our review, we
identified and discussed with TCC officials some inconsistencies that we
found. They agreed, for example, that some but not all agriculture and
bilateral textile agreements, and antidumping suspension notices, are
included in their data base. They also said that although they had tried to
make the data base strictly trade or investment related, the data base
included some other agreements, such as scientific or technical
agreements, made among regulatory officials of the U.S. and other
governments, that might have a trade impact.

TCC’s Director told us that he does not see TCC maintaining a complete
archive of all trade agreements but rather only those trade agreements for
which Commerce is responsible and should be held accountable. In his
view, USTR is responsible for maintaining a complete archive, and the TCC
data base is primarily a tool for the Commerce Department. However, other
Commerce officials told us that the TCC archive should be a
comprehensive archive of trade agreements in general. In addition, in
testimony before the Senate Finance Committee in February 1999, the
Under Secretary for International Trade asserted that one of TCC’s major
functions is to provide information to American companies about trade
agreements, including how to use them, and how to know if their rights
under these agreements are being violated. Commerce noted in agency
comments on this report that its archive’s focus is on nonagricultural trade,
despite the inclusion of some agricultural trade agreements. Commerce
says it will consult with the Departments of Agriculture and State, as well
as USTR, to develop a comprehensive policy on how these agreements
should be handled.

In discussing TCC’s data base, USTR officials told us that USTR (1) has
agreed to provide trade agreements to TCC for inclusion in TCC’s database,
(2) understood that TCC intended to include anything that could be
considered a trade agreement regardless of which U.S. government agency
negotiated it on behalf of the United States, and (3) considered that TCC’s
data base would be a main source for public access to U.S. trade
agreements. Further, they told us that USTR considers its archive to be a
subset of TCC’s data base.




Page 31                                      GAO/NSIAD-00-24 International Trade
Appendix II

Objectives, Scope, and Methodology                                                          Appendx
                                                                                                  iI




              The Chairman of the House Ways and Means Committee asked us to
              determine (1) the number of trade agreements the United States is party to,
              (2) the way in which the executive branch notifies Congress about its trade
              agreements, and (3) the extent to which the public has ready access to
              trade agreements from government sources.

              To determine the number of trade agreements the United States is a party
              to, we reviewed documentation and interviewed officials at USTR and the
              Departments of State and Commerce. Since these agencies do not employ a
              common definition of a trade agreement, and the criteria they use in
              collecting data on trade agreements vary, the agencies could not provide us
              with a total count of how many trade agreements are currently in force. To
              approximate the number of agreements, we reviewed lists of the
              agreements in the archives of USTR, State, and Commerce and sought to
              create a master list that eliminated double- or triple-counting of the same
              agreement. We largely did this by incorporating information on the names,
              dates, and partners of each agreement in each agency’s data base and
              comparing the results. To reconcile the lists, we reviewed the texts of the
              agreements in Commerce’s data base. We did not verify whether the USTR
              and State lists fully reflected the contents of the archives.

              We collected information on agreements that entered into force from
              January 1, 1984, through December 31, 1998. We could not go back farther
              than 1984 because USTR’s central archive generally does not include (with
              two exceptions) agreements that it negotiated prior to 1984. We tried to
              identify only agreements that were still in force on December 31, 1998, but
              were not able to fully do so because of inadequate documentation in the
              Commerce and USTR archives.

              From USTR’s archive, we included all agreements that USTR officials
              identified as being substantive agreements that afford the United States
              increased foreign market access or reduce foreign barriers and other trade-
              distorting policies and practices. We excluded procedural agreements that
              lack enforceable provisions on increasing market access or reducing trade
              barriers. We also excluded agreements that USTR refers to as
              “declarations.” Declarations, according to USTR, usually occur in the
              context of large ministerial meetings. They sometimes include substantive
              points but more often are process oriented and take stock of where the
              countries are at the time a document is issued. If substantive points are
              included, they are not considered enforceable by USTR.




              Page 32                                     GAO/NSIAD-00-24 International Trade
Appendix II
Objectives, Scope, and Methodology




From State’s archive, which includes a wide variety of international
agreements, we included agreements that were categorized by State as
either a “trade” or “trade and commerce” agreement. In addition, we
included agreements categorized under a different subject heading if the
agreement appeared in either the USTR or Commerce data bases. We did
not include agreements categorized by State as customs agreements. Based
on criteria that State uses, any agreement in its data base is one judged by
State to include significant commitments by both parties and to be legally
binding.

We included most documents that appeared in Commerce’s trade
agreements data base. We excluded some documents that clearly were not
trade agreements, that did not fall within the time period of our review, or
that had not entered into force. According to Commerce, its archive
contains the texts of trade agreements. According to Commerce officials,
the data base includes agreements that meet any or all of the following
criteria: (1) the parties are national governments and agencies or
intergovernmental organizations, (2) the parties intend their undertaking to
be binding, (3) the agreement affects or may affect international trade,
and/or (4) one or more parties is a recognized territory outside the United
States. According to Commerce officials, Commerce’s archive also
excludes declarations.

To determine the way in which the executive branch notifies Congress
about its trade agreements, we reviewed statutes and regulations
pertaining to trade policy and procedures for notifying Congress of
international agreements. In addition, we interviewed agency officials from
USTR, Commerce, State, and the Department of Agriculture.

To determine the extent to which the public has easy access to trade
agreements from government sources, we examined Commerce’s internet
trade data base web site; reviewed State publications and its internet site
containing information on international agreements; and inspected USTR’s
internet site. We also interviewed agency officials from Commerce, State,
and USTR. In addition, we spoke with several companies that publish
international agreements and accessed the internet sites of Oceana and
Lexis-Nexis for additional information on their services.

We did our work from June 1998 through November 1999 in accordance
with generally accepted government auditing standards.




Page 33                                     GAO/NSIAD-00-24 International Trade
Appendix III

Comments From the Department of State                           Appendx
                                                                      Ii




               Page 34        GAO/NSIAD-00-24 International Trade
Appendix IV

Comments From the Department of
Commerce                                                                 Appendx
                                                                               IV
                                                                                i




Note: GAO comments
supplementing those in the
report text appear at the
end of this appendix.




See comment 1.




See comment 2.




                             Page 35   GAO/NSIAD-00-24 International Trade
                 Appendix IV
                 Comments From the Department of
                 Commerce




See comment 3.




See comment 4.




                 Page 36                           GAO/NSIAD-00-24 International Trade
               Appendix IV
               Comments From the Department of
               Commerce




               The following are GAO’s comments on the Department of Commerce’s
               letter dated November 24, 1999.



GAO Comments   1. Commerce’s explanation for why its archive does not contain 158 of the
               441 agreements that we identified in the USTR, Commerce, and State
               archives is based on Commerce’s analysis of a list of the 158 agreements we
               provided to them. Since we had also identified instances in which the USTR
               and State archives contained agreements that were no longer in force or
               had been superseded by other agreements, we accept Commerce’s
               explanation for the majority of the missing agreements.

               2. Commerce reported that the remainder of the missing agreements either
               did not meet Commerce’s criteria for inclusion, had not yet been loaded
               into the data base, or had been overlooked. Since Commerce did not
               identify to us the particular agreements in each category, we cannot
               comment specifically on its response. However, Commerce elsewhere
               notes that it is taking steps to clarify the criteria for including agreements
               in its data base and improve its accuracy. Such steps will address our
               concern about the utility of the data base.

               3. We modified our report to acknowledge Commerce’s intent to resolve
               the issue of whether or not agriculture agreements should be included in
               the Commerce data base.

               4. We noted in our report that Commerce has begun periodic reviews of its
               data base to remove obsolete agreements.




               Page 37                                      GAO/NSIAD-00-24 International Trade
Appendix V

GAO Contacts and Staff Acknowledgments                                                          Appendx
                                                                                                      V
                                                                                                      i




GAO Contacts         Elizabeth Sirois (202) 512-8989
                     Anthony Moran (202) 512-8645



Acknowledgments      In addition to those named above, Shirley Brothwell, Wayne Ferris, Kim
                     Frankena, and Katharine Woodward made key contributions to this report.




(711346)     Leter   Page 38                                  GAO/NSIAD-00-24 International Trade
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