oversight

The Results Act: Observations on USTR's September 1996 Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-18.

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

                     United States
GAO                  General Accounting Office
                     Washington, D.C. 20548

                     National Security and
                     International Affairs Division

                     B-277493

                     July 18, 1997

                     The Honorable Richard K. Armey
                     Majority Leader
                     House of Representatives

                     The Honorable John Kasich
                     Chairman, Committee on the Budget
                     House of Representatives

                     The Honorable Dan Burton
                     Chairman, Committee on Government Reform
                       and Oversight
                     House of Representatives

                     The Honorable Bob Livingston
                     Chairman, Committee on Appropriations
                     House of Representatives

                     Subject: The Results Act: Observations on USTR’s September 1996 Draft
                     Strategic Plan

                     On June 12, 1997, you asked us to review the draft strategic plans
                     submitted by the cabinet departments and selected major agencies for
                     consultation with the Congress as required by the Government
                     Performance and Results Act of 1993 (the Results Act). This letter is our
                     response concerning the Office of the United States Trade Representative
                     (USTR).


                     Our overall objective was to review and evaluate the latest available
Objectives, Scope,   version of USTR’s draft strategic plan. As you requested, we specifically
and Methodology      (1) assessed the draft plan’s compliance with the Results Act’s
                     requirements and its strengths and weaknesses; (2) determined whether
                     USTR’s key statutory authorities were reflected; (3) identified whether
                     discussions about interagency coordination and crosscutting functions
                     were included; (4) determined whether the draft plan addressed major
                     management problems; and (5) discussed USTR’s capacity to provide
                     reliable information about its performance.

                     We obtained the September 1996 draft strategic plan that USTR provided to
                     the House of Representatives’ staff team working with the agency on




                     Page 1                             GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
             B-277493




             Results Act issues. USTR told us that it is revising the plan; however, a
             revised draft was not available to us, and thus we based our review on the
             September draft plan. They said that USTR is in the process of significantly
             revising its draft strategic plan since our review began and that they are
             confident that USTR will meet the September 30, 1997, statutory deadline
             for completing the plan and submitting it to Congress.

             Our overall assessment of USTR’s plan was generally based on our
             knowledge of USTR’s operations and activities, our reviews of international
             trade initiatives, and other information available at the time of our
             assessment. Specifically, the criteria we used to determine whether USTR’s
             draft strategic plan complied with the requirements of the Results Act
             were the Results Act itself, supplemented by the Office of Management
             and Budget’s (OMB) guidance on developing the plans (Circular A-11,
             Part 2). To make judgments about the overall quality of the plan and its
             components, we used our May 1997 tool for congressional review of the
             plans.1 To determine whether the plan contained adequate information on
             interagency coordination and addressed management problems, we relied
             on our general knowledge of USTR’s operations and activities and our
             previous reports. A list of our major products related to USTR is at the end
             of this letter.


             The U.S. Trade Representative acts as the principal trade advisor,
Background   negotiator, and spokesperson for the President on trade and related
             investment matters. As chair of an interagency structure, USTR coordinates
             trade policy through the Trade Policy Review Group and the Trade Policy
             Staff Committee. These groups, composed of 17 federal agencies and other
             offices, make up the subcabinet mechanism for developing and
             coordinating U.S. government positions on international trade and
             trade-related investment issues.2 USTR negotiates international trade
             agreements like the North American Free Trade Agreement (NAFTA) and
             the Uruguay Round Agreements that created the World Trade Organization
             (WTO). USTR is responsible for representing U.S. interests in international
             trade organizations like the Asia Pacific Economic Cooperation forum as
             well as the many bodies created to oversee implementation of agreements
             like NAFTA and the WTO agreements. The private sector plays a continuing
             consultative role in these trade policy functions through advisory
             committees. The agency also has administrative responsibilities to enforce

             1
              Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review
             (GAO/GGD-10.1.16, May 1997).
             2
              These agencies include the Departments of Agriculture, Commerce, State, and the Treasury and OMB.



             Page 2                                        GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
B-277493




U.S. trade laws, including the monitoring of foreign trade practices. For
example, the agency is responsible for administering a “section 301”
process that authorizes USTR to investigate and respond to unfair foreign
trade practices.

There is close consultation between USTR and Congress. Five Members
from each House are formally appointed under statute as official
congressional advisors on trade policy, and additional Members may be
appointed as advisors on particular issues or negotiations. Communication
between the agency and Congress takes the form of written reports,
testimony, and briefings on trade issues.

USTR  is a small agency compared to some others covered by the Results
Act. Its fiscal year 1996 budget was about $21 million for necessary
expenses, of which about $15 million, or over 70 percent, was for
personnel compensation and benefits; $2 million for travel; and $4 million
for rent, communications, utilities, and other services. USTR had a full-time
equivalent employment level of 161 staff in 1996. The agency has offices in
Washington, D.C., and in Geneva, Switzerland.

The Results Act dictates that agency strategic plans include six required
elements. These elements are (1) a comprehensive mission statement;
(2) agencywide long-term goals and objectives for all major functions and
operations; (3) the means the agency will use to achieve the goals and
objectives and the various resources needed to do so; (4) the relationship
between the long-term goals/objectives and the annual performance goals;
(5) key factors external to the agency and beyond its control that could
significantly affect achievement of the strategic goals; and (6) a
description of how program evaluations were used to establish or revise
strategic goals and a schedule for future program evaluations.

It is important to recognize that under the Results Act, USTR’s final
strategic plan is not due until September 1997. Furthermore, the Results
Act anticipated that it may take several planning cycles to perfect the
process and that the final plan would be continually refined as various
planning cycles occur. Thus, our comments reflect a snapshot status of the
plan at a given point in time. We recognize that developing a strategic plan
is a dynamic process and that USTR is continuing work to revise the draft
with input from OMB, congressional staff, and other stakeholders.




Page 3                              GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                       B-277493




                       USTR’s draft strategic plan of September 1996 is incomplete and will require
Results in Brief       considerable revision before it meets all of the Results Act’s requirements
                       and OMB’s guidelines. The draft plan meets the requirements of the Results
                       Act in only two of six areas. Specifically, the plan provides a mission
                       statement and key external factors that could affect achievement of
                       agency goals. However, the plan does not meet the requirements for
                       presenting general goals and objectives or for describing how they will be
                       achieved or how they relate to performance goals and program
                       evaluations. Furthermore, the plan does not follow the detailed OMB
                       guidance for drafting strategic plans in many respects. The plan can be
                       improved in additional areas, as well.

                       USTR’s plan does broadly cover all the agency’s major statutory functions.
                       We believe it could be improved by explicitly reflecting the agency’s
                       growing responsibility for monitoring foreign governments’ compliance
                       with trade agreements.

                       This version of USTR’s plan includes the agency’s crosscutting activities but
                       does not reflect the results of consultations with interested parties,
                       including other federal agencies. The draft plan acknowledges this
                       omission, and USTR officials told us that these consultations were taking
                       place. Coordination is an important part of USTR’s mission, and Congress
                       has been concerned with fragmented organization of trade functions
                       among various agencies.

                       USTR’sdraft plan describes a serious management challenge that the
                       agency will face during 1997-2002 but does not contain a strategy for
                       dealing with that challenge. According to the plan, the agency must
                       manage growing workloads with reduced resources, but the plan does not
                       indicate how it will respond to this challenge.

                       We have not done any work to assess the agency’s capacity to provide the
                       data necessary to measure progress in achieving any goals and objectives
                       nor whether its information systems need to be improved to allow it to do
                       so. Once USTR refines the plan’s goals and objectives, it will need to
                       evaluate its ability to gather the information essential to measure its
                       progress in achieving its goals and objectives.


                       USTR’sSeptember 1996 draft plan does not meet the requirements of the
USTR’s Plan Does Not   Results Act in four of six areas. Furthermore, it does not completely follow
Reflect Key Results    the more detailed OMB guidance for drafting strategic plans. The agency’s
Act Requirements       mission statement meets the act’s requirements, and it is clear and


                       Page 4                              GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
B-277493




comprehensive, though USTR could better explain how its activities help
the general public. USTR’s draft plan contains no explicit general goals and
objectives. Instead, the plan describes nine “lines of business” for the
agency and, for each line of business, several “critical success indicators.”
These implicit goals and objectives do not follow OMB guidelines because
they are not stated in a manner that allows a future assessment of whether
they are being achieved. USTR does not identify the approaches or
strategies it intends to use to achieve the lines of business nor what
resources will be used to do so, as is required. The draft plan lists
performance goals but does not (1) describe how those performance goals
are related to the lines of business or any general goals and objectives or
(2) outline their relevance and use in measuring the agency’s
achievements, as called for by the Results Act and OMB guidelines. USTR
does identify budget and staffing constraints and increased workload that
could affect its plan, as required by the act. Yet, the plan does not follow
OMB guidance for linking these key external factors to specific goals. USTR
may want to consider including other external factors that could affect its
plan as well, such as other countries’ willingness to agree to U.S. positions
in trade negotiations. Further, the draft plan does not address the
requirements regarding program evaluations. Table 1 shows the Result
Act’s required components and summarizes the extent to which USTR’s
plan discusses those components.




Page 5                              GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                                          B-277493




Table 1: Strategic Plan Components
Listed by the Results Act and Extent of   Strategic plan components                        Extent of coverage
Coverage in USTR’s September 1996         1. Comprehensive mission statement               Mission statement is clear and
Draft Strategic Plan                        covering the major functions and                comprehensive and generally meets the
                                            operations of the agency                        Result Act’s requirements.
                                          2. General goals and objectives                  USTR instead presents nine “lines of
                                                                                            business” and “critical success
                                                                                            indicators”; these are not stated in a
                                                                                            manner that allows an assessment of
                                                                                            results.
                                          3. Description of how goals and objectives       Draft plan does not explain approaches,
                                            are to be achieved                               strategies, or use of resources to
                                                                                             achieve USTR’s general goals/lines of
                                                                                             business
                                          4. Description of how the performance            Performance goals are listed for each
                                            goals included in the plan shall be related     line of business but lack the required
                                            to the general goals and objectives in the      descriptions and linkages to lines of
                                            plan                                            business/general goals.
                                          5. Identification of key factors external to Two external factors are discussed but
                                            the agency and beyond its control that      are not linked to specific goals and
                                            could affect achievement of general goals   objectives per OMB guidelines. Other
                                            and objectives                              factors could be considered.
                                          6. Description of the program evaluations        Not discussed.
                                            used to establish/revise strategic goals,
                                            with schedule for future program
                                            evaluations
                                          Sources: The Government Performance and Results Act of 1993 and USTR’s draft strategic plan
                                          for September 1996.




Mission Statement Meets                   The first of the six Results Act requirements is that strategic plans contain
Results Act’s Requirements                agency mission statements that are comprehensive and cover agencies’
                                          major functions and operations. OMB Circular A-11, Part 2, states that these
                                          mission statements should be brief and define the basic purpose of the
                                          agency, with particular focus on its core programs and activities.
                                          Additionally, our May 1997 tool for congressional review of agencies’
                                          strategic plans suggested that Congress ask whether an agency’s mission
                                          statement is focused on results, fulfills a clear public need, and is
                                          differentiated from the missions of other federal agencies with similar
                                          functions.

                                          USTR’s  draft mission statement generally meets these criteria and is
                                          generally clear and comprehensive. The mission statement says that USTR
                                          is to “coordinate the development of United States foreign trade policy,
                                          lead the negotiation and enforcement of international trade policy and




                                          Page 6                                        GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                                B-277493




                                direct investment agreements, and provide leadership for the international
                                trading system.” It also states that USTR will “produce trade agreements
                                and undertake enforcement activities that reduce distortions and barriers
                                to U.S. international trade and direct investment.” By referring specifically
                                to its coordinating role in trade policy-making and its lead role in
                                negotiating and enforcing trade agreements, USTR has tried to differentiate
                                its mission from the missions of other agencies engaged in trade-related
                                activities.

                                However, we believe that one aspect of USTR’s mission statement could be
                                improved. According to the mission statement, USTR’s trade agreements
                                and enforcement activities are to “help carry out objectives of the
                                President and the Congress to promote higher average labor productivity,
                                better paying jobs, increased living standards and economic growth for all
                                Americans.” We believe that it would not be possible to measure USTR’s
                                contribution to achieving these outcomes and that this statement should
                                therefore not be a part of USTR’s mission. A USTR official told us that this
                                part of the mission statement received much criticism when USTR
                                circulated its draft plan within USTR and likely would be revised. In its final
                                plan, USTR may wish to restate the basic purpose of the agency in a more
                                results-focused way that directly links the agency’s actions to the public it
                                serves. For example, the plan could state that the agency helps to open
                                foreign markets to goods and services provided by U.S. workers by
                                identifying and eliminating trade barriers, helping to establish
                                international trade rules, and enforcing U.S. trade rights for U.S. business.


No Explicit General Goals       Strategic plans set out the long-term programmatic, policy, and
and Objectives                  management goals of the agency. OMB Circular A-11, Part 2, provides that
                                agency plans should state general goals in a manner that allows a future
                                assessment to be made of whether these goals are being achieved.

                                USTR’s draft plan contains no explicit general goals and objectives. Instead,
                                the plan describes nine “lines of business” for the agency. The nine lines of
                                business are to

                            •   develop and analyze U.S. government trade policies, initiatives, and
                                negotiating positions;
                            •   coordinate the development and implementation of U.S. trade policy;
                            •   negotiate trade agreements and solutions to trade problems affecting U.S.
                                interests;
                            •   enforce and defend U.S. trade and direct investment rights and obligations;



                                Page 7                               GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                               B-277493




                           •   administer trade laws and programs as stipulated by Congress and
                               delegated by the President;
                           •   provide advice and counsel to the President, Congress, and U.S. interests
                               on trade and investment problems, both general and specific;
                           •   communicate U.S. trade policy to the public;
                           •   lead U.S. representation in international trade forums; and
                           •   maintain effective internal management systems and practices to ensure
                               productive agency employees.

                               In addition, for each line of business, the draft plan lists several more
                               specific “critical success indicators”—a total of 34 indicators in all. The
                               draft plan’s critical success indicators are more specific and more results
                               oriented than the lines of business, and many relate to trade policy or
                               negotiating objectives. In our judgment, neither the lines of business nor
                               the critical success indicators meet the OMB guidance.3 The lines of
                               business describe the major activities that USTR engages in, but not all are
                               stated in a manner that allows for assessment. For example, the USTR line
                               of business to “develop and analyze U.S. government trade policies,
                               initiatives, and negotiating positions” is too vague to permit one to
                               determine when it has been achieved. Similarly, the critical success
                               indicators for this line of business are also vague. For instance, one
                               indicator is the extent to which “U.S. trade policy contributes to
                               broadening and strengthening the global trading system.” It is unclear how
                               USTR could measure such a “contribution” and thus its success based on
                               this indicator. We believe the USTR plan would allow assessment of the
                               agency’s results if it more clearly identified the aims of its activities.


No Description of How          USTR’s  plan does not identify the approaches or strategies the agency
Lines of Business or Any       intends to use to implement its lines of business or any general goals and
General Goals and              objectives. Under the Results Act, strategic plans are required to contain
                               strategies that briefly describe how agencies will achieve their mission,
Objectives Will Be             that is, the operational processes, staff skills, and technologies, as well as
Achieved                       the human, capital, information and other resources needed to meet the
                               general goals and objectives of the plan. Additionally, according to OMB
                               Circular A-11, Part 2, strategies should also outline how USTR will
                               communicate strategic goals throughout the organization and hold
                               managers and staff accountable for achieving these goals.




                               3
                                We note that the performance goals presented in USTR’s plan (which we discuss below) to some
                               extent resemble general goals in their level of specificity.



                               Page 8                                        GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
B-277493




USTR’s draft plan does contain brief descriptions of the agency’s resources.
The background section presents the agency’s organizational structure,
budget, and staffing levels. Also, the plan includes a line of business to
“maintain effective internal management systems and practices to ensure
productive agency employees” that offers some general description of USTR
staff skills and technology. Yet the plan does not explain how resources
will be used to achieve agency goals and objectives in terms of who will do
what, when, and how. The plan also does not state how managers and staff
are to be held accountable for achieving the goals.

Also, the plan is not specific as to any particular trade policy, trade
negotiating, or trade enforcement strategies. For example, the line of
business to “negotiate trade agreements and solutions to trade problems
affecting U.S. interests” and its four critical success indicators do not refer
to any ongoing multilateral or bilateral trade negotiations, nor do they
identify any trade disputes or even any particular U.S. sectoral interests
that should be protected. USTR is statutorily required to list annual trade
policy objectives and priorities in a yearly report to Congress. The 1997
report is fairly specific and includes strategies like completing Free Trade
of the Americas negotiations by 2005 and phasing out tariffs worldwide on
information technology products by 2000.4 USTR has enunciated other
substantive strategies elsewhere, as well. For example, USTR identifies
trade expansion priorities in its annual “Super 301” review and report.
Also, USTR issued a report in April 1997 titled Future Free Trade Area
Negotiations: Report on Significant Market Opening, pursuant to NAFTA
implementing legislation.5 This report identifies which markets have the
greatest potential to increase U.S. exports of goods, services, and
export-related investment. We believe that in order to more specifically
identify the approaches or strategies the agency intends to use to
implement its general goals and objectives, USTR should consider
incorporating into its strategic plan those strategies it has enunciated
elsewhere.




4
1997 Trade Policy Agenda and 1996 Annual Report of the President of the United States on the Trade
Agreements Program (Washington, D.C.: The White House, Mar. 1997).
5
 See section 108 (b)(2), P.L.103-182, Dec. 8, 1993.



Page 9                                            GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                           B-277493




No Description of How      Under the Results Act, a strategic plan must contain a description of how
Annual Performance Goals   the performance goals included in each agency’s annual performance plan
Will Relate to Lines of    are related to the strategic plan’s general goals and objectives. Agencies
                           are required to prepare annual performance plans with specific
Business or Any General    performance goals, beginning with the performance plan for fiscal year
Goals                      1999. Without this linkage, Congress may not be able to judge whether an
                           agency is making progress toward achieving its long-term goals. OMB
                           guidance states that strategic plans should briefly outline (1) the type,
                           nature, and scope of the annual performance goals to be included in the
                           performance plan; (2) the relation between the annual performance goals
                           and the general goals and objectives; and (3) the relevance and use of
                           annual performance goals in helping determine the achievement of general
                           goals and objectives.

                           The draft plan actually lists performance goals under each USTR “line of
                           business” but does not describe how those performance goals are related
                           to these business lines or any general goals and objectives. Similarly, the
                           draft USTR plan does not provide a general outline of the performance
                           goals. Thus, USTR’s final strategic plan should, at a minimum, explain the
                           relationship between the annual performance goals and any general goals
                           and objectives and how the performance goals are relevant and are to be
                           used in determining a level of achievement.

                           In addition, we believe that the performance goals as listed in the
                           September 1996 draft plan, if used in the annual performance plans which
                           begin in 1999, would not allow USTR to annually measure its progress
                           toward achieving goals and objectives. Many of the listed performance
                           goals are vague and would be difficult to use to make judgments about the
                           agency’s progress. For example, the performance goals presented to judge
                           progress toward USTR’s line of business to “lead U.S. representation in
                           international trade fora” include measuring (1) “the degree to which U.S.
                           positions are reflected in final agreements and understandings in these
                           fora” and (2) “the extent to which the American public perceives that U.S.
                           leadership in these institutions is an important means of ensuring that U.S.
                           interests are protected and advanced.” However, it is unclear how USTR or
                           Congress could realistically measure the inclusion of U.S. positions and
                           public perceptions as the plan is now written.




                           Page 10                             GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                              B-277493




Key External Factors Are      The Results Act requires that strategic plans identify key factors external
Identified but Not Linked     to the agency and beyond its control that could significantly affect the
to Lines of Business or Any   achievement of the general goals and objectives. OMB Circular A-11, Part 2,
                              states that strategic plans should briefly describe each factor, indicate its
General Goals                 link with a particular goal(s), and describe how achievement of a goal
                              could be affected by the factor.

                              USTR’s  draft strategic plan describes two external factors that have affected
                              its ability to carry out its mission, though they are not explicitly labeled as
                              external factors. The first is a growing workload as a result of increased
                              statutory responsibilities. The second is declining budgets and staffing in
                              recent years. However, the USTR plan does not link these factors to
                              particular goals as called for by OMB guidance and does not discuss the
                              extent to which these or other external factors could affect USTR in the
                              future—that is, during 1996-2002, the years covered by the plan. Further,
                              we believe that USTR’s plan does not contain a thorough treatment of
                              resource and workload issues because it does not address the implications
                              of these issues on the agency’s work. See the next section for a more
                              detailed discussion.

                              In addition, we believe USTR could improve its plan by acknowledging at
                              least two other key external factors. First, much of the success of USTR’s
                              work depends on the actions of other parties. For example, international
                              trade negotiations and disputes can be successfully resolved only if other
                              foreign governments agree. A foreign government’s willingness to agree to
                              U.S. positions may depend on the country’s economic and other domestic
                              conditions over which USTR has no control.6 Therefore, the ability of USTR
                              to meet some of its objectives regarding these activities is outside of its
                              control. Second, U.S. trade policy objectives compete with other domestic
                              and foreign policy objectives. For example, U.S. environmental regulations
                              may create a trade dispute with another country about how they should
                              apply to foreign parties doing business in the United States and whether
                              they violate the terms of an international trade agreement. Therefore,
                              some of USTR’s objectives may be affected by other U.S. government
                              actions taken for non-trade-related reasons and not controlled by USTR.




                              6
                               Evaluating the success of international trade negotiations is complicated by the fact that, as in any
                              negotiation, the parties reach agreement through compromise. A compromise can be construed to
                              mean that each party’s negotiating objectives were not fully met, but that is not to say that the
                              negotiations were not successful.



                              Page 11                                           GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                                B-277493




No Discussion of Use of         Under the Results Act and OMB guidance, agencies’ strategic plans are to
Program Evaluations to          (1) discuss how program evaluations were used to establish strategic goals
Establish or Revise Goals       and (2) lay out a schedule for conducting future program evaluations. OMB
                                Circular A-11, Part 2, states that this section should briefly describe
                                program evaluations that were used in preparing the strategic plan and
                                include a schedule outlining (1) the general scope and methodology for
                                planned evaluations and (2) the particular issues to be addressed.

                                As previously mentioned, USTR’s draft plan lists preliminary performance
                                goals for each line of business, which is a step toward providing program
                                evaluation. However, the plan does not (1) mention any particular findings
                                of program evaluations, done by USTR or others; (2) describe how such
                                evaluations were used to establish or revise strategic goals; (3) provide
                                information on the scope and methodologies of issues to be addressed in
                                forthcoming evaluations; or (4) identify a schedule for when various
                                evaluations will be done.


Other Observations              USTR’s draft plan is not organized along the lines of the six required plan
                                components, although this is not required by the Results Act or OMB. We
                                noted this previously in our discussion of USTR’s general goals and
                                objectives. In general, to facilitate review by decisionmakers, a more
                                useful presentation would have each required component of the plan
                                presented in a single section, and all sections would appear in the same
                                order as outlined in the act.


                                USTR’s September 1996 strategic plan reflects the agency’s principal
USTR’s Plan Generally           statutory functions. The Trade Act of 1974, as amended, specifies USTR’s
Reflects Its Major              responsibilities. Under various provisions of this act, as amended
Statutory Functions             (19 U.S.C. 2171, 2411, and 2416), the Trade Representative

                            •   has primary responsibility for developing and coordinating the
                                implementation of U.S. international trade policy;
                            •   has lead responsibility for conducting international trade negotiations;
                            •   has responsibility for monitoring foreign countries’ implementation of
                                trade agreements and enforcing U.S. rights under those agreements;
                            •   has responsibility for determining whether foreign countries are engaging
                                in unfair trade practices and for responding to such practices;
                            •   issues and coordinates policy guidance to other departments and agencies
                                on basic issues of policy and interpretation arising in the exercise of
                                international trade functions;



                                Page 12                             GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                              B-277493




                          •   is responsible for, and reports to the President and Congress on, the
                              administration of the trade agreements program; and
                          •   serves as the President’s principal advisor and spokesperson on
                              international trade.

                              Although it is not required by the Results Act, USTR’s draft plan also
                              identifies statutory authorities and outlines the history and legislative
                              background of the agency.

                              While USTR’s draft plan does reflect its enforcement responsibilities, it does
                              not explicitly address the agency’s responsibility for monitoring foreign
                              countries’ implementation of trade agreements. This responsibility has
                              become larger and more important as the United States has entered into
                              complex and comprehensive multilateral trade agreements, such the WTO
                              Uruguay Round Agreements, which established rules and commitments
                              covering over 130 other members. Our past work on WTO and other trade
                              issues identified challenges in U.S. efforts to perform this function. (See
                              list of reports at end of letter.) While USTR has recognized this growing
                              responsibility by creating, in January 1996, an office dedicated to
                              monitoring and enforcing trade agreements, we believe the USTR plan
                              could better reflect this growing area of responsibility.


                              The Results Act requires agencies to consult with Congress and solicit and
Plan Includes                 consider the views of parties affected by and interested in the strategic
Crosscutting                  plans. OMB guidance further states that agencies should consult with other
Activities, but Details       agencies about the treatment of crosscutting functions in their plans as
                              part of this requirement. Our May 1997 tool suggested that Congress ask
Lacking                       how agency strategic plans ensure that efforts related to crosscutting
                              functions are complementary, appropriate in scope, and not unnecessarily
                              duplicative.

                              USTR’s  September 1996 draft plan does not reflect the results of
                              consultations with major stakeholders, and the draft plan acknowledges
                              this omission. USTR officials told us they are in the process of concluding
                              these consultations and incorporating suggestions. The officials stated that
                              the USTR draft plan has been circulated for comment to the entire USTR
                              staff, congressional Committees, numerous other federal agencies, all
                              members of the various private sector advisory committees, and other
                              interested parties.




                              Page 13                              GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
B-277493




Such consultations are central to the agency’s mission. USTR’s statutory
responsibilities include coordinating several crosscutting government
functions. USTR’s draft strategic plan explicitly identifies two such
functions: (1) to coordinate the development and implementation of U.S.
trade policy and (2) to lead U.S. representation in international trade
forums. As previously mentioned, USTR chairs the interagency structure for
developing and coordinating trade policy through two committees, the
17-member Trade Policy Review Group and the Trade Policy Staff
Committee.

However, USTR’s draft plan does not reflect another legislative requirement
to help coordinate trade promotion activities, a function that cuts across
government agencies and that involves negotiating and enforcing trade
agreements. USTR is a member of the Trade Promotion Coordinating
Committee which is an interagency organization created to strengthen
federal export promotion efforts. The Committee has established a
governmentwide strategy for promoting U.S. exports,7 as directed in
statute.8 The Committee has begun to establish governmentwide priorities
for export promotion activities and to create an annual unified federal
export promotion budget that reflects those priorities. As part of these
efforts, the Committee has sought to develop uniform performance
measures consistent with the Results Act’s requirements for agency
performance measures.

In our most recent assessment of the Trade Promotion Coordinating
Committee’s activities, we found that while the Committee has made
efforts to develop these performance measures, it has yet to create
measures that are sufficiently refined to influence budget reallocation
decisions, which we view as an essential part of developing a unified
budget.9 Our other work has further highlighted concerns over the
fragmentation and organizational inefficiency of U.S. government trade
programs, and Congress has considered several legislative proposals to
reorganize the trade bureaucracy.10 We believe that USTR’s plan under the


7
 Several of our reports and testimonies contributed to deliberations leading to passage and
implementation of the 1992 act, including Export Promotion: Governmentwide Strategy Needed for
Federal Programs (GAO/T-GGD-93-7, Mar. 15, 1993); Export Promotion: Federal Approach Is
Fragmented (GAO/T-GGD-92-68); and Export Promotion: Federal Programs Lack Organizational and
Funding Cohesiveness (GAO/NSIAD-92-49, Jan. 10, 1992).
8
 Title II of the Export Enhancement Act of 1992 (P.L. 102-429, Oct. 21, 1992).
9
 National Export Strategy (GAO/NSIAD-96-132R, Mar. 26, 1996).
10
 Government Reorganization: Observations About Creating a U.S. Trade Administration
(GAO/T-GGD-95-234, Sept. 6, 1995).



Page 14                                          GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                       B-277493




                       Results Act would be improved if it explicitly recognized interagency trade
                       promotion coorridnation efforts.


                       The Results Act and OMB Circular A-11 indicate that USTR should set out the
Strategic Plan         means the agency will use to achieve its goals and objectives, including a
Contains No Strategy   description of the operational processes, technology, and other resources
for Overcoming         required to meet them. USTR’s draft strategic plan states that the most
                       serious management issue facing the agency is how to handle growing
Challenge of Limited   workloads with reduced resources. The background section of the plan
USTR Resources         describes how USTR’s statutory responsibilities have grown in the last 3
                       decades during which its resources have shrunk. In the last 5 years, the
                       plan states that the agency’s base operating costs have fallen in
                       inflation-adjusted terms by a cumulative sum of about $3 million and
                       staffing authorization has declined by 5 percent since 1992. The plan also
                       states that the number of federal employees detailed to USTR from other
                       agencies dropped by more than one-third between fiscal year 1993 and
                       1996, from nearly 50 to about 30. Therefore, the plan concludes that the
                       central management issue USTR must examine in the strategic planning
                       process is the degree to which the agency can continue to meet its
                       statutory mission successfully.

                       Yet, USTR’s draft plan is silent on how the organization intends to meet the
                       stated management challenge. USTR has only limited control over its
                       workload, as we noted in our discussion of key external factors. This lack
                       of control makes it imperative that USTR indicate in its final plan how the
                       agency might increase its resources (for example, by obtaining more
                       detailees), assign priorities and use its resources more efficiently, delegate
                       some responsibilities to other agencies, or even ask Congress to relieve it
                       of some of its responsibilities.

                       We note that one growing responsibility at USTR involves monitoring and
                       enforcing trade agreements, notably the WTO Uruguay Round Agreements.
                       Both USTR and the Department of Commerce have recently established
                       enforcement offices to monitor foreign governments’ compliance with
                       trade agreements. Also, USTR officials told us that litigating WTO dispute
                       settlement cases is consuming an increasing share of USTR resources,
                       leaving limited time for USTR’s monitoring and enforcement unit to
                       systematically track foreign countries’ compliance with WTO and other
                       trade agreements. We believe USTR’s plan would be improved if it better
                       addressed how the agency will manage its growing workload in areas like
                       monitoring and enforcement.



                       Page 15                             GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
                       B-277493




                       We have not done any work to assess the agency’s capacity to provide the
USTR’s Capacity to     data necessary to measure progress in achieving any goals and objectives
Provide Reliable       nor whether its information systems need to be improved to allow it to do
Information on         so. Our past work, including our reviews of related Trade Promotion
                       Coordinating Committee efforts, our knowledge of USTR activities, and
Achievement of Goals   discussions with USTR officials, indicates that the agency may need to
Is Unknown             begin gathering some data required to measure progress in achieving
                       goals. USTR often relies on other government agencies to provide it with the
                       analysis it needs to conduct its work. A first step, however, will be to
                       refine both the general and performance goals, as we previously
                       described. Then, the agency will need to determine which data are needed
                       to measure success at achieving the goals and the ability of its current
                       information systems to provide the needed data and devise a strategy for
                       how the agency will improve its systems to provide the necessary
                       information.11


                       We provided a draft of this letter to USTR for review and comment on
Agency Comments        July 15, 1997. USTR officials generally agreed with our findings and analysis
                       of their September 1996 draft strategic plan and acknowledged that it was
                       incomplete and did not meet all of the requirements of the Results Act.
                       The officials said that USTR has significantly revised its draft strategic plan
                       since our review began. They have focused their efforts on restating USTR’s
                       mission and activities in measurable terms, being more specific in
                       presenting strategies and linking the components as required by the
                       Results Act and OMB guidance. USTR officials emphasized that the agency’s
                       senior management has been and will continue to be directly involved in
                       drafting the strategic plan and that they considered their efforts to
                       implement the Results Act to be important and worthwhile. They continue
                       to consult with major stakeholders and have circulated the draft plan for
                       comment to all USTR staff, congressional committees, other agencies, and
                       all the members of various private sector advisory committees. USTR
                       officials said they are confident they will meet the September 30, 1997,
                       statutory deadline for completing the plan and submitting it to Congress.


                       As arranged with your offices, unless you publicly announce its contents
                       earlier, we plan no further distribution of this letter until 30 days from its

                       11
                         While USTR may find it necessary to use trade data to develop results measures, the uncertain
                       reliability of U.S. trade data may make it difficult to do so. We and others have found that U.S. trade
                       data have undercounted exports to other countries. See U.S. Trade Data: Limitations of U.S. Statistics
                       on Trade With Mexico (GAO/T-GGD-93-25, Apr. 28, 1993) and Customs Service: Trade Enforcement
                       Activities Impaired by Management Problems (GAO/GGD-92-123, Sept. 24, 1992).



                       Page 16                                          GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
B-277493




issue date. At that time, we will send copies of this letter to the Minority
Leader of the House of Representatives; Ranking Minority Members of
your Committees; the Chairmen and Ranking Minority Members of other
Committees that have jurisdiction over USTR activities; USTR; and the
Director, OMB. Copies will be made available to others on request.

This review was done under the direction of JayEtta Z. Hecker, Associate
Director. If you or your staffs have any questions concerning this letter,
please contact Ms. Hecker at (202) 512-8984. Major contributors to this
report are listed in enclosure I.




Benjamin F. Nelson
Director, International Relations
  and Trade Issues

Enclosure




Page 17                             GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
Enclosure I

Major Contributors to This Report


                        Elizabeth J. Sirois, Assistant Director
National Security and   Sharon W. Chamberlain, Assistant Director
International Affairs   David T. Genser, Evaluator-in-Charge
Division, Washington,   Adam R. Cowles, Senior Evaluator

D.C.
                        Richard P. Burkard, Senior Attorney
Office of the General   Herbert I. Dunn, Senior Attorney
Counsel, Washington,
D.C.




                        Page 18                           GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
Related GAO Products


              World Trade Organization: Observations on the Ministerial Meeting in
              Singapore (GAO/T-NSIAD-97-92, Feb. 26, 1997).

              U.S.-Japan Trade: U.S. Company Views on the Implementation of the 1994
              Insurance Agreement (GAO/NSIAD/GGD-97-64BR, Dec. 20, 1996).

              World Trade Organization: Status of Issues to Be Considered at Singapore
              Ministerial Meeting (GAO/T-NSIAD-96-243, Sept. 27, 1996).

              Textile Trade: Operations of the Committee for the Implementation of
              Textile Agreements (GAO/NSIAD-96-186, Sept. 19, 1996).

              Canada, Australia, and New Zealand: Potential Ability of Agricultural State
              Trading Enterprises to Distort Trade (GAO/NSIAD-96-94, June 24, 1996).

              National Export Strategy (GAO/NSIAD-96-132R, Mar. 26, 1996).

              International Trade: Implementation Issues Concerning the World Trade
              Organization (GAO/T-NSIAD-96-122, Mar. 13, 1996).

              Government Reorganization: Observations About Creating a U.S. Trade
              Administration (GAO/T-GGD-95-234, Sept. 6, 1995).

              State Trading Enterprises: Compliance With the General Agreement on
              Tariffs and Trade (GAO/GGD-95-208, Aug. 30, 1995).

              Government Reorganization: Issues Relating to International Trade
              Responsibilities (GAO/T-GGD-95-218, July 25, 1995).

              U.S.-Canada Free Trade Agreement: Factors Contributing to Controversy
              in Appeals of Trade Remedy Cases to Binational Panels (GAO/GGD-95-175BR,
              June 16, 1995).

              U.S.-China Trade: Implementation of Agreements on Market Access and
              Intellectual Property (GAO/GGD-95-61, Jan. 25, 1995).

              International Trade: Long-Term Viability of U.S.-European Union Aircraft
              Agreement Uncertain (GAO/GGD-95-45, Dec. 19, 1994).

              International Trade: Assessment of the Generalized System of Preferences
              Program (GAO/GGD-95-9, Nov. 9, 1994).




              Page 19                             GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
           Related GAO Products




           North American Free Trade Agreement: Structure and Status of
           Implementing Organizations (GAO/GGD-95-10BR, Oct. 7, 1994).

           Executive Office of the President: Major Procurements for Calendar Years
           1990 to 1993 (GAO/GGD-94-138FS, Sept. 16, 1994).

           The General Agreement on Tariffs and Trade: Uruguay Round Final Act
           Should Produce Overall U.S. Economic Gains (GAO/GGD-94-83A&B, July 29,
           1994).

           U.S. Trade Data: Limitations of U.S. Statistics on Trade With Mexico (GAO/
           T-GGD-93-25, Apr. 28, 1993).

           Export Promotion: Governmentwide Strategy Needed for Federal
           Programs (GAO/T-GGD-93-7, Mar. 15, 1993).

           Customs Service: Trade Enforcement Activities Impaired by Management
           Problems (GAO/GGD-92-123, Sept. 24, 1992).

           Export Promotion: Federal Programs Lack Organizational and Funding
           Cohesiveness (GAO/NSIAD-92-49, Jan. 10, 1992).

           International Trade: Priority Trade Damage Estimates Could Have Been
           Developed (GAO/NSIAD-91-236, Sept. 10, 1991).

           International Procurement: Problems in Identifying Foreign
           Discrimination Against U.S. Companies (GAO/NSIAD-90-127, Apr. 5, 1990).




(711283)   Page 20                            GAO/NSIAD-97-199R USTR’s Draft Strategic Plan
Ordering Information

The first copy of each GAO report and testimony is free.
Additional copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order
made out to the Superintendent of Documents, when
necessary. VISA and MasterCard credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office
P.O. Box 37050
Washington, DC 20013

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information on
how to obtain these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov




PRINTED ON    RECYCLED PAPER
United States                       Bulk Rate
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. G100
Official Business
Penalty for Private Use $300

Address Correction Requested