Sunday, January 15, 2012

Will the USTR go away?

The President of the U.S. is seeking to bring in the Consolidation Authority Act which would give him the power to reorganise the federal government departments by merging and consolidating them. It is proposed to be used first in the field of trade and business.

This release from the office of the U.S. President summarises the proposal:
"The President will also lay out his first proposed use of that authority: consolidating six agencies into one more efficient department to promote competitiveness, exports and American business. The President knows this is a make or break moment for the middle class and those trying to reach it.  The President’s proposed reorganization would help small businesses grow and, in doing so, would help get more Americans back to work.

The President’s first focus under the Consolidation Authority Act would be to make it easier for America's small businesses – which are America’s job creators – to compete, export and grow.  

Currently, there are six major departments and agencies that focus primarily on business and trade in the federal government.  The six are: U.S. Department of Commerce’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.  

This is redundant and inefficient. Small businesses often face a maze of agencies when looking for even the most basic answers to the most basic questions. There is a whole host of websites, toll-free numbers and customer service centers that at times offer them differing advice. The result is a system that is not working for our small businesses.  

The President is proposing to consolidate those six departments and agencies into one Department with one website, one phone number and one mission – helping American businesses succeed. 

One Department: there will be one Department where entrepreneurs can go from the day they come up with an idea and need a patent, to the day they start building a product and need a warehouse, to the day they are ready to export and need help breaking into new markets overseas. 

The new Department will lead the development and implementation of an integrated, strategic, government-wide trade effort and have a focused capacity to help businesses grow and thrive."

The proposed move has been criticised citing the efficiency of the functioning of the USTR presently. Will the USTR whither away? India has a similar model of a combined agency - the Ministry of Commerce which deals with all matter relating to trade policy and implementation, including multilateral negotiations.

An interesting aspect of the rationale for the merging of the different agencies is the emphasis on the role Government has to play in furthering the interests of trade and domestic business interests in the global world.It visualises a proactive Government promoting American industry to boost exports and facilitate breaking into new market oversees. It is another pointer that while the WTO multi-lateral trading system does lay down the framework for reduction fo trade barriers and a globalised world, it does not imply that Governments should not play an assertive and interventionist role to promote domestic industry to compete in the international market. This assertive and interventionist role is definitely limited by the country's WTO commitments. However, there would be enough scope to creatively utilise this space.

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