GAO Report: Better Management of Trade Programs Are Needed to Help Small Businesses Export

Study Makes The Case For Export Promotion Legislation

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Washington D.C., Aug 14, 2013 | DJ Jordan, Joel Hannahs (202-225-5821) | comments

The Government Accountability Office (GAO) released a new report today confirming that the federal government needs to better manage, collaborate and promote trade programs so that export resources can be more efficient, ultimately leading to more small business exports. The report also recommends that Congress have a stronger oversight role to ensure that agencies don't duplicate actions, which leads to a more efficient use of taxpayer funding. House Small Business Committee Chairman Sam Graves (R-MO) requested the report.

“This GAO report is further verification that federal trade agencies need better collaboration between our export programs so that small businesses can pursue new markets internationally,” said Chairman Graves. “Many of the federal assistance trade programs overlap and offer duplicative services, including mirroring the same efforts as many individual state trade offices. Currently, there are over 20 federal agencies that provide some, or all, of the steps in the export process. This can paint a very confusing and intimidating picture for small companies who often don’t have designated export officials or trade representatives on staff to navigate the process for their business.”

On May 9, Graves and Rep. Steve Chabot (R-OH) introduced legislation to reduce some of the key barriers and obstacles faced by small business exporters. The Export Coordination Act, sponsored by Graves, would establish stronger congressional oversight and coordination of the federal export promotion agencies. Graves' legislation was merged with Foreign Affairs Committee Ranking Member Rep. Eliot Engel’s (D-NY) Export Promotion Reform Act (H.R. 1409) during a Foreign Affairs subcommittee markup on June 26. The State Trade Coordination Act, sponsored by Chabot, would establish the framework to ensure that federal and state trade agencies work in unison to assist their local exporters. Both pieces of legislation were reported out of the Foreign Affairs Committee by unanimous voice vote on July 24.

A recent National Small Business Association study found that many small firms lacked information about how to proceed and are confused by the multitude of federal agencies involved. The report noted that “Today, the main barrier is a lack of information and an unclear understanding of where to start, a problem with a clear and doable solution.” The Graves-Engel Export Promotion Reform Act will help streamline the export process and provide better coordination among the federal export promotion agencies to make it easier for small companies to navigate the process and expand into new markets.

Key findings from the GAO Report:
• The interagency Trade Promotion Coordinating Committee (TPCC) neither reports nor compiles information on how federal export promotion resources align with government-wide priorities. As a result, decision makers lack a clear understanding of the total resources dedicated across the country and around the world by TPCC member agencies to priority areas, such as increasing exports by small- and medium-sized businesses.

• The Export Enhancement Act of 1992 requires the TPCC to identify overlap and duplication among export promotion programs. However, they have experienced difficulty in assessing the extent to which federal programs are duplicative because there is lack of clear understanding of the costs of implementing those programs and the activities they support.

• The TPCC last publicly reported a summary budget table in 2008. TPCC secretariat officials acknowledged that the TPCC agencies currently place little emphasis on displaying or discussing agencies’ resources in the National Export Strategy.

• The TPCC last compiled high-level data on member agencies’ budget authority in 2011, but this information is not useful for assessing resource allocations. To be useful, data should, among other things, be consistent and sufficiently complete for the intended purpose. However, the TPCC’s data are inconsistent across agencies and not detailed enough to facilitate an understanding or comparison of how resources are allocated among priorities.

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