Export Promotion: Mixed Progress in Achieving a Governmentwide	 
Strategy (04-SEP-02, GAO-02-850).				 
                                                                 
Ten years ago, to coordinate the activities of the various	 
federal agencies involved in export promotion and to ensure	 
better delivery of services to potential exporters, Congress	 
established the interagency Trade Promotion Coordinating	 
Committee (TPCC) under the Export Enhancement Act of 1992. Among 
other things, the act required the committee to develop a	 
governmentwide strategic plan that (1) establishes priorities for
federal activities in support of U.S. export activities and (2)  
proposes the annual, united federal trade promotion budget that  
supports the plan. TPCC's annual national export strategies	 
identify broad priorities for promoting U.S. trade, but they do  
not discuss agencies' specific goals or assess progress made. In 
its initial strategies, the committee identified 10  regionally  
dispersed priority markets for future trade promotion efforts,	 
but it did not discuss agencies' specific goals or report later  
on progress made in increasing exports to these markets. Shifting
to a regional approach 3 years later in its 1997 strategy, the	 
committee identified Central and Eastern Europe as a region where
U.S. government assistance to U.S. exporters would be important  
in increasing market share.  Again the strategy did not discuss  
agencies' specific goals nor did later strategies report on	 
progress made or even cover consistent topics from year to year. 
Without regular assessments of progress, it is not clear whether 
export promotion resources are being used most productively in	 
support of the strategy.  Furthermore, the committee has limited 
ability to align agency resources with its strategy. The	 
committee has made modest but inconsistent progress in		 
coordinating federal agencies' export promotion efforts. In its  
first national export strategy in 1993, the committee identified 
coordination weaknesses and recommended improvements, most of	 
which required interagency consensus to implement. Although many 
of its initial recommendations were implemented during the	 
committee's first few years, some have not been implemented--for 
example, the need for improved agency staff training and improved
trade information services to bring clarity to the export	 
process, as well as the need for expanded outreach and trade	 
education for new-to-export firms.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-850 					        
    ACCNO:   A04914						        
  TITLE:     Export Promotion: Mixed Progress in Achieving a	      
Governmentwide Strategy 					 
     DATE:   09/04/2002 
  SUBJECT:   Budgets						 
	     Committees 					 
	     Exporting						 
	     Federal agencies					 
	     Interagency relations				 
	     Strategic planning 				 

                                                                 
Export Promotion: Mixed Progress in Achieving a Governmentwide	 
Strategy (04-SEP-02, GAO-02-850).				 
                                                                 
Ten years ago, to coordinate the activities of the various	 
federal agencies involved in export promotion and to ensure	 
better delivery of services to potential exporters, Congress	 
established the interagency Trade Promotion Coordinating	 
Committee (TPCC) under the Export Enhancement Act of 1992. Among 
other things, the act required the committee to develop a	 
governmentwide strategic plan that (1) establishes priorities for
federal activities in support of U.S. export activities and (2)  
proposes the annual, united federal trade promotion budget that  
supports the plan. TPCC's annual national export strategies	 
identify broad priorities for promoting U.S. trade, but they do  
not discuss agencies' specific goals or assess progress made. In 
its initial strategies, the committee identified 10  regionally  
dispersed priority markets for future trade promotion efforts,	 
but it did not discuss agencies' specific goals or report later  
on progress made in increasing exports to these markets. Shifting
to a regional approach 3 years later in its 1997 strategy, the	 
committee identified Central and Eastern Europe as a region where
U.S. government assistance to U.S. exporters would be important  
in increasing market share.  Again the strategy did not discuss  
agencies' specific goals nor did later strategies report on	 
progress made or even cover consistent topics from year to year. 
Without regular assessments of progress, it is not clear whether 
export promotion resources are being used most productively in	 
support of the strategy.  Furthermore, the committee has limited 
ability to align agency resources with its strategy. The	 
committee has made modest but inconsistent progress in		 
coordinating federal agencies' export promotion efforts. In its  
first national export strategy in 1993, the committee identified 
coordination weaknesses and recommended improvements, most of	 
which required interagency consensus to implement. Although many 
of its initial recommendations were implemented during the	 
committee's first few years, some have not been implemented--for 
example, the need for improved agency staff training and improved
trade information services to bring clarity to the export	 
process, as well as the need for expanded outreach and trade	 
education for new-to-export firms.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-850 					        
    ACCNO:   A04914						        
  TITLE:     Export Promotion: Mixed Progress in Achieving a	      
Governmentwide Strategy 					 
     DATE:   09/04/2002 
  SUBJECT:   Budgets						 
	     Committees 					 
	     Exporting						 
	     Federal agencies					 
	     Interagency relations				 
	     Strategic planning 				 

******************************************************************
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GAO-02-850

                                       A

Report to Congressional Requesters

September 2002 EXPORT PROMOTION Mixed Progress in Achieving a
Governmentwide Strategy

GAO- 02- 850

Letter 1 Results in Brief 2 Background 4 The TPCC*s National Export
Strategies Do Not Identify Agencies* Specific Goals or Use of Resources 7

TPCC Has Had Modest Success in Coordinating Agency Programs 15 Agencies
Seek to Increase Small- and Medium- sized Enterprises* Export
Participation 19

Conclusions 21 Recommendations for Executive Action 21 Agency Comments and
Our Evaluation 21

Appendixes

Appendix I: Objectives, Scope, and Methodology 24

Appendix II: U. S. Agencies* Trade Promotion Services 27 Export Training
27 Developing Market Information 28 Trade Events 30 Trade Finance for
Major Projects 31 Advocacy 32

Appendix III: Budgets of Export Promotion Agencies in Constant 2001
Dollars (in Millions, Fiscal Years 1996 through 2001) 34

Appendix IV: FCS Overseas Staff by Country, Fiscal Years 1996 through 2001
35

Appendix V: FAS Overseas Staff by Country, Fiscal Years 1996 through 2001
38

Appendix VI: Comments from the Trade Promotion Coordinating Committee 40
Table Table 1: Export Promotion Services and Federal Providers 27 Figures
Figure 1: Agencies* Share of Federal Dollars Devoted to Export Promotion
Activities, Fiscal Years 1996 and 2002 5

Figure 2: Distribution of Foreign Commercial Service Staff in G- 6
Countries, BEMs, and All Other Countries with FCS Presence, Fiscal Years
1996 and 2001 11

Figure 3: Distribution of Foreign Agricultural Service Staff in G- 6
Countries, BEMs, and All Other Countries with FAS Staff Presence, Fiscal
Years 1996 and 2001 12

Abbreviations

BEM Big Emerging Market DOC Department of Commerce EcoLinks Eastern
European Partnership for Environmentally Sustainable Economies

EU European Union Eximbank U. S. Export- Import Bank FAS Foreign
Agricultural Service FCS Foreign Commercial Service G- 6 Group of Six
industrialized countries GTN Global Technology Network OMB Office of
Management and Budget OPIC Overseas Private Investment Corporation SBA
Small Business Administration SME Small- and Medium- sized Enterprises TDA
Trade and Development Agency TPCC Trade Promotion Coordinating Committee
USAID U. S. Agency for International Development USDA U. S. Department of
Agriculture USTR U. S. Trade Representative

Lett er

September 4, 2002 The Honorable Christopher S. Bond Ranking Minority
Member Committee on Small Business and Entrepreneurship United States
Senate

The Honorable Donald A. Manzullo Chairman Committee on Small Business
House of Representatives

Ten years ago, to coordinate the activities of the various federal
agencies involved in export promotion and to ensure better delivery of
services to potential exporters, Congress established the interagency
Trade Promotion

Coordinating Committee under the Export Enhancement Act of 1992 (P. L.
102- 429). Among other things, the act required the committee to develop a
governmentwide strategic plan that (1) establishes priorities for federal
activities in support of U. S. export activities and (2) proposes an
annual, unified federal trade promotion budget that supports the plan. The
nine federal agencies that play important roles in assisting U. S. firms
to export or invest overseas were to be part of the committee that would
develop the plan and set a unified budget. 1 These nine agencies* export
promotion budgets totaled about $2. 5 billion in fiscal year 2002. The
committee developed the first national export strategy in 1993 and has
generally

reported annually since then. As you requested, we reviewed how the Trade
Promotion Coordinating Committee has carried out these directives.
Specifically, we assessed (1) whether the committee*s strategy has
established export priorities, assessed progress made toward achieving the
strategy*s priorities, and proposed an alignment of federal resources in
support of these priorities; and (2) whether the committee has made
progress in coordinating the

1 Nine federal agencies play an important role in assisting U. S. firms to
export or invest overseas: the Departments of Agriculture, Commerce, and
State; the Office of the U. S. Trade Representative; the U. S. Export-
Import Bank; the Trade and Development Agency; the Overseas Private
Investment Corporation; the Small Business Administration; and the Agency
for International Development. These agencies provide a range of export
services,

including training potential exporters, identifying trade leads,
conducting trade missions, offering trade finance and insurance, and
providing government- to- government advocacy and policy support. Another
10 agencies that contribute to export promotion are also members of the
Trade Promotion Coordinating Committee.

various agencies* export promotion programs. In addition, we also
identified how the various agencies are including small- and medium- sized
businesses in their export promotion programs. To address these questions,
we reviewed the Trade Promotion Coordinating Committee*s national export
strategies for 1993- 1998, 2000, and 2002 and its coordination efforts
during the past 10 years. 2 To examine how the committee developed the
export strategy and coordinated various agencies* export promotion
programs, we reviewed the committee*s strategy for Central and Eastern
Europe contained in the 1997 national export strategy. We visited five
countries in this region including two of the

designated *big emerging markets* 3 *Poland and Turkey* as well as
Croatia, a country in the early stages of making a transition to a market
economy; and the Czech Republic, a country in a more advanced transitional
phase. For perspective on the nature of U. S. programs in a more mature
market, we visited and reviewed U. S. export promotion programs in
Germany. To assess how small businesses have participated in these federal
export programs we obtained data on agencies* programs

dedicated to small- and medium- sized businesses. Appendix I contains a
more detailed description of our scope and methodology.

Results in Brief The Trade Promotion Coordinating Committee*s annual
national export strategies identify broad priorities for promoting U. S.
trade, but they do not

discuss agencies* specific goals or assess progress made. In its initial
strategies, the committee identified 10 regionally dispersed priority
markets for future trade promotion efforts, but it did not discuss
agencies* specific goals or report later on progress made in increasing
exports to these markets. Shifting to a regional approach 3 years later in
its1997

strategy, the committee identified Central and Eastern Europe as a region
where U. S. government assistance to U. S. exporters would be important in
increasing market share. Again the strategy did not discuss agencies*

specific goals nor did later strategies report on progress made or even
cover consistent topics from year to year. Without regular assessments of
2 Change in the national export strategy reporting date resulted in no
1999 strategy, and the Trade Promotion Coordinating Committee did not
prepare a 2001 strategy. 3 The big emerging markets are Argentina, Brazil,
the Chinese Economic Area (China, Hong Kong, and Taiwan), Indonesia,
India, Mexico, Poland, South Africa, South Korea, and Turkey.

progress, it is not clear whether export promotion resources are being
used most productively in support of the strategy. Furthermore, the
committee has limited ability to align agency resources with its strategy.
Nonetheless, the departments of Commerce and Agriculture did realign staff
in support of most of the targeted markets.

The committee has made modest but inconsistent progress in coordinating
federal agencies* export promotion efforts. In its first national export
strategy in 1993, the committee identified coordination weaknesses and
recommended improvements, most of which required interagency consensus to
implement. While many of its initial recommendations were implemented
during the committee*s first few years, some have not been

implemented * for example, the need for improved agency staff training and
improved trade information services to bring clarity to the export
process, as well as the need for expanded outreach and trade education for
new- to- export firms. In its May 2002 national export strategy, the
committee recognized the need to complete these early initiatives to
clarify export processes and programs in order to better service potential
exporters, but the strategy did not specify how its goals were to be

accomplished. Unless the committee follows through consistently on its
initiatives, potential U. S. exporters will continue to find the export
process confusing.

Six export promotion agencies dedicate part of their programs to small-
and medium- sized businesses. The Department of Commerce reports that
almost 91 percent of firms it helped at foreign posts and 25 percent of
firms that received advocacy assistance were small- and medium- sized
businesses. The Small Business Administration focuses exclusively on this
customer base. According to data provided by the agencies, almost 18
percent of the value of the U. S. Export- Import Bank*s fiscal year 2001
loans, guarantees, and insurance, and 48 percent of the Trade and
Development Agency*s total fiscal year 2000 obligations went to small- and
medium- sized businesses. The Overseas Private Investment Corporation
stated that 40 percent of its programs in fiscal year 2000 involved small-
and mediumsized

businesses. Although the U. S. Agency for International Development does
not track the percentage of its programs that go to such businesses, two
of their programs* the Global Technology Network and EcoLinks* assist
smaller businesses. In this report, we are recommending that the Chairman
of the Trade Promotion Coordinating Committee ensure that its national
export strategies consistently (1) identify specific goals established by
the

agencies within the strategies* broad priorities, (2) identify how
agencies* resources are allocated in support of their specific goals, and
(3) analyze the progress made in addressing the recommendations in the
committee*s prior annual strategies.

We obtained comments from the Committee, and it agreed with our findings
(see app. VI).

Background The Trade Promotion Coordinating Committee (TPCC) is a cabinet-
level interagency committee chaired by the Secretary of Commerce. It began
meeting in 1993, and it has met at least once annually, except during an
18- month period between 1999 and 2001. The TPCC also encouraged the
formation of various interagency staff- level working groups. These groups
have met or communicated more frequently. The TPCC has a staff of three or
four Commerce trade professionals, located in Commerce*s International
Trade Administration. The TPCC has no independent budget and no specific
authority to direct its member agencies.

Key Agencies* Nine key TPCC member agencies provide a range of specific
trade

Responsibilities promotion programs for exporters. The Departments of
Commerce and

Agriculture identify export opportunities and conduct trade promotion
activities. The U. S. Export- Import Bank (Eximbank) and the Overseas
Private Investment Corporation (OPIC) help businesses participate in
riskier markets by providing financing and insurance for exports or

development projects. The Small Business Administration (SBA) provides
export training and loans for small- and medium- sized businesses desiring
to export. The U. S. Trade Representative (USTR) and the Department of
State seek to create and maintain open markets for U. S. exports and
investments. Although it is not actually a trade agency, the U. S. Agency
for International Development (USAID) seeks to promote economic growth;
assist developing country governments make economic reforms and identify
changes to laws, regulations, and banking systems; and provide firm- level
assistance to small businesses, thus allowing these countries to become
more attractive trade and investment partners to the United States. In
developing country markets, basic infrastructure and capital equipment are
also essential to assist market growth. The U. S. Trade and Development
Agency (TDA) supports the planning of infrastructure development and

trade capacity building in such areas as energy or transportation systems,

with the expectation that U. S. exporters will later have opportunities to
bid on these projects for which TDA has provided support.

Distribution of the Export Total export promotion funding (excluding that
for OPIC and USAID) 4 Promotion Resources declined slightly, from nearly
$2.4 billion to $2 billion between fiscal years

Among TPCC Agencies 1996 and 2001, but rose to $2. 5 billion in fiscal
year 2002. The resource

allocations among TPCC agencies did not change significantly over the last
5 years. The Department of Agriculture continued to have the largest share
of total export promotion funding in fiscal year 2002, as it did in fiscal
year 1996. (See fig 1.) Eximbank and the Department of Commerce still have
the second and third largest funding levels among the agencies.

Figure 1: Agencies* Share of Federal Dollars Devoted to Export Promotion
Activities, Fiscal Years 1996 and 2002

Export- Import

Export- Import

Bank

Bank

Other Other



11%  Commerce



12%  Commerce

8% 8%

30% 

39% 42%  Agriculture 50%  Agriculture

FY 1996 FY 2002

Other includes: Trade and Development Agency - 3%; Other includes: Trade
and Development Agency - 2%;

Small Business Administration - 0%; State - 4%; Small Business
Administration - 0%; State - 5%;

U. S. Trade Representative 1% U. S. Trade Representative 1%

4 USAID*s primary mission is development.

During this period, the funding levels of the two agencies whose overseas
staff identify and develop export opportunities for U. S. firms seeking to
export* Commerce*s Foreign Commercial Service (FCS) and Agriculture*s
Foreign Agricultural Service (FAS)* increased. The FCS budget increased
about 14 percent, and the FAS budget increased by about 8 percent between
fiscal years 1996 and 2002. However, beginning in 1998, these

agencies* administrative costs increased due to the implementation of the
Department of State*s Interagency Cost Sharing System. According to
Commerce, these costs made fewer funds available for export services.

Limits of TPCC Authority The Export Enhancement Act of 1992 requires that
the TPCC develop and implement an annual national export strategy that,
among other things,

 establishes a set of federal priorities supporting U. S. exports and
explains their rationale;

 develops a plan to align federal programs with established priorities;
and

 proposes an annual unified federal trade promotion budget. The act did
not provide the TPCC with specific authority to create a unified export
promotion budget, 5 which would include the reallocation of agency
resources to support the national export strategies. In practice, the TPCC

 facilitates interagency discussions of trade issues,  coordinates
interagency responses to administrative or congressional initiatives, and

 prepares the mandated national export strategy. 5 Based on the
provisions of the act, we considered the annual unified federal trade
promotion budget as one that coordinates, consolidates, and prioritizes
funding of all federal agency export promotion and financing programs and
activities.

The TPCC*s National The TPCC*s annual national export strategies have
identified broad

Export Strategies Do priorities, but they have not discussed agencies*
specific export promotion goals, such as increasing exports in a TPCC
targeted market, or assessed

Not Identify Agencies* progress made toward achieving the committee*s
broad priorities. The Specific Goals or Use TPCC has limited ability to
affect the alignment of export promotion

of Resources resources across agencies, but some agencies have aligned
resources to

support the TPCC*s broad priorities. Strategies Identify Broad

The TPCC*s annual strategies, called *national export strategies,*
describe Priorities but Not Agencies* export promotion efforts and outline
broad priorities. However, they do not Specific Goals

identify specific goals and associated agency responsibilities. The first
several strategies identified numerous markets and sectors of export
promise as priorities. For example, the 1994 national export strategy
identified a broad set of 10 markets, called the big emerging markets
(BEM), where the TPCC expected exports to grow over the next several
decades. In 1995, the strategy gave additional attention to the
traditional export markets of Japan, Canada, and Western Europe, and 3
years later the strategy expanded its targets further, emphasizing
increasing exports to nontraditional markets in Latin America and Asia.
However, none of these

strategies discussed agencies* specific goals for targeted markets or
regions or outlined various agencies* responsibilities in addressing goals
over the coming years.

One of the regions identified as having promise as a market for U. S.
exporters, for example, was Central and Eastern Europe. Citing Poland*s
and Turkey*s rapid transitions to market economies, their pent- up demand
for western goods, and their desire to join the European Union (EU), the
1997 strategy noted that these countries drove regional trade and,
together with the Czech Republic and Hungary, were regional focal points
for U. S. trade and investment. It identified the most competitive sectors
for U. S.

companies as well as regional barriers to U. S. exports. Later strategies
also discussed broad trade objectives. Again, however, they did not
identify specific goals or agency responsibilities in implementing the
strategy.

TPCC Has Not Assessed The TPCC*s successive strategies lack continuity in
addressing identified

Progress issues, and they have not assessed progress made toward achieving
the

TPCC*s broad export priorities. For example, the 1997 strategy noted that
the United States was losing market share in Eastern Europe 6 to the EU,
but the 1998 strategy did not report on any changes in this condition.
Instead, it discussed U. S. market share in the EU countries. Nor did the
1998 strategy update specific objectives for Central and Eastern Europe
identified earlier, such as addressing bribery, negotiating for
international

product standards in Poland, or identifying specific barriers to trade in
Turkey. Rather, the 1998 strategy focused on Europe and the challenges of
competing in the EU market. The next strategy, for 2000, did not discuss
East European markets but highlighted the opportunities in China. The 2002
strategy did not specifically discuss China.

The TPCC has been unable to identify common performance measures because
it has not achieved consensus on how agencies should measure export
program results. Moreover, it has not reviewed agencies* annual
performance reports under the Government Performance and Results Act of
1993. This act mandates that the Office of Management and Budget (OMB)
require federal agencies to develop performance measures and

assess performance. Since 1994, the TPCC has called for the development of
common measures to evaluate trade promotion performance. The TPCC
identified three common measures of success* the amount of new exports,
the number of new jobs, or the value of sales resulting from exported
services* to help assess agencies* export promotion programs.

However, the TPCC*s 2000 national export strategy noted that generally the
indicators that each agency developed to measure its performance differed
from those of other agencies, as well as from the cross- cutting measures
developed for prior TPCC reports. Without common indicators, it is not

possible to trace performance over time in achieving TPCC priorities. The
overall effect is that it is not clear whether federal export promotion
resources are being used most productively.

6 This includes the Central European countries of Poland, Hungary, the
Czech Republic, Slovakia, Romania, Bulgaria, Estonia, Latvia, Lituania,
Slovenia, Croatia, BosniaHerzegovina, Macedonia, Yugoslavia (Serbia and
Montenegro) Albania, and Turkey.

TPCC Has Limited Ability to The TPCC has sought to move toward developing
a unified federal trade

Align Agency Resources promotion budget and has worked with OMB to
participate in the budget

with Its Strategy process. However, with no authority to reallocate
resources among the

agencies and occasional agency resistance to its guidance, the TPCC has
provided limited direction over the use of export promotion resources used
to support the strategy. Moreover, the most dramatic resource changes
occurred within its own agency, Commerce, but even Commerce did not fully
support all the targeted markets. Finally, resource allocations have been
affected by other factors, such as foreign policy initiatives, the need to
provide broad country coverage, and the agencies* emphasis on pursuing
export opportunities in the most accessible overseas markets.

TPCC Sought to Work with The TPCC has sought to propose a unified federal
trade promotion budget OMB to Influence Resource by making recommendations
to the President, through OMB, on selected Allocations export promotion
budget matters. The TPCC also obtained OMB approval to screen member
agencies* high- priority trade promotion initiatives in 1999; however,
this effort was limited in that it highlighted only individual agency
priorities and did not serve as an examination of how agencies* trade
promotion programs and budgets overall were most productively

used to support the strategy. Agencies have continued to submit their
proposed budgets separately to OMB, and agency representatives told us
that their agencies would resist any TPCC *clearance* of their budgets.
For example, in 1999, USAID decided not to participate in the TPCC budget
reviews, even after representatives of the TPCC Chairman specifically
requested that it do so. USAID representatives with whom we spoke did

not view their programs as having a commercial application, although some
TPCC member agencies consider some types of USAID technical assistance,
such as energy or environmental projects, as possible precursors to
potential exports of U. S. services.

The TPCC indicated to its members that the use of this process could more
likely result in favorable funding decisions; however, OMB was not always
responsive to TPCC recommendations. For example, of 10 items submitted by
the TPCC to OMB for funding, only 2 received full funding, 4 received
partial funding, and 4 were not funded. The TPCC has not consistently used

this process and did not submit a list of priorities to OMB in 2001 or
2002.

Staffing Resources Shifted Based on the TPCC*s strategy of targeting big
emerging markets, we to Targeted Markets

analyzed the shift in staffing allocations to these markets. 7 Generally,
FCS and FAS have shifted their staffing allocations to support TPCC-
identified priority markets. For example, in fiscal year 1996, 32 percent
of FCS overseas staff were located in the BEMs. In the same year, 23
percent of overseas staff were located in the group of industrialized
countries called

the Group of Six (G- 6) countries (to exclude the United States). 8 In
fiscal year 2001, the distribution changed to 37 percent in the BEMs and
17 percent in G- 6 countries. (See fig. 2.)

7 Movement of staff to overseas posts can take several years to complete.
8 The G- 6 countries are Canada, France, Germany, Italy, Japan, and the
United Kingdom.

Figure 2: Distribution of Foreign Commercial Service Staff in G- 6
Countries, BEMs, and All Other Countries with FCS Presence, Fiscal Years
1996 and 2001

Other Other

Countries Countries

413 571

G- 6 G- 6

23% 17%

Countries Countries

209 206

45% 46%

BEM

37%

BEM

32%

Countries Countries

293 465

FY 1996 total staff - 912 FY 2001 total staff - 1, 245 Source: Department
of Commerce.

The distribution of FAS*s staff among G- 6 countries, BEM countries, and
all other countries with FAS offices also shifted between fiscal years
1996 and 2001. In fiscal year 1996, 26 percent of FAS staff in overseas
offices were located in BEM countries, and 22 percent were in G- 6
countries. In fiscal year 2001, the distribution changed to 29 percent in
BEM countries and 21 percent in G- 6 countries. (See fig. 3.)

Figure 3: Distribution of Foreign Agricultural Service Staff in G- 6
Countries, BEMs, and All Other Countries with FAS Staff Presence, Fiscal
Years 1996 and 2001

Other Other

Countries Countries

138 122

G- 6 G- 6

22%

Countries

21%

Countries

57 51 52%

50% 26%

BEM

29%

BEM Countries

Countries

67 71 FY 1996 total staff - 262 FY 2001 total staff - 244

Source: Department of Agriculture.

With respect to the TPCC priority markets that we visited, Poland and
Turkey, Commerce*s FCS staff increases have been at lower levels. In its
1997 national export strategy, the TPCC noted that the United States was
losing market share in some of the BEMs and directed that, where resources
allow, the TPCC agencies target the more promising of these markets. It
identified Poland as one of four BEMs with the greatest market potential.
Commercial staff in Poland initially rose from 9 to 18 between

fiscal years 1996 and 1997; however, the Commerce Inspector General, noted
in a 1997 report that this level was not sufficient. The Inspector General
reported that Poland did not get increased resources, like other BEMs did,
because FCS headquarters did not consider European countries

a priority. 9 In its report to the Congress in September 2001, the
Inspector General citing declines in exports from the United States to
Poland, recommended that the post develop a missionwide strategy that
reflects U. S. priorities and objectives. 10 At the time of our visit in
2002, the FCS post

staff level was 14. Nor did Commerce significantly increase staffing in
Turkey, the other BEM in our study of the TPCC*s 1997 strategy for Central
Europe, where FCS staff levels fluctuated from 13 to 15 staff between
fiscal years 1996 and 2001, and a key position was vacant for more than a
year.

Other Factors Affect Other factors, such as foreign policy initiatives;
the need to provide

Resource Allocations minimum coverage for a broad set of countries; and
agency emphasis on pursuing exports in open, accessible foreign markets,
have also affected

the decisions that agencies make regarding resource allocations. In
response to foreign policy initiatives, agencies have reallocated staff
overseas and established offices, as illustrated by the following
examples.

 In 1994, Congress directed the executive branch to develop an Africa
trade and development policy, 11 and in 2000 Congress enacted the African
Growth and Opportunity Act (P. L. 106* 200, title I). The act offers trade
and other economic benefits to sub- Saharan countries that are committed
to certain economic reforms. As a result, the Trade and

Development Agency requested funding for a training initiative in Nigeria.
Moreover, FCS increased its staffing level at its offices in subSaharan
Africa. For example, FCS opened an office in Ghana in fiscal year 2000. In
fiscal year 2002, FCS expects to increase staffing in Ghana

and plans to open an office in Senegal.  In 1999, TDA and OPIC
established the Caspian Finance Center in Turkey. The center supports two
national interests as well as offers

opportunities for U. S. businesses. First, the development of the rich
Caspian Sea energy reserves estimated to be 178 billion barrels or more of
oil would reduce U. S. reliance on more volatile sources of oil; and

9 U. S. Department of Commerce, *US& FCS Poland: Effective Post Needs
Attention to Certain Management Issues,* Inspection Report No. IPE- 9288
(Washington, DC: Apr. 22, 1997). 10 U. S. Department of Commerce, Office
of the Inspector General, *Semiannual Report to the Congress, April 1 to
September 30, 2001.* 11 The Uruguay Round Agreements Act (P. L. 103- 465).

second, the transport of oil over a western route through Turkey would
economically benefit this vital U. S. ally. One staff person from both
these agencies shares space with FCS in Ankara to help U. S. companies
identify, evaluate, and finance commercially viable projects in the

region.  In 1999, the executive branch pledged to help stabilize and
revitalize southeastern Europe by developing a strategy for trade and
investment in the region. To support the President*s regional initiative,
OPIC and TDA, with TPCC support, have had full- time regional
representatives in Zagreb since about March 2000, and Commerce has
increased its staff

there by one. The office serves as a local point of contact, information,
and support for U. S. investors in the region.

In addition, both FCS and FAS have had to spread their overseas staffing
to cover a broad range of countries. During fiscal years 1998 through
2001, Commerce*s FCS opened 21 new offices overseas* many in the newly
independent former Soviet states and African countries where export
markets are in the early stages of development. During the same time
period, Agriculture*s FAS opened four offices but closed five offices
overseas, with an overall decline of nearly 7 percent in the total number
of staff located overseas. (App. V contains the number of staff at FCS
offices

by country from fiscal year 1996 to fiscal year 2001. App. VI contains the
number of staff at FAS offices by country during the same fiscal years.)

Finally, to meet U. S. exporters* market preferences and increase exports,
FCS has maintained relatively high staff levels in more mature markets
that have open, accessible, and regularized trading relationships,
compared to the often more difficult TPCC- targeted developing country
markets, according to an FCS official. FCS decreased staff levels in three
of the six

G- 6 markets between fiscal years 1996 and 2001, but 2001 staffing levels
are higher in each of the G- 6 countries than in six of the BEMs. For
example, Argentina, Hong Kong, Poland, South Africa, South Korea, and
Turkey each have fewer staff than Italy, the country with the lowest staff
level among the G- 6 countries. Moreover, staff levels have increased

dramatically in the United Kingdom and Canada* where the number of FCS
staff grew by 63 percent and 33 percent, respectively.

TPCC Has Had Modest The TPCC has improved interagency coordination in many
areas, but as it Success in

recognized in its May 2002 national export strategy, it has not completed
implementing several of its early initiatives to coordinate export
promotion Coordinating Agency

programs aimed at better delivery of federal export services. The TPCC has
Programs

improved the delivery of export services by collocating export finance
services and establishing a network to assist U. S. businesses in
addressing barriers to trade. However, the TPCC did not complete its
efforts to clarify and make more readily available the numerous resources
available to exporters, in part because the TPCC did not consistently meet
at the

Cabinet level to address these issues. In October 2001, the committee
reconvened at the cabinet level to readdress these issues, and it is
currently working to alleviate exporters confusion over the export process
by (1)

instituting cross- agency staff training, (2) improving the dissemination
of trade information, and (3) improving outreach to new- to- export
businesses. Overall, we found that, for overseas export promotion
activities in the countries we visited, FCS staff serve as focal points in
coordinating other agency efforts.

Progress Made With interagency cooperation, the TPCC achieved some early
successes in coordinating member agencies* export promotion activities, as
the following examples show.  The TPCC recommended the establishment of
an *advocacy coordinating network* to develop a system of high- level
government

advocacy in coordination with the private sector, for U. S. firms seeking
contracts from other governments. Created in 1993, this advocacy center is
a unit within Commerce and functions as a coordinated, interagency effort.

 The TPCC recommended that the agencies work together to create *one-
stop shops* so that exporters could receive assistance from several
agencies in one location. In 1994, the TPCC established a network of U. S.
Export Assistance Centers that grew to 19 Centers by 1999. The

Centers are staffed by Commerce, the SBA and, in some cases, the Eximbank
to provide centralized export assistance.

 The TPCC recommended that the Eximbank and SBA streamline their pre-
export Working Capital programs to make them more customer focused and to
take advantage of the agencies* comparative strengths. 12 In 1994, the
agencies began the process of sharing the coverage of their similar loan
programs and established a network of private sector lenders to support
small businesses.  The TPCC recommended that the export promotion
agencies create a

country commercial plan that combined disparate TPCC agency documents into
one coordinated country report on commercial activities. This led to the
creation of *country commercial guides* for prospective exporters or
investors to use.  More recently, in 1998, the TPCC developed a
coordinated response to the Asian financial crisis, in response to
direction from executive branch

officials. Progress Slowed The TPCC has not completed its original efforts
to streamline the

numerous federal export services available to exporters, in part, because
the TPCC did not consistently meet at the cabinet level to address these
issues. From June 1999 through October 2001, the TPCC did not meet at the
cabinet level and, as a result, the TPCC was less active in coordinating
agency efforts. During this period some staff- level working groups
continued to address trade promotion issues and work on publishing the
national export strategy, but they were not able to complete work
implementing the earlier recommendations. Key issues continuing to need
resolution are:

 TPCC identified the need to have cross- agency training so that agency
staffs would be knowledgeable enough about the export promotion programs
of the other agencies to explain them to potential exporters. In 1999, the
TPCC requested but did not receive funding from OMB for

such training at overseas posts. At the five overseas posts that we
visited, several of the staff that are responsible for providing U. S.
firms with information on exporting said that they are not fully familiar
with other agencies* programs. Most FCS domestic and overseas staff
acknowledge the need for training to better understand the needs of

12 SBA provides Export Working Capital loans for amounts below $1 million;
the Eximbank provides Export Working Capital Loans for amounts above $1
million.

exporters, and FCS is attempting to institute an exchange program to
address this issue. However, cross- agency training has not been
systematically conducted. The national export strategy for 2002,

released in May 2002, renews the 1993 call to improve cross- training
among TPCC agencies in order to provide better service for U. S.
exporters.

 The TPCC has recognized that improvements were needed in the accuracy,
acquisition, and dissemination of information available to exporters. To
provide this information, 19 TPCC agencies created

Internet Web sites that identify trade assistance programs and in some
cases export leads. However, according to the TPCC survey and focus
groups, businesses have found these sites to be too numerous, difficult,
and time- consuming to navigate. (See app. III for descriptions of
programs that provide trade leads.) Moreover, some of the overseas FCS
staff told us that some U. S. firms get frustrated when directed to
another

agency for assistance. The TPCC*s 2002 national export strategy addresses
this difficulty, stating that a new TPCC task force is working to simplify
and consolidate the various trade information Web sites.

 The TPCC was also unable to coordinate training programs for new-
toexport firms. Our 2001 report 13 noted that the TPCC was unaware of
duplicative, new- to- export training programs that the U. S. Export

Assistance Centers provided. One of these programs was a new initiative
within the Department of Commerce that had not been specifically
coordinated with the TPCC.

Recent TPCC Initiatives In October 2001 the TPCC met and recognized the
need to continue work on problems identified earlier, as well as to
examine some new issues. The TPCC conducted a survey of U. S. businesses
and found that the export process was still confusing to potential
exporters. To address these issues, the TPCC made recommendations in its
2002 strategy, several of which were similar to those made in the TPCC*s
earlier strategies.

13 Our report, Export Promotion: Government Agencies Should Combine Small
Business Export Training Programs, GAO- 01- 1023 (Washington, D. C.: Sept.
21, 2001), recommended that the TPCC eliminate duplication of export
training services and that the U. S. Export Assistance Centers follow up
on new- to- export training participants to better identify the training
needs of small businesses.

Agency Coordination Was TPCC agencies generally coordinated their overseas
export promotion Good at Overseas Posts

activities through contacts with the FCS. In the countries we visited, FCS
staff served as focal points to coordinate various agencies* day- to- day
export activities. In addition to supporting Commerce programs, they
worked in support of other U. S. trade agencies, such as TDA, the

Eximbank, and OPIC, as well as visiting trade missions from various states
and visitors from other U. S. agencies. Typical FCS assistance provided to
U. S. government or business visitors included preparing country
commercial briefings, researching market sectors, scheduling and attending
appointments, arranging for transportation and translation services, and
generally assisting in representing U. S. trade interests overseas.
Overseas U. S. business representatives with whom we spoke

cited numerous ways in which FCS and other embassy staff worked together
to overcome the many foreign bureaucratic obstacles they encountered in
trying to export. In the countries we visited, for example, FCS staff did
the following:

 FCS staff in Poland coordinated eight visits by TDA officials, three
visits by Department of Commerce officials, a visit by Eximbank officials,
one trade association, two state delegations, and a presidential visit in
2001. FCS staff in Turkey coordinated the attendance at a security summit
of the President and the secretaries of State and Energy in fiscal year
2000.

 FCS staff in Turkey prepared background information on the impact of
proposed Turkish policy on U. S.- developed energy projects for the
administration and edited a paper on telecommunication issues for
Commerce*s Market Access and Compliance Division. They also assisted TDA
and its contractors in arranging meetings with high- level Turkish
officials, providing them with information on potential projects.

 Czech Republic FCS staff arranged a trade event in Prague for the
Governor of Pennsylvania that included 36 U. S. firms in 2001. While we
found that the various agencies* overseas staffs would benefit from cross-
agency training to understand various agencies* programs, we also found
that these agencies collaborated on issues that affected

exporters, such as market entry, regulation changes, and contract bidding.
As members of the ambassadors* interagency country teams, commercial
officers shared information about U. S. export activities and became aware
of broader political and economic concerns affecting the export

environment. In the countries that we visited, these teams met at least
weekly. FCS staff, embassy economic officers, agricultural attaches, and

embassy political/ military officers were aware of each other*s in-
country activities and felt that they worked well together. Agencies Seek
to

The Department of Commerce, SBA, Eximbank, TDA, OPIC, and USAID have
programs that assist small- and medium- sized enterprises (SME). 14
Increase Small- and According to the TPCC, SMEs may have limited resources
to address the Medium- sized complex issues associated with exporting, and
U. S. government agencies Enterprises* Export

can help fill this information gap. These U. S. government agencies can
Participation provide market information, guarantee export loans, identify
business opportunities, fund risk and credit insurance, and advocate on
behalf of U. S. firms.

Commerce and SBA focus on providing help to SMEs as their core business.
Commerce data show that for the five countries we visited, SMEs
represented almost 91 percent of the firms that foreign posts helped
during fiscal year 2001. Commerce*s Advocacy Center coordinates the
actions of TPCC agencies to work on behalf of U. S. firms dealing with
foreign governments, complex bidding rules, and regulatory regimes. 15
From November 1993 through fiscal year 2002, 16 the Advocacy Center
reported 685 successes, 17 of which 173 (25 percent) involved SMEs. The
Advocacy Center valued the contracts won by SMEs at $3. 9 billion (about 3
percent).

SBA provides credit and capital assistance, procurement and government
contracting help, and entrepreneurial development assistance to small
business exporters. To promote small business exports, the SBA offers
three export loan guarantee programs: the Export Working Capital Program,
the International Trade Program, 18 and the Export Express

14 Small- and medium- sized enterprises are those that employ fewer than
500 employees. 15 This assistance can take the form of high- level
official visits, letters to foreign decision makers, and coordinated
action by U. S. government agencies for businesses of all types and sizes.
16 Fiscal year 2001 and 2002 data are year to date due to the lag time for
determining results of advocacy actions.

17 The Advocacy Center counts as a success those procurement bids won by
the U. S. firm. 18 The SBA*s International Trade Program provides small
businesses involved in exporting a guarantee up to $1. 25 million for a
combination of fixed asset financing and working capital.

Program. 19 According to SBA, in fiscal year 2001 it guaranteed 425 export
loans worth an estimated $167 million, or about 1.8 percent of the total
loan guarantees of $9.1 billion provided by the agency. The Eximbank
provides SMEs with pre- export financing from commercial lenders through
its Export Working Capital Program. According to the Eximbank, almost 18
percent of the value of its fiscal year 2001 loan authorizations (more
than $1. 6 billion) went to SMEs, and almost 80 percent of its overall
number of loans in fiscal year 2001 loans benefited SMEs. 20 Based on
Eximbank data, the value of fiscal year 2001 Export Working Capital loans
that benefited SMEs averaged about $1. 5 million. The Eximbank also issued
1,723 export credit insurance policies to small businesses in fiscal year
2001. These represented 98 percent of Eximbank insurance policies and
totaled more than $900 million. As for TDA, all consultant contracts for
desk studies, definitional missions, and feasibility studies are with
either small- or medium- sized enterprises. TDA reported that small- and
medium- sized business participation in its programs for fiscal year 2000
amounted to 48 percent of total TDA obligations.

OPIC programs also involved small business in 40 percent of its fiscal
year 2000 programs. According to OPIC, it funded 16 projects involving
SMEs in fiscal year 2000 totaling $265 million.

USAID*s technology transfer programs* the Global Technology Network and
the Eastern Europe Partnership for Environmentally Sustainable Economies
(EcoLinks)* also have SME participation. Both programs provide trade leads
for SMEs, and EcoLinks provides travel and project

grants. (See app. III for a description of agencies* various export
promotion programs.)

19 The Export Express Program provides export financing to small
businesses whose borrowing needs are too small to be profitably met by
lenders using the Export Working Capital and the International Trade loan
programs.

20 The Eximbank is required to provide not less than 10 percent of its
aggregate loans, guarantees, and insurance to small businesses.

Conclusions Our review of the TPCC*s national export strategies indicated
that the strategies have not provided clear and consistent guidance over
federal agencies export promotion programs and that some of the problems
identified remain to be fixed. The TPCC has not used its annual export
strategies to identify specific agencies* goals and responsibilities or to
examine how agencies* resources are aligned, and it is not clear whether

export promotion resources are being used most productively. In its 2002
strategy, the recently energized TPCC identified several key areas for
improved agency coordination, some of which address problems initially
recognized in the TPCC*s 1993 strategy, including the need for (1) cross

training agency personnel so they are knowledgeable about other agency
programs, (2) improving exporters* access to timely and accurate trade
information, and (3) expanding outreach and trade education for new-
toexport

firms. Without identification in the national export strategy of how these
renewed initiatives are to be accomplished, it is not clear how the TPCC
will overcome the problems experienced previously. Recommendations for

To assist federal agencies in making the best use of federal export
Executive Action

promotion resources and to assist U. S. exporters, we recommend that the
Chairman of the TPCC ensure that its national export strategies
consistently (1) identify agencies* specific goals within the strategies*
broad priorities, (2) identify how agencies* resources are allocated in
support of their specific goals, and (3) analyze progress made in
addressing the recommendations in the committee*s prior annual strategies.

Agency Comments and We received written comments on our draft report from
the TPCC

Our Evaluation Secretariat, which incorporated TPCC member agencies* input
(see app. VI). The TPCC agreed with the report*s call for the TPCC to
provide clear

and consistent strategic guidance from year to year, to identify
agencyspecific goals and responsibilities, and to report regularly on
progress made toward achieving recommendations. The TPCC noted that it is
committed to providing periodic reports to Congress on the

implementation of its recommendations, including specific agency goals and
associated responsibilities. It expects that the first of such progress
reports will be sent in October to the Senate Banking Committee and the
House International Relations Committee. The TPCC noted that its 2002
National Export Strategy was based on a survey of exporters and potential
exporters and that regular direct input

from such TPCC customers now provides continuity and consistency in the
TPCC*s strategic approach. It stated that changes in strategic approach
will now be made in response to the changing needs of exporters. We agree
that exporter needs should help define the national export strategy. We
also

believe that the TPCC needs to provide leadership to the various federal
agencies involved in export promotion so that the government strategy
better clarifies goals, agency responsibilities, and associated resource
allocations.

The TPCC noted that our draft report was misleading in its reference to
the TPCC*s not completing its implementation of earlier TPCC
recommendations. It stated that it had made progress in establishing
interagency services such as the Trade Information Center and the Export.
gov Web site and that it did not expect its work ever to be completed. It
also noted that training is another area where agencies are constantly
striving to innovate and improve. We believe these areas are

important, and we agree that continuous improvement is desirable. We
commend the TPCC for its recently renewed efforts to implement earlier
TPCC recommendations. The TPCC also noted that the report*s attention to
the *big emerging markets* detracted from the report*s otherwise valid
findings on consistency and follow- up. According to the TPCC, the world
economy, as well as the economies in these countries, has changed markedly
since the TPCC*s 1994 report. Our purpose in selecting the October 1997
National Export Strategy*s Central and East European regional strategy for
closer review was to examine how the various export promotion agencies

coordinated their efforts in implementing a TPCC strategy over a 5- year
period* not to review the actual results of export activities. Many of the
export agencies were represented in this region, including USAID. In
addition, the region included two special offices designed to facilitate

interagency coordination* the Caspian Finance Center in Turkey and the
Southeastern Europe Initiative office in Croatia. The Department of
Commerce also provided written technical comments, which we incorporated
into the report as appropriate.

As you requested, we plan no further distribution of this report until 30
days from its issue date. At that time, we will send copies of this report
to the Chairman of the Senate Committee on Small Business and
Entrepreneurship and the Ranking Minority Member of the House

Committee on Small Business and interested congressional committees. We
are also sending copies to the Chairman of the TPCC. We will also make
copies available to others on request. In addition, the report will be
available at no charge on the GAO Web site at http:// www/ gao/ gov.

If you or your staff have any questions regarding this report, please call
me at (202) 512- 4128. Key contributors to this assignment were Virginia
Hughes, Patricia Martin, Judith Knepper, Victoria Lin, Ernie E. Jackson,
and

Rona Mendelsohn. Loren Yager Director, International Affairs and Trade

Appendi Appendi xes x I

Objectives, Scope, and Methodology The Ranking Minority Member of the
Senate Committee on Small Business, as well as the Chairman of the House
Committee on Small Business, asked us to determine if the Trade Promotion
Coordinating Committee*s (TPCC) strategies have helped to focus U. S.
export promotion efforts. Specifically, we assessed (1) whether the
committee*s strategy has established export priorities, assessed progress
made toward achieving the strategy*s priorities, and proposed an alignment
of federal resources in support of these priorities; and (2) whether the
committee has made progress in coordinating the various agencies* export
promotion programs. In addition, we also identified how the various
agencies are including small- and medium- sized businesses in their export
promotion programs.

To determine if the committee had established export priorities and
whether federal resources had been aligned in support of these priorities,
we analyzed the TPCC*s and federal agencies* responsibilities under the
Export Enhancement Act of 1992 and the Export Enhancement Act of 1999.

We also obtained and analyzed the TPCC*s national export strategies for
1993 through 2002 to see if, in an effort to increase exports, the
committee targeted specific markets, identified agencies* export goals,
and reported on the progress made by agencies in implementing the
committee*s strategy. We also spoke with TPCC member agency officials from
the

Departments of Agriculture, Commerce, and State; the U. S. Export- Import
Bank; the Overseas Private Investment Corporation; the Small Business
Administration; the U. S. Agency for International Development; and the U.
S. Trade and Development Agency; about the usefulness of the strategy in
defining their programs. To determine if the TPCC member agencies aligned
their resources to support the strategy, we obtained and analyzed,

but did not verify the budget and staffing data reported (1) in the
national export strategies and (2) by the Department of Commerce*s
International Trade Administration and the Department of Agriculture*s
Foreign

Agricultural Service, the two major agencies with overseas staffs. We
obtained documentation from officials of these agencies in both domestic
and overseas offices regarding the staffing process and resource
allocations. We also obtained and reviewed interagency memorandums as well
as the minutes of TPCC*s meetings and met with TPCC officials and member
agency representatives. To identify other factors affecting agencies*
resource allocations, we obtained and reviewed documents on congressional
or administration directives, analyzed their impact on overseas staffing,
and spoke with agency officials responsible for staffing about the impact
of these initiatives on resource allocations. In addition, we analyzed the
Departments of Commerce and Agriculture*s staffing

patterns in the mature Group of six (G- 6) markets and compared them with
TPCC targeted big emerging markets.

To determine if the TPCC was evaluating member- agencies* progress in
implementing the broad priorities identified in the national export
strategies, we obtained and analyzed member agency Government and
Performance Results Act submissions, analyzed the performance sections of
the national export strategies from fiscal years 1993 and 2002, and
discussed with TPCC and various member agency officials the reasons that
the TPCC did not evaluate agency performance.

To determine how the committee has coordinated the various agencies*
export promotion programs, we examined agency trade promotion events,
obtained and analyzed TPCC interagency minutes and other correspondence,
and discussed with TPCC officials and member agency representatives how
issues raised within the committee were resolved. We conducted separate
interviews on these matters with key officials from the Departments of
Agriculture, Commerce, and State; the U. S. Export- Import Bank; the
Overseas Private Investment Corporation; the Small Business

Administration; the U. S. Agency for International Development; the U. S.
Trade and Development Agency; and the U. S. Trade Representative in
Washington, D. C.

To determine how overseas agencies coordinated their efforts to implement
the strategy, we selected five countries in Central and Eastern Europe
identified in the TPCC*s 1997 strategy as a region targeted for growth.
The locations represent markets at various stages of maturity. We visited
Warsaw, Poland; and Ankara and Istanbul, Turkey* two of the

designated big emerging markets; Zagreb, Croatia* a country in the early
stages of making a transition to a market economy; and Prague, Czech
Republic, a country in a more advanced transitional phase. To contrast the
U. S. support provided exporters in a mature market, we also visited
Berlin, Germany, a country with the world*s seventh largest industrial
market economy and the United States* third largest trading partner. We
asked for

copies of the strategy and discussed it with agency officials responsible
for export promotion. We obtained documents from and interviewed officials
representing the Departments of Agriculture, Commerce, Defense, and State;
the Overseas Private Investment Corporation; the U. S. Agency for
International Development; and the U. S. Trade and Development Agency.

The documents we obtained included mission and commercial strategic plans,
correspondence between agencies, quarterly reports, e- mails, and
computerized trade lead data showing interagency interactions.

To determine whether U. S. agencies are including small- and medium- sized
businesses in their export promotion programs, we obtained documents from
the Departments of Commerce, Defense, and State; the Small Business
Administration, the Overseas Private Investment Corporation; the U. S.
Agency for International Development; the U. S. Trade and

Development Agency, and the Eximbank. The documents we obtained included
agency annual reports, reports to Congress, agency performance plans, and
data provided by these agencies outlining the nature and degree of small-
and medium- sized enterprises participation in their programs. We also
obtained documents identifying the use of databases and programs by small-
and medium- sized businesses. We did not verify the data. We also obtained
and discussed with key officials of the U. S. Agency for

International Development reports on small business participation in its
Global Technology Network and EcoLinks programs. Because we focused
primarily on export promotion programs related to commercial exports, we
did not examine in detail small business participation in Agriculture
programs. In addition, we interviewed key agency officials representing

Commerce, the Eximbank, the Overseas Private Investment Corporation, and
the U. S. Trade and Development Agency at headquarters and at posts in the
five countries in Central and Eastern Europe about the participation

in agency programs by small- and medium- sized businesses. We performed
our work from September 2001 through May 2002 in accordance with generally
accepted government auditing standards.

Appendi x II

U. S. Agencies* Trade Promotion Services Each of the nine major trade
promotion agencies offers specific services that, together with other
agencies, provide the exporter with help throughout the export process. As
shown in table 1, more than one agency may be active in providing these
general types of export services. Federal agencies provide export training
for potential new exporters; information on promising markets and export
processes, as well as specific trade leads; opportunities to participate
in trade events that match buyers and sellers; export finance and
insurance for exports and investments in risky markets; and government-
to- government advocacy on behalf of specific companies encountering trade
barriers or bidding (as the sole U. S. bidder) on foreign government
procurements. The Department of Commerce*s Foreign Commercial Service
(FCS) offices serve as focal points for other export agencies operating
overseas.

Table 1: Export Promotion Services and Federal Providers Federal providers
Export promotion services DOC USDA State SBA EXIM OPIC TDA USAID USTR

Export training X X X X Developing market information X X X X X X X Trade
events X X X X Trade finance X X X X X Advocacy XXX XX XX XX

Export Training Both Commerce and SBA assist potential exporters with
export training classes and one- on- one export counseling. Commerce and
SBA staff at the 19 U. S. Export Assistance Centers sponsor export
training, often assisted

by other agencies, like the Export- Import Bank (Eximbank), as well as
state and private sector trade organizations. The training introduces
potential exporters to general information about foreign markets, assists
in the development of sound market plans, explains possible funding
sources,

and sometimes provides opportunities to participate in agency- led trade
missions. 21 The following example illustrates such training.

Developing Market The departments of Commerce and Agriculture, TDA, and
USAID are the Information

major providers of trade information and specific trade leads. Commerce
provides industry analysis and policy support at headquarters, as well as
support in foreign markets through its Foreign Commercial Service (FCS)

and Trade Development unit. FCS staff routinely provide at no charge
general research services, such as industry sector analyses and specific
market insights to customers. They also provide a range of fee- for-
service products, including customized (flexible) market research,
international company profiles, and Commerce*s Gold Key service, which
matches qualified buyers with U. S. firms. Trade Development staff provide
market reports and seminars and regular one- on- one market counseling,
and they manage the Trade Information Center*s 1- 800- USATRADE hotline
and Webbased information service.

To illustrate:  A small U. S. manufacturer of cooling and heating system
parts used

Commerce*s Gold Key service to meet with potential buyers in Poland.
Following the initial sale, a U. S. Export Assistance Center continued to
provide the firm additional trade leads generated through the market

research produced by FCS staff in Poland. The firm went on to make
additional sales in Poland.

Exporters can also find a broad range of trade- related information at the
federal government*s Export. gov Web site in addition to two Commerce Web
sites. Subscription- based STAT- USA provides a broad range of
information, including trade leads, market information, as well as access
to the National Trade Data Bank. The annual fee for this service is $175,
with quarterly subscriptions also available. Commerce*s BUYUSA program

matches U. S. sellers with foreign buyers and provides U. S. firms the
option of publishing on the site the firm*s electronic catalog of
available products. The basic service costs $400, with the enhanced
catalog service ranging between $1, 075 and $2, 000. Currently, about
3,400 U. S. and 19, 000 foreign

21 For a more complete description of export training, see U. S. General
Accounting Office report, Export Promotion: Government Agencies Should
Combine Small Business Export Training Programs, GAO- 01- 1023
(Washington, D. C.: Sept. 21, 2001).

firms are registered at BUYUSA. According to one Commerce official, BUYUSA
permits small businesses to gain low- cost access to prescreened foreign
buyers.

USAID funds two programs that seek to link U. S. small- and medium- sized
exporters with business opportunities in USAID- specific sectors. The
Global Technology Network (GTN) links U. S. agribusiness, environment and
energy, health, and information technology firms with opportunities that
support USAID development goals in Africa, Asia and the Near East, Central
and Southeast Europe, and Latin America and the Caribbean. GTN
automatically notifies (at no charge) registered U. S. firms of qualified
business opportunities. These business opportunities include direct
purchases, agent/ distributor agreements, joint ventures, and franchise

agreements. According to USAID, the GTN program generated 44 transactions
totaling about $10 million in fiscal year 2001, and for the first 6 months
in fiscal year 2002, 38 transactions valued at $30.1 million. USAID*s
Eastern European Partnership for Environmentally Sustainable Economies
(EcoLinks) program addresses environmental issues in the regions of Europe
and Eurasia. The region is struggling to balance economic and
environmental concerns. EcoLinks is a form of technical assistance that
focuses on technology transfer by promoting partnerships between
businesses, municipalities, and associations within the region and between
the region and the United States. Its program focuses on three
interrelated sets of activities: (1) partnership grants, (2) technology

transfer and investment, and (3) an information technology initiative.
EcoLinks program grants fund (1) initial matchmaking meetings between
prospective partners and (2) project grants that test the viability of
potential environmental projects. According to USAID data, EcoLinks
generated four deals totaling $0.4 million in fiscal year 2001. An example
of

an EcoLinks grant follows.  An EcoLinks grant helped rebuild a Croatian
meat processing wastewater treatment plant destroyed by war. A small U. S.
water

management firm assisted plant managers in restoring the facility. The new
plan will reduce water consumption by 30 percent and has already reduced
the amount of waste produced in processing and cut the plant*s

operating costs by 20 percent. TDA also provides market information to U.
S. exporters and investors. It provides TDA grants for feasibility
studies, whose contractors are primarily small- and medium- sized U. S.
businesses. TDA also sponsors conferences

that familiarize foreign decision makers with U. S. goods and services,
build business relationships, and encourage and assist U. S. firms in
exporting to developing and middle- income countries. To illustrate:  A
TDA contractor organized a *Building Infrastructure for Tourism

Development* conference in May 2002 in Istanbul, Turkey. The conference
focused on the Eurasian region and, according to the meeting
subcontractor, the conference drew approximately 300 people, including
about 50 U. S. firms and 75 to 100 foreign firms.

Like Commerce, the Department of Agriculture provides full range of
information and services to agricultural exporters, including market
information, trade leads, and other help, including a Web- based training
module, to agricultural exporters. 22

Trade Events Trade events bring buyers and sellers together or provide
them with information (including but not limited to trade missions, trade
fairs, catalog shows, reverse trade missions, and seminars). Two units in
Commerce*s International Trade Administration* the U. S. and Foreign
Commercial Service and Trade Development* share responsibility in
coordinating trade

events. Other federal agencies also organize trade events that focus on
specific sectors. For example, Agriculture sponsors trade missions for
agricultural products; Energy, the Environmental Protection Agency, and
USAID have sponsored events related to energy and the environmental
technology sectors; and the SBA organizes a few trade missions annually
for small businesses. Trade events are also sponsored by other federal
agencies, including Eximbank, TDA, the Departments of State and

Transportation, and states. For all of these other entities, Commerce
provides essential support in doing market research and arranging foreign
business community contacts for the associated trade events. Based on a
cursory review of world trade events data maintained by Commerce, we found
that Commerce sponsors the large majority of all trade events.

Of the four Central and Eastern European countries in which we did field
work (Croatia, the Czech Republic, Poland, and Turkey), Poland had the 22
Our review of the Department of Agriculture*s export promotion activities
was limited to interviews about the Department*s coordination with other
TPCC agencies at the foreign posts we visited, its participation at TPCC
meetings in Washington, D. C., and a cursory examination of its Web- based
provision of market information.

most trade events (23) during fiscal years 1996 through 2000. In contrast,
Germany, a more mature European market, was the destination for 164 trade
events during the same time period.

Trade Finance for Major infrastructure projects require years of
negotiation with foreign

Major Projects governments, are costly, and are risky because their
returns are generated

from revenues from operations that can be affected by economic or
political turmoil. Three agencies, Eximbank, OPIC, and TDA, work on
separate aspects of trade finance in markets where commercial funding is
not readily available.

The Eximbank provides U. S. firms with financing and insurance for exports
in markets where commercial financing is limited or unavailable due to
risk. The Eximbank has an export working capital program that provides

loans for and guarantees lenders financing of pre- export production of
goods. It also provides project finance for exporters or project sponsors
that need financing for exports to large foreign infrastructure projects,
such as oil and gas refineries. Exporters* goods must contain over 50
percent U. S. content. OPIC is a self- sustaining agency that provides
loans and guarantees to investors in overseas developing markets. OPIC*s
political risk insurance and loans help U. S. businesses of all sizes
invest and compete in developing nations worldwide. Specifically, OPIC
insures investments overseas against a broad range of political risks,
finances businesses overseas through loans and loan guaranties, finances
private investment funds that provide equity

to businesses overseas, and advocates in the interests of the American
business community overseas. TDA provides planning assistance for foreign
development projects that might offer sales opportunities for U. S.
exporters. TDA*s primary tool for such projects, feasibility studies,
evaluates the technical, legal, economic, environmental, and financial
aspects of a potential project. In developing markets, for example, TDA
approaches foreign governments or municipalities considering privatizing
national assets such as energy plants or constructing an airport terminal
and offers to have a small U. S. firm

study the feasibility of the project or to provide technical assistance
such as air controller training. If the foreign government or municipality
agrees to the project, it may use U. S. firms or equipment. If the market
holds risk

of repayment and commercial financing is scarce, 23 OPIC may provide the
U. S. firm with loans or insurance, 24 while the Eximbank may provide
loans or guarantees for the equipment used in the project. An example
follows.

 In 1997, the U. S. government supported building the Baku- Ceyhan oil
pipeline from Azerbaijan through Turkey to a Black Sea port and on to
lucrative markets in Western Europe. In 1998, TDA provided grant money to
assist the Turkish government with the legal and financial negotiations of
the deal. FCS staff in Turkey have continued to advocate

for U. S. companies bidding on the Turkish portion of the project, and the
Eximbank is now considering a guarantee covering U. S. goods and services
for part of the project.

Advocacy Operating since November 1993, Commerce*s Advocacy Center assists
U. S. firms when they encounter difficulty in winning foreign government

procurements. The center coordinates the actions of the relevant U. S.
agencies in a specific procurement. Top- level U. S. government officials
work with their foreign counterparts to ensure a level playing field
during all phases of the procurement process, and the Advocacy Center
coordinates the timing of the actions, which may be official contacts via
letters, telephone calls, or personal visits by one or more high- level U.
S. official( s). Examples of problems that the center addresses include:

 foreign firms* pursuit of contracts using assistance from their home
governments to persuade foreign government officials to buy their
equipment or services;

 unfair treatment by government decisionmakers, preventing firms from
having a chance to compete; and  bidding offers that may be tied up in
bureaucratic red tape, resulting in lost opportunities and providing an
unfair advantage to a competitor. In considering requests for assistance
from a U. S. firm, the Advocacy Center confirms that the international
transaction is in the national 23 OPIC*s mandate is to help U. S.
businesses invest in overseas markets while assisting in the development
of emerging countries. 24 OPIC*s loan requirements call for the firm to
have 25 percent equity in the project.

interest, that the U. S. content of the potential procurement is at least
50 percent, and that the firm is the only U. S. bidder. When more than one
U. S. firm is bidding on the procurement, U. S. officials will advocate
with the foreign government for U. S. participation but not for any one U.
S. firm. Advocacy Center officials advocate for both large and small U. S.
businesses, and a Commerce publication states that when large U. S. firms
win a procurement bid, their U. S. suppliers* often small- and mediumsized
businesses* also benefit. For example, the Advocacy Center has worked with
the Boeing Corporation in its successful efforts to win contracts in
Cyprus, Morocco, and South Africa. According to Commerce, Boeing has in
excess of 500 suppliers covering all 50 states.

According to Commerce, the center re- committed itself in July 2002 to
expand its support of small and medium- sized businesses. The efforts of
center managers with responsibility for these businesses will be
coordinated by a Small Business Advocate and Advisor to the Director. The
center has also launched a plan for extended outreach and will work to
define the target market to which advocacy services can be realistically
and

effectively offered.

Budgets of Export Promotion Agencies in Constant 2001 Dollars (in
Millions, Fiscal

Appendi x II I Years 1996 through 2001) FY 1996 FY 1997 FY 1998 FY 1999 FY
2000 FY 2001 FY 2002 Commerce

Trade Development $61 $62 $61 $61 $63 $64 $66 Market Access and Compliance
20 18 18 18 20 25 27 U. S. and Foreign Commercial Service HQ 19 19 17 17
20 16 16 U. S. Commercial Service (Domestic) 36 36 32 31 34 34 33 Foreign
Commercial Service (Overseas) 123 121 136 126 131 142 140 Administrative
No data No data 13 13 12 12 13

Commerce Export Promotion Activities a 258 258 277 265 281 293 294

Agriculture

Export Enhancement Program 5 0 2 1 2 7 467 Dairy Export Incentive Program
22 130 116 151 80 8 60 Market A ccess P rogram 98 97 95 94 92 90 88
Foreign M arket D evelopment P rogram 37 36 36 29 29 28 27 P. L. 480 Title
I - Food Aid 317 217 267 867 354 214 171 CCC Export Credit Guarantees 467
4 216 195 218 198 408 Foreign A gricultural S ervice 50 57 57 56 55 55 54

Agriculture Export Promotion Activities a 998 541 789 1, 394 830 600 1,
275

Export Import Bank 910 828 773 851 833 928 748

U. S. Trade and Development Agency 65 58 66 64 57 64 49

Overseas Private Investment Corporation (117) (126) (185) (183) (209)
(206) (245)

Small Business Administration 7 10 11 13 13 14 12

State Department 98 102 105 127 127 129 124

U. S. Trade Representative 23 23 24 27 27 30 29

U. S. Agency for International Development 723 579 450 0 0 0 0

Total Budget for Export Promotion Activities (excluding OPIC and USAID
programs) $2, 359 $1,819 $2, 045 $2, 741 $2, 168 $2,058 $2, 532

a Totals may not add due to rounding. Source: National Export Strategies
and federal budget documents.

FCS Overseas Staff by Country, Fiscal Years

Appendi x V I 1996 through 2001 1996 1997 1998 1999 2000 2001 #Staff a
#Offices #Staff a #Offices #Staff a #Offices #Staff a #Offices #Staff a
#Offices #Staff a #Offices

Algeria 111 11 11 11111 Argentina b 10117 121122 1231241 Armenia 00 11
11111111 Australia 17 4 17 3 18 3 19 3 20 3 20 4 Austria 71 81 51818171
Azerbaijan000 03 13 13131 Barbados111 11 11 11111 Belarus 11 11 11111111
Belgium 17 2 17 2 16 2 16 2 18 2 23 2 Brazil b 30454 456460 4625695
Bulgaria 319 17 17 17161 Canada 24 6 31 7 32 7 29 7 29 7 32 7 Chile 10114
114114 1141151 China b 50563 580586 5815835 Colombia10111 110111 1111131
Costa R ica316 15 16 16151 Cote d*Ivoire 6 2 10 2 11 2 11 2 11 2 11 2

Croatia 11 41 41313141 Czech Republic 5 1 8 1 11 1 11 1 10 1 5 1

Denmark 61 61 61616141 Dominican Republic 5 1 9 1 13 1 11 1 12 1 11 1

Ecuador 628 28 28 28282 Egypt 12 2 15 2 13 2 14 2 12 2 16 2 Finland 414 14
14 14141 France 34 6 34 6 36 6 34 5 33 6 32 5 Georgia 00 11 11111111
Germany 47 7 49 7 48 7 48 6 49 6 39 6 Ghana 00 00 00001111 Greece 9 1 10 1
9 1 9 1 12 2 12 2 Guatemala 4 1 5 1 9 1 7 1 7 1 7 1 Haiti 00 31 31414141
Honduras 21 41 51514141

(Continued From Previous Page)

1996 1997 1998 1999 2000 2001 #Staff a #Offices #Staff a #Offices #Staff a
#Offices #Staff a #Offices #Staff a #Offices #Staff a #Offices

Hong Kong b 14123 122121 1221191 Hungary 8 1 10 1 10 1 10 1 9 1 9 1 India
b 30533 548752 7547588 Indonesia b 17225 223228 2432412 Ireland 4 1 6 1 6
1 5 1 6 1 6 1 Ireland, Northern 00 00 11111131

Israel 14 2 15 2 15 2 15 2 16 2 14 2 Italy 25 5 24 5 26 5 26 5 26 5 25 5
Jamaica 00 21 21212121 Japan 57 5 59 5 52 5 51 5 53 5 50 5 Jordan 000 00
00 02131 Kazakstan 6 1 12 1 11 1 11 1 10 1 9 1 Kenya 41 31 214111181 Korea
b 23128 127124 1271241 Kuwait 619 17 17 110161 Latvia 000 00 00 01131
Lebanon 0 0 0 0 0 0 0 0 1 1 1 1 Malaysia 9 1 14 1 12 1 14 1 14 1 13 1
Mexico b 61376 373375 3703664 Morocco 32 52 42426262 Netherlands 11 2 10 2
12 2 12 2 11 2 12 2 New Zealand 425 24 23 16242

Nigeria 7 1 10 1 9 1 9 1 9 1 11 1 Norway 316 16 15 16161 Pakistan 8 3 10 3
9 3 9 3 10 3 10 3 Panama 41 61 61616161 Peru 418 18 18 18181 Philippines
18 2 25 2 20 2 19 2 25 2 22 2 Poland a 9 1 18 1 18 1 18 1 16 1 14 1
Portugal 7 2 8 2 10 2 10 2 9 2 10 2 Romania 41 71 61615161 Russia 38347
443442 4404404 Saudi Arabia 24 3 35 3 35 3 37 3 38 3 34 3

Singapore 17 1 16 1 18 1 19 1 19 1 17 1

(Continued From Previous Page)

1996 1997 1998 1999 2000 2001 #Staff a #Offices #Staff a #Offices #Staff a
#Offices #Staff a #Offices #Staff a #Offices #Staff a #Offices

Slovak Republic 11 41 41413131 South Africa b 11319 316321 3243243 Spain
15 2 17 2 18 2 18 2 17 2 17 2 Sweden 8 1 9 1 9 1 10 1 10 1 9 1
Switzerland73 83 83838393 Tai wan b 25228 226226 2282302 Thailand 18 1 23
1 22 1 23 1 22 1 19 1 Trinidad/ Tobago 001 11 11 11111

Tur key b 13313 314314 3153133 UAE 929210 29 211292 Ukraine 7116 113113
1131121 United Kingdom 19 2 21 2 25 2 26 2 29 2 31 2

Uruguay 0 0 0 0 0 0 1 1 2 1 2 1 Uzbekistan41 61 71719171 Venezuela 10 1 14
1 16 1 15 1 18 1 20 1 Vietnam 1 1 4 1 12 2 12 2 20 2 5 2 Yugoslavia000 00
00 01111

Total 912 137 1, 168 143 1, 198 148 1, 222 146 1,286 155 1, 245 157

a Staff includes Foreign Commercial Service officers, foreign service
nationals, and personal service contractors. b Countries in Big Emerging
Markets as defined in TPCC*s 1994 National Export Strategy.

Source: Department of Commerce.

FAS Overseas Staff by Country, Fiscal Years

Appendi x V

1996 through 2001 1996 1997 1998 1999 2000 2001 #Staff #Offices #Staff
#Offices #Staff #Offices #Staff #Offices #Staff #Offices #Staff #Offices

Argentina a 5 15 15 15 15 151 Australia 41 4141 414141 Austria 41 4141
414141 Bangladesh 1 11 11 11 11 111 Belgium 82 7282 826262 Brazil a 8 28
28 27 28 282 Bulgaria 4 13 13 13 13 141 Burma 11 0000 000000 Canada 51
5141 415151 Chile 3 13 13 13 13 131 China a 6 36 36 35 35 373 Colombia 3
14 14 14 14 141 Costa R ica 3 13 13 13 13 131 Cote d*Ivoire3 13 13 13 13
131 Czech Republic 1 1 1 1 1 1 1 1 1 1 1 1 Denmark 31 2121 213131
Dominican Republic 31 2121 212121

Ecuador 2 12 12 12 11 111 Egypt 31 3131 313121 France 81 7171 716161
Germany 10 2 9 2 10 2 8 2 8 2 9 2 Greece 3 12 12 12 12 121 Guatemala 4 1 2
1 2 1 2 1 2 1 2 1 Hong Kong a 4 14 14 14 13 131 Hungary 1 10 00 00 00 000
India a 7 18 17 17 17 171 Indonesia a 4 15 25 25 25 252 Ireland 1 1 1 1 1
1 1 1 1 1 1 1 Israel 1 11 11 11 11 111 Italy 92 9393 937272 Japan 19 3 21
3 21 3 18 3 20 3 20 3 Kazakhstan 1 11 11 11 11 111 Kenya 11 1111 111111

(Continued From Previous Page)

1996 1997 1998 1999 2000 2001 #Staff #Offices #Staff #Offices #Staff
#Offices #Staff #Offices #Staff #Offices #Staff #Offices

Korea a 8 19 19 19 19 191 Latvia 1 11 11 11 11 111 Malaysia 3 13 13 13 13
131 Mexico a 11213 212213 213214 3 Morocco 21 2121 212121 Netherlands 5 1
4 1 5 1 4 1 6 1 6 1 New Zealand 2 1 2 1 2 1 2 1 2 1 2 1 Nigeria 2 12 12 12
12 121 Pakistan 3 13 13 13 13 131 Peru 3 13 13 13 13 131 Philippines 5 1 5
1 5 1 4 1 5 1 4 1 Poland b 4 14 14 14 14 131 Portugal 21 1111 212121
Romania 11 1111 111111 Russia 8 19 19 29 29 282 Saudia A rabia3 23 23 23
12 121 Serbia 1 11 11 11 00 000 Singapore 4 1 3 1 3 1 3 1 2 1 2 1 South
Africa a 6 15 16 16 16 161 Spain 61 6161 616161 Sri L anka 1 10 00 00 00
000 Sweden 4 14 14 14 13 131 Switzerland 32 4242 414141 Syria 11 1111
111111 Thailand 5 15 15 15 15 151 Tunisia 31 2121 212121 Tur key a 4 14 14
14 14 141 UAE 41 4141 414141 Ukraine 21 1121 111121 United Kingdom 6 15 15
14 14 141

Venezuela 5 15 15 14 15 141 Vietnam 11 1111 111111

Total 262 76 253 75 255 76 245 73 243 72 244 73

a Countries in Big Emerging Markets as defined in TPCC*s 1994 National
Export Strategy. Source: Department of Agriculture.

Comments from the Trade Promotion

Appendi x VI Coordinating Committee

(320082)

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GAO United States General Accounting Office

Page i GAO- 02- 850 Export Promotion Strategy

Contents

Contents

Page ii GAO- 02- 850 Export Promotion Strategy

Page 1 GAO- 02- 850 Export Promotion Strategy United States General
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Appendix I

Appendix I Objectives, Scope, and Methodology

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Appendix I Objectives, Scope, and Methodology

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Appendix II

Appendix II U. S. Agencies* Trade Promotion Services

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Appendix II U. S. Agencies* Trade Promotion Services

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Appendix II U. S. Agencies* Trade Promotion Services

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Appendix II U. S. Agencies* Trade Promotion Services

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Appendix II U. S. Agencies* Trade Promotion Services

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Appendix II U. S. Agencies* Trade Promotion Services

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Appendix III

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Appendix IV

Appendix IV FCS Overseas Staff by Country, Fiscal Years 1996 through 2001

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Appendix IV FCS Overseas Staff by Country, Fiscal Years 1996 through 2001

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Appendix V

Appendix V FAS Overseas Staff by Country, Fiscal Years 1996 through 2001

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Appendix VI

Appendix VI Comments from the Trade Promotion Coordinating Committee

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Appendix VI

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