International Trade: An Analysis of Free Trade Agreements and	 
Congressional and Private Sector Consultations under Trade	 
Promotion Authority (07-NOV-07, GAO-08-59).			 
                                                                 
Congress granted the President Trade Promotion Authority (TPA) to
negotiate agreements, including free trade agreements (FTA) in	 
2002. TPA stipulated negotiating objectives and procedural steps 
for the administration, including consulting with Congress and	 
trade advisory committees. TPA lapsed in July 2007 amidst	 
questions about its use. GAO was asked to review: (1) What FTAs  
have been pursued under TPA and why? (2) Overall, what is the	 
economic significance of these agreements for the United States? 
(3) What is the nature of the consultation process for Congress  
and how well has it worked in practice? (4) What is the nature of
the consultation process for trade advisory committees, and how  
well has it worked in practice? GAO interviewed staff of the	 
Office of the U.S. Trade Representative (USTR), the International
Trade Commission (ITC), congressional committees with		 
jurisdiction, trade advisory committees, and others, and reviewed
USTR documents. 						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-59						        
    ACCNO:   A78049						        
  TITLE:     International Trade: An Analysis of Free Trade Agreements
and Congressional and Private Sector Consultations under Trade	 
Promotion Authority						 
     DATE:   11/07/2007 
  SUBJECT:   Advisory committees				 
	     Economic policies					 
	     Exporting						 
	     Foreign governments				 
	     Foreign trade agreements				 
	     Foreign trade policies				 
	     Importing						 
	     International organizations			 
	     International trade				 
	     International trade regulation			 
	     International trade restriction			 
	     Investments abroad 				 
	     Policy evaluation					 
	     Program management 				 
	     Trade agreements					 
	     Trade policies					 
	     Trade regulation					 
	     Trade negotiations 				 

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GAO-08-59

   

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Report to the Chairman, Committee on Finance, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

November 2007: 

International Trade: 

An Analysis of Free Trade Agreements and Congressional and Private 
Sector Consultations under Trade Promotion Authority: 

Free Trade Agreements under Trade Promotion Authority: 

GAO-08-59: 

GAO Highlights: 

Highlights of GAO-08-59, a report to the Chairman, Committee on 
Finance, U.S. Senate. 

Why GAO Did This Study: 

Congress granted the President Trade Promotion Authority (TPA) to 
negotiate agreements, including free trade agreements (FTA) in 2002. 
TPA stipulated negotiating objectives and procedural steps for the 
administration, including consulting with Congress and trade advisory 
committees. TPA lapsed in July 2007 amidst questions about its use. GAO 
was asked to review: (1) What FTAs have been pursued under TPA and why? 
(2) Overall, what is the economic significance of these agreements for 
the United States? (3) What is the nature of the consultation process 
for Congress and how well has it worked in practice? (4) What is the 
nature of the consultation process for trade advisory committees, and 
how well has it worked in practice? GAO interviewed staff of the Office 
of the U.S. Trade Representative (USTR), the International Trade 
Commission (ITC), congressional committees with jurisdiction, trade 
advisory committees, and others, and reviewed USTR documents. 

What GAO Found: 

In the 5-year period that TPA was granted to the President, from 2002-
2007, the United States pursued 17 FTAs with 47 countries for a variety 
of foreign and economic policy reasons. Six FTAs have been approved and 
are in force, and the remaining 11 are in various stages of being 
negotiated and approved. The United States has simultaneously pursued 
comprehensive, high-standard trade agreements on the bilateral and 
multilateral levels. 

Trade with countries for which FTAs were pursued under TPA comprises 
about 16 percent of U.S. trade and foreign direct investment. Twenty-
seven percent of U.S. trade is with countries with FTAs in effect prior 
to TPA (e.g., Canada and Mexico); 56 percent is with countries with 
which the United States does not have FTAs. The largest U.S. trade 
partners not pursued under TPA are the European Union, Japan, and 
China; the rest account for relatively small shares of U.S. trade. 

USTR held 1,605 consultations with congressional committee staff from 
August 2002 through April 2007, but satisfaction with the consultations 
was mixed. About two-thirds of these meetings were with the House and 
Senate trade and agriculture committees. Almost all the congressional 
staff GAO contacted viewed the consultations as providing good 
information, but slightly more than half said that they did not provide 
opportunities for real input or influence. These staff often said that 
they were not given sufficient time to provide meaningful input. 

The trade advisory committee chairs GAO contacted said that USTR and 
managing agencies consulted with their committees fairly regularly, 
although process issues at times hindered some from functioning 
effectively. For example, about half said that the 30-day deadline for 
reporting on the likely impact of FTAs can be difficult to meet, and 
the ITC had a similar problem. In addition, adherence to statutory 
representation requirements is not always transparent. Several 
committees have not been able to meet while their charters were 
expired, or members had not been reappointed. However, USTR and 
managing agencies are not required to report to Congress such lapses in 
a committeeâs ability to meet. 

Figure: Total U.S. Trade by Status of FTA Negotiations Under TPA as of 
2006: 

This figure is a pie chart showing total U.S. trade by status of FTS 
negotiations under TPA as of 2006. 

Non-FTA trade partners: 56%; 
FTAs prior to TPA: 27%; 
FTAs pursued under TPA since 2002: 9%; 
FTAs concluded and in force: 4%; 
FTAs pursued but not yet concluded: 4%. 

[See PDF for image] 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

[End of figure] 

What GAO Recommends: 

GAO is making recommendations to USTR and other managing agencies to 
improve information access and timeliness of congressional 
consultations, as well as timeliness of rechartering trade advisory 
committees. GAO also recommends USTR report to Congress on how it meets 
statutory representation requirements in advisory committee 
composition. In addition, Congress should consider extending the 
deadlines for advisory committee and ITC reports by 15 days. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-59]. For more information, contact Loren 
Yager at (202) 512-4347 or [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Since Passage of TPA, the United States Has Pursued Negotiations of 17 
Comprehensive FTAs for Foreign and Economic Policy Reasons: 

FTAs Pursued Account for Limited Share of U.S. Trade and Investment but 
Include Diverse Markets for U.S. Exports: 

USTR Consulted Extensively with Congressional Staff, but Staff Have 
Mixed Views about Having a Meaningful Opportunity for Input: 

Consultations Afford Trade Advisory Committees Access, but Process 
Issues Impede Effective Provision of Advice: 

Conclusions: 

Matter for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Expansion of Congressional Consultation Requirements and 
Role of Gatekeeper Provision: 

Appendix III: Detailed Information on U.S. Goods and Services Trade, 
Investment, and Tariffs of U.S. Trade Partners: 

Appendix IV: Comparison of U.S. Trade and Investment with FTA and Non-
FTA Partners: 

Appendix V: Comments from the Department of Commerce: 

Appendix VIGAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Free Trade Agreements Negotiated under Trade Promotion 
Authority: 

Table 2: U.S. Trade (Goods and Services) with All U.S. Trade Partners: 

Table 3: U.S. Trade (Goods and Services) for FTAs Pursued under TPA: 

Table 4: Top 20 Non-FTA Trade Partners, Goods Exports and Imports, 
2006: 

Table 5: U.S. Goods Exports and Imports with Trade Partners: 

Table 6: U.S. Services Exports and Imports with Trade Partners: 

Table 7: U.S. Direct Investment Abroad (Foreign Direct Investment) by 
Trade Partner: 

Table 8: Most Favored Nation Applied Tariff Rates by Trade Partner: 

Table 9: U.S. Direct Investment Abroad (Foreign Direct Investment) by 
Trade Partner Group: 

Figures: 

Figure 1: Pursuit of a Regional Focus for FTAs: 

Figure 2: Total U.S. Trade by Status of FTA Negotiations under TPA: 

Figure 3: Congressional Time Line for Consultations under TPA: 

Figure 4: USTR Consultations with Congress: 

Figure 5: USTR Congressional Consultations on CAFTA-DR: 

Figure 6: USTR Congressional Consultations on Australia FTA: 

Figure 7: USTR Congressional Consultations on All FTA-Specific and FTA- 
Related Topics, August 6, 2002, to April 20, 2007, with Chronology and 
Status of FTA Negotiations: 

Figure 8: Trade Advisory Committee System: 

Figure 9: U.S. Goods Trade Balance (Exports-Imports) with TPA 
Countries, Existing FTAs, and Non-FTA Countries, 1997-2006: 

Figure 10: U.S. Goods Trade Balance (Exports-Imports) with TPA 
Countries, by Status of FTA Negotiations, 1997-2006: 

Figure 11: Comparison of U.S. Exports to TPA Countries Versus Non-FTA 
Countries: 

Figure 12: Comparison of U.S. Imports from TPA Countries Versus Non-FTA 
Countries by Product Group: 

Abbreviations: 

ACTPN: Advisory Committee for Trade Policy and Negotiations: 

APAC: Agricultural Policy Advisory Committee: 

ATAC: Agricultural Technical Advisory Committee: 

CAFTA-DR: Central America - Dominican Republic Free Trade Agreement: 

COG: Congressional Oversight Group: 

EU: European Union: 

FACA: Federal Advisory Committee Act: 

FTA: Free trade agreement: 

FTAA: Free Trade Area of the Americas: 

IGPAC: Intergovernmental Policy Advisory Committee: 

ITAC: Industry Trade Advisory Committee: 

ITC: U.S. International Trade Commission: 

LAC: Labor Advisory Committee: 

NAFTA: North American Free Trade Agreement: 

SACU: Southern African Customs Union: 

TACA: Trade Advisory Committee on Africa: 

TEPAC: Trade and Environment Policy Advisory Committee: 

TPA: Trade Promotion Authority: 

USTR: Office of the U.S. Trade Representative: 

WTO: World Trade Organization: 

United States Government Accountability Office: 

Washington, DC 20548: 

November 7, 2007: 

The Honorable Max Baucus: 
Chairman: 
Committee on Finance: 
United States Senate: 

Dear Mr. Chairman: 

Congress granted the President Trade Promotion Authority (TPA) in 2002 
through the Trade Act of 2002[Footnote 1] to negotiate agreements, 
including free trade agreements (FTA), which aim to reduce trade 
barriers and expand trade with selected trade partners. The legislation 
granting TPA stipulated trade negotiating objectives and procedural 
steps to guide the administration in these negotiations. These include 
mandatory consultations before, during, and after negotiations with 
Congress, as well as reports on the likely impact of trade agreements 
from the formal trade advisory committee system. This congressionally 
created trade advisory committee system, which includes both policy- 
level and technical committees, also provides ongoing advice throughout 
negotiations. 

TPA authority lapsed in July 2007, amidst questions about how this 
authority was used, the economic significance of the FTAs pursued, and 
the conduct of required consultations before, during, and after 
negotiations. Yet, the World Trade Organization's (WTO) Doha round of 
talks aimed at liberalizing trade on a worldwide basis,[Footnote 2] as 
well as FTA negotiations with Malaysia, are still ongoing, prompting 
the President to urge Congress to renew TPA. 

To address these issues, we reviewed: (1) What FTAs have been pursued 
under TPA and why? (2) Overall, what is the economic significance of 
these agreements to the United States? (3) What is the nature of the 
consultation process for Congress and how well has it worked in 
practice? (4) What is the nature of the consultation process for 
private sector trade advisory committees and other stakeholders, and 
how well has it worked in practice? As agreed, we will provide a second 
report in spring 2008 that will provide more information and analysis 
on the economic and commercial significance of FTAs, as well as a 
review of progress made by FTA partner countries in strengthening labor 
and environmental laws and enforcement. 

To answer these questions, we reviewed documents and interviewed 
officials responsible for international trade policy and negotiations 
at the Office of the U.S. Trade Representative (USTR); the Departments 
of Agriculture, Commerce, Labor, State, and the Treasury; and the 
Environmental Protection Agency, as well as officials of the U.S. 
International Trade Commission (ITC). In addition, to determine what 
FTAs have been pursued under TPA and why, we reviewed USTR documents 
and interagency memoranda discussing FTA partner selection and updated 
our findings from prior GAO work on FTA partner selection.[Footnote 3] 
To determine the potential economic and commercial significance of 
these FTAs, we analyzed official U.S. trade and investment data, as 
well as studies and analyses from USTR, Commerce, ITC, and trade 
experts. To determine the nature of the congressional consultation 
process and how well it has worked in practice, we reviewed 
consultation provisions from the Trade Act of 1974 up through the Trade 
Act of 2002,[Footnote 4] analyzed USTR's congressional consultation 
logs, and interviewed current and former staff of USTR and the 
congressional committees that had participated in these consultation 
meetings. In our congressional interviews, we interviewed House and 
Senate committees, including majority and minority staffs, of the 
trade, agriculture, and other committees of jurisdiction. To determine 
the nature of the consultation process for the trade advisory 
committees and how well it worked in practice, we reviewed relevant 
provisions in the: 

Trade Act of 1974,[Footnote 5] the Federal Advisory Committee Act 
(FACA),[Footnote 6] and TPA[Footnote 7]; analyzed meeting records, 
charter information, and committee rosters; and interviewed 16 of the 
relevant 27 trade advisory committee chairs, judgmentally selected from 
the policy and technical levels of the system, as well as select 
committee members referred to us by the chairs, and the agency 
officials responsible for overseeing these committees. We also updated 
findings from prior GAO work on the trade advisory committees.[Footnote 
8] We conducted our work from January 2007 through August 2007 in 
accordance with generally accepted government auditing standards. (See 
appendix I for details about our objectives, scope, and methodology.) 

Results in Brief: 

In the 5-year period that the President was granted TPA, the United 
States pursued 17 FTAs with 47 countries for a variety of foreign and 
economic policy reasons. Since 2002, 6 FTAs have been approved and are 
in force.[Footnote 9] Negotiations for another 4 FTAs have been 
concluded. Strengthening strategic relationships and promoting reform 
in partner countries are two examples of foreign policy goals that 
influenced FTA partner selection. Economic policy decision factors 
included forming regional and sub-regional trading groups in key 
regions of the world market and replacing one-way U.S. trade preference 
programs with two-way reciprocal agreements. In order to further trade 
liberalization amid lagging WTO talks, the United States simultaneously 
pursued trade agreements with a number of partners on the bilateral, 
regional, and global stage as part of a strategy originally referred to 
as "competitive liberalization" and more recently as "complementary 
liberalization." The United States also followed a strategy of pursuing 
comprehensive and uniformly high standard FTAs, based on TPA 
negotiating goals, foreign and economic policy considerations, and 
private sector input. A number of large trading partners such as the 
European Union (EU), Switzerland, and Japan have not been considered 
ready to enter into FTA negotiations with the United States because of 
its requirement that the FTA include agriculture and other sensitive 
industries or issues, such as services or intellectual property rights. 
Other partners were not considered ready for FTAs because they were not 
WTO members or had only recently acceded. 

Trade with countries for which FTAs were pursued under TPA comprise 
about 16 percent of U.S. trade and about 16 percent of U.S. foreign 
direct investment.[Footnote 10] Of the 16 percent of trade with 
partners pursued under TPA, about half is covered by FTAs that are now 
in force or have been concluded. These FTAs provide reciprocal access 
to trade partners' markets and more competitive access for U.S. 
exporters. Several FTA partners pursued under TPA already had special 
access to the U.S. market through U.S. trade preference programs, which 
are unilateral and do not give U.S. exporters preferential duty-free 
access to foreign beneficiary markets. FTAs address this disparity. 
Also, while reduction or elimination of trade barriers through FTAs has 
been estimated to create an overall net economic benefit for the United 
States and its FTA partners, most economic studies find the gains for 
the United States of the completed FTAs to be relatively small compared 
with the overall U.S. economy. Trade with countries not pursued under 
TPA accounts for about 84 percent of U.S. trade, of which 27 percent is 
with countries covered by FTAs in force prior to TPA (e.g., Canada and 
Mexico), and 56 percent is with countries with which the United States 
does not have FTAs. The largest U.S. trade partners not pursued under 
TPA are the EU, Japan, and China. Remaining trade partners not pursued 
under TPA individually account for relatively small shares of U.S. 
trade. 

USTR held extensive consultations with congressional committee staff on 
FTA negotiations, but satisfaction with those consultations was mixed. 
USTR held 1,605 consultation meetings with Congress related to FTAs 
from August 2002 through April 2007. Just over half of these meetings 
were with the two main trade committees, House Ways and Means and 
Senate Finance, with another 17 percent with the House and Senate 
Agriculture Committees, so that about two-thirds of USTR's 
consultations were with these four committees. Almost all the 
congressional staff we contacted viewed the consultations as a good 
conduit for information flow from USTR. However, satisfaction with the 
quality of the consultations was mixed. While slightly less than half 
of the staff we interviewed were satisfied with the quality of 
consultations, slightly more than half believed that the consultations 
did not provide the opportunity for meaningful input or influence into 
trade negotiations. A particular concern of many of these staff, 
especially those not on the trade or agriculture committees, was that 
the timing of the consultations was often too late to provide 
meaningful input. Several staff also expressed concern that USTR had 
not always fully informed them of important changes in the draft text 
of agreements, which led to controversy in several cases. Various 
process issues were also raised as concerns to some, including how and 
to what extent Congress was involved in selection of FTA partners and 
whether the newly-created Congressional Oversight Group (COG), a 
bicameral institution involving Members from all committees of 
jurisdiction, was effective. Congressional staff and former USTR 
negotiators both agreed on the need to get Congress to focus on trade 
agreements earlier in the process. USTR officials also said that if 
more congressional staff working on FTAs under negotiation obtained 
security clearances, it would greatly facilitate the consultation 
process. 

The private sector advisory committee chairs we contacted said that 
USTR and the relevant executive branch agencies consulted with the 
committees on a fairly regular basis, although process issues at times 
made it difficult for some committees to function effectively. For 
example, half of the committee chairs we interviewed said that the 30- 
day deadline for reporting to the President and Congress on the likely 
impact of final trade agreements[Footnote 11] can be difficult to meet 
for several reasons, including sometimes not getting the full text of 
the agreement from USTR until several days into the 30-day period that 
officially starts when the President notifies Congress of his or her 
intent to enter into an FTA.[Footnote 12] Officials at the ITC reported 
a similar problem associated with the statutory deadline for its 
report. In addition, several committee chairs expressed the perception 
that the composition of their committees was not optimal, either 
favoring one type of industry or group over another or industry over 
nonbusiness interests. At the same time, while Congress mandates that 
the advisory committee system is to involve representative segments of 
the private sector (e.g., industry, agriculture, and labor and 
environmental groups), adherence to these statutory 
requirements[Footnote 13] is not always transparent. Furthermore, 
several committees have not been able to meet for periods of time, 
either because agencies allowed their charters to lapse or had not 
started the process of soliciting and appointing members soon enough to 
ensure committees could meet once they were rechartered. The Labor 
Advisory Committee, for example, did not meet for over 2 years from 
September 2003 until November 2005 due in part to delays in the member 
appointment process. USTR and managing agencies, however, are not 
required to report such lapses in a committee's ability to meet and the 
reasons behind them. 

In this report, we recommend that USTR and other managing agencies 
improve the timeliness of congressional consultation meetings and the 
trade advisory committee rechartering and appointment processes. We 
also recommend that USTR work with Congress to improve access to 
information prior to consultation meetings. In addition, we recommend 
USTR report to Congress on any lapses in trade advisory committees' 
ability to meet, as well as how they meet statutory representation 
requirements in the composition of the advisory committees. Further, we 
provide a matter for congressional consideration to extend the deadline 
of the trade advisory committee and ITC reports by 15 days. We provided 
a draft of this report to USTR; the Departments of Agriculture, 
Commerce, Labor, State, and the Treasury; the Environmental Protection 
Agency; and ITC. The Department of Commerce provided written comments, 
in which it said that the report was generally an accurate summation of 
the status and impacts of FTAs and provided a good overview of some of 
the complexities associated with negotiating an FTA. These comments are 
reproduced in appendix V. USTR; the Departments of Agriculture, 
Commerce, and Labor; the Environmental Protection Agency, and ITC 
provided us with technical comments, which we have incorporated where 
appropriate. The Departments of State and the Treasury had no comments. 
USTR staff also commented to GAO on the proposed recommendations 
regarding statutory representation requirements in advisory committee 
composition and consultation with Congress. GAO incorporated these 
comments as appropriate in the final report. USTR indicated that it 
would report on the actions taken in response to the recommendations in 
a letter as required under U.S. law. 

Background: 

In 2002, Congress passed legislation renewing the President's ability 
to enter into certain trade agreements and submit implementing 
bills[Footnote 14] on an expedited legislative track without 
possibility of amendment. The bill granting this "fast track" 
authority, renamed TPA, passed the House by one vote amid contentious 
debate, with a noticeable split along party lines. Although delegation 
of the constitutional authority to "regulate commerce with foreign 
nations" dates back to 1934[Footnote 15] and some form of fast track 
authority was granted by Congress to every president since 
1974,[Footnote 16] the Bipartisan Trade Promotion Authority Act of 2002 
restored this authority after an 8-year hiatus. 

Congress accompanied this grant with statutorily defined objectives for 
the trade negotiations and requirements that the administration consult 
with Congress and other stakeholders before, during, and after the 
negotiations.[Footnote 17] If Congress decided that the President 
hadn't satisfied his or her obligations to consult under TPA, the 
implementing legislation could be treated like any other bill. Congress 
has applied TPA procedures to every implementing bill submitted under 
the Trade Act, according to USTR. Additional information about the 
history of the consultation requirements can be found in appendix II. 

TPA also requires the administration to consult with private sector 
advisory committees.[Footnote 18] It continues the advisory committee 
system established under the Trade Act of 1974, which was intended to 
ensure that representatives from private business and other groups with 
a stake in trade policy could provide input before, during, and after 
negotiations. The system has a three-tier structure of committees to 
advise the President on (1) overall trade policy, (2) general policy 
areas, and (3) technical aspects of trade agreements. The law requires 
the President to consult with these committees on a continuing and 
timely basis.[Footnote 19] Each advisory committee must submit a report 
to Congress and the President on each trade agreement negotiated under 
TPA no later than 30 days after the President notifies Congress of his 
or her intent to enter into the agreement. [Footnote 20] The system 
comprises about 700 advisors across 28 committees broadly 
representative of the U.S. economy and various trade policy interests. 

The Trade Act of 1974 also requires USTR to provide an opportunity to 
private organizations or groups outside the advisory committee system 
to present their views on trade issues.[Footnote 21] To comply with 
this requirement, USTR publishes a Federal Register notice and the 
Trade Policy Staff Committee[Footnote 22] conducts a hearing. The 
public can comment on any matter relevant to the proposed agreement in 
response to the Federal Register notice, either in writing or at the 
public hearing. USTR also consults with groups outside of these 
mechanisms; sometimes USTR is contacted, and sometimes USTR seeks out 
comments. 

We reported on the trade advisory committee system in 2002 and found 
that it has made valuable contributions to U.S. trade policy and 
agreements.[Footnote 23] We also found, however, that consultations 
were not always timely or useful and that the process needed greater 
accountability. Furthermore, we found that committee structure and 
composition had not been updated to reflect changes in the U.S. economy 
and trade policy. In response to these findings, USTR and the other 
managing agencies have taken several actions, including the 
installation of a secure Web site for viewing draft agreement text; 
reconfiguration of the committee system; introduction of a monthly 
teleconference of chairs; and introduction of periodic plenary sessions 
for the third tier technical committees. 

TPA was actively used by the President. In addition to pursuing 
numerous FTAs, a global round of trade liberalization talks at the WTO 
launched in November 2001 was subsequently notified under TPA. WTO 
talks made some progress, but they were not concluded by the July 1, 
2007, deadline TPA set for an agreement to qualify. The President has 
called on Congress to renew TPA, in part to continue pursuit of WTO 
talks in hopes of achieving fundamental global agriculture reform and 
meaningful reduction in trade barriers to goods and services worldwide. 
Some in Congress are supportive, but others are skeptical, making an 
examination of recent experience under TPA timely. Meanwhile, FTA 
negotiations with Malaysia have continued despite the lapse in TPA. 
Congress must also decide whether to approve the last four FTAs 
concluded under TPA--with Peru, Colombia, Panama, and South Korea. 

Since Passage of TPA, the United States Has Pursued Negotiations of 17 
Comprehensive FTAs for Foreign and Economic Policy Reasons: 

Since the passage of TPA in 2002, the United States has pursued 
negotiations towards 17 comprehensive FTAs covering 47 countries. FTA 
partner countries were selected for a variety of foreign and economic 
policy reasons. The United States followed a strategy of competitive 
liberalization, which entails simultaneously pursuing bilateral, 
multilateral, and global trade agreements. Furthermore, the United 
States only pursued comprehensive FTAs, but a number of large trading 
partners were unwilling to negotiate on sensitive topics such as 
agriculture in FTAs. 

Since 2002, the United States Has Pursued Negotiations of 17 FTAs with 
47 Countries: 

In the 5-year period that TPA was granted to the President, from 2002- 
2007, the administration pursued negotiations toward 17 FTAs with 47 
countries.[Footnote 24] These 47 countries extend from North America to 
South America to the Pacific Rim to the Middle East. (See table 1.) Six 
FTAs have been approved and are in force. An additional 4 FTAs with 4 
countries have been signed but not yet approved, and FTAs with Costa 
Rica[Footnote 25] and Oman have been signed and approved by the U.S. 
Congress but are not yet in force.[Footnote 26] Furthermore, an FTA 
with Malaysia is currently under negotiation, and negotiations for the 
remaining 5 FTAs are not yet concluded.[Footnote 27] 

Table 1: Free Trade Agreements Negotiated under Trade Promotion 
Authority: 

Agreements concluded and in force: Agreement country: Singapore; 
Agreements concluded and in force: Entry into force: January 1, 2004. 

Agreements concluded and in force: Agreement country: Chile; 
Agreements concluded and in force: Entry into force: January 1, 2004. 

Agreements concluded and in force: Agreement country: Australia; 
Agreements concluded and in force: Entry into force: January 1, 2005. 

Agreements concluded and in force: Agreement country: Morocco; 
Agreements concluded and in force: Entry into force: January 1, 2006. 

Agreements concluded and in force: Agreement country: Central America-
Dominican Republic FTA (CAFTA-DR)[A]: El Salvador; 
Agreements concluded and in force: Entry into force: March 1, 2006. 

Agreements concluded and in force: Agreement country: Central America-
Dominican Republic FTA (CAFTA-DR)[A]: Honduras; 
Agreements concluded and in force: Entry into force: April 1, 2006. 

Agreements concluded and in force: Agreement country: Central America-
Dominican Republic FTA (CAFTA-DR)[A]: Nicaragua; 
Agreements concluded and in force: Entry into force: April 1, 2006. 

Agreements concluded and in force: Central America-Dominican Republic 
FTA (CAFTA-DR)[A]: Guatemala; 
Agreements concluded and in force: Entry into force: July 1, 2006. 

Agreements concluded and in force: Agreement country: Central America-
Dominican Republic FTA (CAFTA-DR)[A]: Dominican Republic; 
Agreements concluded and in force: Entry into force: March 1, 2006. 

Agreements concluded and in force: Agreement country: Bahrain; 
Agreements concluded and in force: Entry into force: August 1, 2006. 

Agreements concluded but not yet in force: Agreement Country: CAFTA-DR 
Costa Rica; 
Agreements concluded but not yet in force: Negotiations concluded: 
January 25, 2004; 
Agreements concluded but not yet in force: Agreement signed: May 28, 
2004; 
Agreements concluded but not yet in force: U.S. implementing 
legislation signed: August 2, 2005 (Costa Rica government approved, but 
not yet implemented). 

Agreements concluded but not yet in force: Agreement Country: Oman; 
Agreements concluded but not yet in force: Negotiations concluded: 
October 3, 2005; 
Agreements concluded but not yet in force: Agreement signed: January 
19, 2006; 
Agreements concluded but not yet in force: U.S. implementing 
legislation signed: September 26, 2006 (Oman government approved, but 
not yet implemented). 

Agreements concluded but not yet in force: Agreement Country: Peru[B]; 
Agreements concluded but not yet in force: Negotiations concluded: 
December 7, 2005; 
Agreements concluded but not yet in force: Agreement signed: April 12, 
2006; 
Agreements concluded but not yet in force: U.S. implementing 
legislation signed: Not yet signed. 

Agreements concluded but not yet in force: Agreement Country: 
Colombia[B]; 
Agreements concluded and in force: Entry into force: February 27, 2006; 
Agreements concluded but not yet in force: Agreement signed: November 
22, 2006; 
Agreements concluded but not yet in force: U.S. implementing 
legislation signed: Not yet signed. 

Agreements concluded but not yet in force: Agreement Country: Panama; 
Agreements concluded and in force: Entry into force: December 19, 2006; 
Agreements concluded but not yet in force: Agreement signed: June 28, 
2007; 
Agreements concluded but not yet in force: U.S. implementing 
legislation signed: Not yet signed. 

Agreements concluded but not yet in force: Agreement Country: South 
Korea; 
Agreements concluded and in force: Entry into force: April 1, 2007; 
Agreements concluded but not yet in force: Agreement signed: June 30, 
2007; 
Agreements concluded but not yet in force: U.S. implementing 
legislation signed: Not yet signed. 

Current negotiations: Negotiation country: Malaysia; 
Current negotiations: Negotiations began: March 8, 2006. 

Negotiations not yet concluded: Negotiation country: Free Trade Area of 
the Americas (FTAA)[E]; 
Negotiations not yet concluded: Negotiations began: April 19, 1998[C]. 

Negotiations not yet concluded: Negotiation country: Southern African 
Customs Union (SACU)[F; 
Negotiations not yet concluded: Negotiations began: June 2, 2003. 

Negotiations not yet concluded: Negotiation country: Ecuador[B]; 
Negotiations not yet concluded: Negotiations began: May 18, 2004. 

Negotiations not yet concluded: Negotiation country: Thailand; 
Negotiations not yet concluded: Negotiations began: June 28, 2004. 

Negotiations not yet concluded: Negotiation country: United Arab 
Emirates[D]; 
Negotiations not yet concluded: Negotiations began: March 12, 2005. 

Agreements concluded and in force prior to TPA: Agreement country: 
Israel; 
Agreements concluded and in force prior to TPA: Entry into effect: 
September 1, 1985. 

Agreements concluded and in force prior to TPA: Agreement country: 
Canada; 
Agreements concluded and in force prior to TPA: Entry into effect: 
January 1, 1989. 

Agreements concluded and in force prior to TPA: Agreement country: 
Canada; 
Agreements concluded and in force prior to TPA: Entry into effect: 
January 1, 1994. 

Agreements concluded and in force prior to TPA: Agreement country: 
Mexico; 
Agreements concluded and in force prior to TPA: Entry into effect: 
January 1, 1994. 

Agreements concluded and in force prior to TPA: Agreement country: 
Jordan; 
Agreements concluded and in force prior to TPA: Entry into effect: 
December 17, 2001. 

Source: GAO analysis of USTR data. 

[A] The Dominican Republic was integrated into CAFTA after CAFTA 
negotiations had been concluded. 

[B] Negotiations with Peru, Colombia, and Ecuador began together on May 
18, 2004. Eventually, the Untied States concluded separate bilateral 
agreements with Peru and Colombia, but not with Ecuador. While Bolivia 
was an observer at the initial talks, negotiations with Bolivia never 
got under way. 

[C] Negotiations for the FTAA began before TPA was granted, but the 
United States continued to negotiate it under TPA. At present, however, 
negotiations for the FTAA are at an impasse. 

[D] The United States and the United Arab Emirates have, for the short 
term, switched their efforts from negotiating an FTA to deepening their 
economic relationship through their 2004 Trade and Investment Framework 
Agreement. The long-term objective of both sides, however, remains a 
comprehensive FTA. 

[E] The countries included in the FTAA are: Antigua and Barbuda, 
Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, 
Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El 
Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, 
Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, 
Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, 
Uruguay, and Venezuela. 

[F] The countries included in SACU are: Botswana, Lesotho, Namibia, 
South Africa, and Swaziland. 

[End of table] 

FTA Partners Were Selected for a Variety of Foreign and Economic Policy 
Reasons: 

The United States has negotiated comprehensive FTAs for a variety of 
foreign and economic policy reasons. Agency officials confirmed that 
since mid-2004, FTA partners have been judged on six criteria outlined 
by the National Security Council, as GAO reported in 2004.[Footnote 28] 
These criteria are as follows: 

* country readiness, 

* economic/commercial benefit, 

* benefits to the broader trade liberalization strategy, 

* compatibility with U.S. interests, 

* congressional/private sector support, and: 

* U.S. government resource constraints. 

According to officials we interviewed, these criteria are broad and, as 
a result, the administration has considerable discretion in choosing 
potential FTA partners. Among the foreign policy considerations for 
selecting FTA partners are the strengthening of strategic relationships 
and the promotion of reform in partner countries. In addition to the 
first two criteria mentioned above of assessing country readiness as 
well as the economic/commercial benefit, forming regional trading 
blocks and replacing trade preference programs were among the economic 
policy factors. 

Strengthening Strategic Relationships: 

Agency officials told us that establishing trading relationships with 
strategic friends and allies was a key factor in deciding with whom to 
enter into FTA negotiations. Particularly following the September 11 
terrorist attacks and the onset of the Iraq war, pursuing FTAs with 
moderate Muslim countries became a significant policy goal. In May 
2003, the President announced a Middle East Free Trade Initiative, 
which lays out a plan of graduated steps for Middle Eastern nations to 
increase trade and investment with the United States. Under this 
initiative, the United States has entered into FTAs with Morocco and 
Bahrain and has approved an FTA with Oman. This is in addition to the 
FTAs the United States already had with Israel and Jordan. USTR 
indicated in its November 2004 letter of intent to enter into an FTA 
with Oman, for example, that Oman, as a member of the Gulf Cooperation 
Council, will "continue to be an important strategic colleague on a 
broad array of foreign and national security issues." The United States 
has sought to strengthen strategic relationships through FTAs in other 
regions as well. For example, the November 2003 letter of intent to 
enter into an FTA with Panama indicated that "an FTA will serve to 
strengthen not only economic ties but also political and security 
ones." 

Promoting Reform in Partner Countries: 

Another foreign policy goal in selecting FTA partners was promoting 
economic and political reform in partner countries. Public statements 
regarding the FTA with Morocco, for example, suggest that it would add 
momentum to political reform already under way there. USTR also stated 
that the Central America--Dominican Republic Free Trade Agreement 
(CAFTA-DR) will strengthen "free-market reforms" in Central America, 
adding that "the growth stimulated by trade and the openness of an 
agreement will help deepen democracy, the rule of law, and sustainable 
development." Public documents related to the Andean FTA initiative 
state that an Andean FTA would "enhance our efforts to strengthen 
democracy and support for fundamental values in the region" such as 
rule of law, sustainable development, transparency, anti-corruption, 
and good governance. USTR also indicated that an FTA with South Korea 
would promote enhanced regulatory transparency in a top U.S. trade 
partner. 

Enhancing Regional Economic Initiatives: 

Beyond assessing a country's readiness and potential economic/ 
commercial benefits, USTR publications and interviews with senior 
agency officials suggest that sequencing from previous FTAs and 
building toward larger regional initiatives were considerations for 
entering into negotiations with a number of countries. For example, as 
the U.S.-Chile FTA negotiations were drawing to a close, the United 
States announced its intent to enter into FTA negotiations with the 
Central American countries of Costa Rica, El Salvador, Guatemala, 
Honduras, and Nicaragua under CAFTA and later announced its intent to 
include the Dominican Republic in those negotiations. USTR also 
submitted a letter of intent to enter into FTA negotiations with the 
Andean countries of Colombia, Peru, Ecuador, and Bolivia under the 
Andean FTA. The individual letters of intent to enter in FTA 
negotiations with these ten countries cited the complementary nature of 
these negotiations, which would lend momentum to concluding the Free 
Trade Area of the Americas (FTAA). Agency officials explained that when 
the United States pursues individual bilateral FTAs, one goal is to 
enable them to be woven into regional agreements under the mantle of 
broader integration. The individual letters of intent to enter into FTA 
negotiations with Thailand and Malaysia also cited the Enterprise for 
ASEAN Initiative as a factor in the selection process, building upon 
the U.S.-Singapore FTA. The administration envisioned similar regional 
or subregional trading groups for the Middle East (the Middle East Free 
Trade Area) and South Africa (SACU, Southern African Customs Union). 
(See fig. 1.) 

Figure 1: Pursuit of a Regional Focus for FTAs: 

This figure is a chart showing pursuit of a regional focus for FTAs. 

[See PDF for image] 

Source: GAO (data); Map Resources (maps). 

[End of figure] 

Transitioning from Trade Preference Programs: 

For certain developing country FTA partners, one motivation in U.S. 
selection was converting one-way U.S. trade preference programs into 
two-way reciprocal agreements. Agency officials explained that under 
preference programs such as the Generalized System of 
Preferences[Footnote 29] and the Caribbean Basin Initiative,[Footnote 
30] developing countries have preferential duty-free access to the 
American market without having to reciprocate; by entering into FTAs 
with them, the United States "levels the playing field" by gaining 
market access in these countries. Public documents related to the SACU 
trade negotiations, for example, noted an opportunity to replace the 
African Growth and Opportunity Act[Footnote 31] trade preference 
program with an FTA for several of the partner countries. The Andean 
FTA was motivated in part by a desire to replace the Andean Trade 
Preference Agreement,[Footnote 32] while the CAFTA-DR[Footnote 33] was 
motivated in part by a desire to replace a major portion of the 
Caribbean Basin Initiative. Furthermore, USTR officials noted that 
transitioning from unilateral trade preferences to reciprocal trade 
agreements would deepen existing regional integration. USTR identified 
section 202(b) of the United States-Caribbean Basin Trade Partnership 
Act[Footnote 34] as an example of how this evolution was also a goal 
that Congress shared. 

Under TPA, the Administration Pursued Strategies of Competitive 
Liberalization and Comprehensive FTAs: 

As WTO negotiations have repeatedly stalled in the face of wide 
substantive differences, particularly over agriculture,[Footnote 35] 
the United States has sought to continue to be active in pursuing trade 
agreements at other levels, even prior to TPA. As part of its mission 
to play the leading role in developing and coordinating U.S. trade 
policy, USTR pursued trade agreements throughout the 1990s not only at 
the global level through the WTO, but also at the bilateral and 
multilateral levels, such as through the U.S.-Jordan FTA and the North 
American Free Trade Agreement (NAFTA). Since TPA passage, USTR 
officials stressed that they would simultaneously pursue bilateral, 
multilateral, and global trade agreements under a strategy referred to 
as "competitive liberalization," or more recently as "complementary 
liberalization." This competitive liberalization strategy linked trade 
policy to foreign policy, security policy, and commercial policy goals. 
Although still committed to liberalization on a global front, working 
in parallel with the WTO framework offered an opportunity to keep the 
concept of achieving liberalization moving forward despite setbacks at 
the global level. 

Competitive liberalization had the dual goal of providing momentum for 
global trade liberalization and providing an alternative if global 
trade talks failed to progress. As former U.S. Trade Representative 
Robert Zoellick explained in 2002, "we will not passively accept a veto 
over America's drive to open markets. We want to encourage reformers 
who favor free trade. If others do not want to move forward, the United 
States will move ahead with those who do." Agency officials say that, 
due to its importance to the global trading system and the potential of 
more significant and broad-based economic gains, the successful 
completion of global trade agreements such as the WTO Doha Round is the 
administration's ultimate goal and that FTAs were intended to serve as 
a stepping stone to that goal since they can provide a substantial 
demonstration effect. U.S. Trade Representative Susan Schwab said in 
her May 2006 Senate confirmation hearing that pursuing FTAs helps "to 
establish the breadth and scope of potential multilateral agreements in 
years to come by setting precedents and by demonstrating the real 
benefits of free and fair trade." For example, according to 
administration officials, signing NAFTA contributed to moving the last 
(Uruguay) round of global trade talks creating the WTO to conclusion. 
Additionally, FTAs were seen as a tool to strengthen relationships with 
trading partners similarly seeking progress in global liberalization. 
In the letter announcing its intent to negotiate an FTA with Australia, 
for example, the USTR stated "we believe that an FTA would further 
unite and strengthen the alliance of countries leading the effort 
toward global trade liberalization." The second goal of competitive 
liberalization was to provide an alternative venue for pursuing trade 
liberalization as WTO talks lagged. However, whereas competitive 
liberalization sought to pressure other countries to agree to tariff 
and subsidy cuts in the WTO, complementary liberalization sees the 
simultaneous pursuit of FTAs and WTO negotiations as a mutually 
reinforcing effort. Former U.S. Trade Representative Robert Portman 
explained in 2006 that, "where we have a free trade agreement, we find 
we haveâ¦the ability to have a better relationship on the multilateral 
issues [and] it's relatively easy on the global stageâ¦to find some 
solutions." 

Closely tied to the strategy of competitive/complementary 
liberalization is the strategy of pursuing only highly comprehensive 
"gold standard" bilateral and regional FTAs. Such agreements have a 
number of absolute requirements, based on the model USTR seeks to use. 
NAFTA was the original "model," although requirements have evolved with 
time and with different regions. USTR insists, for example, that 
partners accept the inclusion of agriculture, as well as a "negative 
list" approach to services,[Footnote 36] because they believe this will 
provide greater liberalization and lessen impediments to securing 
market access. Agency officials did say there is some room to change 
specific language depending on a country's individual needs, such as 
changing what level of market access would be proposed, and the 
timetable for phasing down barriers. However, officials also noted that 
taking products, sectors, or issues off the table, particularly ones 
such as intellectual property rights that are considered to provide a 
U.S. competitive advantage, generally precludes or creates an impasse 
in negotiations. Other countries that negotiate FTAs frequently exclude 
sensitive industries or issues. Some trade experts argued that USTR's 
pursuit of comprehensive agreements limits potential FTA partners since 
a number of larger economies are unwilling to enter into such 
comprehensive negotiations. Administration officials recognized this 
and cited the EU, Switzerland, and Japan as examples of major trading 
partners with which an FTA with the United States could have 
significant commercial value but where the trading partner appears 
unwilling to assume obligations consistent with the objectives set out 
in TPA. USTR reports that it paused negotiations pursued under TPA with 
other large countries or subregions, such as the FTAA and SACU, in part 
for similar reasons. At the same time, some partners were not 
considered ready for FTAs because they either were not WTO members or 
had only recently acceded. 

Agency officials told us that a number of interrelated factors 
influenced their decision to pursue exclusively comprehensive trade 
agreements: 

* Legislative requirements-Agency officials told us that TPA 
legislation played a large role in the decision to pursue only 
comprehensive FTAs. Since, under TPA, each agreement must make progress 
in meeting the applicable negotiating objectives prescribed by 
Congress,[Footnote 37] USTR only pursues FTAs in which the negotiating 
objectives are translated into 16 standard chapter headings, and the 
provisions require partner countries to pursue a number of nontariff 
based reforms. These include transparency in government procurement, 
protection from discrimination for investors, and liberalization of 
financial and other services. Agency officials told us that USTR has 
some discretion in how to pursue these objectives, but since the 
objectives are statutorily mandated, their discretion starts at a 
fairly high bar. 

* Foreign and economic policy goals-The administration has said that 
pursuing comprehensive FTAs links trade policy to foreign policy and 
security policy goals. According to USTR, comprehensive FTAs include a 
number of provisions linking the trade agreement to other goals such as 
encouraging reform and openness, strengthening partners' regulatory 
environments, and establishing the framework for promoting democracy. 
Furthermore, agency officials and trade experts stressed that if the 
United States pursued FTAs with "sweetheart exemptions" it would 
actually be undermining the international trading system in violation 
of WTO rules and regulations. Furthermore, agency officials questioned 
whether pursuing noncomprehensive FTAs would lead to noticeable 
commercial gains since trade barriers with large trading partners 
usually only remain in sensitive industries. 

* Private sector input-Since all trade agreements must be approved by 
Congress, USTR officials told us they only negotiate agreements that 
they think will receive broad domestic support. As private sector 
representatives have identified certain "deal breakers," which must be 
included in order to gain their support, USTR officials always include 
these topics in the FTAs they negotiate. These topics include a 
negative lists approach to services and inclusion of intellectual 
property protection provisions. 

* Negotiating strategy-Agency officials and congressional staff 
involved in trade issues also told us that since the precedent that the 
United States only engages in comprehensive FTAs has been set, they 
have reinforced their credibility in insisting on future comprehensive 
FTAs. Partner countries also have a better sense of what the United 
States expects. A trade expert we spoke with added that due to the 
asymmetric bargaining strength of the United States compared with most 
of its negotiating partners given the relative sizes of their 
economies, USTR likely has more leverage in proposing the baseline 
agreement for the negotiation. On the other hand, the United States has 
had less success in insisting on such requirements with some large 
prospective partners, such as Brazil, Switzerland, and Japan. 

Not everyone involved in trade negotiations, however, believes that 
exclusively pursuing comprehensive FTAs is in the best interest of the 
United States. We heard from both the private sector and former 
congressional staff that strict insistence on comprehensive FTAs may 
disadvantage the United States compared with other countries that 
engage in FTAs more liberally. In addition, they told us that "one size 
does not fit all" and developing countries need help to develop before 
they trade with the United States. Agency officials told us, however, 
that due to the factors listed above, they remain convinced that 
pursuing comprehensive FTAs is the best policy for the United States. 
Furthermore, they pointed out that a prospective FTA partner's 
readiness to undertake obligations which would meet TPA objectives and 
U.S. interests is evaluated in the selection choice. If a country or 
group of countries is not ready, the United States uses other 
mechanisms such as Trade and Investment Framework Agreements as 
building blocks, including capacity building. 

FTAs Pursued Account for Limited Share of U.S. Trade and Investment but 
Include Diverse Markets for U.S. Exports: 

Trade with countries for which FTAs were pursued under TPA accounted 
for about 16 percent of U.S. trade in 2006 and about 16 percent of U.S. 
foreign direct investment in 2005. FTAs seek to expand opportunities 
for U.S. exporters in foreign markets, while solidifying the trade and 
investment relationship with these trade partners. Of the remaining 84 
percent of U.S. trade, 27 percent was with countries for which the U.S. 
had an FTA prior to TPA (e.g., Canada and Mexico) and 56 percent was 
with countries not pursued under TPA, including the EU, Japan, and 
China. 

FTAs Pursued Account for about 16 Percent of U.S. Trade: 

Of the approximately $3.4 trillion in U.S. trade in 2006, FTAs pursued 
under TPA accounted for about $558 billion, or 16 percent of the total. 
This includes exports and imports and both goods and services. About 
half of this trade (8 percent) was accounted for by agreements in force 
or concluded; the remainder was with partners with whom the United 
States has not yet concluded an agreement. Figure 2 shows the breakdown 
of total U.S. trade (exports plus imports of goods and services) across 
groups of trade partners. 

Figure 2: Total U.S. Trade by Status of FTA Negotiations under TPA: 

This figure is a pie chart showing the total U.S. trade by status of 
FTA negotiations under TPA. 

Non-FTA trade partners: 56%; 
FTAs prior to TPA: 27%; 
FTAs pursued under TPA since 2002: 9%; 
FTAs concluded and in force: 4%; 
FTAs pursued but not yet concluded: 4%. 

[See PDF for image] 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

Notes: Percentages for FTAs pursued under TPA actually add to 16 
percent but do not total due to rounding. 

See table 2 for data and analysis used. 

[End of figure] 

FTAs pursued under TPA accounted for a somewhat larger share of total 
U.S. exports (19 percent) than U.S. imports (15 percent). This pattern 
is reversed with non-FTA countries, which accounted for 52 percent of 
U.S. exports, but 59 percent of U.S. imports. Table 2 shows the share 
of overall U.S. trade, exports, and imports by status of FTA 
negotiations under TPA. In addition, countries with which the United 
States pursued FTAs accounted for about 16 percent of U.S. foreign 
direct investment in 2005 (see app. III for more information on U.S. 
foreign direct investment). 

Table 2: U.S. Trade (Goods and Services) with All U.S. Trade Partners: 

U.S. dollars in millions. 

FTAs pursued under TPA; 
Total trade: 558,276; 
Share of total: 16%; 
Share of exports: 19%; 
Share of imports: 15%. 

FTAs concluded and in force; 
Total trade: 136,082; 
Share of total: 4; 
Share of exports: 6; 
Share of imports: 3. 

FTAs concluded but not yet in force; 
Total trade: 128,304; 
Share of total: 4; 
Share of exports: 4; 
Share of imports: 3. 

FTAs pursued but not yet concluded; 
Total trade: 293,890; 
Share of total: 9; 
Share of exports: 9; 
Share of imports: 8. 

FTAs prior to TPA; 
Total trade: 937,092; 
Share of total: 27; 
Share of exports: 29; 
Share of imports: 26. 

Non-FTA trade partners; 
Total trade: 1,920,223; 
Share of total: 56; 
Share of exports: 52; 
Share of imports: 59. 

Total; 
Total trade: 3,415,591; 
Share of total: 100%; 
Share of exports: 100%; 
Share of imports: 100%. 

Sources: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau and the Bureau of Economic Analysis. 

Notes: U.S. trade in goods statistics from 2006; U.S. trade in services 
statistics from 2005 (most recent year available). Percentages do not 
always total 100 percent due to rounding. 

Services trade data was not available individually for some countries 
if they were not large suppliers or purchasers of services products. 
See appendix III, table 6, for services trade by country, which 
indicates whether trade data was available. 

Goods trade statistics are imports for consumption (customs value) and 
domestic exports (free alongside ship (FAS) value). 

[End of table] 

Countries with which the United States has pursued FTAs under TPA are a 
diverse group. Table 3 shows the countries pursued by the status of the 
FTA negotiations. Concluded agreements already in force include 
countries in Asia (Australia and Singapore), the Middle East and North 
Africa (Bahrain and Morocco), and Latin America (Chile and CAFTA- 
DR[Footnote 38]). The concluded agreement with South Korea, for which 
implementing legislation has not yet been submitted to Congress, would 
account for the single largest individual trade partner of those 
pursued under TPA (about 3 percent of total U.S. trade). However, the 
FTAA, for which negotiations are at an impasse, would have encompassed 
the largest economic area since it includes Brazil and Argentina, as 
well as existing FTA partners in NAFTA (Canada and Mexico), CAFTA-DR, 
Chile, and others in the Western Hemisphere. 

Table 3: U.S. Trade (Goods and Services) for FTAs Pursued under TPA: 

U.S. dollars in millions. 

All countries; 
Total trade: 3,415,591; 
Share of total: 100.0%; 
Share of exports: 100.0%; 
Share of imports: 100.0%. 

All FTAs under TPA; 
Share of total: 558,276; 
Share of exports: 16.3; 
Share of imports: 19.2; 
14.6. 

FTAs concluded and in force; 
Share of total: 136,082; 
Share of exports: 4.0; 
Share of imports: 5.9; 
2.8. 

Australia; 
Share of total: 37,149; 
Share of exports: 1.1; 
Share of imports: 1.9; 
0.6. 

Bahrain; 
Share of total: 1,103; 
Share of exports: 0.0; 
Share of imports: 0.0; 
0.0. 

Singapore; 
Share of total: 49,141; 
Share of exports: 1.4; 
Share of imports: 2.1; 
1.0. 

Chile; 
Share of total: 17,837; 
Share of exports: 0.5; 
Share of imports: 0.6; 
0.5. 

Morocco; 
Share of total: 1,416; 
Share of exports: 0.0; 
Share of imports: 0.1; 
0.0. 

CAFTA-DR; 
Share of total: 29,437; 
Share of exports: 0.9; 
Share of imports: 1.1; 
0.7. 

Dominican Republic; 
Share of total: 9,573; 
Share of exports: 0.3; 
Share of imports: 0.4; 
0.2. 

El Salvador; 
Share of total: 3,926; 
Share of exports: 0.1; 
Share of imports: 0.2; 
0.1. 

Guatemala; 
Share of total: 6,401; 
Share of exports: 0.2; 
Share of imports: 0.3; 
0.1. 

Honduras; 
Share of total: 7,306; 
Share of exports: 0.2; 
Share of imports: 0.3; 
0.2. 

Nicaragua; 
Share of total: 2,231; 
Share of exports: 0.1; 
Share of imports: 0.1; 
0.1. 

FTAs concluded but not yet in force; 
Share of total: 128,304; 
Share of exports: 3.8; 
Share of imports: 4.4; 
3.3. 

Colombia; 
Share of total: 15,475; 
Share of exports: 0.5; 
Share of imports: 0.5; 
0.4. 

Costa Rica; 
Share of total: 7,691; 
Share of exports: 0.2; 
Share of imports: 0.3; 
0.2. 

Oman; 
Share of total: 1,614; 
Share of exports: 0.0; 
Share of imports: 0.1; 
0.0. 

Panama; 
Share of total: 2,861; 
Share of exports: 0.1; 
Share of imports: 0.2; 
0.0. 

Peru; 
Share of total: 8,552; 
Share of exports: 0.3; 
Share of imports: 0.2; 
0.3. 

South Korea; 
Share of total: 92,111; 
Share of exports: 2.7; 
Share of imports: 3.2; 
2.4. 

FTAs pursued but not yet concluded; 
Share of total: 293,890; 
Share of exports: 8.6; 
Share of imports: 8.9; 
8.4. 

FTAA; 
Share of total: 184,068; 
Share of exports: 5.4; 
Share of imports: 5.9; 
5.1. 

Brazil; 
Share of total: 51,074; 
Share of exports: 1.5; 
Share of imports: 1.8; 
1.3. 

Argentina; 
Share of total: 10,800; 
Share of exports: 0.3; 
Share of imports: 0.5; 
0.2. 

Venezuela; 
Share of total: 47,977; 
Share of exports: 1.4; 
Share of imports: 0.9; 
1.7. 

Ecuador; 
Share of total: 9,560; 
Share of exports: 0.3; 
Share of imports: 0.2; 
0.3. 

Other; 
Share of total: 64,657; 
Share of exports: 1.9; 
Share of imports: 2.6; 
1.5. 

Thailand; 
Share of total: 32,469; 
Share of exports: 1.0; 
Share of imports: 0.7; 
1.1. 

Malaysia; 
Share of total: 49,685; 
Share of exports: 1.5; 
Share of imports: 1.0; 
1.7. 

United Arab Emirates; 
Share of total: 12,511; 
Share of exports: 0.4; 
Share of imports: 0.9; 
0.1. 

SACU; 
Share of total: 15,156; 
Share of exports: 0.4; 
Share of imports: 0.5; 
0.4. 

Botswana; 
Share of total: 279; 
Share of exports: 0.0; 
Share of imports: 0.0; 
0.0. 

Lesotho; 
Share of total: 412; 
Share of exports: 0.0; 
Share of imports: 0.0; 
0.0. 

Namibia; 
Share of total: 229; 
Share of exports: 0.0; 
Share of imports: 0.0; 
0.0. 

South Africa; 
Share of total: 14,069; 
Share of exports: 0.4; 
Share of imports: 0.4; 
0.4. 

Swaziland; 
Share of total: 167; 
Share of exports: 0.0; 
Share of imports: 0.0; 
0.0. 

FTAs prior to TPA; 
Share of total: 937,092; 
Share of exports: 27.4; 
Share of imports: 29.3; 
26.3. 

Israel; 
Share of total: 32,363; 
Share of exports: 0.9; 
Share of imports: 0.8; 
1.0. 

Jordan; 
Share of total: 2,045; 
Share of exports: 0.1; 
Share of imports: 0.0; 
0.1. 

NAFTA; 
Share of total: 902,684; 
Share of exports: 26.4; 
Share of imports: 28.4; 
25.3. 

Canada; 
Share of total: 555,789; 
Share of exports: 16.3; 
Share of imports: 17.9; 
15.3. 

Mexico; 
Share of total: 346,896; 
Share of exports: 10.2; 
Share of imports: 10.5; 
10.0. 

Non-FTA countries; 
Share of total: 1,920,223; 
Share of exports: 56.2; 
Share of imports: 51.6; 
59.0. 

EU; 
Share of total: 761,921; 
Share of exports: 22.3; 
Share of imports: 25.2; 
20.5. 

Japan; 
Share of total: 267,768; 
Share of exports: 7.8; 
Share of imports: 7.6; 
8.0. 

China; 
Share of total: 354,260; 
Share of exports: 10.4; 
Share of imports: 4.7; 
13.8. 

India; 
Share of total: 40,910; 
Share of exports: 1.2; 
Share of imports: 1.1; 
1.3. 

All others; 
Share of total: 495,365; 
Share of exports: 14.5%; 
Share of imports: 13.0%; 
15.4%. 

Legend: 

CAFTA-DR = Central America-Dominican Republic Free Trade Agreement FTAA 
= Free Trade Area of the Americas NAFTA = North American Free Trade 
Agreement SACU = Southern African Customs Union: 

Sources: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau and the Bureau of Economic Analysis. 

Notes: U.S. trade in goods statistics are for 2006; U.S. trade in 
services statistics are for 2005, which is the most recent year 
available. "0.0%" are values less than 0.05 percent which round to 
zero. Percentages do not always total 100 percent due to rounding. 

Services trade data was not available individually for some countries 
if they were not large suppliers or purchasers of services products. 
See appendix III, table 6, for services trade by country, which 
indicates whether trade data was available. 

[End of table] 

FTAs Provide Permanent, Reciprocal Access for U.S. Trade and 
Competitive Playing Field for U.S. Exports: 

The FTAs pursued under TPA seek a high level of liberalization. As 
noted previously, the United States has sought elimination of 
substantially all trade barriers under its FTAs in order to maximize 
the overall economic benefits of the agreements. While reduction or 
elimination of trade barriers through FTAs has been estimated to create 
an overall net economic benefit for the United States and its FTA 
partners, most economic studies find the gains for the United States of 
the FTAs to be relatively small compared with the overall U.S. 
economy.[Footnote 39] Assessments by ITC of economy-wide and sectoral 
effects of actual, completed FTAs also indicate positive but generally 
small effects on the U.S. economy and trade overall. (The U.S. FTA with 
South Korea is predicted to have modest effects.) However, with the 
exception of Singapore, given the FTA partners' generally higher trade 
barriers, U.S. export gains are predicted to be larger than import 
increases for each FTA the ITC has assessed. For South Korea, U.S. 
exports are predicted to rise by $9.7 to 10.9 billion, while U.S. 
imports from South Korea rise by $6.4 to $6.9 billion.[Footnote 40] 

While FTAs require the United States to lower its trade barriers, 
several FTA partners pursued under TPA already had special access to 
the U.S. market through U.S. trade preference programs. For example, 
CAFTA-DR economies had preferential access to the U.S. market through 
the Generalized System of Preferences and the Caribbean Basin 
Initiative (including the Caribbean Basin Trade Promotion Act, which 
provided additional access). However, FTAs provide superior market 
access for several reasons. First, product coverage under FTAs is more 
complete. About 91 percent of products in the U.S. tariff schedule (for 
goods) are either eligible for preferential access (54 percent) or are 
already duty-free for most countries (37 percent). The remaining 9 
percent of products are still dutiable even for countries eligible for 
preference programs. FTAs eliminate nearly all U.S. duties on these 
remaining products. Second, FTAs are bilateral agreements that provide 
trade partners with permanent access to the U.S. market. Preference 
programs are unilateral programs that need reauthorization.[Footnote 
41] Lapses in authorization have created uncertainty in the past for 
both foreign exporters and investors. Finally, since preference 
programs are unilateral, U.S. exporters do not receive preferential 
duty-free access to foreign beneficiary markets. FTAs address this 
disparity. 

FTAs also help U.S. exports maintain a competitive advantage or 
counteract the advantages of third-country competitors that may already 
have better access to foreign markets through their own FTAs. In cases 
in which competitors do not have an FTA with U.S. FTA partners, U.S. 
exports gain an advantage over exports from competitors. The edge 
varies by country and product and depends on the restrictiveness of the 
tariff and nontariff barriers in our FTA partners' economies. For 
example, in CAFTA-DR countries, the simple average tariff rate across 
all products ranged from 5.6 to 8.5 percent in 2006, with tariffs on 
agricultural products ranging from 9.7 to 13.1 percent.[Footnote 42] 
Non-FTA countries must still pay these rates on their exports. U.S. 
"most favored nation" tariff rates,[Footnote 43] which apply to all but 
two U.S. partners (North Korea and Cuba) that do not otherwise qualify 
for special, lower, rates, by comparison, were 3.5 percent overall and 
5.3 percent for agricultural products. In some countries, average most 
favored nation tariff rates are even higher on agricultural products 
relative to those on nonagricultural products. For example, according 
to the WTO,[Footnote 44] the overall average tariff rate for South 
Korea on all products was 12.1 percent, but 47.8 percent for 
agricultural products. Table 8 in appendix III shows the simple average 
tariff rates (non-FTA rates) across U.S. FTA partners to provide an 
indication of the tariff benefits provided by FTAs. For countries that 
have FTAs with trade partners besides the United States, FTAs help 
restore the competitiveness of U.S. exports by providing comparable 
access. For example, Chile also has FTAs with Canada, Mexico, and the 
EU, as well as the United States. If the United States did not have an 
FTA with Chile, then U.S. exporters would be at a disadvantage relative 
to exporters from Canada, Mexico, and the EU. On the other hand, since 
FTA partners are free to enter into additional agreement with other 
countries, any advantage gained for U.S. exporters may be temporary. 

Majority of Trade Already Covered by FTAs Prior to TPA or Not Pursued 
under TPA: 

Non-FTA trade partners accounted for over half (56 percent) of U.S. 
trade in 2006. The remaining share of U.S. trade was accounted for by 
countries pursued under TPA (16 percent) and countries with which the 
United States already had an existing FTA (27 percent). Of the non-FTA 
trade partners, some of them comprised relatively large shares of U.S. 
trade. Table 4 shows the top 20 markets for U.S. exports and top 20 
suppliers of U.S. imports among non-FTA trade partners. The largest 
market and supplier--the EU with its current 27 member countries-- 
accounted for approximately 21 percent of U.S. exports and nearly 18 
percent of U.S. imports. Japan, China, and Taiwan were the next 3 
largest markets and suppliers for the United States, although China is 
the second largest non-FTA supplier after the EU. 

Table 4: Top 20 Non-FTA Trade Partners, Goods Exports and Imports, 
2006: 

U.S. dollars in millions. 

Rank: 1; 
Trade partner: EU-27; 
Exports 2006: 197,281; 
Share of exports 2006: 21.2%; 
Rank: 1; 
Trade partner: EU-27; 
Imports 2006: 330,898; 
Share of imports 2006: 17.9%. 

Rank: 2; 
Trade partner: Japan; 
Exports 2006: 55,596; 
Share of exports 2006: 6.0; 
Rank: 2; 
Trade partner: China; 
Imports 2006: 287,052; 
Share of imports 2006: 15.6. 

Rank: 3; 
Trade partner: China; 
Exports 2006: 51,624; 
Share of exports 2006: 5.6; 
Rank: 3; 
Trade partner: Japan; 
Imports 2006: 148,071; 
Share of imports 2006: 8.0. 

Rank: 4; 
Trade partner: Taiwan; 
Exports 2006: 21,376; 
Share of exports 2006: 2.3; 
Rank: 4; 
Trade partner: Taiwan; 
Imports 2006: 38,086; 
Share of imports 2006: 2.1. 

Rank: 5; 
Trade partner: Hong Kong; 
Exports 2006: 13,395; 
Share of exports 2006: 1.4; 
Rank: 5; 
Trade partner: Saudi Arabia; 
Imports 2006: 31,142; 
Share of imports 2006: 1.7. 

Rank: 6; 
Trade partner: Switzerland; 
Exports 2006: 11,597; 
Share of exports 2006: 1.2; 
Rank: 6; 
Trade partner: Nigeria; 
Imports 2006: 27,863; 
Share of imports 2006: 1.5. 

Rank: 7; 
Trade partner: India; 
Exports 2006: 9,025; 
Share of exports 2006: 1.0; 
Rank: 7; 
Trade partner: India; 
Imports 2006: 21,674; 
Share of imports 2006: 1.2. 

Rank: 8; 
Trade partner: Philippines; 
Exports 2006: 7,304; 
Share of exports 2006: 0.8; 
Rank: 8; 
Trade partner: Russia; 
Imports 2006: 19,642; 
Share of imports 2006: 1.1. 

Rank: 9; 
Trade partner: Saudi Arabia; 
Exports 2006: 7,262; 
Share of exports 2006: 0.8; 
Rank: 9; 
Trade partner: Algeria; 
Imports 2006: 14,753; 
Share of imports 2006: 0.8. 

Rank: 10; 
Trade partner: Turkey; 
Exports 2006: 5,524; 
Share of exports 2006: 0.6; 
Rank: 10; 
Trade partner: Switzerland; 
Imports 2006: 14,174; 
Share of imports 2006: 0.8. 

Rank: 11; 
Trade partner: Russia; 
Exports 2006: 4,215; 
Share of exports 2006: 0.5; 
Rank: 11; 
Trade partner: Indonesia; 
Imports 2006: 13,268; 
Share of imports 2006: 0.7. 

Rank: 12; 
Trade partner: Egypt; 
Exports 2006: 4,061; 
Share of exports 2006: 0.4; 
Rank: 12; 
Trade partner: Angola; 
Imports 2006: 11,514; 
Share of imports 2006: 0.6. 

Rank: 13; 
Trade partner: Indonesia; 
Exports 2006: 3,015; 
Share of exports 2006: 0.3; 
Rank: 13; 
Trade partner: Iraq; 
Imports 2006: 11,326; 
Share of imports 2006: 0.6. 

Rank: 14; 
Trade partner: New Zealand; 
Exports 2006: 2,802; 
Share of exports 2006: 0.3; 
Rank: 14; 
Trade partner: Philippines; 
Imports 2006: 9,697; 
Share of imports 2006: 0.5. 

Rank: 15; 
Trade partner: Norway; 
Exports 2006: 2,259; 
Share of exports 2006: 0.2; 
Rank: 15; 
Trade partner: Vietnam; 
Imports 2006: 8,463; 
Share of imports 2006: 0.5. 

Rank: 16; 
Trade partner: Nigeria; 
Exports 2006: 2,146; 
Share of exports 2006: 0.2; 
Rank: 16; 
Trade partner: Hong Kong; 
Imports 2006: 7,921; 
Share of imports 2006: 0.4. 

Rank: 17; 
Trade partner: Pakistan; 
Exports 2006: 1,962; 
Share of exports 2006: 0.2; 
Rank: 17; 
Trade partner: Norway; 
Imports 2006: 6,852; 
Share of imports 2006: 0.4. 

Rank: 18; 
Trade partner: Kuwait; 
Exports 2006: 1,948; 
Share of exports 2006: 0.2; 
Rank: 18; 
Trade partner: Turkey; 
Imports 2006: 5,387; 
Share of imports 2006: 0.3. 

19; 
Trade partner: Angola; 
Exports 2006: 1,543; 
Share of exports 2006: 0.2; 
Rank: 19; 
Trade partner: Kuwait; 
Imports 2006: 3,903; 
Share of imports 2006: 0.2. 

20; 
Trade partner: Iraq; 
Exports 2006: 1,456; 
Share of exports 2006: 0.2%; 
Rank: 20; 
Trade partner: Pakistan; 
Imports 2006: 3,667; 
Share of imports 2006: 0.2%. 

Source: GAO analysis of official U.S. statistics from the U.S. Census 
Bureau. 

[End of table] 

There are several reasons why the United States has chosen not to 
pursue some of the largest trade partners for FTA negotiations. As 
discussed previously, the United States seeks to include agricultural 
liberalization in its FTA agreements. This is a sensitive issue with 
the EU that is also being dealt with at the WTO and has made prospects 
for a U.S.-EU FTA less likely. Since trade barriers on nonagricultural 
products between the U.S. and EU are already very low, an FTA that did 
not include agriculture would have less impact. Similarly, agriculture 
issues are sensitive with Japan and Switzerland. However, the United 
States did pursue an FTA with South Korea, which also had sensitive 
agricultural issues but was willing to address them within the context 
of an FTA. Although agriculture is also a sensitive issue with China, 
the country also recently acceded to the WTO (December 2001), is still 
implementing those commitments, and has been in transition to a more 
market-based economy. Similarly, Taiwan has recently acceded to the 
WTO. 

After the top few non-FTA trade partners, remaining trade partners each 
account for about 1 percent or less of U.S. trade.[Footnote 45] Since 
most of the smaller non-FTA trade partners are WTO members, successful 
conclusion of the WTO Doha Round would still provide market 
liberalization. However, a Doha agreement would be less likely to 
completely eliminate trade barriers; FTAs provide much deeper 
liberalization for individual countries by eliminating trade barriers 
between the United States and its FTA partners. Nevertheless, various 
studies conclude that a Doha agreement, even though unlikely to 
eliminate all trade barriers, would still have a much larger impact on 
global--and overall U.S.--trade than eliminating all trade barriers 
with small non-FTA partners. 

Comparing countries pursued under TPA with those not pursued shows some 
differences in the U.S. trade and investment relationship between these 
two groups.[Footnote 46] Overall, the U.S. tends to (1) maintain more 
balanced trade with TPA countries, (2) export relatively more 
manufactured goods (compared with services and agriculture), and (3) 
have relatively faster investment growth with TPA countries, 
particularly in countries with FTAs in effect. While these differences 
do not necessarily indicate the reasons countries were chosen to be 
pursued, they do provide useful context for the overall U.S. economic 
relationships with these countries as those relationships get deepened. 
Appendix IV discusses these differences in more detail. 

USTR Consulted Extensively with Congressional Staff, but Staff Have 
Mixed Views about Having a Meaningful Opportunity for Input: 

Although USTR consulted frequently with Congress, some congressional 
staff said that both the nature of the consultations and issues such as 
timing of the consultations limited congressional input into FTAs. TPA 
requires consultations with Congress before, during, and after FTA 
negotiations,[Footnote 47] and records indicate consultations were 
extensive, particularly with the primary trade committees. The 
preponderance of congressional staff we interviewed viewed the 
consultation process as generally a good conduit for information flow 
from USTR. While slightly less than half of the staff we interviewed 
were satisfied with the quality of consultations, slightly more than 
half believed that the consultations did not provide the opportunity 
for meaningful input or influence into trade negotiations. An important 
element of this perception for many of these staff, particularly staff 
not on the trade or agriculture committees, was their view that the 
timing of the consultation meetings did not give them sufficient time 
to provide meaningful input to the negotiations. Several staff also 
cited situations where USTR had not fully informed them of important 
changes in the draft text under negotiation. Process issues of concern 
included the role and function of COG, selection of FTA partners, use 
of mock markup and the lack of a mock conference, the need to get 
Congress to focus on trade agreements earlier in the process, the need 
for additional technical information, access to USTR's secure Web site, 
and the importance of congressional staff working on FTAs obtaining 
security clearances to facilitate the consultation process. 

TPA Requires Significant Consultation with Congress: 

In addition to requiring the President to consult with Congress before, 
during, and after trade agreement negotiations, TPA also established 
the Congressional Oversight Group, known as COG.[Footnote 48] COG is to 
be consulted at key points in trade negotiations, and its members are 
accredited as official advisors to the U.S. negotiating delegation. COG 
was designed to consult with and provide advice to USTR regarding the 
formulation of specific objectives, negotiating strategies and 
positions, development of trade agreements, and compliance and 
enforcement of negotiated commitments. Its meetings were with the U.S. 
Trade Representative. COG's members were the Chairs and Ranking 
Minority Members of the Senate Finance and House Ways and Means 
Committees plus two majority and one minority Member from each. In 
addition, membership was extended to the Chair and Ranking Minority 
Member of each House and Senate committee that had jurisdiction over 
issues affected by the negotiations, including agriculture and 
fisheries, which were specifically designated by TPA for consultations. 

TPA also contained a detailed time line for required consultations, as 
shown in figure 3. 

Figure 3: Congressional Time Line for Consultations under TPA: 

This is a flowchart showing the congressional time line for 
consultations under TPA. 

[See PDF for image] 

Source: GAO. 

[A] TPA mandated specific consultations at a particular stage of the 
negotiations or related to particular industries. 

[B] TPA also had an overall mandate for ongoing USTR consultations with 
Congress: "In the course of negotiations conducted under this title, 
the United States Trade Representative shall consult closely and on a 
timely basis with, and keep fully apprised of the negotiations, the 
Congressional Oversight Group convened under section 2107 and all 
committees of the House of Representatives and the Senate with 
jurisdiction over laws that would be affected by a trade agreement 
resulting from the negotiations." (Trade Act of 2002 Section 
2102(d)(1).) 

[End of figure] 

Before beginning trade negotiations, the President must[Footnote 49]: 

* notify Congress in writing of an intention to commence negotiations 
at least 90 days before initiating negotiations; 

* consult, before, and after the submission of the notice, with the 
House Ways and Means Committee, the Senate Finance Committee, other 
relevant committees, and COG; and: 

* conduct consultations with Congress regarding agriculture, import 
sensitive agricultural products, the fishing industry, and textiles. 

During negotiations, or before entering into (signing) trade 
agreements, the President must[Footnote 50]: 

* consult with the House Ways and Means, Senate Finance, other 
committees with jurisdiction over legislation involving matters 
affected by the trade agreement, and COG, with respect to the nature of 
the agreement, how it achieves congressional objectives set forth in 
TPA, and the effect the agreement may have on existing laws; 

* report to the House Ways and Means and Senate Finance committees on 
any changes to U.S. trade remedy laws that an agreement would require 
at least 180 days before entering into the agreement;[Footnote 51] 

* notify Congress of intent to enter into the agreement at least 90 
days before doing so; 

* submit private sector advisory committee reports to Congress within 
30 days of notifying Congress of intent to enter into an agreement; 
and: 

* provide the ITC, at least 90 days before entering into the agreement, 
with the details of the agreement and request that ITC conduct an 
assessment of the likely economic impact of the agreement; the ITC must 
then present this assessment to the President and Congress no later 
than 90 days after the President enters into the agreement. 

There are also consultation requirements for the period between when 
the President signs the agreement and when the implementing legislation 
is voted upon in Congress. In order for the agreement to enter into 
force, the President must do the following during this period[Footnote 
52]: 

* submit to the Congress, within 60 days after entering into the 
agreement, a description of the changes to existing laws that would be 
required to bring the United States into compliance with the agreement; 
and: 

* submit to Congress the final legal text of the agreement, a draft of 
an implementing bill, a statement of administrative action proposed to 
implement the trade agreement, and other supporting information, 
including a statement describing how the agreement makes progress in 
achieving goals set by Congress in TPA and a statement on how the 
agreement serves U.S. commercial interests; there is no deadline for 
this step. 

If Congress believes that the President has failed to meet these 
consultation requirements, it may make the implementing bill ineligible 
for consideration under TPA procedures by adopting a procedural 
disapproval resolution in both houses.[Footnote 53] In addition, 
Congress limits trade promotion authority by making it a time-limited 
authority.[Footnote 54] The most recent grant of TPA expired July 1, 
2007. It could have expired 2 years earlier had Congress passed a 
resolution that was introduced to disapprove of its extension. Finally, 
TPA includes language stating that TPA procedures are rules and that 
Congress retains the right of either house to change the 
rules.[Footnote 55] In combination with the need to secure 
congressional approval of each agreement, these conditions all help 
ensure Congress's influence over agreements. 

USTR Has Consulted Frequently with Congress: 

USTR had held frequent consultation meetings with Congress on FTA- 
related issues, as well as other topics. USTR consulted with Congress 
1,605 times on FTA-related issues between the date TPA was signed into 
law on August 6, 2002, and the cutoff date for our analysis, April 20, 
2007, according to a copy of USTR's consultation log. Of these 
consultations, 1,289 were related to specific FTAs, and 316 were 
related to general FTA issues, such as investment provisions or 
agriculture issues.[Footnote 56] Consultations were primarily in- 
person meetings with the trade and agriculture committees but also 
included conference calls, particularly with the other committees of 
jurisdiction. 

Most USTR consultations (83 percent) were with staff of congressional 
committees with jurisdiction over trade issues. USTR met 459 times with 
the Senate Finance Committee and 454 times with the House Ways and 
Means Committee. (See fig. 4.) It met 153 times with the House 
Agriculture Committee and 152 times with the Senate Agriculture, 
Nutrition, and Forestry Committee. Thus, about two-thirds of USTR's 
consultations were with these four committees. USTR also met with the 
other committees that had jurisdiction over the following: 

* Fisheries-Senate Commerce, Science and Transportation and House 
Natural Resources; 

* Intellectual property, competition, and immigration-House and Senate 
Judiciary; 

* Financial services-House Financial Services and Senate Banking, 
Housing, and Urban Affairs; 

* Telecommunications-House Energy and Commerce and Senate Commerce, 
Science and Transportation; and: 

* Government procurement-House Oversight and Government Reform and 
Senate Homeland Security and Governmental Affairs. 

In addition to these meetings, 163, or 9 percent, of meetings were with 
individual Senators and Representatives, and 3 percent were with staff 
of individual Senators and Representatives. Another 2 percent of 
meetings were with other committees, caucuses, or congressional groups. 
COG met as a body nine times, constituting less than 1 percent of 
meetings. USTR also met with the Senate Foreign Relations Committee 
seven times and the House International Relations Committee four times 
on matters related to FTAs. 

A USTR official told us that the majority of meetings were open to both 
majority and minority committee staff, as well as to legislative 
assistants of Members of Congress on the committees. This is consistent 
with GAO analysis of the USTR logs, which showed that 148, or 11 
percent, of the 1,329 meetings with staff of committees of jurisdiction 
were with majority members only, and 6 percent were with minority 
members only.[Footnote 57] This was also confirmed in our interviews 
with congressional staff. 

Figure 4: USTR Consultations with Congress: 

This figure is a pie chart showing USTR consultations with Congress. 

26%: (459) Senate Finance; 
25%: (454) House Ways and Means; 
17%: Other Committees of jurisdiction: 
(4% (64) Senate Commerce, Science
and Transportation; 
2%: (44) House Natural Resources; 
2%: (43) House Judiciary; 
2%: (37) House Financial Services; 
2%: (34) Senate Judiciary; 
2%: (33) Senate Banking, Housing,
and Urban Affairs; 
1%: (21) House Energy and Commerce; 
1%: (16) House Oversight and
Government Reform; 
1%: (13) Senate Homeland Security and
Governmental Affairs); 
9%: (163) Individual Members; 
9%: (153) House Agriculture; 
8%: (152) Senate Agriculture,
Nutrition, and Forestry; 
6%: (105) Other Member staff, other
committees, caucuses,
congressional groups; 
1%: (9) COG. 

[See PDF for image] 

Source: GAO. 

Note: Numbers total greater than 1,605 because some meetings included 
multiple committees or congressional entities. 

[End of figure] 

Current and former USTR officials told us that, for each FTA, they met 
with Congress throughout the process of negotiating and implementing 
the agreement. This was generally confirmed in our interviews with 
congressional staff. These officials said they met with Congress before 
negotiations began, before each negotiating round (with more 
congressional meetings in the later rounds of each FTA), before signing 
agreements, during congressional consideration of the FTA implementing 
legislation, and during FTA implementation. They said that they 
provided the classified negotiating text to the staff with security 
clearances on the trade and agriculture committees in advance of each 
round and discussed it at the consultation meetings. These officials 
said there was ample opportunity for committee staff to provide input 
during the negotiations and that they valued the insights they gained 
as to what was important to the committees. USTR officials said that 
they had never turned down a request for a briefing and believed that 
they had fully consulted with Congress. One former negotiator said that 
they could not conceive of a way that USTR could do more consultations 
than it does now and that consultations were both extensive and 
substantive. 

As required by TPA,[Footnote 58] USTR developed guidelines for COG in 
consultation with Congress that established notice, consultation, and 
reporting requirements for agreements negotiated under TPA. USTR 
officials said that in developing these guidelines they consulted with 
the Senate Finance and House Ways and Means Committees and got their 
input. These guidelines provide that, in the course of negotiations, 
USTR will consult "closely and on a timely basis" with COG and all 
House and Senate committees with jurisdiction over laws that would be 
affected by an agreement. 

To verify that consultations occurred before, during, and after 
negotiations, we analyzed consultation patterns for two agreements. 
Figures 5 and 6 show the number of USTR consultations with Congress on 
CAFTA-DR and on the Australia FTA over time in relation to key points 
in the negotiation and implementation process. 

Figure 5: USTR Congressional Consultations on CAFTA-DR: 

This figure is a line chart showing USTR congressional consultations on 
CAFTA-DR. The year is on the X axis, and the number of consultations is 
on the Y axis. 

[See PDF for image] 

Source: GAO analysis of USTR data. 

[End of figure] 

Figure 6: USTR Congressional Consultations on Australia FTA: 

This figure is a line chart showing USTR congressional consultations on 
Australia FTA. The month and year is on the X axis, and the number of 
consultations is on the Y axis. 

[See PDF for image] 

Source: GAO analysis of USTR data. 

[End of figure] 

We also analyzed the total number of congressional consultations on FTA-
specific and FTA-related topics and found they varied over time. (See 
fig. 7.) There were more consultations when more FTAs were under 
negotiation at the same time. There were also more consultations in the 
1 Â½ years after TPA passed in 2002, when model text for each of the 16 
standard FTA chapters was being developed. 

Figure 7: USTR Congressional Consultations on All FTA-Specific and FTA- 
Related Topics, August 6, 2002, to April 20, 2007, with Chronology and 
Status of FTA Negotiations: 

This figure is a line chart with bars showing status of U.S. free trade 
agreements showing USTR congressional consultations on all FTA-specific 
and FTA-related topics, August 6, 2002, to April 20, 2007, with 
chronology and status of FTA negotiations. The X axis represents the 
month and year, and the Y axis represents a the number of 
consultations. 

[See PDF for image] 

Source: GAO analysis of USTR data. 

Note: The dates shown for the status of FTAs are the dates the 
negotiations were launched and entered into force. The Oman FTA has 
been approved but has not yet been implemented. The implementing 
legislation for the FTAs with Peru, Colombia, Panama, and South Korea 
have not yet been approved. 

[A] Costa Rica approved the agreement by referendum on Oct. 7, 2007; 
domestic legal procedures have not yet concluded. 

[End of figure] 

Some Congressional Staff Noted Improvements That Could Be Made to 
Content and Process of Consultations: 

Current and former congressional committee staff[Footnote 59] on key 
committees with jurisdiction over matters covered by FTAs[Footnote 60] 
provided us with their views[Footnote 61] on a range of issues related 
to the FTA consultations. These issues included the nature and extent 
of consultation meetings, as well as how well they met their 
expectations and needs. 

Consultations Weekly with Trade Committees, Less Frequently with 
Others: 

From August 2002 to April 2007, the trade committees (Senate Finance 
and House Ways and Means) generally had weekly consultation meetings 
with USTR officials that often lasted an hour to an hour-and-a-half. 
Sometimes two or even three such meetings were held back to back on the 
various FTAs being negotiated. Typically, the USTR lead 
negotiator[Footnote 62] and members of the FTA negotiating team would 
meet in person with the committee. Occasionally, the USTR staff were 
joined by staff from other agencies, such as the Departments of 
Agriculture or Commerce. Generally, these meetings were bipartisan, 
with both majority and minority professional committee staff invited, 
as well as the responsible legislative assistants of the Senators or 
Representatives that were members of the committee. [Footnote 63] 

Trade committee staff said that most consultation meetings were held in 
person. Some were conducted through a conference call, which was 
usually shorter. Generally, there were more conference calls at the end 
of the negotiations, when the USTR negotiators were more pressed for 
time or were overseas at negotiating sessions and calling back to 
update the committee staff on progress. Some of the trade committee 
staff we interviewed commented that in-person meetings were much more 
useful, although they understood the need for conference calls. 

The trade committee staff we spoke with said that consultations 
generally took place before and after each negotiating round. Before 
each round, USTR provided the confidential text that it was going to 
table in the negotiations with the FTA partner country. Staff with 
security clearances had access to this text; staff without clearances 
received more general information.[Footnote 64] After each negotiating 
round, USTR updated congressional staff on the issues that had been 
raised, the progress made, and what they thought the next round would 
bring. 

The agriculture committees had consultation meetings with USTR 
approximately every 2 weeks, with the Department of Agriculture 
generally accompanying the USTR negotiators, according to a committee 
staff person. Otherwise, the descriptions of the consultation meetings 
were mostly similar to those of the trade committee staff. In contrast, 
the other committees of jurisdiction generally had a much more limited 
experience with consultation meetings than the trade and agriculture 
committees, which are the main committees of jurisdiction regarding FTA 
issues. Generally, the issues involved in the FTA negotiations were not 
priority issues for these committees, and many of them had a much more 
limited understanding of the proceedings. Most did not have clearances 
and received more general descriptions of provisions that would be 
negotiated, since they were not cleared to receive actual negotiating 
text. The number of consultation meetings for these committees was 
substantially less than for the trade and agriculture committees and 
varied from once a month to once for each FTA. 

Consultations Generally Praised for Providing High-Quality Information 
but Satisfaction with Input and Influence Mixed: 

Almost all of the committee staff we interviewed said that USTR 
provided high-quality information that provided them with insight into 
the progress of the negotiations. In this respect, they met the 
expectations of these congressional staff for information related to 
the FTA negotiations. These staff felt that the briefings were very 
well done. They also praised USTR's willingness to answer questions and 
follow up on particular issues of interest. The general view was that 
USTR was very responsive in answering questions and providing follow-up 
information. 

In terms of satisfaction that the consultation meetings provided an 
opportunity for input or influence on the trade negotiations, however, 
the committee staff we interviewed were fairly evenly divided.[Footnote 
65] Slightly less than half of the congressional staff we interviewed 
felt that the consultation meetings had met their expectations in this 
respect as well. They were satisfied that they had been fully briefed, 
and the USTR negotiators had listened to their views. They indicated 
that they knew that USTR could not always obtain the results their 
committee or their Member of Congress wanted, but felt that their views 
had been taken into consideration. However, slightly more than half of 
the congressional committee staff with whom we spoke felt that they did 
not have any real input or influence on the trade negotiations. For 
these staff, USTR's consultation meetings had not met their 
expectations because they had not provided an opportunity for a two-way 
exchange of information that the staff considered a true consultation. 
One committee staff person appeared to reflect the views of these staff 
in characterizing the consultations as a good conduit for information 
flow from USTR, but not as a good forum for working together and 
developing policy jointly. Others characterized the meetings as helping 
them feel well-briefed, but not consulted. Among these staff, several 
said they felt that USTR was "checking the box" in their meetings with 
them. At the same time, among the staff who indicated that the 
consultations were more of a one-way briefing than a two-way 
consultation, several were on the other committees of jurisdiction and 
said they did not have expectations of more. They said that they were 
satisfied with receiving briefings because this was not a priority 
issue for them or because they did not expect to influence the 
negotiations. Overall, on this issue, the degree to which the committee 
staff we interviewed felt that they had input or influence on trade 
negotiations varied across parties. In particular, Republican staff 
(which was in the majority in Congress for nearly all of the TPA 
period) generally had more positive views about their input and 
influence than Democrats. 

We also found mixed views among the staff we interviewed on whether the 
timing of the consultations gave sufficient time for staff to provide 
meaningful input. Most, but not all, of the staff of the trade and 
agriculture committees said the timeliness of consultations was 
good.[Footnote 66] However, staff from the other committees of 
jurisdiction often said that the consultations were not timely and 
cited this as a reason that they felt briefed rather than consulted. 
They said that they generally weren't briefed and given information 
until the last business day before the negotiators were leaving for the 
next round. This did not give them enough time to fully consider the 
information, consult with their committee or Member to develop a 
response, and give feedback that USTR would have time to consider. 
These staff felt strongly that one way to achieve more meaningful 
congressional input was to allow more time for feedback by having 
earlier consultations and by providing them with text or other 
information in a more timely manner. In addition, staff of one of the 
primary committees of jurisdiction complained of last-minute 
consultations on some of the more controversial issues. While they 
understood that the interagency process took time and that USTR was 
moving as quickly as possible, they felt that if congressional 
consultation was meant to be meaningful, USTR could either build in the 
time needed for congressional consultation or delay tabling the 
controversial text at the next negotiating round to allow time for 
congressional input. 

Among the committee staff who had expressed satisfaction with the 
consultation meetings, several noted that the style of the briefer was 
important. In some cases, the briefers tended to keep the briefing 
short and let committee staff ask questions. The staff we spoke with 
said that if they asked a question, the briefers would answer it fully. 
But, if staffers didn't know what to ask, they were at a disadvantage 
in obtaining pertinent information. They said that most staff depended 
on the briefers to let them know about issues of concern. This was very 
important to them. It was much more helpful when the briefers provided 
the context and alerted them to any changes in the text or any areas of 
concern developing in the negotiations. 

Several other committee staff, who were dissatisfied with the 
consultations, expressed a much more negative view about briefers' 
willingness to share information. While they agreed that the 
information USTR provided was generally of good quality, they said 
there were instances when, in their opinion, USTR deliberately did not 
offer information on changes to the negotiated text that would be of 
concern to staffers, unless they asked specific questions, which they 
often did not know to ask. One committee staff said that this had been 
the case, for example, with the U.S.-Korea FTA, in which significant 
changes had been made to the investment chapter. Although the committee 
staff had received the amended text, USTR did not mention that changes 
had been made to a sensitive provision in the Expropriation Annex, 
which the committee staff said was extremely controversial--to the 
point that the language in the text had been carefully worked out in 
the 2001-2002 time period and then never touched again. The staff 
person said that this text was considered to be "set in stone," and any 
change to it clearly merited mention by USTR. With the press of 
business during consideration of the U.S.-Korea FTA, the committee 
staff had not realized that it had been changed, and they didn't learn 
about it until they were alerted by the private sector. The committee 
staff who were dissatisfied with the consultations also said that there 
had been instances when it appeared USTR had withheld information. For 
example, several committee staff mentioned that a controversy related 
to the Australia FTA pharmaceuticals benefits scheme resulted from USTR 
withholding information. Again, committee staff found out about the 
controversial provisions from the private sector when the text was made 
public. In another example, some committee staff said that USTR had not 
adequately briefed Judiciary Committee staff on the H1-B visas issue 
with the Chile and Singapore FTAs. While there was disagreement among 
the staff who commented on this as to whether USTR had adequately 
briefed the staff or withheld critical information, a lack of clarity 
in the consultations did result in the Judiciary Committee being highly 
upset about this issue. (As a result of the Judiciary Committee's 
views, USTR significantly modified its objectives regarding 
immigration. Subsequent agreements have either included a side letter 
stating that the agreement has no effect on U.S. immigration law or 
policy or, in more recent agreements, this type of provision has been 
included in the text of the agreement.) These staff felt strongly that 
in order for the consultation process to work, Members of Congress and 
committee staff need to know that USTR will always make a good faith 
effort to tell them when substantive changes to the model text have 
been made in the negotiations. In FTAs, specific details that are 
negotiated are critical to the outcome. 

Many Staff Cite Shortcomings in Consultation Process: 

Congressional staff also expressed concerns about the consultation 
process, including the usefulness of COG, the congressional role in FTA 
partner selection, the role of mock markup, the importance of earlier 
congressional focus on FTA negotiations, the need for greater access to 
technical information, and problems with access to USTR's secure 
website. Most of these issues focused more on internal congressional 
matters than on USTR. In addition, USTR also stressed the importance of 
congressional staff working on FTAs to obtain security clearances to 
facilitate the consultation process. 

COG Generally Not Seen as Successful: 

COG was a new mechanism under TPA intended to draw Members of Congress 
into the consultation process, particularly members from nontrade 
committees, and to provide them with a private and confidential 
opportunity to have a consultative and advisory role in trade policy, 
according to a committee staff person familiar with its creation. The 
staff person went on to state that COG was also meant to provide 
greater transparency and inclusiveness to the trade policy consultation 
process. After it was launched in September 2002, COG was convened only 
nine times before TPA lapsed in July 2007, according to the USTR 
consultation log. COG's record drew mixed reviews. Some trade committee 
staff had a positive view of COG, saying that it had been a useful 
forum for input on FTAs, including FTA selection, or that it was 
worthwhile because it had provided a mechanism for transparency. 
However, most trade and agriculture committee staff said it had been of 
limited usefulness and had not functioned well. These staff said that 
COG was not well attended, particularly after the first few years. 
While the trade committee members continued to attend regularly, few 
others did. Some trade committee staff said that the separate committee 
executive sessions with their Members were more useful than COG. Most 
staff outside of the trade and agriculture committees with whom we 
spoke were unfamiliar with COG or unaware it existed; those staff who 
were familiar with COG did not find it to be useful. 

USTR officials and committee staff noted that it was difficult to 
schedule meetings around the busy schedules of Members of Congress. One 
committee staff said that it had been difficult to schedule attendance 
by the Member because of short notice for the COG meetings, pointing 
out that it would be helpful if COG meetings were put on a regular 
schedule. Two committee staff said a limitation of COG was the 
requirement that staff could only attend with their Member, so they 
could not cover meetings the Member could not attend. Another committee 
staff said that COG meetings should not be scheduled solely at the 
discretion of the majority staff but also by the minority in order to 
protect minority rights. Several committee staff described the COG 
meetings as formalities, particularly as time went on. One staff of a 
Member on a trade committee, but not on the COG, said that they had 
resented being excluded from this trade policy-making forum. 

FTA Partner Selection Concerns Due to Lack of Commercial Significance: 

Most congressional staff we interviewed who had a view on this issue 
felt that their committee did not have any meaningful input into the 
selection of FTA partner countries. However, there was substantially 
more awareness and concern about this issue among the trade and 
agriculture committee staff than among staff of other committees of 
jurisdiction.[Footnote 67] 

Among those concerned about partner selection, the primary concern 
seemed to be that so many smaller trading partners were being selected 
for FTA negotiations, rather than larger trading partners with greater 
commercial and economic significance. One committee staff commented 
that, increasingly, every congressional vote for an FTA was a difficult 
vote that involved using up significant political capital. While 
Members supporting free trade had no problem in principle with 
negotiating FTAs with smaller countries for foreign policy or other 
reasons, if Members were going to be expending significant political 
capital, they wanted it to at least be economically and commercially 
beneficial. Another committee staff said that the selection of FTA 
partners and dialogue about it with Congress should be more transparent 
and that the reasoning behind the choices of FTA partners and the 
complicating factors should be openly discussed. 

Some staff said that in TPA the role of input into FTA partner 
selection had been given to COG, rather than to committee staff. 
Although this role was informal, some committee staff and USTR 
officials said that USTR took COG's advice on selection seriously and 
that some potential partners supported by COG had been pursued by USTR. 
They cited the U.S.-Korea FTA as an example. 

A few committee staff favored restoring the gatekeeper 
provision,[Footnote 68] which was part of prior fast track legislation 
but was dropped when TPA was passed in 2002. The gatekeeper provision 
had required the President to notify Congress and give it an 
opportunity to disapprove launching of negotiations with a particular 
partner. [Footnote 69] These staff felt that restoring it might be 
beneficial in terms of potentially generating greater buy-in to the 
FTAs selected for negotiation. Generally, only trade committee staff 
were aware of the gatekeeper provision. Those opposed did not see any 
value in it given COG's role in discussing potential FTA partners. The 
former USTR negotiators with whom we discussed this issue also opposed 
it. They were particularly concerned about the potential effects of any 
requirement for an affirmative vote for launching FTA negotiations with 
a trade partner country because it would mean that Congress would have 
to vote twice for each FTA and it would force a vote before anyone knew 
what the actual benefits from the FTA would be. 

Mock Markup Considered Important, but Mock Conference Controversial: 

Most trade and agriculture staff we interviewed were familiar with the 
mock markup process--the informal committee process to "mark up" or 
amend the draft implementing bills for FTAs.[Footnote 70] Most trade 
staff said that it was an important part of the consultations process 
for TPA.[Footnote 71] Committee mock markups are generally the only 
opportunity Congress has to offer amendments to the proposed FTA 
implementing bill. However, while some were concerned that the mock 
mark-up process had not been used effectively, others were concerned 
that it could be misused in order to delay consideration of FTAs or to 
introduce inappropriate last-minute provisions that should have been 
addressed during the negotiations. 

Some also expressed concern that the trade committees had not scheduled 
mock conferences when the House and Senate had adopted differing mock 
amendments. They said that a mock conference was an important part of 
the consultation process. Some of these staff cited the case of CAFTA 
when the House and Senate versions of the draft implementing bills 
differed because the Senate Finance Committee and the House Ways and 
Means Committee had recommended different mock amendments. They said 
the two committees did not hold a mock conference and the 
administration chose the version it preferred, the House version, 
ignoring the Senate Finance Committee amendments. Other staffers said 
that complex multilateral negotiations like those of the WTO would need 
a mock conference, but that FTAs were simpler and a mock conference was 
often unnecessary and time consuming. 

Earlier Congressional Focus on FTA Negotiations Seen as Important: 

Some committee staff felt that an inherent problem with the 
consultation process was that Congress tended to focus on the FTAs at 
the end of the negotiations, when the deal was essentially done, and it 
was difficult (if not impossible) to change the terms of the agreement. 
They said that this resulted from the congressional culture of waiting 
until an issue was fully developed and likely to become law before 
focusing on it. In contrast, they said that trade negotiations 
particularly require congressional attention throughout the process. 
For consultations to be meaningful and most effective, they felt that 
it would be important to find ways through the consultation process to 
facilitate Congress focusing earlier on the FTAs. This was particularly 
critical given the nature of fast track provisions, in which the final 
agreement comes to Congress for an up-or-down vote with no amendments. 

USTR officials, including some former lead negotiators who we 
interviewed, also said that earlier attention by Congress was 
important. Some of them expressed frustration that they would hold 
frequent consultation meetings, but that many committee staff would not 
attend, or would not actively engage. Then, at the end of the process, 
when the negotiations were finalized, they would start to focus and ask 
questions and want changes. This was very ineffective--sometimes USTR 
was able to get changes, but often it was no longer possible to modify 
something that could have been changed earlier in the negotiations. 

Greater Access to Technical Expertise and Information Desired: 

Another issue raised by several congressional staff was the need for 
greater access to technical information on an ongoing basis. These 
staff said that although committee staff on the trade and agricultural 
committees are knowledgeable about their fields, trade negotiations are 
today too broad and complex for any one staff member to fully 
understand all of the implications. One trade staff told us that staff 
on the other committees of jurisdiction are at a disadvantage because 
trade is not their primary issue, and they don't have time to follow 
it. Having access to expert staff, such as through a congressional 
trade office, would be very helpful, according to one committee staff. 
Another committee staff opposed what they feared might be creation of 
an additional bureaucracy with a new trade office and instead said that 
GAO could serve this role. 

In principle, the formal private sector trade advisors could help fill 
this void. However, committee staff said that they did not have contact 
with them during the FTA negotiations. One staff said that they used to 
be invited to trade advisory committee meetings, but no longer. 
Although the trade advisory committees provide extensive technical 
information to Congress in their required reports on each FTA at the 
end of the process, committee staff did not have access to their 
substantial knowledge base during the negotiations. 

A related issue raised by a few staff on some of the nontrade 
committees of jurisdiction was that trade negotiations involve a great 
deal of specialized terminology and information. Staff of one committee 
said that sometimes they found it difficult to fully understand the 
briefings because the negotiators used so much jargon. They said that 
it would be helpful if USTR developed a primer describing the typical 
evolution of the trade negotiations process and providing a glossary of 
trade terms. Other ideas included USTR providing an overview on 
upcoming issues at the start of the year, giving more of an overview on 
FTAs early on, and describing in some detail FTAs at their conclusion. 

Problems with Access to Secure USTR Web Site Limits Information 
Availability: 

An issue raised by many of the trade and agriculture committee staff 
that we interviewed was access to USTR's secure Web site on which it 
posts the negotiating text for FTAs, as well as other information. The 
Senate staff said that this was more a matter related to internal 
congressional security issues than to USTR. Until this year, the Senate 
committee staff that have access to the classified negotiating texts 
said they received hard copy information because the Senate was unable 
to resolve security concerns to allow electronic access. When USTR sent 
a hard copy to the Office of Senate Security, it took the office a day 
to log it in and notify staff of its availability. Then staff had to 
make an appointment to go to a secure room in the Capitol in order to 
read these documents. The result was that they had a significantly 
smaller window of time to access the documents than if they had been 
immediately available electronically. Staffers said that recently a 
computer in a Senate office building had been made available for this 
purpose. While this was an improvement, they would prefer to have 
access in their own offices, or at least their own buildings. On the 
House side, committee staff did not have any electronic access to 
USTR's secure Web site, as of the end of August 2007. However, several 
committee staff said that access was being planned and would greatly 
improve timely staff access to negotiating information. 

USTR officials said that they would welcome expansion of congressional 
access to USTR's secure Web site. They also said that an important 
related issue is whether congressional staff working on FTAs under 
negotiation had security clearances. USTR officials felt strongly that 
if more congressional staff obtained security clearances, it would 
greatly facilitate the consultation process, both in terms of access to 
information and timeliness of information. 

Consultations Afford Trade Advisory Committees Access, but Process 
Issues Impede Effective Provision of Advice: 

The trade advisory committee chairs we contacted said that USTR and the 
managing executive branch agencies consulted with their committees on a 
fairly regular basis, providing access to administration officials, but 
process issues made it difficult for some committees to function 
effectively. In addition to consultations with Congress, the 
administration is required to consult with private sector advisory 
committees and with the public at large[Footnote 72] to get a sense of 
their views. We spoke with 16 chairs of the relevant 27 trade advisory 
committees, as well as five additional committee members.[Footnote 73] 
They reported that consultations were generally extensive in number. 
The chairs and members, however, had mixed reactions as to whether the 
nature of the consultations, quality of information provided, and 
feedback received were satisfactory. Furthermore, process issues such 
as reporting time frames, committee composition, and chartering and 
appointment sometimes impeded advisory committees' ability to provide 
advice on trade negotiations. 

Consultations with Trade Advisory Committees Were Generally Extensive: 

Four agencies, led by USTR, administer the three-tiered trade advisory 
committee system. (See fig. 8.) USTR directly administers the first 
tier overall policy committee, the President's Advisory Committee for 
Trade Policy and Negotiations (ACTPN), and three of the second tier 
general policy committees, the Trade Advisory Committee on Africa 
(TACA),[Footnote 74] the Intergovernmental Policy Advisory Committee 
(IGPAC), and the Trade and Environment Policy Advisory Committee 
(TEPAC), for which the Environmental Protection Agency also plays a 
supporting role. The Department of Labor coadministers the second tier 
Labor Advisory Committee (LAC) and the Department of Agriculture 
coadministers the second tier Agricultural Policy Advisory Committee 
(APAC). The Department of Agriculture also coadministers the third tier 
Agricultural Technical Advisory Committees (ATACs), while the 
Department of Commerce coadministers the third tier Industry Trade 
Advisory Committees (ITACs). Ultimately, member appointments to the 
committees have to be cleared by both the Secretary of the managing 
agency and the U.S. Trade Representative, as they are the appointing 
officials. 

Figure 8: Trade Advisory Committee System: 

This figure is a chart showing the trade advisory committee system.  

[See PDF for image] 

Source: GAO and USTR. 

[End of figure] 

USTR and the relevant executive branch agencies consulted with the 
first and third tier advisory committees on a fairly regular basis. The 
first and third tier chairs we contacted generally felt that these 
consultations provided the committees with important access to the 
administration and ongoing negotiations. From fiscal year 2002 through 
May of fiscal year 2007, USTR met with the 16 ITACs[Footnote 75] a 
total of 729 times. From fiscal year 2002 through fiscal year 2006, 
USTR met with the six ATACs a total of 92 times. Most of these meetings 
were in person, although conference calls were sometimes held for fast- 
moving issues or during the 30-day time frame for report writing. In 
addition, USTR established a monthly conference call for all trade 
advisory committee chairs, beginning in late 2002. 

The number of consultations with USTR was more limited at the second 
tier policy committee level. Although USTR has met fairly regularly 
with APAC and TEPAC over the past 5 years, the LAC had no meetings for 
over 2 years from September 2003 to November 2005. Furthermore, IGPAC 
did not have an in-person consultation with USTR from July 2005 to 
September 2007. In late 2006, USTR instituted a monthly conference call 
for IGPAC, together with state points of contact.[Footnote 76] Agency 
officials said this was done to broaden outreach to the states and 
increase the frequency of interaction with USTR without travel costs. 
The officials added that they have also convened additional IGPAC 
conference call meetings, as needed on particular issues. LAC and TEPAC 
(as well as ACTPN) have liaison groups that meet more often. For 
example, the TEPAC liaison group tries to meet every 4 to 6 weeks. 
According to members from these committees, liaison meetings are at the 
staff level and are usually fairly technical, whereas the principals' 
meetings tend to look at broader, political issues. 

Committees Had Mixed Reactions to Nature of Consultations: 

Slightly over half of the committee chairs we interviewed felt that 
their expectations of the consultation process were met, but overall 
views on the opportunity to provide meaningful input varied. For 
example, one third tier chair said that his expectations were met since 
the process works well to facilitate access between negotiators and 
private sector representatives, and the administration seems to take 
consultations seriously. The second tier committees in particular, 
however, stated that their advice and opinions were not considered. A 
few of the third tier committees concurred. Those who said their 
expectations were not met told us their committees were not being used 
properly. According to a few of these chairs, while the administration 
has consultation meetings with them, they are more to "check off the 
box" than to engage in meaningful dialogue. The chairs feel that the 
administration tells them what has already been decided upon instead of 
soliciting their advice. Furthermore, two ITAC chairs told us that it 
is more effective to use venues other than the advisory committee 
system to provide meaningful input. For example, one chair said that a 
coalition of industry-related companies outside of the ITAC is the 
major venue for consultations with the administration for that 
industry. The chair told us that the ITAC advisory process tends to be 
at the end of negotiations and is not as significant as it should be. 
At the same time, the chair felt the ITAC did play a role in the 
consultation process. Although it could not consult at the highly 
technical level that the coalition could, it was able to consult on the 
broad direction of U.S. trade policy for that industry. USTR officials 
told us that the fact that the advice of any particular advisory 
committee may not be reflected in a trade agreement does not mean that 
the advice was not carefully considered. USTR emphasized that it does 
consider advice from its advisory committees in formulating U.S. trade 
policy. At the same time, however, USTR also acknowledged that for some 
contentious issues, the advice is not in line with long-standing U.S. 
policy or congressional guidance set out in TPA. In those instances, 
USTR told us they are very limited in what they can do in response to 
advisory committee advice. This appears to be particularly problematic 
for second tier policy advisory committees. For example, the strength 
and reach of FTA investment provisions and dispute settlement 
mechanisms have long been a concern of both IGPAC and TEPAC. LAC, 
meanwhile, has criticized the worker rights standards and dispute 
settlement mechanisms in FTAs as insufficient. 

Overall, the first tier and most of the third tier committee chairs we 
interviewed felt that the information USTR provided was of high quality 
and detail, providing a mixture of publicly available information and 
more proprietary, confidential information. Most of the second tier 
policy committee and a few third tier technical committee chairs in our 
selection, however, were not satisfied with the quality of information 
presented during consultations and felt that it was no better than 
information available to the general public. Of those committees, one 
chair felt USTR was constantly holding back information, and the 
committee learned something new only every seventh or eighth meeting. 
Another chair expressed frustration at trying to get information as 
negotiations were in progress, saying that USTR was reluctant to state 
what the other country was proposing. Two of the chairs who were 
dissatisfied went on to say that although most of the information 
presented is available publicly, having access to administration 
officials was valuable. Several other committee chairs also emphasized 
the value they place on having access to the administration through the 
advisory committee process. 

Approximately half of the advisory committee chairs with whom we spoke 
felt that the administration was responsive to their advice and 
provided feedback, whether or not their advice was incorporated into 
the agreement. The first tier and over half of the third tier committee 
chairs feel there is an adequate opportunity for dialogue and that 
their interests are considered. Most of the second tier and a few of 
the third tier committee chairs, however, expressed dissatisfaction 
with the feedback from USTR. They expressed their perception that USTR 
is either biased against their committee or that by being asked to 
comment on completed deals, their opinions are not truly valued or 
taken into consideration. Two chairs said USTR wants them to "rubber- 
stamp" decisions or to be "cheerleaders" for the administration. Other 
chairs said their committees rarely or never get feedback. 

In general, the advisory committee chairs we spoke with were pleased 
with the numerous changes that have been made to the advisory committee 
system in response to GAO's 2002 report. In particular, members found 
the secure Web site very useful. A quarter of the chairs said that 
having text on the Web site sooner, or when USTR says it will be 
posted, would be helpful, but they agreed that the secure Web site was 
a valuable tool. Three-quarters of the chairs we interviewed had no 
complaints about the reconfiguration of the committee system to more 
closely align with the current U.S. economy, although chairs and 
members from slightly over a third of the committees we interviewed 
found problems with the representation of interests on their individual 
committees. Ten of the 16 chairs with whom we spoke did not find the 
monthly chairs' teleconference call useful, primarily because of a lack 
of detailed information; those chairs located in Washington, D.C., 
cited lack of new information. Furthermore, 8 of the 11 chairs we 
interviewed whose committees are invited to the newly instituted 
periodic plenary meetings[Footnote 77] (ATACs and ITACs) did not find 
them useful. A couple of those chairs did acknowledge, however, that 
their out-of-town members might find them more useful and that they are 
a good opportunity to hear cabinet-level speakers to whom they would 
not routinely have access. Beyond the plenary meetings, several chairs, 
particularly among the ITACs, said that more interaction with other 
advisory committees would be useful. Currently, only three ITACs 
(Customs Matters and Trade Facilitation, Intellectual Property Rights, 
and Standards and Technical Trade Barriers) allow for members from 
other ITACs to sit in on meetings in a nonvoting capacity. There is 
also an Investment Working Group that draws from across the ITAC 
committees that a couple of chairs said was a helpful device. 

Other Stakeholders Found Public Hearings Ineffective or Did Not 
Participate: 

Stakeholders outside of the trade advisory committee system were also 
provided an opportunity to express their views on the record through 
the public hearing process; however, they have found other methods to 
be more effective. The administration holds public hearings and gives 
the public an opportunity to submit written comments for each FTA. 
Anyone is free to come to these meetings and express their opinions. 

We spoke with three of the former Assistant U.S. Trade Representatives 
who were in charge of negotiating FTAs over the past 5 years under TPA, 
and each said that the public hearing process was useful and gave USTR 
a good overall sense of what issues were important to the general 
public. They noted that they sometimes gained information from 
viewpoints not represented in the formal system and that comments were 
distributed to responsible officials and taken into account. 

While we did not speak extensively with stakeholders that used these 
formal and informal avenues for input, we spoke with a few trade 
experts in the nongovernmental organization and academic communities 
that had used them or were familiar with them. The experts from the 
academic community admitted that although they were aware of the public 
hearing process, they did not participate in it. Those in the 
nongovernmental organization community, however, had either personally 
participated or their organization had, but they did not feel that 
their opinions were heard. Furthermore, they felt left out of the 
process and that industry groups had much better access. As a result, 
these groups said they have to go directly to Congress to express their 
opinions through hearings or personal contact. 

Process Issues Impeded Committees' Function: 

Despite the frequency and quality of USTR consultations with the 
advisory committees, process issues such as short reporting time 
frames, lack of transparency in committee composition, and delays in 
rechartering committees and appointing members sometimes impeded 
committees' ability to provide trade advice. 

Reporting Deadlines Are Difficult to Meet: 

The Trade Act of 1974 requires trade advisory committees to provide to 
the President, the Congress, and USTR a report detailing their advisory 
opinion as to (1) whether and to what extent the agreement promotes the 
economic interests of the United States and achieves the applicable 
overall and principal negotiating objectives (for first and second tier 
committees) and (2) whether the agreement provides for equity and 
reciprocity within the sector or within the functional area.[Footnote 
78] TPA legislation gives the advisory committees 30 days after the 
President notifies Congress of the intent to sign a trade agreement to 
submit these reports. 

Approximately half of the committee chairs we interviewed said that 
this deadline can be difficult to meet for both technical and 
logistical reasons, and the committees cannot always give advice based 
on a thorough review. Reasons they gave include the following: 

* FTAs are technical, complex documents including thousands of lines of 
tariffs. 

* Advisory committee members are volunteers with full-time jobs and 
other commitments. 

* Coordinating the FTA review and report within 30 days can be a 
challenge. 

* The text is sometimes not available until several days into the 30- 
day period. 

* Negotiations are not always finalized for all sectors at the same 
time, and the posting of various chapters is staggered. 

* Although committee members see versions of the text as the FTA 
develops, the final agreed-upon text can change the implications for 
their particular interest significantly. 

The FTA with South Korea provides the most obvious and recent example 
of presenting a challenge in meeting the deadline. Chairs told us the 
text was not available to their committees until between 7 and 14 of 
the 30 days had passed. Furthermore, although some issues such as rice 
had been agreed upon in principle between the United States and South 
Korea at the conclusion of the agreement and the advisors had been 
briefed on the results, the final text had not yet been written. 
According to administration officials, the FTA with South Korea was an 
exception, since USTR was rushing to finish negotiations before TPA 
expired.[Footnote 79] Committee chairs told us, however, that meeting 
the 30-day deadline has been difficult for other FTAs as well. One of 
the second tier policy committee chairs, for example, noted that the 
committee did not have access to the agricultural sections of the final 
text of the Colombia FTA in time to complete the review prior to 
issuing a committee report. The committee therefore had to submit a pro 
forma letter, noting that they would provide a more detailed addendum 
to their report after the full text became available. A third tier 
committee chair told us that his committee regularly reserves the right 
to amend its report. USTR officials acknowledged that the time frame 
for report writing has been problematic for years. Furthermore, they 
pointed out that as USTR is actually tasked with sending all of the 
committee reports within 30 days to Congress, they need at least a 
couple of days to collect reports from the various committees, make 
copies, and then send them by courier. 

It is also difficult for the ITC to provide in the specified time frame 
its statutorily required report[Footnote 80] assessing the likely 
impact of the agreement on the U.S. economy and specific industry 
sectors because of delays in receiving the final agreement text. The 
President is required to provide the ITC with the details of the 
agreement, as it exists at that time, 90 days before the date on which 
the President enters into the agreement. The ITC has a total of 180 
days from that date to hold any hearings, do its analysis, and submit 
its report. TPA also requires the President to update ITC on the 
details of the agreement during this period.[Footnote 81] According to 
ITC officials, the deadline is often difficult to make due to last 
minute changes and late delivery of the final text. These officials 
told us that ITC sometimes does not get the full text of the agreement 
and all of the annexes until they are already more than halfway through 
the 180-day period. The ITC officials agreed with advisory committee 
chairs who suggested that a longer report writing window would be 
useful. One committee chair specifically suggested extending the window 
by 15 days. Commerce and USTR officials agreed that they would like to 
see at least 15 more days allowed for report writing. 

Incorporation of Nonbusiness Interests Remains Difficult, and Committee 
Composition Is Not Transparent: 

The represented interests on trade advisory committees are not always 
transparent. Congress requires, through the Trade Act of 1974, that the 
President seek information and advice from representative elements of 
the private sector and the nonfederal government sector through trade 
advisory committees that include representatives of certain interests. 
For example, the first tier ACTPN is to include representatives of 
nonfederal governments, labor, agriculture, small business, 
environmental and conservation organizations, and consumer interests, 
among others.[Footnote 82] The third tier committees are to be 
representative, insofar as is practicable, of all industry, labor, 
agricultural, or service interests in the sector or functional areas 
concerned.[Footnote 83] After we reported in 2002 that the committee 
system's structure needed to be revisited, USTR and managing agencies 
worked with Congress in reconfiguring some of the committees. For 
example, the LAC membership now includes primarily union presidents to 
ensure that the administration receives advice from the highest levels. 
Furthermore, the 21 industry functional and sector committees were 
realigned and streamlined into 16 industry committees to more 
accurately reflect the current U.S. economy and trade policy needs. 
USTR and the other managing agencies, however, still have had 
difficulty incorporating nonbusiness stakeholders into the committees. 
For example, USTR said it has had difficulties finding labor 
representatives willing to serve on ACTPN, the overall policy first 
tier committee that is required to be broadly representative of key 
sectors and groups affected by trade.[Footnote 84] Just under half of 
the committee members with whom we spoke expressed frustration with the 
current composition of their committees. Members who were dissatisfied 
with representation told us either that they felt that certain relevant 
viewpoints were not adequately represented or that the composition 
favored representation of one industry or group at the expense of 
another. Furthermore, some members are the sole representative of a 
nonbusiness interest on their committee. The nonbusiness members we 
spoke with told us that although their interest is now represented, 
they still feel isolated within their own committee. The result is the 
perception that their minority perspective is not influential. 

Available public information makes it difficult to determine what 
perspective or interest a committee member represents. For example, 
USTR officials pointed to the charters of the committees for which USTR 
is the principal administrator for guidelines as to which 
representatives they select. The charter for TEPAC, however, simply 
says that members shall be from environmental interest groups, 
industry, agriculture, services, nonfederal governments, and consumer 
interests, and that they shall be broadly representative of key sectors 
and groups with an interest in trade and environmental policy issues. 
The Department of Labor's charter for LAC only says members will be 
selected from the U.S. labor community. In addition to charters, the 
Departments of Agriculture and Commerce also put out Federal Register 
notices soliciting new members. These notices stipulate that members 
must have expertise and knowledge of trade issues relevant to the 
committees and that geographic, demographic, and sector balance will be 
sought. Neither the charters nor the Federal Register notices, however, 
explain how the agencies actually determined which representatives they 
placed on committees, although these are the documents agencies 
continually referred us to for this information. Without reporting such 
an explanation, it is not transparent how agencies followed their own 
guidelines for member selection or met statutory representation 
requirements. 

It is also not always transparent from the final roster which interest 
a particular member represents. The FACA[Footnote 85] required the 
President to report annually on the status of advisory committees, 
although this requirement was terminated in 2000.[Footnote 86] The 
General Services Administration now collects this information from the 
relevant executive branch agencies and posts it on the FACA database (a 
publicly available database on committees operating under FACA). While 
the Department of Commerce reports on the specific interest each 
committee member represents, USTR and the Departments of Agriculture 
and Labor do not. Instead, they list the member's occupation or 
affiliation. However, it is not always possible to deduce from that 
information a member's represented interest, as for example, several 
committee members are from law firms or large companies that deal with 
a variety of issues. Listing the name of the firm or company alone does 
not necessarily indicate representation of a particular interest. As a 
result, it is difficult to determine whether USTR is receiving the 
information and advice Congress intended it to obtain from these 
committees. 

Rechartering and Appointment Processes Flawed: 

Weaknesses in the processes of rechartering and repopulating committees 
have caused significant lapses in committees' functions. Originally, 
FACA called for the termination of advisory committees every 2 years 
unless renewed or its duration is otherwise provided for by 
law.[Footnote 87] Legislation passed in 2004 in response to our 2002 
report leaves it to the discretion of the President whether or not to 
extend the charters of the trade advisory committees established under 
the Trade Act of 1974 to 4 years.[Footnote 88] All of these committees, 
with the exception of LAC, now have 4-year charters. Department of 
Labor officials told us this is because of miscommunication surrounding 
the 2004 legislation. Charters of several committees have been allowed 
to lapse recently, however, resulting in committees not being able to 
meet for extended periods of time (up to 7 months in the case of LAC). 
Furthermore, the process of selecting and appointing committee members 
requires a number of time-consuming steps. The Department of Commerce, 
for example, starts the process of appointing new members approximately 
9 months prior to the ITACs' charter expiration dates, to try and 
ensure that the work of the ITACs does not stop, and has been 
successful in avoiding lapses as a result. However, other agencies do 
not always start this process in time for committees to begin meeting 
once the charter is renewed. When both processes of rechartering and 
member appointment are delayed, it further reduces a committee's 
ability to give timely, official advice before the committee is 
terminated, and the rechartering process has to begin again. This is 
particularly true in the case of LAC, which still has a 2-year charter. 

These periods of committees not being able to meet have occurred during 
important stages of the U.S. trade agenda for both bilateral agreements 
and the WTO. Most recently, the charters of APAC and all six of the 
ATACs expired on April 29, 2007. The Department of Agriculture began 
the process of soliciting new members on March 20. Although the 
committees were rechartered in late May, as of late September 2007 they 
had still been unable to meet because they had not yet been 
repopulated. A Department of Agriculture official told us that this is 
because key people responsible for the vetting process in the 
undersecretary's office have been unavailable due to travel schedules. 
In the interim, however, the United States signed FTAs with Panama and 
South Korea on June 28 and June 30, respectively. Although these 
committees were able to get their reports on the two FTAs to USTR just 
before their charters expired, they have not been able to give any 
official advice in the interim period, when agricultural issues-- 
particularly rice in the FTA with South Korea--were still being 
negotiated. In another example, the LAC did not meet from September 
2003 until November 2005.[Footnote 89] Department of Labor officials 
indicated this was due in part to the difficulty in getting members 
vetted and appointed.[Footnote 90] During this more than 2-year period, 
the United States was not only negotiating in the Doha Round of the 
WTO, but was also negotiating FTAs with numerous countries. The 
administration, however, is not required to report such lapses and the 
reasons behind them. The FACA database does collect data on the length 
of the current charter and the number of meetings held each year. This 
information, however, is only reported on an annual basis, and we found 
several discrepancies in the data posted, including incorrect charter 
and meeting dates. 

Conclusions: 

TPA expired on July 1, 2007, but the issue of its renewal awaits 
congressional consideration. This report reviews what FTAs the 
administration pursued under TPA. The systematic review this report 
provides forms part of the historical record of what was achieved with 
this important grant of authority. This report also examines how well 
the congressional and private sector consultations worked in practice. 
Although these are considered an essential check to ensure 
substantively sound and well-supported agreements, our report finds 
room for improvement. 

Under this TPA authority, we found USTR has pursued bilateral and 
subregional FTAs in order to advance both foreign policy and economic 
policy goals and as building blocks to larger regional initiatives and 
global trade expansion. While many in Congress and U.S. industry have 
supported these FTA negotiations, some have been concerned about the 
limited economic and commercial benefits gained. However, the U.S. 
standard of only negotiating comprehensive FTAs has had implications 
for the universe of suitable trading partners. Certain larger trading 
partners like the EU and Japan have been unwilling to open up sensitive 
sectors such as agriculture bilaterally. Negotiations with some larger 
developing country partners such as Brazil were ultimately abandoned, 
in part because they were unwilling to accept the comprehensive 
template proposed by the United States on such topics, as well as 
intellectual property rights and services. The results in terms of 
trade coverage illustrate the limitations of pursuing comprehensive 
FTAs: those in force or concluded under TPA accounted for just 8 
percent of total U.S. trade. Yet, after the EU, Japan, and China, the 
trade partners that remain to be covered by FTAs each account for 
relatively small shares of U.S. trade. 

TPA required that the administration consult with Congress as USTR 
negotiated trade agreements. We found that USTR provided extensive 
consultations on FTAs, numbering well over a thousand, over the past 5 
years--a significant expenditure of effort, resources, and time for an 
office of about 200 staff. However, while some current and former 
congressional committee staff we spoke with were satisfied with the 
consultations, others still came away feeling that they had not been 
truly consulted, particularly staff outside of the trade committees. 
Current and former USTR negotiators we interviewed believed that 
congressional input was constantly being factored into their 
discussions, but said lack of early focus by Congress on agreement 
details often complicated USTR's ability to incorporate congressional 
input. Clearly, clarification of expectations on both sides is 
essential to any renewal of TPA. 

Certain procedural issues also hampered consultations. For example, 
most committee staff, particularly outside the trade and agriculture 
committees, often did not feel that they had the time they needed to 
review the information USTR shared with them on the status of the 
negotiations and, in turn, provide meaningful input. Although USTR 
reports that it has already taken the step of providing committee staff 
that have security clearances with the negotiating text 5 days in 
advance, several committee staff told us they frequently have less 
time. Staff also need to obtain security clearances if they want to be 
able to access the classified negotiating text; however, some key staff 
still lack clearances. In addition, some staff with clearances are only 
able to access text through a cumbersome paper process, while others 
enjoy electronic access through USTR's secure Web site. Discussing 
changes from previously proposed text also appears essential to 
ensuring trust and effective communication. However, both committee 
staff and former USTR negotiators commented that process changes alone 
cannot resolve the issues at the heart of the consultation controversy. 
They said that the political will to engage in meaningful consultations 
is key and that consultations only work as well as the political 
relations and good faith of players. 

Just over half of the private sector advisory committee chairs we spoke 
with said they were adequately consulted and told us that having direct 
access to administration officials is valuable. Nevertheless, our work 
suggests that tight reporting time frames and delays in finalizing text 
often compromise committees' ability to provide an advisory opinion 
within 30 days as to whether agreements promote U.S. economic 
interests, achieve negotiating goals, and provide for equity and 
reciprocity, as TPA required. The ITC faces similar challenges in 
securing text or agreement details that can impede its ability to 
prepare required reports within statutory time frames. Finally, delays 
in both committee rechartering and member appointments have led to 
prolonged lapses in some committees' ability to convene and provide 
advice. Current reporting by the administration on the trade advisory 
committee status does not provide sufficient transparency, so Congress 
may be unaware of some committees' inability to meet and how statutory 
representation requirements are achieved. As a result, to effectively 
perform the unique role in U.S. trade policy Congress has given trade 
advisory committees, certain process issues need to be resolved. 

Matter for Congressional Consideration: 

To assist the U.S. Trade Representative and the other agencies in 
improving the operations and input of the trade advisory committees, 
Congress should consider extending the reporting deadlines for the 
trade advisory committees and the ITC by 15 days, giving them 45 days 
and 195 days, respectively. 

Recommendations for Executive Action: 

To facilitate better consultations with Congress, we recommend that the 
U.S. Trade Representative: 

* Take steps to reach agreement with the committees of jurisdiction on 
the amount of time they need to receive information in advance of 
consultation meetings in order to afford them better opportunity for 
meaningful input, and: 

* Work together with Congress on ways to improve access to information 
prior to consultation meetings, such as through security clearances, so 
that congressional staff can better assess the status of negotiations 
and provide advice to USTR. 

To provide transparency and accountability to the composition of the 
trade advisory committees, we recommend that the Secretaries of 
Agriculture, Commerce, and Labor work with the U.S. Trade 
Representative to annually report publicly on how they meet the 
representation requirements of FACA and the Trade Act of 1974, 
including clarifying which interest members represent in a manner 
similar to the Department of Commerce and explaining how they 
determined which representatives they placed on committees. 

To assure Congress that it is receiving the private sector advisory 
opinions that it intended in the Trade Act of 1974, we recommend that 
the Secretaries of Agriculture and Labor work with the U.S. Trade 
Representative to take the following two actions: 

* Start the advisory committee rechartering and member appointment 
processes with sufficient time to avoid any lapse in the ability to 
hold committee meetings, and: 

* Notify Congress if a committee is unable to meet for more than 3 
months due to an expired charter or a delay in the member appointment 
process. 

To promote greater efficiency in trade advisory committee function, we 
recommend that the Secretary of Labor work with the U.S. Trade 
Representative to extend the Labor Advisory Committee charter from 2 
years to 4 years, to be in alignment with the rest of the trade 
advisory committee system. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to USTR; the Departments of 
Agriculture, Commerce, Labor, State, and the Treasury; the 
Environmental Protection Agency, and ITC. The Department of Commerce 
provided written comments, which are reproduced in appendix V. It said 
that the report was generally an accurate summation of the status and 
impacts of FTAs and provided a good overview of some of the 
complexities associated with negotiating an FTA. USTR; the Departments 
of Agriculture, Commerce, and Labor; the Environmental Protection 
Agency, and ITC provided us with technical comments, which we have 
incorporated where appropriate. The Departments of State and the 
Treasury had no comments. 

USTR staff also commented to GAO on the proposed recommendations 
regarding statutory representation requirements in advisory committee 
composition and consultation with Congress. GAO incorporated these 
comments as appropriate in the final report. USTR indicated that it 
would report on the actions taken in response to the recommendations in 
a letter as required under U.S. law. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to interested congressional committees; the U.S. Trade Representative; 
the Departments of Agriculture, Commerce, Labor, State, and the 
Treasury; the Environmental Protection Agency; and ITC. We also will 
make copies available to others upon request. In addition, this report 
will be available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff has any questions about this report, please 
contact me at (202) 512-4128 or [email protected]. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions to 
this report are listed in appendix VI. 

Sincerely yours, 

Signed by: 

Signed by: 

Loren Yager: 

Director, International Affairs and Trade: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

To determine how Trade Promotion Authority (TPA) has been used in 
negotiation of free trade agreements (FTA), we reviewed: (1) What FTAs 
have been pursued under TPA and why? (2) Overall, what is the economic 
significance of these agreements to the United States? (3) What is the 
nature of the consultation process for Congress, and how well has it 
worked in practice? (4) What is the nature of the consultation process 
for trade advisory committees and other stakeholders, and how well has 
it worked in practice? 

To answer these questions, generally we reviewed documents and 
interviewed officials responsible for international trade policy and 
negotiations at the Office of the U.S. Trade Representative (USTR); the 
Departments of Agriculture, Commerce, Labor, State, and the Treasury; 
and the Environmental Protection Agency, as well as officials of the 
U.S. International Trade Commission (ITC). 

To determine what FTAs have been pursued under TPA and why, we reviewed 
USTR documents and interagency memoranda discussing FTA partner 
selection and updated our findings from our prior work on FTA partner 
selection.[Footnote 91] We also interviewed relevant executive branch 
agency officials, both current and former, in order to gain the 
perspectives of those officials involved with the earlier FTAs 
negotiated under TPA. In addition, we interviewed congressional staff 
from the House and Senate trade and agriculture committees, as well as 
other committees of jurisdiction, and over half of the trade advisory 
committee chairs, in order to learn what input they had into the 
partner selection process. 

To determine the overall economic significance of these FTAs, we 
analyzed official U.S. trade and investment data, as well as selected 
studies and analyses from USTR, ITC, and trade experts. U.S. goods 
trade statistics are from the Bureau of the Census, and are through 
2006. U.S. services trade and investment statistics are from the Bureau 
of Economic Analysis, and are through 2005, which is the most recent 
year available. For the purpose of analyzing the overall U.S. trade and 
investment relationship with TPA and non-TPA trade partners, we 
determined that these data are sufficiently reliable. Where we combined 
the two data sets to show the share of total trade (imports plus 
exports of goods plus services), the modest changes that occur from 
year to year would only have a minimal effect on the shares reported 
and no effect on the overall findings. We also grouped detailed U.S. 
goods trade statistics into two broad categories: agriculture and 
manufacturing based on the Harmonized Tariff Schedule product chapters. 
Chapters 1 through 24 are agriculture and the remaining nonagricultural 
chapters are manufacturing. ITC maintains the official U.S. tariff 
schedule. A complete list of the product chapters of the Harmonized 
Tariff schedule can be found at [hyperlink, http://www.usitc.gov]. 
Finally, in order to analyze the growth of U.S. goods trade flows over 
time we used Bureau of Labor Statistics import and export price 
deflators at the most disaggregated level available to adjust U.S. 
trade statistics for inflation from 1992 to 2006. We did not adjust 
U.S. services statistics since reliable price deflators are not 
available for the time period we examined. 

To determine the nature of the congressional consultation process and 
how well it has worked in practice, we reviewed fast track provisions 
from the Trade Act of 1974 up through TPA to trace the evolution of the 
consultation provisions. We also analyzed USTR's congressional 
consultation logs in order to determine which committees USTR had 
provided with consultation meetings, how often, and on which FTAs. We 
interviewed USTR officials about how the log was compiled and generally 
found them sufficiently reliable for the purposes of this report. In 
addition, we interviewed current and former USTR officials who had been 
involved in providing the FTA consultations, as well as current and 
former staff of congressional committees that had participated in these 
consultation meetings, in order to obtain their descriptions of the 
consultation process and their views on what had worked well and what 
could be improved. In our congressional interviews, we interviewed both 
House and Senate committees, including both majority and minority 
staffs, of all the trade, agriculture, and other committees of 
jurisdiction that had been involved in these consultations. The 
committees of jurisdiction comprised the following: 

* Senate Finance and House Ways and Means, 

* Senate Agriculture, Nutrition, and Forestry and House Agriculture, 

* Senate Commerce, Science and Transportation and House Natural 
Resources (fisheries subcommittees), 

* Senate and House Judiciary (intellectual property rights 
subcommittees), 

* Senate Banking, Housing, and Urban Affairs and House Financial 
Services, 

* Senate Commerce, Science and Transportation (telecommunications 
staff) and House Energy and Commerce (telecommunications subcommittee), 

* Senate Homeland Security and Governmental Affairs and House Oversight 
and Government Reform. 

Of the 28 committee staffs (from 7 Senate committees and 7 House 
committees, each with majority and minority staffs) that we contacted, 
staff of 18 (64 percent) agreed to be interviewed. The views of the 
committee staff we interviewed are not necessarily representative to 
all relevant Senate and House Committees. We interviewed staff of all 4 
trade committee staffs, as well as 4 former trade committee staff in 
order to assure coverage back to the beginning of TPA in 2002, due to 
staff turnover on some committees. We also interviewed former committee 
staff of the other committees of jurisdiction when there had been 
turnover on the staff and the current staff were not sufficiently 
familiar with the process to comment and referred us to the appropriate 
former staff. 

To determine the nature of the consultation process for the trade 
advisory committees and how well it worked in practice, we reviewed 
relevant provisions in the Trade Act of 1974,[Footnote 92] the Federal 
Advisory Committee Act (FACA),[Footnote 93] and TPA[Footnote 94] 
governing the establishment and function of the committees as well as 
their reporting requirements and time frames. We obtained and analyzed 
committee meeting records and charter and roster information from both 
designated agency officials and through the FACA database maintained by 
the General Services Administration. We interviewed a nongeneralizable 
sampling of 27 trade advisory committee chairs.[Footnote 95] We 
interviewed the first tier and all of the relevant second tier chairs. 
For the third tier, we interviewed a judgmental sample of half of the 
chairs--half of the agricultural technical advisory committee chairs 
and half of the industry trade advisory committee chairs--representing 
a cross section of both agriculture and industry, as well as select 
committee members referred to us by the chairs for their alternative 
views. Altogether, we interviewed 16 of the 27 chairs and 5 additional 
members. The views of the trade advisory committee chairs with whom we 
spoke are not necessarily representative of all committee chairs. We 
also selected four other stakeholders to interview, based on literature 
and background research, recommendations from trade experts, and 
participation in public hearings held for each FTA. These stakeholders 
were trade experts in the nongovernmental organization and academic 
communities. In addition, we interviewed the executive branch agency 
officials responsible for overseeing the committees, at USTR and the 
Departments of Agriculture, Commerce, and Labor. We also interviewed 
agency officials from the ITC. Finally, we updated findings from our 
prior work on the trade advisory committees through interviews and 
document review and analysis.[Footnote 96] 

We conducted our work from January 2007 to August 2007 in accordance 
with generally accepted government auditing standards. 

[End of section] 

Appendix II: Expansion of Congressional Consultation Requirements and 
Role of Gatekeeper Provision: 

This appendix briefly reviews the evolution of congressional 
consultation requirements under TPA. In general, consultation 
requirements have expanded under each renewal of authority. The Trade 
Act of 1974 was the first grant of fast track authority, which later 
became known as trade promotion authority.[Footnote 97] It established 
the basic consultation framework, including required notifications, 
consultations with congressional committees, the advisory committee 
system, and the accreditation of 10 Members of Congress to serve as 
official advisors to the U.S. delegation of negotiators. The Trade 
Agreements Act of 1979 extended fast track authority but made no 
significant changes.[Footnote 98] The next renewal came through the 
Trade and Tariff Act of 1984.[Footnote 99] This act added a new 
requirement that the President notify Congress of intent to begin trade 
negotiations at least 60 days in advance.[Footnote 100] Either the 
House Ways and Means or the Senate Finance committees could deny fast 
track consideration by disapproving of the negotiation within 60 days 
of the notification. This provision became known as the "gatekeeper" 
provision. In at least one instance, Congress reportedly used the 
provision as a tool to successfully influence the 
administration.[Footnote 101] 

The Omnibus Trade and Competitiveness Act of 1988 continued the 
previous consultation requirements and added that the Congress could 
withhold a trade agreement from fast track consideration by passing 
resolutions of disapproval if it determined that the President had 
failed to adequately consult with Congress.[Footnote 102] In addition, 
the 1988 act extended fast track procedures only for 3 years but 
allowed an extension of fast track procedures for an additional 2 years 
if the President requested the extension, and Congress did not pass a 
resolution disapproving of the extension. The Trade Act of 2002 
included all of the consultation requirements of previous acts with the 
exception of the gatekeeper provision.[Footnote 103] Instead of giving 
the two main trade committees the power to essentially veto potential 
trading partners before negotiations begin, the 2002 act replaced the 
60-day notification of intent to begin negotiations with a 90-day 
notification. The Trade Act of 2002 also established the Congressional 
Oversight Group (COG) as an additional consultation mechanism.[Footnote 
104] 

[End of section] 

Appendix III Detailed Information on U.S. Goods and Services Trade, 
Investment, and Tariffs of U.S. Trade Partners: 

This appendix provides detailed information on U.S. goods trade (table 
5) and services trade (table 6) with U.S. trade partners grouped by 
whether the United States pursued an FTA with them under TPA, already 
had an existing FTA with them, or did not pursue an FTA with them. It 
also provides information on U.S. foreign direct investment in these 
countries (table 7) and the countries' average applied tariff rates 
(table 8). 

Table 5: U.S. Goods Exports and Imports with Trade Partners: 

[See PDF for image] 

Legend CAFTA-DR = Central America-Dominican Republic Free Trade 
Agreement FTAA = Free Trade Area of the Americas NAFTA = North American 
Free Trade Agreement SACU = Southern African Customs Union: 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

Notes: CAGR stands for Compound Annual Growth Rate. "0%" represents 
values that are less than 0.5 percent and therefore round to zero. 

[End of table] 

Table 6: U.S. Services Exports and Imports with Trade Partners: 

[See PDF for image] 

Legend: 

CAFTA-DR = Central America-Dominican Republic Free Trade Agreement FTAA 
= Free Trade Area of the Americas NAFTA = North American Free Trade 
Agreement SACU = Southern African Customs Union: 

Source: GAO analysis of official private services trade statistics from 
the Bureau of Economic Analysis. 

Notes: "n.a." indicates that data was not reported by the Bureau of 
Economic Analysis (BEA) for these countries. 

[End of table] 

The values for "FTAA (other)" are based on BEA's categories "Other 
South and Central America" and "Other Western Hemisphere," excluding 
countries already listed in this table and Bermuda. 

Growth rates are based on nominal values. 

U.S. trade in services statistics are through 2005, which is the most 
recent year available. 

Table 7: U.S. Direct Investment Abroad (Foreign Direct Investment) by 
Trade Partner: 

[See PDF for image] 

Legend: 

CAFTA-DR = Central America-Dominican Republic Free Trade Agreement FTAA 
= Free Trade Area of the Americas NAFTA = North American Free Trade 
Agreement SACU = Southern African Customs Union: 

Source: GAO analysis of official U.S. direct investment abroad 
statistics from the Bureau of Economic Analysis. 

Notes: "n.a." indicates that data was not reported by the Bureau of 
Economic Analysis (BEA) for these countries. 

The values for "FTAA (other)" are based on BEA's categories "South 
America," "Central America," and "Other Western Hemisphere," excluding 
countries already listed in this table or not a part of the FTAA 
negotiations. Values are direct investment position (stock) on an 
historical cost basis. 

Growth rates are based on nominal values. 

U.S. direct investment abroad statistics are through 2005, which is the 
most recent year available. 

[End of table] 

Table 8: Most Favored Nation Applied Tariff Rates by Trade Partner: 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: Australia; 
All products: 3.5%; 
Agriculture: 1.2%; 
Nonagriculture: 3.9%. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: Bahrain; 
All products: 5.1; 
Agriculture: 7.2; 
Nonagriculture: 4.8. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: Singapore; 
All products: 0.0; 
Agriculture: 0.2; 
Nonagriculture: 0.0. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: Chile; 
All products: 6.0; 
Agriculture: 6.0; 
Nonagriculture: 6.0. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: Morocco; 
All products: 24.5; 
Agriculture: 46.2; 
Nonagriculture: 21.2. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: CAFTA-DR: Dominican Republic; 
All products: 8.5; 
Agriculture: 13.1; 
Nonagriculture: 7.8. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: CAFTA-DR: El Salvador; 
All products: 5.9; 
Agriculture: 11.5; 
Nonagriculture: 5.0. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: CAFTA-DR: Guatemala; 
All products: 5.6; 
Agriculture: 9.7; 
Nonagriculture: 5.0. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: CAFTA-DR: Honduras; 
All products: 5.6; 
Agriculture: 9.9; 
Nonagriculture: 4.9. 

Trade partner: All FTA's pursued under TPA: FTAs concluded and in 
force: CAFTA-DR: Nicaragua; 
All products: 5.6; 
Agriculture: 10.6; 
Nonagriculture: 4.9. 

Trade partner: All FTA's pursued under TPA: FTAs concluded but not yet 
in force: Colombia; 
All products: 12.5; 
Agriculture: 16.6; 
Nonagriculture: 11.8. 

Trade partner: All FTA's pursued under TPA: FTAs concluded but not yet 
in force: Costa Rica; 
All products: 5.9; 
Agriculture: 12.3; 
Nonagriculture: 4.9. 

Trade partner: All FTA's pursued under TPA: FTAs concluded but not yet 
in force: Oman; 
All products: 5.3; 
Agriculture: 8.7; 
Nonagriculture: 4.8. 

Trade partner: All FTA's pursued under TPA: FTAs concluded but not yet 
in force: Panama; 
All products: 7.3; 
Agriculture: 13.6; 
Nonagriculture: 6.4. 

Trade partner: All FTA's pursued under TPA: FTAs concluded but not yet 
in force: Peru; 
All products: 10.2; 
Agriculture: 13.6; 
Nonagriculture: 9.7. 

Trade partner: All FTA's pursued under TPA: FTAs concluded but not yet 
in force: South Korea; 
All products: 12.1; 
Agriculture: 47.8; 
Nonagriculture: 6.6. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: FTAA: Brazil; 
All products: 12.3; 
Agriculture: 10.2; 
Nonagriculture: 12.6. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: FTAA: Argentina; 
All products: 12.2; 
Agriculture: 10.1; 
Nonagriculture: 12.6. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: FTAA: Venezuela; 
All products: n.a; 
Agriculture: n.a; 
Nonagriculture: n.a. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: FTAA: Ecuador; 
All products: n.a; 
Agriculture: n.a; 
Nonagriculture: n.a. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: FTAA: Other; 
All products: n.a; 
Agriculture: n.a; 
Nonagriculture: n.a. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: Thailand; 
All products: 10.0; 
Agriculture: 22.1; 
Nonagriculture: 8.2. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: Malaysia; 
All products: 8.5; 
Agriculture: 12.3; 
Nonagriculture: 7.9. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: United Arab Emirates; 
All products: 5.0; 
Agriculture: 6.5; 
Nonagriculture: 4.8. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: SACU: Botswana; 
All products: 8.0; 
Agriculture: 9.3; 
Nonagriculture: 7.8. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: Lesotho; 
All products: 7.9; 
Agriculture: 9.0; 
Nonagriculture: 7.8. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: Namibia; 
All products: 8.0; 
Agriculture: 9.2; 
Nonagriculture: 7.8. 

Trade partner: All FTA's pursued under TPA: FTAs pursued but not yet 
concluded: South Africa; 
All products: 8.0; 
Agriculture: 9.0; 
Nonagriculture: 7.9. 

Trade partner: Swaziland; 
All products: 8.0; 
Agriculture: 9.3; 
Nonagriculture: 7.8. 

Trade partner: FTAs prior to TPA: Israel; 
All products: 6.5; 
Agriculture: 17.1; 
Nonagriculture: 4.9. 

Trade partner: FTAs prior to TPA: Jordan; 
All products: 11.5; 
Agriculture: 18.1; 
Nonagriculture: 10.4. 

Trade partner: FTAs prior to TPA: NAFTA: Canada; 
All products: 5.5; 
Agriculture: 17.3; 
Nonagriculture: 3.7. 

Trade partner: FTAs prior to TPA: NAFTA: Mexico; 
All products: 14.0; 
Agriculture: 18.2; 
Nonagriculture: 13.3. 

Trade partner: Non-FTA countries: EU; 
All products: 5.4; 
Agriculture: 15.1; 
Nonagriculture: 3.9. 

Trade partner: Non-FTA countries: Japan; 
All products: 5.6; 
Agriculture: 24.3; 
Nonagriculture: 2.8. 

Trade partner: Non-FTA countries: China; 
All products: 9.9; 
Agriculture: 15.7; 
Nonagriculture: 9.0. 

Trade partner: Non-FTA countries: India; 
All products: 19.2; 
Agriculture: 37.6; 
Nonagriculture: 16.4. 

Trade partner: Addendum: United States; 
All products: 3.5%; 
Agriculture: 5.3%; 
Nonagriculture: 3.3%. 

Legend: 

CAFTA-DR = Central America-Dominican Republic Free Trade Agreement: 

FTAA = Free Trade Area of the Americas: 

NAFTA = North American Free Trade Agreement: 

SACU = Southern African Customs Union: 

Source: World Trade Organization, World Tariff Profiles 2006. 

Note: Applied rates listed in this table are based on the simple 
average of ad valorem most favored nation rates. It does not include 
non ad valorem duties unless ad valorem equivalent rates were 
available. 

[End of table] 

[End of section] 

Appendix IV: Comparison of U.S. Trade and Investment with FTA and Non- 
FTA Partners: 

The U.S. trade and investment relationship with countries that the 
United States has chosen to pursue FTAs under TPA differs from that 
with non-FTA countries in several ways.[Footnote 105] The United States 
tends to (1) maintain more balanced trade with TPA countries, (2) 
export relatively more manufactured goods (compared with services and 
agriculture), and (3) have relatively faster investment growth with TPA 
countries, particularly in countries with FTAs in force. 

U.S. Maintains More Balanced Trade with TPA Countries: 

The overall U.S. trade deficit has been large and growing for many 
years. Much of the gap between exports and imports has been driven by 
increased imports from Asian countries, including China and 
Japan.[Footnote 106] In contrast, the United States has relatively more 
balanced trade with the group of countries pursued under TPA. Figure 9 
shows the goods trade balances for TPA countries, existing FTA partners 
(e.g., Canada and Mexico), and non-FTA countries (e.g., EU, Japan, 
China, India). The trade balance with TPA countries is in deficit 
overall, but the deficit is relatively smaller and has deteriorated 
less rapidly than the much larger deficit with non-FTA 
countries.[Footnote 107] 

Figure 9: U.S. Goods Trade Balance (Exports-Imports) with TPA 
Countries, Existing FTAs, and Non-FTA Countries, 1997-2006: 

This figure is a combination line graph showing U.S. goods trade 
balance with TPA countries, existing FTAs, and Non-FTA countries, 1997-
2006. The X axis represents the year, and the Y axis represents dollars 
in billions. 

[See PDF for image] 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

[End of figure] 

Moreover, the trends in the U.S. trade deficit vary across the groups 
of countries pursued under TPA. For TPA countries with which the United 
States has put in force the FTA agreements (e.g., Australia, Chile, 
CAFTA-DR), the goods trade balance is in surplus. Figure 10 shows TPA 
countries by the status of the FTA negotiations: in force, concluded 
but not yet in force, and pursued but not yet concluded. For FTA 
agreements that have been put in force, the United States maintains a 
small but growing trade surplus. For agreements that have been 
concluded but not yet in force, the United States maintains a trade 
deficit that has declined in recent years. Finally, for countries in 
which the United States pursued an FTA agreement, but has not yet 
completed negotiations, the trade deficit has been negative and 
growing. 

Figure 10: U.S. Goods Trade Balance (Exports-Imports) with TPA 
Countries, by Status of FTA Negotiations, 1997-2006: 

This figure is a combination line chart showing U.S. goods trade 
balance (exports-imports) with TPA countries, by status of FTA 
negotiations, 1997-2006. The X axis represents the year, and the Y axis 
represents the dollars in billions. 

[See PDF for image] 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

[End of figure] 

U.S. Exports More Manufacturing and Imports More Agricultural Products 
with TPA Countries: 

Relative to services and agriculture, manufacturing products comprise a 
higher share of total U.S. exports to TPA countries (70 percent) 
compared with non-FTA countries (59 percent), as shown in figure 11. 
This is mirrored by a relatively smaller share of services exports to 
TPA countries (26 percent) compared with non-FTA countries (36 
percent). In addition, while U.S. manufacturing exports to both TPA and 
non-FTA countries are growing at similar rates (between 10-11 percent 
annually, from 2002-2006 based on a compound annual growth rate), U.S. 
services exports to TPA countries are growing more slowly than U.S. 
services exports to non-FTA countries (5 percent for TPA countries, 
versus 10 percent for non-FTA countries). Table 6 in appendix III shows 
growth rates for services trade. 

Figure 11: Comparison of U.S. Exports to TPA Countries Versus Non-FTA 
Countries: 

This figure is a combination pie chart showing comparison of U.S. 
exports to TPA countries verus non-FTA countries. 

U.S. exports to TPA countries, $247 billion: 

70%: Manufacturing; 
26%: Services; 
4%: Agriculture. 

U.S. exports to non-FTA countries, $666 billion: 

59%: Agriculture; 
36%: Services; 
5%: Manufacturing. 

[See PDF for image] 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

Notes: Figures based on U.S. trade with all countries pursued under TPA 
(TPA countries) and U.S. trade with countries not pursued under TPA and 
with which the U.S. does not currently have an FTA (non-FTA countries). 

[End of figure] 

Manufacturing includes all nonagricultural goods trade. U.S. trade in 
goods statistics are for 2006. U.S. trade in services statistics are 
for 2005, which is the most recent year available. See appendix I for 
more information on our methodology and product composition. 

In terms of U.S. imports, manufacturing products comprise a much larger 
share of both TPA and non-FTA imports--80 and 82 percent, respectively, 
than manufacturing comprises in U.S. exports to these groups. Figure 12 
shows the composition of U.S. imports from both groups. While U.S. 
services imports are relatively similar for TPA and non-FTA countries, 
agricultural imports from TPA countries (7 percent) are much larger as 
a share of total imports from TPA countries, compared to non-FTA 
countries (2 percent). In addition, agricultural imports from TPA 
countries have also been growing faster (9 percent annually) compared 
to imports of agricultural products from non-FTA countries (6 percent 
annually) from 2002 to 2006, based on a compound annual growth rate. 

Figure 12: Comparison of U.S. Imports from TPA Countries Versus Non-FTA 
Countries by Product Group: 

This figure is a combination pie chart showing comparison of U.S. 
imports from TPA countries versus non-FTA countries by product group. 

U.S. Imports from TPA countries, $311 billion: 

80%: Manufacturing; 
13%: Services; 
7%: Agriculture. 

U.S. Imports from non-FTA countries, $1,255 billion: 

82%: Manufacturing; 
16%: Services; 
2%: Agriculture. 

[See PDF for image] 

Source: GAO analysis of official U.S. trade statistics from the U.S. 
Census Bureau. 

Notes: Figures based on U.S. trade with all countries pursued under TPA 
(TPA countries) and U.S. trade with countries not pursued under TPA and 
with which the United States does not currently have an FTA (non-FTA 
countries): 

Manufacturing includes all nonagricultural goods trade. U.S. trade in 
goods statistics are for 2006. U.S. trade in services statistics are 
for 2005, which is the most recent year available. See appendix I for 
more information on our methodology and product composition. 

[End of figure] 

U.S. Investment in TPA Countries Growing Relatively Rapidly Since 
Completion of FTAs: 

U.S. direct investment abroad (or foreign direct investment, FDI) in 
TPA countries has grown more rapidly than investment in non-FTA 
countries, particularly in recent years since the conclusion of FTA 
agreements. Table 9 shows that U.S. FDI in TPA countries registered a 
compound annual growth rate of 9 percent between 1996 and 2005, and a 
13 percent compound annual growth rate since 2002. For TPA countries in 
which an FTA with the United States is already in force, the compound 
annual growth rate was 20 percent from 2002 to 2005. In comparison, 
U.S. direct investment in non-FTA countries grew at a compound annual 
growth rate of 7 percent over the same period. 

Table 9: U.S. Direct Investment Abroad (Foreign Direct Investment) by 
Trade Partner Group: 

U.S. dollars in millions. 

Trade partner: All countries; 
Value: 2005: 2,069,983; 
Share: 2005: 100%; 
Growth: 1996- 2005: 11%; 
2002-2005: 9%. 

Trade partner: All FTAs under TPA; 
Value: 2005: 321,871; 
Share: 2005: 16; 
Growth: 1996-2005: 9; 
2002-2005: 13. 

Trade partner: FTAs concluded and in force; 
Value: 2005: 174,438; 
Share: 2005: 8; 
Growth: 1996-2005: 14; 
2002-2005: 20. 

Trade partner: FTAs concluded but not yet in force; 
Value: 2005: 33,106; 
Share: 2005: 2; 
Growth: 1996-2005: 1; 
2002-2005: 9. 

Trade partner: FTAs prior to TPA; 
Value: 2005: 314,170; 
Share: 2005: 15; 
Growth: 1996- 2005: 12; 
2002-2005: 11. 

Trade partner: Non-FTA countries; 
Value: 2005: 1,433,942; 
Share: 2005: 69%; 
Growth: 1996-2005: 12%; 
2002-2005: 7%. 

Source: GAO analysis of official U.S. direct investment abroad 
statistics from the Bureau of Economic Analysis. 

Note: Growth rates are based on nominal values. 

[End of table] 

[End of section] 

Appendix V: Comments from the Department of Commerce: 

The Secretary of Commerce: 
Washington D.C. 20230: 

October 4, 2007: 

Mr. David Walker: 
Comptroller General of the United States: 
United States Government Accountability Office: 
441 G. Street, NW: 
Washington, D.C. 20548: 

Dear Mr. Walker: 

Thank you for sharing with us the draft United States Government 
Accountability Office report entitled, "International Trade: An 
Analysis of Free Trade Agreements and Congressional and Private Sector 
Consultations under Trade Promotion Authority," and for the opportunity 
to comment on the report. We believe the report is, in general, an 
accurate summation of the status and impacts of Free Trade Agreements 
(FTA). In addition, the report provides a good overview of some of the 
complexities associated with negotiating an FTA. Technical comments and 
corrections are being sent under separate cover for your consideration. 

Sincerely, 

Signed by: 

Carlos M. Gutierrez: 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Loren Yager, (202) 512-4347, [email protected]: 

Staff Acknowledgments: 

In addition to the individual named above, Kim Frankena, Assistant 
Director; Leyla Kazaz; Tim Wedding; Judith Williams; Gezu Bekele; Tina 
Hodges; and Arthur Lord made key contributions to this report. Other 
contributors include Grace Lui, Martin De Alteriis, and Karen Deans. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 107-210, Div. B, 116 Stat. 933, 993-1022 (codified at 
19 U.S.C. Â§Â§ 3801-13). 

[2] Launched in November 2001 in Doha, Qatar, these negotiations 
involve 150 nations and encompass a far-reaching agenda for 
liberalizing trade and bolstering development in poorer countries. 
Among other things, they involve efforts to reach agreement to reduce 
barriers such as tariffs (border taxes) and trade-distorting subsidies 
on agriculture, manufactures, and services trade. For further 
background see [hyperlink, http://www.wto.org] and GAO, World Trade 
Organization: Congress Faces Key Decisions as Efforts to Reach Doha 
Agreement Intensify, GAO-07-379 (Washington, D.C.: Mar. 5, 2007). 

[3] See GAO, International Trade: Intensifying Free Trade Negotiating 
Agenda Calls for Better Allocation of Staff and Resources, GAO-04-233 
(Washington, D.C.: Jan. 12, 2004). 

[4] See Trade Act of 1974, Pub. L. No. 93-618, 88 Stat. 1978 (1975); 
Trade Agreement Act of 1979, Pub. L. No. 96-39, 93 Stat. 144; Trade and 
Tariff Act of 1984, Pub. L. No. 98-573, 98 Stat. 2948; Omnibus Trade 
and Competitiveness Act of 1988, Pub. L. No. 100-418, 102 Stat. 1107; 
Trade Act of 2002, Pub. L. No. 107-210, 116 Stat. 933. 

[5] Pub. L. No. 93-618. 

[6] Pub. L. No. 92-463, 86 Stat. 770 (1972). 

[7] Pub. L. No. 107-210. 

[8] GAO, International Trade: Advisory Committee System Should Be 
Updated to Better Serve U.S. Policy Needs, GAO-02-876 (Washington, D.C; 
Sept. 24, 2002). 

[9] See, United States-Chile Free Trade Agreement Implementation Act, 
Pub. L. No. 108-77, 117 Stat. 909 (2003); United States-Singapore Free 
Trade Agreement Implementation Act, Pub. L. No. 108-78, 117 Stat. 948 
(2003); United States-Australia Free Trade Agreement Implementation 
Act, Pub. L. No. 108-286, 118 Stat. 919 (2004); United States-Morocco 
Free Trade Agreement Implementation Act, Pub. L. No. 108-302, 118 Stat. 
1103 (2004); Dominican Republic-Central America-United States Free 
Trade Agreement Implementation Act, Pub. L. No. 109-53, 119 Stat. 462 
(2005); United States-Bahrain Free Trade Agreement Implementation Act, 
Pub. L. No. 109-169, 119 Stat. 3581 (2006). 

[10] Goods trade data are from 2006, while services trade data and 
investment data are from 2005, which is the most recent year available. 

[11] 19 U.S.C. Â§ 3804 (e). 

[12] A prerequisite to FTAs entering into force is that the President 
must notify Congress 90 days before signing the agreement. Advisory 
committee reports are required to be submitted to Congress not later 
than 30 days after the Presidential notification of the intention to 
sign the agreement. See 19 U.S.C. Â§Â§ 3805(a), 3804(a). 

[13] 19 U.S.C. Â§ 2155. 

[14] The implementing bill makes the changes in current U.S. law needed 
to fulfill the terms of the FTA. 

[15] Reciprocal Trade Agreements Act of 1934, Pub. L. No. 73-316, 48 
Stat. 943. 

[16] See Trade Act of 1974, Pub. L. No. 93-618; Trade Agreement Act of 
1979, Pub. L. No. 96-39; Trade and Tariff Act of 1984, Pub. L. No. 98- 
573; Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100- 
418; Trade Act of 2002, Pub. L. No. 107-210. 

[17] 19 U.S.C. Â§Â§ 3801-13. 

[18] 19 U.S.C. Â§ 3803 (c)(3). 

[19] 19 U.S.C. Â§ 2155 (i). 

[20] 19 U.S.C. Â§ 3804 (e). 

[21] 19 U.S.C. Â§ 2153. 

[22] The Trade Policy Staff Committee is administered and chaired by 
USTR, and is the subcabinet-level mechanism for developing and 
coordinating U.S. government positions on international trade and trade-
related investment issues. 

[23] GAO, International Trade: Advisory Committee System Should Be 
Updated to Better Serve U.S. Policy Needs, GAO-02-876 (Washington, D.C; 
Sept. 24, 2002). 

[24] Prior to TPA, the United States had already concluded and put into 
force four FTAs with four countries. Two of those countries, Canada and 
Mexico, were also part of the Free Trade Area of the Americas agreement 
pursued under TPA. 

[25] Costa Rica is the only partner country of the Central America- 
Dominican Republic Free Trade Agreement (CAFTA-DR) that has not yet 
approved implementing legislation. As CAFTA-DR is already in force for 
the remaining countries (El Salvador, Honduras, Nicaragua, Guatemala, 
the Dominican Republic, and the United States), it was not counted as 
an additional FTA here. 

[26] Once a trade agreement on tariff and nontariff barriers, including 
an FTA, has been concluded and signed by the President under TPA, 
before the agreement can enter into force, Congress must enact the 
implementing bill into law. Additionally, the agreement enters into 
force only once each party has completed the necessary domestic legal 
procedures (for the United States, this means enactment of the 
implementing bill into law), and the parties have exchanged written 
notices that such procedures have been completed. 

[27] Agency officials told us that negotiations for these 5 FTAs have 
not yet been concluded for a variety of reasons. For example, 
negotiations with SACU were suspended due to a mutual recognition of a 
lack of readiness, and the United States will be ready to resume 
negotiations with Thailand once it returns to a democratically elected 
government. 

[28] GAO reported in 2004 that possible FTA partners are proposed 
through an interagency process, which USTR coordinates. (GAO-04-233). 
Senior congressional staff, Members of Congress, and trade advisory 
committee members have also at times provided USTR with informal, 
unsolicited feedback on FTA partner selection. 

[29] 19 U.S.C. Â§Â§ 2461-67. 

[30] 19 U.S.C. Â§Â§ 2701-07. 

[31] Trade and Development Act of 2000, Pub. L. No. 106-200, Title I, 
114 Stat. 251, 252-275. 

[32] 119 U.S.C. Â§Â§ 3201-06. 

[33] Pub. L. No. 109-53. 

[34] Pub. L. No. 106-200, Title II, Â§ 202, 34 Stat. 251, 276 (codified 
at 19 U.S.C. Â§ 2701 note). 

[35] For a more detailed discussion of these differences, see GAO, 
World Trade Organization: Congress Faces Key Decisions as Efforts to 
Reach Doha Agreement Intensify, GAO-07-379 (Washington, D.C.: Mar. 5, 
2007). 

[36] With a negative list approach to services, all services sectors 
and measures would be covered by the agreement unless they are 
specifically excluded. With a positive list approach, only services 
specifically listed would be included in the agreement. 

[37] 19 U.S.C. Â§ 2902 (b)(2). 

[38] Costa Rica is the only CAFTA partner country that has not yet 
approved implementing legislation. 

[39] See, for example, DeRosa, Dean A and John P. Gilbert, "Technical 
Appendix: Quantitative Estimates of the Economic Impacts of U.S. 
Bilateral Free Trade Agreements," in Jeffrey J. Schott, ed., Free Trade 
Agreements: US Strategies and Priorities (Washington, D.C.: Institute 
for International Economics, April 2004), 383-417. 

[40] See U.S. International Trade Commission, U.S.-Korea Free Trade 
Agreement: Potential Economy-wide and Selected Sectoral Effects 
(Washington, D.C.: USITC Publication 3949, September 2007) as well as 
reports of other investigations conducted under Section 2104 of TPA. 

[41] For example, see 19 U.S.C. Â§ 2465. 

[42] These are simple average tariff rates calculated by the WTO for 
all tariff lines in which ad valorem (i.e., percentage of price) tariff 
rates were available. They generally do not include non-ad valorem 
rates (e.g., specific rates of duty, such as 5 cents per bushel). 

[43] Although the term "most favored nation" was replaced domestically 
with the term "normal trade relations" in 1998, the former is still 
used in international agreements. 

[44] This is cited in WTO's World Tariff Profiles 2006. USDA and ITC 
estimate South Korea's average ad valorem tariff for agricultural goods 
at 52 percent. 

[45] The United States has pursued several FTAs with countries that are 
small in terms of the size of U.S. trade, including Bahrain and 
Morocco. 

[46] In this report, we compare the trade and investment relationship 
of the United States with countries pursued under TPA (TPA countries) 
to countries with which the United States neither has an FTA nor has 
pursued one under TPA (non-FTA countries). A third group includes those 
countries with which the United States already had an FTA in effect 
prior to TPA (FTAs prior to TPA; e.g., NAFTA). 

[47] 19 U.S.C. Â§ 3804. 

[48] 19 U.S.C. Â§Â§ 3804, 3807. 

[49] 19 U.S.C. Â§ 3804. 

[50] 19 U.S.C. Â§Â§ 3804(d)-(f), 3805. 

[51] The President "enters into" an international trade agreement when 
he or she signs it. However, FTAs do not "enter into force" until 
Congress approves the implementing bill and all other signatories have 
taken the measures necessary to come into compliance with the 
provisions of the agreement that are to take effect on the date on 
which the agreement enters into force, and the signatories set a date 
for entry into force. 

[52] 19 U.S.C. Â§ 3805(a). 

[53] 19 U.S.C. Â§ 3805(b). 

[54] 19 U.S.C. Â§ 3803. 

[55] 19 U.S.C. Â§ 3805(c). 

[56] USTR also held an additional 1,217 consultation meetings related 
to issues other than FTAs, such as WTO negotiations and trade with 
China, according to its consultation log. 

[57] This is for the entire period of analysis, August 6, 2002 (date of 
TPA passage)-April 20, 2007. The majority and minority parties switched 
in January 2007. In addition, the majority party in the Senate switched 
in January 2003. For the period from August 2002 through December 2002, 
when the Senate was under Democratic control, and the House was under 
Republican control, there were 10 majority-only meetings with staff of 
committees of jurisdiction and 10 minority-only meetings. For the 
period that accounts for the bulk of the period of analysis, from 
January 2003 through December 2006, there were 134 majority-only 
meetings with staff of committees of jurisdiction and 60 minority-only 
meetings. From January 2007 through April 20, 2007, there were 4 
majority-only meetings and 7 minority-only meetings. 

[58] 19 U.S.C. Â§ 3807. 

[59] We interviewed current and former committee staff of the key 
committees of jurisdiction. We interviewed former committee staff when 
there had been turnover on the staff and the current staff were not 
sufficiently familiar with the process to comment and referred us to 
the appropriate former staff. For the trade committees, particularly 
where there had been significant turnover among senior committee staff, 
we tried to ensure that we spoke with former staff that had been 
present on the committee back to 2002, when TPA was launched and the 
initial understandings reached. 

[60] Of 28 committee staffs (from seven committees of jurisdiction in 
each House, each with a majority and minority staff) that we contacted, 
we were able to secure interviews with individuals from 18. For more 
information about our methodology, see appendix I. 

[61] In characterizing the views of committee staff in our report, we 
do not hereafter indicate whether the views given were from current or 
former staff, in order to protect the confidentiality of their views. 

[62] The USTR lead negotiators are generally Assistant U.S. Trade 
Representatives, who are office directors within USTR. 

[63] Each congressional committee typically has separate majority and 
minority professional committee staff, hired by the Chair and Ranking 
Minority Member, respectively. The other Members of Congress who are 
committee members generally have legislative assistants from their own 
personal staff assigned to cover their committee work. 

[64] Almost all of the trade committee staff that we interviewed that 
participated in the consultations had clearances or a lapsed clearance 
they said they intended to have updated soon. 

[65] We spoke with 18 of 28 committee staffs, which is a response rate 
of 64 percent. The staff that we were able to interview had a larger 
proportion of majority (now Democratic) staff than minority (now 
Republican) staff. Given the small number of staff involved and the 
potential for response bias, we are not characterizing our findings in 
terms of a specific percentage of respondents. 

[66] While this had been a complaint of the trade committees during the 
early years of TPA, several years ago USTR instituted a 5-day policy 
whereby text and information were provided to the trade committees at 
least 5 business days in advance of the consultation meeting. In 
addition, USTR reported that its policy did not apply just to the trade 
committees, but that it provided text to staff with security clearances 
of all committees 5 days in advance. However, several committee staff 
across a range of committees told us that they frequently have less 
time. As a result, it is not clear whether this policy has been applied 
consistently. 

[67] Almost all of the committee staff we interviewed from the other 
committees of jurisdiction either did not feel FTA partner selection 
was an issue of concern or had no views on the subject. 

[68] The gatekeeper provision was a requirement that the President 
notify Congress of intent to begin trade negotiations at least 60 days 
in advance. Either the House Ways and Means or the Senate Finance 
committees could deny fast track consideration by disapproving of the 
negotiation within 60 days of the notification. See appendix II for 
additional information about the history of fast track and the role of 
the gatekeeper provision. 

[69] 19 U.S.C. Â§ 2112(4). 

[70] Mock markup was instituted because any bill submitted under TPA 
must be voted on an up-or-down basis without amendment. Before USTR 
sends up an FTA package for congressional consideration, it sends a 
draft that includes the signed agreement and a draft of the proposed 
implementing bill, as well as other supporting documents. Because the 
fast track process provides that there will be no amendments to the 
implementing legislation, the trade committees hold "mock" markups of 
the draft legislation before it is formally submitted to Congress, so 
that they can indicate the changes that need to be made before it will 
be acceptable to the committee. However, the mock markups are 
nonbinding, allowing USTR to decide against changing the legislative 
language before sending to Congress for an up or down vote. Mock markup 
is congressional custom and is not mentioned in TPA. 

[71] Most staff of the other committees of jurisdiction were not 
involved in this process and did not offer a view. 

[72] 19 U.S.C. Â§Â§ 2153, 2155. 

[73] For a discussion of our selection criteria, see appendix I. 

[74] TACA's charter was renewed in March 2006 after having been 
terminated a year and a half earlier. TACA's first meeting after its 
charter was renewed was in March 2007, with a second meeting in June 
2007. Neither of these meetings, however, dealt with FTAs, and it held 
no other meetings under TPA. Furthermore, USTR officials told us that 
TACA members did not give advice or write an official report on any of 
the FTAs pursued under TPA. For these reasons, we did not include TACA 
in the count for our review. 

[75] In response to GAO's 2002 report, GAO-02-876, the administration 
reorganized the trade advisory committee system in March 2004. Prior to 
this reorganization, the third tier committees had included 17 industry 
sector advisory committees and 4 industry functional advisory 
committees. These 21 committees were streamlined into 16 ITACs. 

[76] Each governor's office designates a single contact point to 
disseminate and relay trade-related information between USTR and 
relevant state and local offices. 

[77] Plenary meetings periodically bring all ATAC members or all ITAC 
members together in Washington, D.C., to hear presentations from 
cabinet-level and other high-ranking officials. The ITAC plenary 
meetings, for example, have been held twice a year since fiscal year 
2005. The purpose of these meetings is to cover subjects of broad 
interest to many committees, combined with workshops on subjects of 
crosscutting issues. 

[78] 19 U.S.C. Â§ 2155. 

[79] As TPA expired on July 1, 2007, any trade agreements that were 
going to fall under this legislative authority had to be signed by that 
date. Since the President is required to notify Congress of the intent 
to sign a trade agreement 90 days before doing so, this meant that the 
President had to notify Congress about his intent to sign the U.S.- 
Korea FTA by April 1, 2007. 

[80] 19 U.S.C. Â§ 3804(f). 

[81] 19 U.S.C. Â§ 3804(f). 

[82] 19 U.S.C. Â§ 2155 (b). 

[83] 19 U.S.C. Â§ 2155 (c). 

[84] After the three labor representatives temporarily resigned from 
ACTPN in 2000, because they felt their issues were not being addressed, 
the International Brotherhood of Teamsters General President joined in 
2003, but resigned in 2004 citing continued disregard of advice and 
dissenting views, as well as failure to make the ACTPN broadly 
representative of labor, environment, and consumer interests. His 
successor was the treasurer of a local engineering union, who resigned 
in mid-2007. As of September 2007, the new and sole ACTPN Labor 
representative is the General President of the United Association of 
Plumbers and Pipefitters. 

[85] Under 19 U.S.C. Â§ 2155 (f), with certain exceptions, the 
provisions of the Federal Advisory Committee Act, 5 U.S.C. app. 2, 
apply to the advisory committees established under the Trade Act of 
1974. 

[86] 5 U.S.C. app. 2, Â§ 6(c) (terminated by Federal Reports Elimination 
and Sunset Act of 1995, Pub. L. No. 104-66, Â§ 3003, as amended). 

[87] 5 U.S.C. app. 2, Â§ 14. 

[88] Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 
No. 108-429, Â§ 2004 (i)(2), 118 Stat. 2434, 2595. 

[89] A Department of Labor official told us that the liaison group met 
twice with USTR during this 2-year period to stay abreast of trade 
issues. 

[90] USTR and the Department of Labor restructured the LAC in May 2004, 
in response to our 2002 report. USTR told us that the LAC was unable to 
meet for 2 months after the May 2004 rechartering due to delays in 
getting members appointed, but letters of invitation to join the 
committee were not sent out until July 2004. A Department of Labor 
official told us that once invited, the vetting and appointment 
processes for new members can take over a year to complete. 

[91] See GAO-04-233. 

[92] Pub. L. No. 93-618. 

[93] Pub. L. No. 92-463, 86 Stat. 770 (1972). 

[94] Pub. L. No. 107-210. 

[95] The second tier Trade Committee on Africa (TACA) did not hold any 
meetings during the time frame of TPA and did not exist for a year and 
a half of that period. Furthermore, USTR officials told us that TACA 
members did not give advice or write an official report on any of the 
FTAs pursued under TPA. For these reasons, we did not include TACA in 
the count for our review. 

[96] GAO-02-876. 

[97] Pub. L. No. 93-618, Â§Â§ 102, 151 (codified at 19 U.S.C. Â§Â§ 2112, 
2191). 

[98] Pub. L. No. 96-39, Â§ 3(c). 

[99] Pub. L. No. 98-573. 

[100] Pub. L. No. 98-573, Â§ 401(a). 

[101] According to Hal Shapiro, the Senate Finance Committee threatened 
to use the gatekeeper provision to disapprove the negotiation of the 
U.S -Canada FTA. Furthermore, after extracting significant concessions 
from the President, the committee deadlocked, allowing negotiations to 
proceed by a thin margin. Hal Shapiro, Fast Track: A Legal, Historical, 
and Political Analysis (Ardsley, NY: Transnational Publishers, 2006), 
158. 

[102] Pub. L. No. 100-418, Â§ 1103 (codified at 19 U.S.C. Â§ 2903). 

[103] Pub. L. No. 107-210, Â§ 2104 (codified at 19 U.S.C. Â§ 3804). 

[104] Pub. L. No. 107-210, Â§ 2107 (codified at 19 U.S.C. Â§ 3807). 

[105] In this report, we compare the trade and investment relationship 
of the United States with countries pursued under TPA (TPA countries) 
to countries with which the United States neither has an FTA nor has 
pursued one under TPA (non-FTA countries). A third group includes those 
countries with which the United States already had an FTA in force 
prior to TPA (FTAs prior to TPA; e.g., North American Free Trade 
Agreement [NAFTA]). 

[106] Economists point out that the imbalance between exports and 
imports is mirrored by the imbalance in capital flows--borrowing by the 
United States (consumers, businesses, and government) outstrips U.S. 
investment and lending abroad. 

[107] While U.S. services trade is in surplus overall for each of these 
groups, the value of these surpluses is relatively low in comparison to 
the goods trade deficits and, therefore, does not remove the overall 
trade deficit. 

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