The Results Act: Observations on USTR's September 1996 Draft Strategic
Plan (Correspondence, 07/18/97, GAO/NSIAD-97-199R).

Pursuant to a congressional request, GAO reviewed the draft strategic
plan submitted by the Office of the United States Trade Representative
(USTR) as required by the Government Performance and Results Act.

GAO noted that: (1) USTR's draft strategic plan of September 1996 is
incomplete and will require considerable revision before it meets all of
the Results Act's requirements and the Office of Management and Budget's
(OMB) guidelines; (2) the draft plan meets the requirements of the
Results Act in only two of six areas; (3) specifically, the plan
provides a mission statement and key external factors that could affect
achievement of agency goals; (4) however, the plan does not meet the
requirements for presenting general goals and objectives or for
describing how they will be achieved or how they relate to performance
goals and program evaluations; (5) furthermore, the plan does not follow
the detailed OMB guidance for drafting strategic plans in many respects;
(6) the plan can be improved in additional areas, as well; (7) USTR's
plan does broadly cover all the agency's major statutory functions; (8)
GAO believes it could be improved by explicitly reflecting the agency's
growing responsibility for monitoring foreign governments' compliance
with trade agreements; (9) this version of USTR's plan includes the
agency's crosscutting activities but does not reflect the results of
consultations with interested parties, including other federal agencies;
(10) the draft plan acknowledges this omission, and USTR officials told
GAO that these consultations were taking place; (11) coordination is an
important part of USTR's mission, and Congress has been concerned with
fragmented organization of trade functions among various agencies; (12)
USTR's draft plan describes a serious management challenge that the
agency will face during 1997-2002 but does not contain a strategy for
dealing with that challenge; (13) according to the plan, the agency must
manage growing workloads with reduced resources, but the plan does not
indicate how it will respond to this challenge; (14) GAO has not done
any work to assess the agency's capacity to provide the data necessary
to measure progress in achieving any goals and objectives nor whether
its information systems need to be improved to allow it to do so; and
(15) once USTR refines the plan's goals and objectives, it will need to
evaluate its ability to gather the information essential to measure its
progress in achieving its goals and objectives.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-97-199R
     TITLE:  The Results Act: Observations on USTR's September 1996 
             Draft Strategic Plan
      DATE:  07/18/97
   SUBJECT:  Interagency relations
             Agency missions
             International trade
             Foreign trade policies
             Program evaluation
             Strategic planning
             Congressional/executive relations
             Internal controls

             
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Cover
================================================================ COVER



September 1997


GAO/NSIAD-97-199R

USTR's Draft Strategic Plan

(711283)


Abbreviations
=============================================================== ABBREV

  BOP - Federal Bureau of Prisons
  CFO - Chief Financial Officers
  DEA - Drug Enforcement Administration
  DOJ - Department of Justice
  FBI - Federal Bureau of Investigation
  INS - Immigration and Naturalization Service
  NAFTA - x
  NPR - National Performance Review
  OMB - Office of Management and Budget
  USTR - x
  WTO - x

Letter
=============================================================== LETTER


B-277493

July 18, 1997

The Honorable Richard K.  Armey
Majority Leader
House of Representatives

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

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

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

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

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


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :1

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

We obtained the September 1996 draft strategic plan that USTR
provided to the House of Representatives' staff team working with the
agency on Results Act issues.  USTR told us that it is revising the
plan; however, a revised draft was not available to us, and thus we
based our review on the September draft plan.  They said that USTR is
in the process of significantly revising its draft strategic plan
since our review began and that they are confident that USTR will
meet the September 30, 1997, statutory deadline for completing the
plan and submitting it to Congress. 

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


--------------------
\1 Agencies' Strategic Plans Under GPRA:  Key Questions to Facilitate
Congressional Review (GAO/GGD-10.1.16, May 1997). 


   BACKGROUND
------------------------------------------------------------ Letter :2

The U.S.  Trade Representative acts as the principal trade advisor,
negotiator, and spokesperson for the President on trade and related
investment matters.  As chair of an interagency structure, USTR
coordinates trade policy through the Trade Policy Review Group and
the Trade Policy Staff Committee.  These groups, composed of 17
federal agencies and other offices, make up the subcabinet mechanism
for developing and coordinating U.S.  government positions on
international trade and trade-related investment issues.\2 USTR
negotiates international trade agreements like the North American
Free Trade Agreement (NAFTA) and the Uruguay Round Agreements that
created the World Trade Organization (WTO).  USTR is responsible for
representing U.S.  interests in international trade organizations
like the Asia Pacific Economic Cooperation forum as well as the many
bodies created to oversee implementation of agreements like NAFTA and
the WTO agreements.  The private sector plays a continuing
consultative role in these trade policy functions through advisory
committees.  The agency also has administrative responsibilities to
enforce U.S.  trade laws, including the monitoring of foreign trade
practices.  For example, the agency is responsible for administering
a "section 301" process that authorizes USTR to investigate and
respond to unfair foreign trade practices. 

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

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

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

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


--------------------
\2 These agencies include the Departments of Agriculture, Commerce,
State, and the Treasury and OMB. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :3

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

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

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

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

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


   USTR'S PLAN DOES NOT REFLECT
   KEY RESULTS ACT REQUIREMENTS
------------------------------------------------------------ Letter :4

USTR's September 1996 draft plan does not meet the requirements of
the Results Act in four of six areas.  Furthermore, it does not
completely follow the more detailed OMB guidance for drafting
strategic plans.  The agency's mission statement meets the act's
requirements, and it is clear and comprehensive, though USTR could
better explain how its activities help the general public.  USTR's
draft plan contains no explicit general goals and objectives. 
Instead, the plan describes nine "lines of business" for the agency
and, for each line of business, several "critical success
indicators." These implicit goals and objectives do not follow OMB
guidelines because they are not stated in a manner that allows a
future assessment of whether they are being achieved.  USTR does not
identify the approaches or strategies it intends to use to achieve
the lines of business nor what resources will be used to do so, as is
required.  The draft plan lists performance goals but does not (1)
describe how those performance goals are related to the lines of
business or any general goals and objectives or (2) outline their
relevance and use in measuring the agency's achievements, as called
for by the Results Act and OMB guidelines.  USTR does identify budget
and staffing constraints and increased workload that could affect its
plan, as required by the act.  Yet, the plan does not follow OMB
guidance for linking these key external factors to specific goals. 
USTR may want to consider including other external factors that could
affect its plan as well, such as other countries' willingness to
agree to U.S.  positions in trade negotiations.  Further, the draft
plan does not address the requirements regarding program evaluations. 
Table 1 shows the Result Act's required components and summarizes the
extent to which USTR's plan discusses those components. 



                                Table 1
                
                Strategic Plan Components Listed by the
                 Results Act and Extent of Coverage in
                 USTR's September 1996 Draft Strategic
                                  Plan

Strategic plan components           Extent of coverage
----------------------------------  ----------------------------------
1. Comprehensive mission statement  Mission statement is clear and
covering the major functions and    comprehensive and generally meets
operations of the agency            the Result Act's requirements.

2. General goals and objectives     USTR instead presents nine "lines
                                    of business" and "critical success
                                    indicators"; these are not stated
                                    in a manner that allows an
                                    assessment of results.

3. Description of how goals and     Draft plan does not explain
objectives are to be achieved       approaches, strategies, or use of
                                    resources to achieve USTR's
                                    general goals/lines of business

4. Description of how the           Performance goals are listed for
performance goals included in the   each line of business but lack the
plan shall be related to the        required descriptions and linkages
general goals and objectives in     to lines of business/general
the plan                            goals.

5. Identification of key factors    Two external factors are discussed
external to the agency and beyond   but are not linked to specific
its control that could affect       goals and objectives per OMB
achievement of general goals and    guidelines. Other factors could be
objectives                          considered.

6. Description of the program       Not discussed.
evaluations used to establish/
revise strategic goals, with
schedule for future program
evaluations
----------------------------------------------------------------------
Sources:  The Government Performance and Results Act of 1993 and
USTR's draft strategic plan for September 1996. 


      MISSION STATEMENT MEETS
      RESULTS ACT'S REQUIREMENTS
---------------------------------------------------------- Letter :4.1

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

USTR's draft mission statement generally meets these criteria and is
generally clear and comprehensive.  The mission statement says that
USTR is to "coordinate the development of United States foreign trade
policy, lead the negotiation and enforcement of international trade
policy and direct investment agreements, and provide leadership for
the international trading system." It also states that USTR will
"produce trade agreements and undertake enforcement activities that
reduce distortions and barriers to U.S.  international trade and
direct investment." By referring specifically to its coordinating
role in trade policy-making and its lead role in negotiating and
enforcing trade agreements, USTR has tried to differentiate its
mission from the missions of other agencies engaged in trade-related
activities. 

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


      NO EXPLICIT GENERAL GOALS
      AND OBJECTIVES
---------------------------------------------------------- Letter :4.2

Strategic plans set out the long-term programmatic, policy, and
management goals of the agency.  OMB Circular A-11, Part 2, provides
that agency plans should state general goals in a manner that allows
a future assessment to be made of whether these goals are being
achieved. 

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

  -- develop and analyze U.S.  government trade policies,
     initiatives, and negotiating positions;

  -- coordinate the development and implementation of U.S.  trade
     policy;

  -- negotiate trade agreements and solutions to trade problems
     affecting U.S.  interests;

  -- enforce and defend U.S.  trade and direct investment rights and
     obligations;

  -- administer trade laws and programs as stipulated by Congress and
     delegated by the President;

  -- provide advice and counsel to the President, Congress, and U.S. 
     interests on trade and investment problems, both general and
     specific;

  -- communicate U.S.  trade policy to the public;

  -- lead U.S.  representation in international trade forums; and

  -- maintain effective internal management systems and practices to
     ensure productive agency employees. 

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


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


      NO DESCRIPTION OF HOW LINES
      OF BUSINESS OR ANY GENERAL
      GOALS AND OBJECTIVES WILL BE
      ACHIEVED
---------------------------------------------------------- Letter :4.3

USTR's plan does not identify the approaches or strategies the agency
intends to use to implement its lines of business or any general
goals and objectives.  Under the Results Act, strategic plans are
required to contain strategies that briefly describe how agencies
will achieve their mission, that is, the operational processes, staff
skills, and technologies, as well as the human, capital, information
and other resources needed to meet the general goals and objectives
of the plan.  Additionally, according to OMB Circular A-11, Part 2,
strategies should also outline how USTR will communicate strategic
goals throughout the organization and hold managers and staff
accountable for achieving these goals. 

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

Also, the plan is not specific as to any particular trade policy,
trade negotiating, or trade enforcement strategies.  For example, the
line of business to "negotiate trade agreements and solutions to
trade problems affecting U.S.  interests" and its four critical
success indicators do not refer to any ongoing multilateral or
bilateral trade negotiations, nor do they identify any trade disputes
or even any particular U.S.  sectoral interests that should be
protected.  USTR is statutorily required to list annual trade policy
objectives and priorities in a yearly report to Congress.  The 1997
report is fairly specific and includes strategies like completing
Free Trade of the Americas negotiations by 2005 and phasing out
tariffs worldwide on information technology products by 2000.\4 USTR
has enunciated other substantive strategies elsewhere, as well.  For
example, USTR identifies trade expansion priorities in its annual
"Super 301" review and report.  Also, USTR issued a report in April
1997 titled Future Free Trade Area Negotiations:  Report on
Significant Market Opening, pursuant to NAFTA implementing
legislation.\5 This report identifies which markets have the greatest
potential to increase U.S.  exports of goods, services, and
export-related investment.  We believe that in order to more
specifically identify the approaches or strategies the agency intends
to use to implement its general goals and objectives, USTR should
consider incorporating into its strategic plan those strategies it
has enunciated elsewhere. 


--------------------
\4 1997 Trade Policy Agenda and 1996 Annual Report of the President
of the United States on the Trade Agreements Program (Washington,
D.C.:  The White House, Mar.  1997). 

\5 See section 108 (b)(2), P.L.103-182, Dec.  8, 1993. 


      NO DESCRIPTION OF HOW ANNUAL
      PERFORMANCE GOALS WILL
      RELATE TO LINES OF BUSINESS
      OR ANY GENERAL GOALS
---------------------------------------------------------- Letter :4.4

Under the Results Act, a strategic plan must contain a description of
how the performance goals included in each agency's annual
performance plan are related to the strategic plan's general goals
and objectives.  Agencies are required to prepare annual performance
plans with specific performance goals, beginning with the performance
plan for fiscal year 1999.  Without this linkage, Congress may not be
able to judge whether an agency is making progress toward achieving
its long-term goals.  OMB guidance states that strategic plans should
briefly outline (1) the type, nature, and scope of the annual
performance goals to be included in the performance plan; (2) the
relation between the annual performance goals and the general goals
and objectives; and (3) the relevance and use of annual performance
goals in helping determine the achievement of general goals and
objectives. 

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

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


      KEY EXTERNAL FACTORS ARE
      IDENTIFIED BUT NOT LINKED TO
      LINES OF BUSINESS OR ANY
      GENERAL GOALS
---------------------------------------------------------- Letter :4.5

The Results Act requires that strategic plans identify key factors
external to the agency and beyond its control that could
significantly affect the achievement of the general goals and
objectives.  OMB Circular A-11, Part 2, states that strategic plans
should briefly describe each factor, indicate its link with a
particular goal(s), and describe how achievement of a goal could be
affected by the factor. 

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

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


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


      NO DISCUSSION OF USE OF
      PROGRAM EVALUATIONS TO
      ESTABLISH OR REVISE GOALS
---------------------------------------------------------- Letter :4.6

Under the Results Act and OMB guidance, agencies' strategic plans are
to (1) discuss how program evaluations were used to establish
strategic goals and (2) lay out a schedule for conducting future
program evaluations.  OMB Circular A-11, Part 2, states that this
section should briefly describe program evaluations that were used in
preparing the strategic plan and include a schedule outlining (1) the
general scope and methodology for planned evaluations and (2) the
particular issues to be addressed. 

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


      OTHER OBSERVATIONS
---------------------------------------------------------- Letter :4.7

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


   USTR'S PLAN GENERALLY REFLECTS
   ITS MAJOR STATUTORY FUNCTIONS
------------------------------------------------------------ Letter :5

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

  -- has primary responsibility for developing and coordinating the
     implementation of U.S.  international trade policy;

  -- has lead responsibility for conducting international trade
     negotiations;

  -- has responsibility for monitoring foreign countries'
     implementation of trade agreements and enforcing U.S.  rights
     under those agreements;

  -- has responsibility for determining whether foreign countries are
     engaging in unfair trade practices and for responding to such
     practices;

  -- issues and coordinates policy guidance to other departments and
     agencies on basic issues of policy and interpretation arising in
     the exercise of international trade functions;

  -- is responsible for, and reports to the President and Congress
     on, the administration of the trade agreements program; and

  -- serves as the President's principal advisor and spokesperson on
     international trade. 

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

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


   PLAN INCLUDES CROSSCUTTING
   ACTIVITIES, BUT DETAILS LACKING
------------------------------------------------------------ Letter :6

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

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

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

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

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


--------------------
\7 Several of our reports and testimonies contributed to
deliberations leading to passage and implementation of the 1992 act,
including Export Promotion:  Governmentwide Strategy Needed for
Federal Programs (GAO/T-GGD-93-7, Mar.  15, 1993); Export Promotion: 
Federal Approach Is Fragmented (GAO/T-GGD-92-68); and Export
Promotion:  Federal Programs Lack Organizational and Funding
Cohesiveness (GAO/NSIAD-92-49, Jan.  10, 1992). 

\8 Title II of the Export Enhancement Act of 1992 (P.L.  102-429,
Oct.  21, 1992). 

\9 National Export Strategy (GAO/NSIAD-96-132R, Mar.  26, 1996). 

\10 Government Reorganization:  Observations About Creating a U.S. 
Trade Administration (GAO/T-GGD-95-234, Sept.  6, 1995). 


   STRATEGIC PLAN CONTAINS NO
   STRATEGY FOR OVERCOMING
   CHALLENGE OF LIMITED USTR
   RESOURCES
------------------------------------------------------------ Letter :7

The Results Act and OMB Circular A-11 indicate that USTR should set
out the means the agency will use to achieve its goals and
objectives, including a description of the operational processes,
technology, and other resources required to meet them.  USTR's draft
strategic plan states that the most serious management issue facing
the agency is how to handle growing workloads with reduced resources. 
The background section of the plan describes how USTR's statutory
responsibilities have grown in the last 3 decades during which its
resources have shrunk.  In the last 5 years, the plan states that the
agency's base operating costs have fallen in inflation-adjusted terms
by a cumulative sum of about $3 million and staffing authorization
has declined by 5 percent since 1992.  The plan also states that the
number of federal employees detailed to USTR from other agencies
dropped by more than one-third between fiscal year 1993 and 1996,
from nearly 50 to about 30.  Therefore, the plan concludes that the
central management issue USTR must examine in the strategic planning
process is the degree to which the agency can continue to meet its
statutory mission successfully. 

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

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


   USTR'S CAPACITY TO PROVIDE
   RELIABLE INFORMATION ON
   ACHIEVEMENT OF GOALS IS UNKNOWN
------------------------------------------------------------ Letter :8

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


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


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

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


---------------------------------------------------------- Letter :9.1

As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this letter
until 30 days from its issue date.  At that time, we will send copies
of this letter to the Minority Leader of the House of
Representatives; Ranking Minority Members of your Committees; the
Chairmen and Ranking Minority Members of other Committees that have
jurisdiction over USTR activities; USTR; and the Director, OMB. 
Copies will be made available to others on request. 

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

Benjamin F.  Nelson
Director, International Relations
 and Trade Issues

Enclosure


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix I


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
--------------------------------------------------------- Appendix I:1

Elizabeth J.  Sirois, Assistant Director
Sharon W.  Chamberlain, Assistant Director
David T.  Genser, Evaluator-in-Charge
Adam R.  Cowles, Senior Evaluator


   OFFICE OF THE GENERAL COUNSEL,
   WASHINGTON, D.C. 
--------------------------------------------------------- Appendix I:2

Richard P.  Burkard, Senior Attorney
Herbert I.  Dunn, Senior Attorney


RELATED GAO PRODUCTS
============================================================ Chapter 0

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


*** End of document. ***