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QUESTION: What changes, if any, can be expected as a result of the 

 reccrmnendatlons of the Trade Promotion Coordinating Committee for a unified 

 budget for all federal government export promotion programs? Which programs 

 are affected by this recommendation? . . 



ANSWER: The Export Enhancement Act of 1992 requires the TPCC to create a 

 "unified budget" for export promotion for the federal government that will 

 be consistent with priorities established by the TPCC export promotion 

 strategy. The unified budget (FY1995 target) is to be achieved through an 

 inter-agency resource allocation process, with key roles for the National 

 Economic Council, Office of Management and Budget and the TPCC. 



The TPCC continues to wrestle with the definition of export promotion, to 

 complete an analysis of current expenditures of U.S. export promotion 

 efforts, and to determine the role of performance measures in the allocation 

 process. 



There is some confusion concerning the amount of Department funding for 

 export promotion, particularly in relation to funding availabilities for the 

 rest of the Executive Branch of Government. In particular, the General 

 Accounting Office's January 10, 1992 report (GAO/NSIAD-92-49) is somewhat 

 misleading in stipulating that 80 percent of the Federal Government's export 

 promotion funding is spent through an agency, the Department of Agriculture, 

 which only represents 10 percent of U.S. exports of foods and manufactures. 



In point of fact, about 80 percent of the "promotional funding" cited in 

 this report is not what would normally be considered promotional, but 

 rather, consists of food aid, price subsidies and credit assistance. The 

 latter, while intended to assist exports of U.S. farm products, are not 

 generally aimed at promoting overseas demand for U.S. farm products. USDA's 

 export promotion efforts are conducted primarily under the Market Promotion 

 Program (MPP) and the Foreign Market Development Program (FMD), which in 

 Fiscal Year 1993 were together funded at about $185 million. In other 

 words, the Department's true level of promotional funding as a percentage of 

 total Federal Government export promotion funding is much less than the 80 

 percent cited in GAO's report. 



The USDA strongly supports the coordination and streamlining of export 

 services and programs, but this must be done in a manner which takes into 

 consideration domestic and international program objectives designed by 

 Congress. The USDA does not support the inclusion of performance measures 

 as the sole means to determine aggregate allocations of federal promotional 

 funds among competing export interests or programs. Level of funding should 

 be done on a sector basxs, which supports domestic economic policy, notes 

 the relative importance of exports to the sector, and the barriers to trade 

 for each sector (trade policy issues). The TPCC must define "export 

 promotion". In addition, no consideration is made of the mandatory, versus 

 discretionary funding nature of some of USDA's programs. Any consideration 

 of budget must be done with consideration of the unique situation of each 

 particular sector. The importance of export programs to Agriculture is 

 unique. Aspects of USDA's export programs are interlocked with domestic 

 programs and our trade negotiations. Until such time as the above issues 

 are addressed we cannot correctly gauge the impact on the USDA budget nor 

 affect on select programs. 



