WASHINGTON, January 18, 2012 -Retiring President Obama’s proposal to merge the U.S. Trade Representative and four other independent agencies into a new department that includes business-related components of the Department of Commerce is running into criticism from agricultural and trade interest groups. The proposal came last week when Obama asked for statutory authority, similar to that accorded to President Reagan three decades ago, to propose government reorganization subject to a veto by Congress.

The new department would include not only USTR but also the Small Business Administration, Export-Import Bank, Overseas Private Investment Corporation and Trade and Development Agency along with “business and trade functions” from Commerce. It seems to create an unwieldy arrangement in which three people in the same department would be in the president’s cabinet – the trade representative, the SBA administrator and the secretary of the department.

Four agricultural commodity groups were quick to reprise arguments similar to those raised by nearly all Washington-based farm groups and their congressional allies to block a similar proposal by the Reagan Administration in 1982. The National Cattlemen’s Beef Association and American Soybean Association both endorsed the idea of improving government efficiency and eliminating wasteful spending but warned of unintended consequences.

“USTR should remain an independent agency within the Executive Office of the President, focusing on trade negotiations, trade agreements and trade enforcement,” NCBA said. “By being an independent office within the White House, USTR serves an important role reducing trade barriers and advocating for free and fair trade for all sectors of the U.S. economy.” USTR’s effectiveness could be jeopardized if it is wrapped into Commerce, NCBA argued.

As an independent office reporting to the president, ASA said, “USTR serves a critical function in supporting and balancing the divergent trade interests of each sector of the U.S. economy.” To fold USTR into “a massive Department of Commerce or Industry structure would significantly weaken the coordination role played by USTR on trade interests across sectors, and the work on agricultural trade opportunities and barriers would be diminished.”

They were followed yesterday by the U.S. Dairy Export Council and National Milk Producers Federation with the observation that such a merger “could detrimentally affect U.S. ability to effectively negotiate and enforce trade agreements.” The dairy groups agreed with other features of the reorganization but said they oppose inclusion of USTR. NMPF said that “USTR’s unique role in trade negotiations and its superb level of openness to input from the public would be greatly harmed by submerging this agency within a larger bureaucracy.”

The National Foreign Trade Council and the Coalition for Employment through Exports offered a similar dissent. “Congress has historically been reluctant to combine USTR with other functions, preferring to have our chief trade negotiator concentrate on negotiating rather than be burdened with broader programmatic responsibilities,” NFTC said.

In addition to trade, Obama suggested Friday in a talk to small business leaders that he might propose food safety and housing agency mergers likely to stir controversy. “There are five different entities dealing with housing,” he said. “There are more than a dozen agencies dealing with food safety . . . No business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations. You wouldn’t do it when you’re thinking about your businesses. So why is it okay for our government? It’s not. It has to change.”



Original story printed in January 18, 2012 Agri-Pulse Newsletter.

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