Background

The International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the Office of the United States Trade Representative (USTR) are funded through the annual Commerce, Justice, Science, and Related Agencies (CJS) appropriations.¹ This report provides an overview of these agencies' programs and a comparison of the FY2021 CJS proposals with the previous year's enacted legislation.² In this report, appropriations are rounded to the nearest million. However, percentage changes and annual differences are calculated using whole, not rounded, numbers, meaning that in some instances totals may not sum due to rounding and there may be small differences between the actual percentage change and the percentage change that would be calculated by using the rounded amounts discussed in the report.

For FY2020, the Consolidated Appropriations Act, 2020 (P.L. 116-93), provided $678.7 million for the three CJS trade-related agencies, including $510.3 million in direct appropriations for ITA,³ $99.4 million for USITC, and a total of $69.0 million for USTR.⁴ The FY2020 appropriations for the three CJS trade-related agencies represented a 4.9% increase ($31.7 million) from the FY2019-enacted amount.

In addition to regular appropriations, Congress also passed supplemental funding for USTR in the United States-Mexico-Canada Agreement Implementation Act (USMCA, P.L. 116-113). USMCA provided a total of $90.0 million for USTR, to remain available until September 30, 2023. The supplemental funds were provided to monitor compliance with labor and environmental obligations of the agreement and to carry out the enforcement of USMCA environmental obligations, including for state-to-state dispute settlement actions. In this report, when comparing FY2021 and FY2020 funding, the FY2020 funding levels are taken from the Consolidated Appropriations Act, 2020, and do not include supplemental appropriations provided in USMCA.

See the Appendix for enacted budget authority for the trade-related agencies for FY2009-FY2020.⁵

FY2021 Appropriations

For the FY2021 appropriations cycle, the President submitted his budget request to Congress on February 10, 2020. The Administration requests a total of $647.0 million in appropriations for the three CJS trade-related agencies. This request is $31.6 million (-4.7%) less than the FY2020 enacted amount.

The House Committee on Appropriations reported its FY2021 CJS appropriations proposal, H.R. 7667, on July 16, 2020. The CJS proposal was consolidated, along with five other appropriations bills, into H.R. 7617, and passed the House on July 31, 2020. The House-passed bill would provide $706.4 million for the three trade-related agencies, which is $27.8 million (4.1%) more than the previous year's enacted funding, and $59.4 million (9.2%) more than the President's FY2021 budget request.

International Trade Administration (ITA)⁶

ITA is a bureau within the Department of Commerce whose mission is to improve U.S. prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring compliance with trade laws and agreements. ITA provides export promotion services, works to enforce and ensure compliance with trade laws and agreements, administers trade remedies such as antidumping and countervailing duties, and provides analytical support for ongoing trade negotiations.

In October 2013, ITA went through a major organizational change in which it consolidated four organizational units into three more functionally aligned units: (1) Global Markets, (2) Enforcement and Compliance, and (3) Industry and Analysis. ITA also has a fourth organizational unit, the Executive and Administrative Directorate, which is responsible for providing policy leadership, information technology support, and administration services for all of ITA. (Table 2 outlines FY2021 budget proposals for ITA by unit. For historical budget amounts for ITA units, see Table A-1.)

ITA is funded through a combination of direct appropriations and user fees collected for certain services. For FY2021, the Administration requests $474.4 million in direct appropriations for ITA, with an additional $11.0 million to be collected in fees, for a total of $485.4 million in authorized spending. The budget request is $35.8 million (-7.0%) less than the FY2020 enacted direct appropriation.

The House-passed H.R. 7617 would provide $531.4 million in direct appropriations for ITA, with an additional $11.0 million to be collected in fees, for a total of $542.4 million in authorized spending. The House proposal is $21.2 million (4.2%) more than the FY2020 direct appropriation, and $57.0 million (12.0%) more than the Administration's request.

Global Markets

ITA's Global Markets (GM) unit is a combination of the United States and Foreign Commercial Service (US&FCS) program, which provides export promotion services to U.S. businesses, and the SelectUSA program, which works to attract foreign investment into the United States. Through US&FCS, GM aims to promote U.S. exports by helping U.S. exporters research foreign markets and identify opportunities abroad. GM's country and regional experts―in domestic and overseas offices—advise U.S. companies on market access, local standards, and regulations. The unit also helps to make connections through business-to-business trade shows, fairs, and missions. GM is designed to advance U.S. commercial interests by engaging with foreign governments and U.S. businesses, identifying and resolving market barriers, and leading efforts that advocate for U.S. firms with foreign governments. Through its SelectUSA program, the GM unit promotes the United States as a destination for foreign investment. (For more on SelectUSA, see section "SelectUSA Program" below.)

As in the previous three budget requests, the Administration proposes reducing funding for the Global Markets unit. The Administration requests $280.3 million in funding for Global Markets, which is $52.7 million less (-15.8%) than the FY2020 enacted amount. The Administration proposes rescaling ITA's global network in order to reduce fixed operational expenses. According to the congressional budget justification, "ITA estimates the need to close 32 offices overseas, 18 offices domestically, and reduce personnel [by 114 fulltime-equivalent (FTE) positions]."⁷

In the report accompanying the committee-reported bill, the House Committee on Appropriations does not adopt the Administration's proposed cuts to Global Markets, and instead recommends boosting funding for the Global Markets unit. The House Committee on Appropriations recommends $348.0 million for the unit, which is $15.0 million (4.5%) more than the FY2020 enacted amount, and $67.7 million (24.1%) more than the Administration's request. The Committee's report includes language that would direct ITA to staff all U.S. export centers and would require additional reporting from ITA on its staffing plans for Global Markets.⁸

Enforcement and Compliance

The mission of ITA's Enforcement and Compliance unit is to enforce U.S. trade laws and ensure compliance with negotiated international trade agreements. The Enforcement and Compliance unit is responsible for enforcing U.S. antidumping and countervailing duty (AD/CVD) laws, overseeing a variety of programs and policies regarding the enforcement and administration of U.S. trade remedy laws, assisting U.S. industry and businesses with unfair trade matters, and administering the Foreign-Trade Zone program and other U.S. import programs.⁹

For FY2021, the Administration requests $103.4 million in funding for the Enforcement and Compliance unit.¹⁰ This request is $11.6 million (12.6%) more than the previous year's enacted amount. According to budget documents, the request includes additional funds to support ITA's work in reviewing AD/CVD petitions, which the agency projects will continue to increase, and in reviewing exclusion requests for the Section 232 tariffs on steel and aluminum.¹¹

The House Committee on Appropriations also recommends $103.4 million in funding for the Enforcement and Compliance unit. The Committee's recommendation is $11.6 million (12.6%) more than the FY2020 enacted amount, and equal to the Administration's request.¹²

Industry and Analysis

ITA's Industry and Analysis unit brings together ITA's industry, trade, and economic experts to advance the competitiveness of U.S. industries through the development and execution of international trade and investment policies, export promotion strategies, and investment promotion. It analyzes economic and international policies to improve market access for U.S. businesses, and designs and implements trade and investment promotion programs. The unit serves as the primary liaison between U.S. industries and the federal government on trade and investment promotion. It administers programs that support small and medium-sized enterprises, such as the Market Development Cooperator Program.

For FY2021, the Administration proposes increasing funding for the Industry and Analysis unit. The Administration requests $67.2 million for Industry and Analysis. This request is $4.8 million (7.6%) more than the FY2020 enacted amount.¹³ According to ITA's budget documents, the unit's expertise has been in increasing demand in recent years:

"(1) to support Section 301, 201, and 232 trade actions, (2) to address and counter U.S. trading partners' retaliatory actions and (3) to maintain support for ITA and other agencies with data analytics and sectoral expertise in trade compliance and export promotion work."¹⁴

For FY2021, the House Committee on Appropriations does not recommend a specific funding recommendation for the Industry and Analysis unit.¹⁵

U.S. International Trade Commission (USITC)

USITC is an independent, quasi-judicial agency responsible for conducting trade-related investigations and providing independent technical advice on U.S. international trade policy to Congress, the President, and USTR. The Commission (1) investigates and determines whether imports injure a domestic industry or violate U.S. intellectual property rights; (2) provides independent tariff, trade, and competitiveness-related analysis to the President, Congress, and USTR; and (3) maintains the U.S. tariff schedule. USITC also serves as a federal resource for trade data and other trade policy information. It makes most of its information and analyses available to the public to promote understanding of competitiveness, international trade issues, and the role that international trade plays in the U.S. economy.

USITC's annual budget request to Congress is subject to two types of submission: (1) the President's budget request for the Commission, included in the President's annual budget; and (2) the Commission's independent budget request. USITC has the authority to submit its independent budget directly to Congress without revision by the President, pursuant to Section 175 of the Trade Act of 1974.

The President's FY2021 budget requests $99.6 million in funding for USITC. The budget request is $0.2 million (0.2%) more than the FY2020 enacted levels. While the President requested a slight increase, the Commission's independent budget submission to Congress requests $105.0 million for FY2021, which is $5.6 million (5.6%) above the FY2020 enacted funding level.¹⁶

The House-passed H.R. 7617 includes $105.0 million for USITC, the same amount as USITC's independently submitted request, which is $5.6 million (5.6%) more than the FY2020 funding level, and $5.4 million (5.4%) more than the President's budget request.

Office of the U.S. Trade Representative (USTR)

USTR has primary responsibility for developing and coordinating U.S. international trade and direct investment policies, as the head of the interagency trade policy coordinating process.¹⁷ As part of the Executive Office of the President, USTR is the President's principal advisor on trade policy and the President's chief negotiator for international trade agreements, including commodity and direct investment negotiations. USTR negotiates directly with foreign governments to create trade agreements (which generally also require legislative approval) and resolve disputes, and participates in global trade policy organizations such as the World Trade Organization. It also meets with business groups, policymakers, and public interest groups on trade policy issues.¹⁸

In addition to direct appropriations for USTR, Congress can provide USTR additional funding from the congressionally established Trade Enforcement Trust Fund. Funding from the trust fund may be used by USTR for certain trade enforcement activities, authorized by the Trade Facilitation and Trade Enforcement Act of 2015. See the section below, "Trade Enforcement Trust Fund (TETF), USTR" for more detail.

For FY2021, the Administration requests a total of $73.0 million for USTR, including $60.0 million in direct appropriations for salaries and expenses and $13.0 million to be derived from the TETF for certain trade enforcement activities (Table 3). The total request is $4.0 million (5.8%) more than the FY2020 enacted funding level. The Administration proposes increasing USTR's staff by 16 FTEs above the FY2020 level, in order to support the President's trade policy.¹⁹

The House-passed H.R. 7617 would provide a total of $70.0 million in total funding for USTR, including $55.0 million in direct appropriations for salaries and expenses, and an additional $15.0 million to be derived from the TETF for certain trade enforcement activities. The total proposal is $1.0 million (1.4%) more than FY2020 funding level, and $3.0 million less (-4.1%) than the Administration's request.

In addition to regular appropriations, Congress also passed supplemental funding for USTR in the USMCA implementing act.²⁰ Under this act, Congress provides $50.0 million for USTR to remain available until September 30, 2023 for salaries and expenses to monitor compliance with labor and environmental obligations of the agreement. USMCA implementing legislation also includes $40.0 million for the TETF "to carry out the enforcement of environmental obligations under the USMCA, including for state-to-state dispute settlement actions, during fiscal years 2020 through 2023."²¹

Selected Trade-Related Programs and Activities

Over the past decade, Congress has provided funding for specific trade-related programs or activities within broader agency budgets. The following programs are highlighted in this report, due to recent and ongoing congressional interest: (1) ITA's China trade enforcement and compliance activities; (2) ITA's investment promotion activities in its SelectUSA Program; (3) the Survey of International Air Travelers (SIAT) within ITA; and (4) the Trade Enforcement Trust Fund, which funds certain activities of USTR. (See Table A-3 for historical budget authority for these selected programs.)

China Trade Enforcement and Compliance Activities, ITA

Since 2004, Congress has dedicated some of ITA's funding to AD/CVD enforcement and compliance activities with respect to China and other nonmarket economies.²² ITA's Office of China Compliance was established by the Consolidated Appropriations Act of 2004 (P.L. 108-199). Its primary role has been to enforce U.S. AD/CVD laws and to develop and implement other policies and programs aimed at countering unfair foreign trade practices in China. ITA's China Countervailing Duty Group was established by the Consolidated Appropriations Act, 2010 (P.L. 111-117) to accommodate the workload that resulted from the application of countervailing duty law to imports from nonmarket economy countries.²³

ITA's FY2021 budget justification did not provide a breakdown of funding for its China AD/CVD activities.

The House-passed H.R. 7617 includes $16.4 million, within ITA's budget, for China antidumping and countervailing duty enforcement and compliance activities in FY2021, an amount equal to the FY2020 enacted funding.

SelectUSA Program, ITA

SelectUSA was established by executive order in 2011 as a Commerce Department program to promote the United States as an investment market and to address investor climate concerns that could impede investment in the United States. SelectUSA coordinates investment-related resources across more than 20 federal agencies; serves as an information resource for international investors; and advocates for U.S. cities, states, and regions as investment destinations.²⁴ SelectUSA currently is part of ITA's Global Markets unit. Between FY2012 and FY2020, CJS appropriations provided specific funding levels for SelectUSA.

ITA's FY2021 budget justification does not provide a breakdown for requested funding for SelectUSA.

The House Appropriations Committee also does not outline a specific funding level for SelectUSA within ITA.

Survey of International Air Travelers (SIAT), ITA

ITA's Survey of International Air Travelers (SIAT) gathers statistics about air passenger travelers in the United States. Federal agencies use these statistics for a variety of purposes, such as to estimate the contribution of international travel to the economy, develop public policy on the travel industry, and forecast staffing needs at consulates and ports of entry.

SIAT is within the Industry and Analysis unit at ITA. ITA's FY2021 budget justification does not provide a breakdown for requested funding for SIAT.

In the report accompanying the committee-reported bill, the House Appropriations Committee recommends "support for the Survey of International Air Travelers (SIAT) at no less than the fiscal year 2020 level and encourages ITA to include an assessment of the impacts of the coronavirus on the travel and tourism industries in future SIAT surveys."²⁵

Trade Enforcement Trust Fund (TETF), USTR

In order to provide additional funding for trade enforcement activities, Congress established the Trade Enforcement Trust Fund (TETF) in 2016. In Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125), Congress directed the Secretary of the Treasury to transfer $15.0 million annually into TETF from the general fund of Treasury, and outlined authorized uses of the funds.²⁶ Under Section 611(d) of this act, funds are available to USTR, "only as provided by appropriations Acts," for any of the following: (1) to monitor and enforce U.S. free trade agreements and World Trade Organization (WTO) commitments; (2) to support trade capacity-building assistance to help partner countries meet their free-trade agreement obligations and commitments; and (3) to investigate petitions concerning unfair trade practices under Section 301 of the Trade Act of 1974. ²⁷ The Trade Facilitation and Trade Enforcement Act of 2015 also authorizes USTR to transfer funds to select federal agencies for trade enforcement activities authorized in Section 611(d).

For FY2021, the Administration requests $13.0 million to be derived from the TETF for USTR, for trade enforcement activities authorized by the Trade Facilitation and Trade Enforcement Act of 2015. The request is $2.0 million less (-13.3%) than the FY2020 enacted level.

The House-passed H.R. 7617 would include $15.0 million to be to be derived from the TETF for USTR, for authorized trade enforcement activities. The recommendation is equal to the FY2020 enacted funding level, and $2.0 million more (15.4%) than the Administration's request.

In addition to regular appropriations, Congress also provides supplemental funding of $50.0 million for USTR in USMCA implementing legislation (P.L. 116-113) to remain available until September 30, 2023. Of this amount, $30.0 million is to be available to USTR to provide for additional capacity for FY2020-FY2023 to monitor compliance with USMCA labor obligations, while $20.0 million shall be available to monitor compliance of environmental obligations. The supplemental appropriations in USMCA implementing legislation also provides for an additional $40.0 million for the TETF "to carry out the enforcement of environmental obligations under the USMCA, including for state-to-state dispute settlement actions, during fiscal years 2020 through 2023."²⁸

Appendix. Budget Authority Tables