Reorganizing Government for Economic Growth and Efficiency

By Stern, Paula | Issues in Science and Technology, Summer 1996 | Go to article overview

Reorganizing Government for Economic Growth and Efficiency


Stern, Paula, Issues in Science and Technology


Consolidating many of the nation's now-scattered economic and trade functions into one new department would revitalize U.S. economic policy and streamline government.

The political environment in Washington presents a golden opportunity to reorganize how the federal government crafts and implements international economic policy. The conditions are right to consolidate many of the nation's now-scattered economic and trade functions into a new, cabinet-level U.S. Department of Economic, Industry, and Trade Affairs. The department would combine many functions of the Department of Commerce, the Office of the U.S. Trade Representative (USTR), and other economic- and trade-related agencies to create a powerful cabinet voice for U.S. economic interests. And its creation would reduce the size of government in this broad area.

Debate in Congress about the government's economic functions has devolved to the simple elimination of the Commerce Department and other agencies in the name of reducing the budget deficit. Instead, it should focus on how to better implement a successful foreign economic policy for the 21st century. The proposals to dismantle various agencies do not even address what to do with vital functions that would be lost, much less how to perform them more effectively. Separating valid government programs from those that can be trimmed or cut is detailed work that should be done with a paring knife, not a cleaver.

The new department that I propose would sharpen the government's ability to pursue U.S. economic interests worldwide and specifically its ability to develop and execute a trade policy that enhances competitiveness. It would also restructure the U.S. international economic policy apparatus in ways that reflect trade's real importance in the broader economy, and it would help thwart the partisan posturing, turf protection, special interest appeals, and bureaucratic inertia that today compromise the government's efforts.

Although the department would not take over every trade function of the government, its creation would greatly reduce the unhealthy level of fragmentation that now exists. Today's structure encourages bureaucratic rivalries, duplication of work, lack of communication, and an undesirable separation between policy development and implementation. The new department would catalyze the expansion of two-way international trade, bringing enormous economic benefits, including enhanced productivity, increased exports, less debt, and a rising living standard - all with less government in place.

Strength through consolidation

Two basic premises underlie the idea for a Department of Economic, Industry, and Trade Affairs. First, federal activities that enhance opportunities for U.S. products or companies in foreign markets are vital. Most of the recent restructuring proposals, however, pay little attention to these efforts; they focus on the more visible and adversarial activities of USTR in wielding Section 301 of U.S. trade law (which authorizes sanctions on countries engaged in unfair trade) and on the pursuit of dumping and countervailing duty complaints by the Commerce Department's Bureau of Import Administration and by the International Trade Commission. These functions, although important, constitute only a small part of the government's trade operations.

The second premise is that officials responsible for formulating and implementing U.S. trade policy should have ready access to information about how their actions could affect all industries individually as well as the economy as a whole. They also need access to economists who can help bring a broad perspective to bear on trade decisions.

This goal is important because of the close relationship between trade and the broader economy. Of all policy areas, trade involves the largest number of inherently competing interests. Among these are U.S. producers versus consumers, U.S. suppliers versus producers of finished goods, domestic producers versus foreign producers, and U. …

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Reorganizing Government for Economic Growth and Efficiency
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