“What staggers me is not the persistence of illusion, but the persistence of the world in the face of illusion.”  A. G. Mojtabai

The Administration kicked off 2012 with what appears to be a full court press on trade enforcement and export promotion.  Given that exports supplied nearly half of U.S. GDP growth in 2012 and access to foreign markets is likely to be a primary factor in the country’s long-term prosperity, smart and strategic efforts to help American companies expand overseas are warranted.  However, most government agencies, businesses and families currently have to do more with less.  In this light, it is important to consider a few questions:

1. Is more always better?
2. How is the success of additional and overlapping initiatives measured?  In other words, how do you know if it’s working?
3. Are these initiatives designed to actually help business or have they been designed to create the illusion of helping business?

Receiving the most media attention has been the Obama Administration’s 2011 State of the Union proposal to combine six federal trade-related agencies into one “tightly integrated, new department focused on business.”   This new streamlined department would combine the U.S. Department of Commerce’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative (USTR), the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.

The White House claims a new consolidated (yet-to-be-named) trade department would eliminate redundancies and provide U.S. firms and small businesses in particular with a “one-stop shop” in navigating the federal bureaucracy.  Although this proposal is nothing new and it has received more than its share of opposition, eliminating redundancies in a time when budgets are tight and government agencies are under pressure to rein in spending seems a worthy goal.

However, not to be outdone or forgotten, Secretary of State Clinton announced on February 21st a new so-called “jobs diplomacy ” initiative.  According to the announcement, the goal is to be the “most effective force multiplier for business and to ensure level playing fields worldwide.”  To do this, “every U.S. embassy and consulate should serve as a gateway for American firms seeking to export their products and any firm seeking to invest and create jobs in America.”  Under this banner, State is also launching a “Direct Line to American Business” program, in which ambassadors will conduct regular conference calls to brief the U.S. business community on economic opportunities and answer questions.  State says it will also convene regular leadership conferences around the world to promote U.S. business.

In a nutshell, it seems the goal is to assist U.S. exporters (already in place via Commerce’s Commercial Service (CS)); hold conference calls between business and U.S. Ambassadors (most of which are not experts in trade promotion); and organize conferences (a novel idea).  At this juncture it is difficult to assess how replicating what is already done by other agencies and organizations furthers U.S. interests.

Further, State’s foray into trade promotion may run counter to the specific separation of foreign and trade / commercial policy that Congress set out when USTR and the CS were created in 1979/1980.  And perhaps more importantly, State does not, by and large, have in place a system to measure results.  Activity for the sake of activity (or conferences for the sake of conferences) does not generate increased exports.  Some system of metrics needs to be utilized to know if business is actually being served and if taxpayers’ dollars are being well spent.

That is not to say that all government initiatives designed to help companies succeed in overseas markets do not measure their results.  Indeed, the Department of Commerce’s U.S. & Foreign Commercial Service has a robust and comprehensive system which measures the extent to which their efforts actually lead to increased exports for U.S. businesses.  Often operating below the political radar, the CS mission is to assist U.S. companies who want to expand into overseas markets, support the interests of the companies already in these markets, and to support foreign investment in the United States.  To accomplish this mission they have trade professionals in over 100 U.S. cities and about 170 foreign commercial officers and more than 700 local experts in key markets around the world. Further, in an effort to strategically leverage dwindling resources, plans are underway to further regionalize CS operations putting officers where U.S. companies see the greatest opportunities for new or increased exports.

In sum, to answer the questions set out above:

1. No – more is not always better.  A smart and effective strategy trumps volume.
2. No – with the exception of the CS, results are not measured and there is no way to know if State’s new jobs initiative is more than action for the sake of action.
3. Yes – the Department of State’s amateur foray into trade promotion is designed to provide an election-year illusion instead of genuinely increasing the competitiveness of U.S. companies in the global economy.