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entitled 'Department Of Commerce: Office of Manufacturing and Services 
Could Better Measure and Communicate Its Contributions to Trade 
Policy' which was released on July 7, 2011. 

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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

June 2011: 

Department Of Commerce: 

Office of Manufacturing and Services Could Better Measure and 
Communicate Its Contributions to Trade Policy: 

GAO-11-583: 

GAO Highlights: 

Highlights of GAO-11-583, a report to congressional requesters. 

Why GAO Did This Study: 

Declining U.S. manufacturing has been an issue of continuing concern 
for policymakers; this was reflected in the Obama Administration’s 
(Administration) 2010 announcement of the National Export Initiative. 
The Administration has also shown interest in improving the efficiency 
of the federal support of trade operations. In 2004, the Office of 
Manufacturing and Services (MAS) was established within the Department 
of Commerce’s (Commerce) International Trade Administration (ITA) to 
enhance the global competitiveness of U.S. industry. 

GAO was asked to examine (1) MAS’s goals and activities and how they 
compare with those of other government entities; (2) how MAS 
prioritizes its activities and targets its resources; and (3) the 
extent to which MAS tracks and reports its efforts. GAO reviewed 
agency documents and interviewed officials from MAS, other parts of 
ITA and Commerce, and other agencies. 

What GAO Found: 

MAS’s primary goal is to support the competitiveness of U.S. industry, 
which it does largely through combining its industry and trade 
expertise to support other parts of Commerce, including other parts of 
the ITA (see figure below) and external U.S. government clients, such 
as the Office of the U.S. Trade Representative (USTR). The major 
activities of MAS’s offices include: collection and dissemination of 
data on U.S. industry and trade, production of analyses on policies 
that can affect competitiveness, and identification and resolution of 
overseas trade barriers. While some activities may seem similar to 
those of other agencies, such as USTR, officials from MAS’s client 
agencies stated that MAS’s combination of industry and trade expertise 
is not readily available to them elsewhere in the government. 

MAS has undertaken an internal review to update its mission and 
priorities regarding activities and clients and has proposed changes 
currently under departmental review. MAS does not have a mechanism to 
systematically monitor analysts’ workload or the amount of time spent 
on requests for different clients. The absence of workload data may 
hinder its ability to effectively allocate its resources to address 
the needs of the trade policy process. Further, MAS’s role has not 
been clearly communicated, and ITA’s Web site provides limited 
information about MAS. Consequently, the public and Congress have 
limited information about MAS’s activities and contributions to policy 
making. 

MAS’s ability to meet its performance targets largely depends on 
actions from other government agencies and other parties, making 
isolating its contributions difficult. MAS developed a series of 
steps, or milestones, to help isolate its contributions to trade 
policy outcomes, although officials acknowledged continuing 
challenges. Further, MAS does not systematically obtain feedback on 
its performance from the agencies to which it provides analysis, nor 
does it track its contributions to major policy decisions that fall 
outside its externally reported performance targets. This makes it 
difficult to assess the extent to which MAS’s work adds value to the 
trade policy process. 

Figure: Office of Manufacturing and Services in the ITA: 

[Refer to PDF for image: illustration] 

ITA: 
* MAS; 
* U.S. Foreign Commercial Services; 
* Market Access and Compliance; 
* Import Administration. 

MAS: 
Office of Planning, Coordination, and Management; 
* Advisory Committee Staff; 
* Office of Manufacturing; 
* Office of Industry Analysis; 
* Office of Services. 

Source: GAO analysis of ITA data. 

[End of figure] 

What GAO Recommends: 

GAO recommends that the Secretary of Commerce take actions, in concert 
with MAS, to finalize MAS’s focusing of mission and priorities, 
systematically monitor workload, and more systematically obtain and 
communicate information on the value MAS adds to the trade policy 
process. In its comments, Commerce concurred with the findings and 
recommendations and expects to make progress by October 2011. 

View [hyperlink, http://www.gao.gov/products/GAO-11-583] or key 
components. For more information, contact Loren Yager at (202) 512-
4347 or yagerl@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

MAS Combines Industry and Trade Expertise in Providing Analytical and 
Policy Support to the U.S. Government: 

MAS Faces Challenges in Prioritizing Activities, Monitoring its 
Workload, and Communicating its Role and Contributions: 

MAS Faces Challenges in Measuring Its Contributions to the Trade 
Policy Process: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Manufacturing's Role in the U.S. Economy and Exports: 

Appendix III: Industry-specific Trade Barriers MAS Addressed in Fiscal 
Year 2010: 

Appendix IV: MAS Created a New Sector Strategy Document in Response to 
the National Export Initiative: 

Appendix V: Comments from the Department of Commerce: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: International Trade Administration Offices--Budget, Staffing, 
and Activities: 

Table 2: Examples of MAS Activities that Support Internal Commerce 
Clients, Including Other ITA Business Units: 

Table 3: Examples of MAS Activities that Support the Efforts of Other 
Executive Agencies: 

Table 4: Differences between MAS's Activities and Clients and Those of 
Other Executive Agencies: 

Table 5: MAS Objectives and External Performance Measures Used to 
Enhance U.S. Competitiveness in International Markets: 

Table 6: MAS Objectives and Internal Performance Measures to Enhance 
U.S. Competitiveness in International Markets: 

Table 7: Value of Manufacturing GDP and Percentage of World 
Manufacturing GDP for Selected Countries, 2000 and 2008: 

Table 8: Value of Manufacturing Exports and Percentage of World 
Manufacturing Exports for Selected Countries, 2000 and 2009: 

Table 9: Number and Percentage of U.S. Workers Employed in Various 
Sectors, 2000 and 2009: 

Figures: 

Figure 1: GDP and Employment in the Manufacturing Sector Relative to 
the Overall U.S. Economy, 1969 - 2009: 

Figure 2: Distribution of Staff (Full-Time Equivalents) Across MAS 
Offices, as of January 2011: 

Figure 3: U.S. Share of Nominal GDP Represented by Manufacturing, 1989 
- 2009: 

Figure 4: U.S. Manufacturing Exports as a Percentage of Total U.S. 
Exports: 

Figure 5: Manufacturing's Share of U.S. Employment: 

Figure 6: MAS Sector Strategy Example--Excerpt from Aerospace Sector 
Strategy: 

Abbreviations: 

Administration: Obama Administration: 

APEC: Asia-Pacific Economic Cooperation: 

BEA: Bureau of Economic Analysis: 

Board: ITA's Web Governance Board: 

Commerce: Department of Commerce: 

Committee: Committee on Foreign Investment in the United States: 

DFO: designated federal officers: 

EU: European Union: 

GDP: Gross Domestic Product: 

IT: Information Technology: 

ITA: International Trade Administration: 

MAS: Office of Manufacturing and Services: 

MDCP: Market Development Cooperator Program: 

MRA: Mutual Recognition Agreement: 

OMB: Office of Management and Budget: 

PART: Program Assessment Rating Tool: 

State: Department of State: 

TPCC: Trade Promotion Coordination Cabinet: 

TPIS: Trade Policy Information System: 

USITC: U.S. International Trade Commission: 

USTR: Office of the U.S. Trade Representative: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

June 7, 2011: 

The Honorable Sherrod Brown:
Chairman:
Subcommittee on Financial Institutions and Consumer Protection:
Committee on Banking, Housing, and Urban Development:
United States Senate: 

The Honorable Jeff Merkley:
United States Senate: 

Declining U.S. manufacturing, particularly manufacturing jobs, has 
been an issue of continuing concern for policymakers. This concern was 
reflected in the Obama Administration's (Administration) 2010 
announcement of the National Export Initiative, which brought new 
emphasis to one proposed government response to manufacturing 
declines--a renewed federal focus on increasing U.S. exports.[Footnote 
1] In addition, the Administration has demonstrated increased interest 
in improving the efficiency of the multiple federal agencies that 
support trade operations, with President Obama requesting that the 
Office of Management and Budget (OMB) prepare a reorganization 
proposal by June 2011. Recently, Congress expressed interest in the 
activities and achievements of the Office of Manufacturing and 
Services (MAS) within the Department of Commerce (Commerce), which was 
established to enhance the global competitiveness of U.S. industry, 
expand market access, and increase exports. 

In response to your request, we examined: (1) the goals and activities 
of MAS and how the types of analysis and expertise MAS provides 
compare with those provided by other government entities; (2) how MAS 
prioritizes its activities and targets its resources; and (3) the 
extent to which MAS tracks and reports its contributions to increasing 
U.S. competitiveness and trade. In addition, you asked us to provide 
information on U.S. and global manufacturing trends (see appendix II). 

To address these objectives, we reviewed relevant documents, including 
legislative authority and budget and staffing information; documents 
related to MAS's performance measurement system; and examples of how 
MAS's work has been used by parts of Commerce and other U.S. 
government agencies over the last 5 years. In addition, we discussed 
MAS's efforts with its officials, its government clients, and others 
who are knowledgeable about MAS. We interviewed Commerce officials 
from the Offices of the Secretary, Commercial Service, Market Access 
and Compliance, Import Administration, and the National Institute of 
Standards and Technology. We also interviewed officials from other 
U.S. government agencies, including the U.S. International Trade 
Commission (USITC), the Office of the United States Trade 
Representative (USTR), Departments of State (State), Energy, 
Transportation, and Treasury, the Environmental Protection Agency, and 
OMB. Appendix I provides more information on our scope and methodology. 

We conducted this performance audit from August 2010 to June 2011 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

MAS is a 207-person unit within Commerce's International Trade 
Administration (ITA), as shown in table 1. ITA's stated mission is to 
strengthen the competitiveness of U.S. industry by promoting trade and 
investment and by monitoring and enforcing U.S. trade laws and 
agreements.[Footnote 2] MAS is one of four distinct, but interrelated, 
business units within ITA, each led by an Assistant Secretary. 

Table 1: International Trade Administration Offices--Budget, Staffing, 
and Activities: 

ITA business unit: Manufacturing and Services; 
Fiscal year 2010 budget: $49.5 million; 
Full-time equivalents: 207; 
Activities summary: MAS industry experts and economists perform 
research and analysis for internal government clients on trade policy 
and competitiveness issues. MAS also provides support to the private 
sector when there is a wider industry focus. 

ITA business unit: U.S. and Foreign Commercial Service; 
Fiscal year 2010 budget: $260.4 million; 
Full-time equivalents: 1,041; 
Activities summary: Commercial Service promotes and protects U.S. 
commercial interests abroad and advises individual businesses to 
enhance firms' global competitiveness. 

ITA business unit: Market Access and Compliance; 
Fiscal year 2010 budget: $44.7 million; 
Full-time equivalents: 204; 
Activities summary: Market Access and Compliance uses its regional 
expertise to assist U.S. companies facing trade barriers in foreign 
markets by working to remove those barriers and contributes regional 
and country expertise to trade policy making. 

ITA business unit: Import Administration; 
Fiscal year 2010 budget: $69.1 million; 
Full-time equivalents: 331; 
Activities summary: Import Administration is the lead unit on 
enforcing trade laws and agreements to prevent unfairly traded imports 
and to safeguard jobs and the competitive strength of U.S. industry. 

Source: GAO analysis of ITA information and data. 

[End of table] 

MAS was created in 2004, after the publication of Commerce's 
Manufacturing in America report which called for its creation to 
support the Secretary of Commerce in his role as the federal 
government's chief advocate for the manufacturing sector. The report 
grew out of a 2003 review of the U.S. manufacturing sector initiated 
by former Secretary of Commerce Donald Evans in response to 
"unprecedented challenges" facing U.S. manufacturers. Commerce 
received input from industry associations and large and small 
manufacturers from critical sectors, and the report summarized 
manufacturers' concerns, which included the government's limited focus 
on manufacturing and its ability to compete globally. In addition to 
other recommendations, the report called for the creation of an 
Assistant Secretary of Commerce for Manufacturing and Services. 

Congress made recommendations in a 2003 House of Representatives 
Appropriations Committee Report to realign ITA's structure and clarify 
the mission of each business unit to better address an increasingly 
competitive global economy and growing U.S. trade deficit.[Footnote 3] 
The report called for the creation of a better analytic basis for U.S. 
trade policies and negotiations. It contained several specific 
actions, including ones targeting U.S. manufacturers. For example, 
Congress expected the proposed MAS unit to develop tools and expertise 
to assess industry trends and evaluate the impact of trade agreements, 
and to identify and address challenges facing manufacturers through an 
interdepartmental advisory committee. Subsequent legislative and 
agency activity established the reorganization proposed in the 
committee report and transferred functions and staff across ITA 
business units, with one result being the reorganization of the Trade 
Development unit into MAS.[Footnote 4] 

Congressional concerns leading to the reorganization of ITA stemmed, 
to a large degree, from continuing trends in manufacturing and trade. 
Although the United States remains the world's largest producer of 
manufactured products, there have been steep declines in manufacturing 
employment as measured by share of hours worked, and manufacturing's 
share of gross domestic product (GDP) (see figure 1). Manufacturing 
employment fell from about 28 percent of total U.S. employment in 1969 
to about 10 percent in 2009. As a share of nominal GDP, the drop has 
been similar. However, even with declines, almost 10 percent of the 
U.S. economy is in manufacturing--roughly 11 million workers. In 
addition, manufacturing continues to account for a large share of U.S 
trade. In 2009, manufactured goods accounted for about 60 percent of 
U.S. exports. 

Figure 1: GDP and Employment in the Manufacturing Sector Relative to 
the Overall U.S. Economy, 1969 - 2009: 

[Refer to PDF for image] 

Year: 1969; 
Manufacturing share of GDP: 24.3%; 
Manufacturing share of employment: 27.6%. 

Year: 1973; 
Manufacturing share of GDP: 21.9%; 
Manufacturing share of employment: 26.0%. 

Year: 1977; 
Manufacturing share of GDP: 21.6%; 
Manufacturing share of employment: 24.2%. 

Year: 1981; 
Manufacturing share of GDP: 19.8%; 
Manufacturing share of employment: 22.7%. 

Year: 1985; 
Manufacturing share of GDP: 17.8%; 
Manufacturing share of employment: 20.9%. 

Year: 1989; 
Manufacturing share of GDP: 17.3%; 
Manufacturing share of employment: 19.4%. 

Year: 1993; 
Manufacturing share of GDP: 15.9%; 
Manufacturing share of employment: 18.1%. 

Year: 1997; 
Manufacturing share of GDP: 15.3%; 
Manufacturing share of employment: 17.1%. 

Year: 2001; 
Manufacturing share of GDP: 13.1%; 
Manufacturing share of employment: 13.9%. 

Year: 2005; 
Manufacturing share of GDP: 12.4%; 
Manufacturing share of employment: 12.0%. 

Year 2006: 
Manufacturing share of GDP: 12.3%; 
Manufacturing share of employment: 11.8%. 

Year: 2007: 
Manufacturing share of GDP: 12.1%; 
Manufacturing share of employment: 11.4%. 

Year: 2008; 
Manufacturing share of GDP: 11.5%; 
Manufacturing share of employment: 11.0%. 

Year: 2009; 
Manufacturing share of GDP: 11.2%; 
Manufacturing share of employment: 10.1%. 

Source: GAO analysis of Bureau of Economic Analysis data. 

Note: Manufacturing's share of GDP is calculated as the ratio of the 
value added in manufacturing to nominal GDP. Correcting for inflation 
would not change the share if the same inflation factor were applied 
to the numerator (manufacturing GDP) and the denominator (total GDP). 
However, analysts sometimes adjust manufacturing output by a different 
inflation factor that reflects slower rises in the prices of 
manufacturing goods and productivity gains. Using that inflation 
factor, manufacturing's share of real output would have remained 
roughly constant over this period. 

[End of figure] 

The National Export Initiative brought new emphasis to the federal 
government's role in promoting exports.[Footnote 5] Commerce, with ITA 
as the lead entity within Commerce, works with other federal 
government agencies on the Export Promotion Cabinet, which, in 
collaboration with the Trade Promotion Coordinating Committee (TPCC), 
is charged with carrying out the initiative and spurring job growth 
through the doubling of U.S. exports by 2015. ITA also works through 
the USTR-led interagency structure used to formulate trade policy and 
represent U.S. trade interests in multilateral and bilateral forums 
such as the World Trade Organization. MAS analysts cover essentially 
all nonagricultural sectors of the economy. 

MAS Combines Industry and Trade Expertise in Providing Analytical and 
Policy Support to the U.S. Government: 

MAS Offices Focus on Industry Sectors and Economic Analysis, Primarily 
in Manufacturing: 

MAS's primary goal is to support the competitiveness of U.S. industry 
in domestic and international markets, which it does largely through 
providing policy advice, research, and analytical support to other 
parts of Commerce and the U.S. government.[Footnote 6] MAS has 
distributed 182 of its 207 staff across three suboffices, with the 
largest share in its Office of Manufacturing. As shown in figure 2, 
analysts in the Office of Manufacturing and the Office of Services 
cover a number of industry sectors, serving as sources of industry 
information from a trade perspective. Analysts and economists in the 
Office of Industry Analysis conduct economic and policy analysis to 
support U.S. industry and evaluate industry recommendations for trade 
negotiations and U.S. competitiveness. 

Figure 2: Distribution of Staff (Full-Time Equivalents) Across MAS 
Offices, as of January 2011: 

[Refer to PDF for image: organization chart and associated pie-chart] 

Top level: 
Assistant Secretary for Manufacturing and Services. 

Second level, reporting to Assistant Secretary for Manufacturing and 
Services: 
* Deputy Assistant Secretary for Manufacturing and Services; 
* Office of Planning, Coordination, and Management; 
* Advisory Committee Staff. 

Third level, reporting to Deputy Assistant Secretary for Manufacturing 
and Services: 
* Deputy Assistant Secretary for Manufacturing (5): 
- Office of Transportation and Machinery (26); 
- Office of Technology and Electronic Commerce (21); 
- Office of Health and Consumer Goods 18); 
- Office of Energy and Environmental Industries (16); 
- Office of Materials Industries (10). 
* Deputy Assistant Secretary Industry Analysis (4): 
- Office of Competition and Economic Analysis (14); 
- Office of Trade Policy Analysis (12); 
- Office of Trade and Industry Information (11); 
* Deputy Assistant Secretary for Services (4): 
- Office of Service Industries (15); 
- Office of Travel and Tourism (13); 
- Office of Financial Services Industries (13). 

Full-time equivalents: 207: 
Manufacturing: 96 (46%); 
Services: 45 (22%); 
Industry Analysis: 41 (20%); 
Other: 25 (12%). 

Source: GAO analysis of MAS data. 

[End of figure] 

MAS Supports Trade Policy Efforts of Internal and External Government 
Clients Mainly Through Industry Research and Sector-Specific Analysis: 

MAS analysts provide industry research and sector-specific analysis to 
support trade policy efforts of both internal clients in Commerce and 
external government clients, such as USTR. MAS's major activities 
include: collection and dissemination of data on U.S. industry and 
trade; production of analyses on domestic and international trade and 
investment policies that can affect competitiveness; identification 
and resolution of overseas market and trade barriers; and management 
of the Industry Trade Advisory Committees (see tables 2 and 3 for more 
detailed descriptions of MAS's activities; see appendix III for 
examples of industry-specific trade barriers that MAS addressed in 
fiscal year 2010). 

The 2004 reorganization of Trade Development into MAS transferred day- 
to-day servicing of private sector requests to the Commercial Service 
offices in the field.[Footnote 7] The portion of MAS's research and 
analysis that is used primarily by internal government clients 
(including Commerce and ITA business units, as well as other executive 
branch agencies such as USTR and the Department of the Treasury) for 
sensitive negotiations and policy making is not publicly available. 
However, some of the industry-specific information and data produced 
by the Office of Industry Analysis is made publicly available. 

MAS provides other parts of ITA and Commerce with industry sector 
analyses, which contain background information on the specific 
industry; evaluation of its competitive strengths and weaknesses both 
domestically and internationally; and proposed strategic direction for 
industry sectors (see appendix IV for more information on MAS's sector 
analyses). According to agency officials, other ITA units use these 
analyses to address specific trade issues that affect industries and 
regions. Table 2 shows examples of the types of support MAS provides 
to its internal Commerce clients. 

Table 2: Examples of MAS Activities that Support Internal Commerce 
Clients, Including Other ITA Business Units: 

MAS Works with Other ITA Business Units to Address Specific Trade 
Issues that Affect Industries and Regions: 
* Market Access and Compliance. MAS provides information about a 
particular industry as a whole to Market Access and Compliance 
analysts who focus on market access issues in specific regions. MAS 
provides industry-wide information and analysis on broader trade 
barriers that affect more than one company. A Market Access and 
Compliance official stated that its Trade Compliance Center involves 
MAS industry experts on every case; 
* Commercial Service. MAS responds to the needs of Commercial Service 
officers who are advising companies in the field by providing industry-
specific information. For example, a Commercial Service official 
stated that she contacted MAS industry analysts who had knowledge of 
the agricultural machinery sector to obtain information for a U.S. 
company interested in exporting irrigation equipment to Eastern Europe; 
* Import Administration. MAS provides industry information to Import 
Administration in its review of overseas companies' applications for 
foreign trade zone designation. For example, an Import Administration 
official said that her office relies on MAS to ensure that its review 
of applications for special customs treatment is consistent with U.S. 
trade policy and will not adversely affect other companies. 

MAS Provides Senior Commerce Officials with Briefing Materials: 
* MAS provided export and trade data to the Secretary of Commerce for 
the President's trip to India; 
* MAS worked with Commerce's Economic Development Administration, 
National Oceanic and Atmospheric Administration, and Minority Business 
Development Administration to provide the Secretary of Commerce and 
White House officials with an analysis of the economic impact of the 
Deepwater Horizon Gulf oil spill and, more specifically, the impact on 
the Gulf's travel and tourism industry. 

Source: GAO analysis of MAS information and data. 

[End of table] 

MAS also supports the efforts of other executive agencies, including 
USTR, through activities that include review and analysis of trade 
agreements, tariffs, and domestic regulations; involvement in the 
interagency trade policy-making process; and serving as a source of 
trade data to the government and public. USTR officials noted the 
contribution of MAS's expertise and analysis to the U.S. trade policy 
process. According to USTR officials, MAS's position in government, 
its insight into industry, and its analysis through a trade focused 
viewpoint are utilized by USTR in the trade negotiating process. A 
USTR official further stated that, in addition to MAS's role in 
supporting the trade policy process, it also engages directly in trade 
promotion activities that benefit U.S. companies. USTR noted that MAS 
can play an important role in providing insight into industry's 
concerns and potential reactions to policy changes. USTR officials 
also commented that MAS provided useful information to them during the 
U.S.-Korea free trade agreement negotiations. For example, MAS 
provided detailed trade data on autos traded according to engine 
sizes, which could affect the application of certain tariffs. 
According to USTR officials, other government or private sector 
entities do not generally have the capacity for the specialized trade 
and tariff data that MAS can produce. 

USTR officials stated they were unable to provide the actual documents 
MAS provided to USTR because they were part of the internal 
deliberative process used to develop U.S. negotiating positions. 
However, they did state that the type of analyses are not unlike MAS 
state and sector analyses, which are available to the public. That 
analysis is developed in collaboration with other ITA units for each 
free trade agreement and are posted on USTR's Web site, as well as 
ITA's. These analyses highlight the new market opportunities that a 
particular trade agreement provides to U.S. exporters and the effects 
of international trade on all 50 states' economies. 

In addition to supporting USTR, MAS plays a key role within Commerce 
in providing support to other government agencies in areas such as 
supporting trade negotiations and providing data on travel and 
tourism, a leading U.S. services export. According to MAS officials, 
MAS provides analysis of and policy advice to Commerce on transactions 
seeking official financing from U.S. government agencies and 
multilateral development banks in which the U.S. government has a 
vote, as well as on key official finance issues under discussion in 
multilateral forums. These include, for example, the U.S. Export-
Import Bank, Overseas Private Investment Corporation, and the 
Organisation of Economic Cooperation and Development Exports Credits 
Group. Table 3 provides specific examples of the types of MAS 
activities that support other executive branch agencies. 

Table 3: Examples of MAS Activities that Support the Efforts of Other 
Executive Agencies: 

MAS Supports USTR's Trade Negotiations by Helping to Develop U.S. 
Positions on Tariffs, Government Procurement, and Rules of Origin: 
* MAS recommends the tariff treatment for industrial products in trade 
negotiations and compiles tariff offers and requests for U.S. trading 
partners; 
* MAS develops recommendations for USTR on U.S. government procurement 
offers and requests for improvement based on industry input, 
assessments from MAS industry analysts, and research of the trading 
partners' government procurement market; 
* MAS ensures that U.S. industry positions on product-specific rules 
of origin are considered during negotiation of trade agreements. 

MAS Analysis Supports Government Efforts to Implement and Enforce U.S. 
Trade Laws: 
* MAS analyzes product petitions submitted under the Generalized 
System of Preferences program and provides recommendations for 
Commerce's positions on these petitions; 
* MAS creates lists for the interagency process identifying imports 
from countries to which the U.S. government potentially will apply 
additional duties in retaliation for unfair trade practices, pursuant 
to Section 301 of the U.S. Trade Act of 1974; 
* MAS reviews and analyzes the Miscellaneous Tariff and Trade bills 
and coordinates the interagency process for developing Administration 
recommendations for consideration by Congress. 

MAS Provides Industry's Perspective to the Interagency Policy-making 
Process: 
* MAS provides support to the Industry Trade Advisory Committee 
system, which Commerce jointly administers with USTR. The advisory 
committees allow representatives from private business and other 
groups who are cleared advisors, and whose companies engage in trade 
to provide input with respect to ongoing trade negotiations and trade 
policy; 
* MAS provided guidance on the renegotiation of the OECD Aircraft 
Sector Understanding, the special set of rules governing support for 
civil-aircraft exports. 

MAS Provides Analysis on Certain Domestic Industry Issues: 
* MAS analyzes the impact of regulations and legislation on U.S. 
industry and provides recommendations to regulatory agencies such as 
the Environmental Protection Agency; 
* MAS provides industry analysis to the Department of the Treasury on 
cases before the Committee on Foreign Investment in the United States, 
which considers the national-security implications of certain foreign 
mergers, takeovers, and acquisitions in the United States. 

MAS Is a Source for Data and Statistics on Exporters, Trade, and 
Industry that Are Used by the Government and Private Sector: 
* MAS is responsible for the management of the travel and tourism 
statistical system for assessing the economic contribution of the 
industry. As part of this work, MAS collects, analyzes, and 
disseminates international travel and tourism statistics; 
* MAS is one source of accessible and comprehensive trade data for 
government (Trade Policy Information System (TPIS)) and general public 
(TradeStats Express) users. The trade data that MAS provides includes 
the Metropolitan Export Series and the Exporter Database, which 
contain subnational export data. 

Source: GAO analysis of MAS information and data. 

[End of table] 

MAS's Clients Report that MAS Provides Analysis Not Readily Available 
Elsewhere in Government: 

While MAS conducts activities that have similarities to activities of 
other agencies, officials from MAS's client agencies stated that MAS 
can provide analysis that combines industry and trade expertise that 
is not readily available elsewhere in government. For example, 
government officials we interviewed stated that some other agencies 
may have technical expertise in particular disciplines but have less 
of a focus on developing trade policy. Table 4 provides examples of 
how MAS differs from other ITA units, the U.S. International Trade 
Commission, and other government agencies. 

Table 4: Differences between MAS's Activities and Clients and Those of 
Other Executive Agencies: 

MAS Focuses on Industry and Trade Policy, while Other ITA Units Have 
Regional Expertise and Counsel Individual Businesses: 
* MAS's counsel of individual businesses is limited to sector-specific 
policy and promotional issues. In contrast, U.S. and Foreign Commerce 
Service officers are placed in domestic and foreign field offices to 
work directly with individual businesses to help them expand their 
exporting capacity and access foreign markets; 
* MAS analysts are organized by industry and sector and work to 
address industry-wide trade policy barriers, rather than those 
affecting individual firms. In contrast, Market Access and Compliance 
analysts work by geographic region and respond to specific market-
access issues faced by a particular U.S. firm; 
* Import Administration is responsible for enforcing U.S. trade laws 
and responds to complaints and petitions from individual firms. MAS's 
involvement in trade enforcement includes providing industry and 
sectoral analysis as it pertains to resolving certain trade disputes. 

Like MAS, USITC Has Industry Offices, but It Acts Principally as a 
Technical Advisor to the Interagency Policy-making Process and 
Provides Its Formal Reports and Advice in Response to Official 
Requests: 
* USITC is an independent, quasi-judicial federal agency. As such, it 
serves as a nonvoting member of the Trade Policy Staff Committee; 
* USITC prepares reports under Section 332 of the Tariff Act only at 
the request of the President (who has delegated that authority to 
USTR), the House of Representatives Committee on Ways and Means, the 
Senate Finance Committee, the full House of Representatives, or full 
Senate; 
* USITC provides information and analysis, but, unlike MAS, does not 
provide policy recommendations. USITC reports are made available to 
the public, except those that are classified as national security 
information by USTR. USITC redacts confidential business information 
from all public reports. 

MAS's Trade Specific Industry Expertise Differs from the Technical 
Expertise Found in other Government Agencies: 
* The Department of Energy employs engineers and scientists with 
specific expertise in the relevant technologies utilized in the energy 
sectors, not expertise in trade or the industry as a whole. Department 
of Energy officials noted that in contrast, MAS analysts typically 
have international business backgrounds, not scientific ones; 
* Officials from the Department of Transportation stated that MAS's 
knowledge of trade policy complements their technical understanding of 
engineering and infrastructure, allowing them to better serve industry 
and move their issues to a more prominent position in the National 
Export Initiative. 

Source: GAO analysis of Commerce and other agency information. 

[End of table] 

MAS Faces Challenges in Prioritizing Activities, Monitoring its 
Workload, and Communicating its Role and Contributions: 

MAS Has Undertaken an Internal Review, but Has Not Had a Clear System 
to Prioritize Activities or a Clear Mission Statement: 

MAS has undertaken an internal review to update its mission and 
priorities regarding activities and clients and has proposed changes 
which are currently under departmental review. Since the 2004 
reorganization of ITA, MAS's broad mission statement has not clearly 
defined its role in government. MAS's stated mission has been to 
strengthen the competitiveness of U.S. manufacturing and services by 
addressing commercial and economic impediments that disadvantage U.S. 
companies overseas. However, ensuring the competitiveness of U.S. 
industry requires policies and actions from many government agencies, 
not just Commerce. For example, U.S. corporate tax policy affects the 
competitiveness of U.S. industry, but Commerce does not have decision- 
making authority to regulate tax policy. 

MAS officials have acknowledged the need for having clearer priorities 
and mission alignment with the Administration's National Export 
Initiative's goals to successfully serve its clients. A MAS official 
stated that MAS cannot be "all things to all people," which has been a 
consistent concern raised by staff. To address this need, in early 
summer 2010, MAS officials began an internal review of its mission and 
activities. As a result, MAS revised its mission statement: to advance 
the competitiveness of U.S. industries by leveraging its in-depth 
sector expertise in the development of trade policy and promotion 
strategies. MAS officials stated that the changes made as a result of 
the internal review are still in process and must be approved at the 
departmental level. 

MAS has an annual planning process to identify industry issues and 
determine actions to address them, but MAS officials acknowledged that 
these plans do not capture the numerous day-to-day unanticipated 
requests that come from sources such as the Secretary of Commerce, 
Executive Office of the President, other Executive Branch agencies, 
and the Congress. Every year, each industry office develops an 
assessment of the industry sectors it covers which, MAS guidance 
states, should present an analysis of the competitive strengths and 
weaknesses of the industry and an assessment of the industry's needs. 
Each office then uses these industry assessments to develop business 
plans, which describe activities the office plans to undertake during 
the year, and links business plan activities to objectives, 
performance measures, and targets. For example, the fiscal year 2010 
business plan for MAS's Office of Energy and Environment included 
identifying market access opportunities and barriers, as part of its 
energy-efficiency initiative. The plan linked this activity to MAS's 
performance measure to identify the percentage of industry-specific 
trade barriers that were removed or prevented. MAS officials told us 
that its management reviews the plans and uses them in making 
decisions throughout the year. However, MAS managers told us they 
prioritize the unanticipated requests based on resource availability 
and importance of the activity. 

As part of its internal review, MAS has developed decision criteria to 
assist analysts in prioritizing their work demands. According to the 
proposed criteria, which is in process awaiting departmental approval, 
MAS will primarily support sectors that have a direct connection to 
exports or that strategically impact trade. Such a sector must be a 
high-volume exporter, with $10 billion or more in exports or be a high 
potential-growth sector such as renewable energy. MAS management has 
set the goal of having 75 percent of MAS's resources working toward 
National Export Initiative objectives of doubling exports by 2015. 
However, MAS officials noted that they currently conduct work that is 
important for U.S. global competitiveness but not directly related to 
exports. For example, MAS provides the business perspective on cases 
that go before the Committee on Foreign Investment in the United 
States (Committee), and coordinates Commerce participation in these 
cases. The Committee is an interagency panel authorized to review 
transactions that could result in control of a U.S. business by a 
foreign person. The review is to determine the effect of such 
transactions on the national security of the United States and is not 
directly related to exports. To align with its new approach for 
prioritizing analysis related to exports, MAS management plans to 
streamline resources devoted to working on those cases that are not of 
strategic importance. In addition, MAS plans to reduce its effort in 
analyzing domestic regulations that do not have a significant impact 
on exports. 

MAS's System to Monitor Its Workload is Used Unevenly: 

MAS does not have a mechanism to systematically monitor analysts' 
workload or the amount of time spent on requests for different 
clients. MAS officials identified several top-priority clients, but 
the many unanticipated daily requests can pose difficulties for MAS 
analysts. Some requests for the Offices of Services and Manufacturing 
come to analysts through ITA's formal "tasker" system and are 
delegated by senior management to analysts. The "tasker" system is an 
electronic system through which tasks are assigned to staff and signed 
off on by management. MAS officials stated that it is useful for 
tasking out assignments to multiple offices; however, they noted that 
it does not cover all the work undertaken within MAS. They noted that 
for the Office of Industry Analysis, most requests are directly 
communicated to managers and analysts by a colleague in ITA or another 
government agency. They stated that entering Office of Industry 
Analysis workload data into the tasker system is not current practice. 
Moreover, according to MAS officials, many of the requests involve 
sensitive documents which cannot be entered into the system in order 
to comply with security protocols. MAS managers said that the 
proportion of work captured by the tasker system varies greatly among 
its program areas, ranging from 85-90 percent for the Offices of 
Manufacturing and Services to less than 5 percent for the Office of 
Industry Analysis. Without a way to systematically monitor staff's 
workload, it is difficult for management to determine how to most 
efficiently allocate resources. 

In prior work, we found that for an entity to run and control its 
operations, management must have relevant, reliable, and timely 
information.[Footnote 8] However, MAS did not systematically track the 
time spent on tasks by different types of clients. After our 
inquiries, the Deputy Assistant Secretary of MAS's Office of Industry 
Analysis began monitoring short-term (2 to 3 days) requests by 
different types of clients and found that approximately 70-75 percent 
of short-term requests for analysis came from within ITA, 5-10 percent 
were generated from the rest of Commerce, and the remaining 15-20 
percent were from other agencies in the Executive Branch and the 
Congress. However, these data reflect only the requests--which average 
5,400 annually, according to MAS officials--submitted to the 41 staff 
in Office of Industry Analysis, not MAS offices overall, and they do 
not include information that involves security protocols or longer-
term projects. According to agency officials, these short-term 
requests are ad hoc and often time sensitive and must be balanced with 
the broader long-term activities MAS analysts undertake. Given that 
management does not have reliable and timely information about staff's 
workload, it may be difficult for management to ensure staff are 
working on the highest-priority efforts. 

MAS Faces Challenges in Communicating Its Contributions to Congress 
and the General Public: 

Officials from agencies that work with MAS told us they understand 
MAS's role and contributions to trade policy and competitiveness 
issues, but these contributions are not readily apparent to Congress 
or the general public. This is partly because MAS's policy-development 
work is not publicly available. Although ITA's Web site does provide 
public access to industry, trade, and economic data and analysis 
produced in MAS, it provides limited information about MAS's role and 
activities. Consequently, the public and Congress may have limited 
information about MAS's contributions to policy making. This lack of 
transparency may hinder Congress's ability to provide effective 
oversight of MAS's activities. 

There is little publicly available information about MAS's priorities 
and contributions to policy making. As noted above, MAS's work is 
largely intended for use by internal government clients, and much of 
that output is not in the form of products that are externally 
available. Previously, we found that, in addition to adequate internal 
communications, management should ensure there are adequate means of 
communicating with external stakeholders, which can include Congress. 
[Footnote 9] 

An organization's Web site is typically a readily accessible source of 
information to the public about the organization's mission and 
activities. A MAS official stated that when she worked in the private 
sector, she relied on the Web site to get the analysis and information 
they needed and that its Web sites were organized in a manner useful 
for industry users. In addition, officials from agencies that rely on 
MAS for analytical support stated they generally communicate with MAS 
via phone or e-mail and do not rely on the Web site. Further, MAS and 
other officials stated that ITA's internal Web site, or intranet, 
provides a primary means of communication among ITA units and, thus, a 
public ITA Web site is less important for that purpose. 

For the general public, ITA's Web sites provide limited information 
about MAS's priorities and activities. According to a 2007 Commerce 
Inspector General report, ITA's Web sites have duplicative, confusing, 
disorganized, and outdated pages.[Footnote 10] In a December 2010 
meeting, members of ITA's Web Governance Board (Board) told us that 
the issues raised in the report are still relevant. The board observed 
that Web sites are important tools to increase public awareness of ITA 
programs and expertise, not only for the business community, but also 
for external stakeholders who may have difficulty finding useful 
information about MAS as an organization and its role in trade policy. 

The board members told us that because ITA does not have a centrally 
directed web management office, each business unit is responsible for 
managing its own web presence, but there is great variation among the 
offices' ability and technical expertise. A MAS official stated that, 
MAS, like some of the other ITA business units, does not have 
dedicated full-time staff focused on maintaining MAS's web presence. 
Instead there are several MAS analysts who have the auxiliary duty of 
working on MAS's Web site in addition to their other duties. 
Consequently, MAS and ITA as a whole lack cohesive, transparent, and 
consistent Web sites. This may also hinder MAS's ability to 
effectively communicate its priorities and contributions to 
stakeholders, Congress, and the public. 

MAS Faces Challenges in Measuring Its Contributions to the Trade 
Policy Process: 

External Factors Affect MAS's Achievement of Its Broad, Outcome-Based 
Performance Targets: 

Due to its policy-support role, MAS's ability to meet its performance 
targets, such as breaking down trade barriers faced by U.S. firms, 
depends on actions from other agencies, Congress, businesses, and 
foreign governments. MAS has three main objectives linked to five 
outcome-based performance measures[Footnote 11] that it reports on 
externally in assessing its performance.[Footnote 12] One objective--
to ensure appropriate industry and other stakeholder input into trade 
policy development, negotiations, and implementation--covers much of 
what MAS does, including addressing industry-specific trade barriers 
and working with USTR on trade agreements. MAS has also developed 
internal measures that are used to track activities and for planning, 
but are not reported externally (see tables 5 and 6). 

Table 5: MAS Objectives and External Performance Measures Used to 
Enhance U.S. Competitiveness in International Markets: 

Objective: Ensure industry and other stakeholder input into trade 
policy development, negotiations, and implementation; 
Performance measure (external--for Government Performance and Results 
Act): Percentage of industry-specific trade barriers addressed that 
were removed or prevented[A]; 
Example: An example of a trade barrier MAS addressed that was removed 
is an Indian tariff on general-aviation aircraft. 

Objective: Ensure industry and other stakeholder input into trade 
policy development, negotiations, and implementation; 
Performance measure (external--for Government Performance and Results 
Act): Objective: Percentage of industry-specific trade barrier 
milestones completed; 
Example: Objective: An example of a trade barrier milestone for 
removing Indian tariffs on general-aviation aircraft is identifying 
market-access issues of interest to U.S. industry. 

Objective: Ensure industry and other stakeholder input into trade 
policy development, negotiations, and implementation; 
Performance measure (external--for Government Performance and Results 
Act): Percentage of trade agreement milestones completed; 
Example: An example of a trade agreement milestone is to identify 
industry-specific opportunities resulting from a particular trade 
agreement, such as the opportunities for the automotive industry 
resulting from the Korea-U.S. free trade agreement. 

Objective: Improve efficiency in the distribution of information and 
data; 
Performance measure (external--for Government Performance and Results 
Act): Percentage of reduction in per-unit costs of data distribution; 
Examples: Changes in per-minute cost of use of TradeStats Express 
compared to a baseline. 

Objective: Conduct studies and analysis to promote U.S. 
competitiveness; 
Performance measure (external--for Government Performance and Results 
Act): Total annual cost savings resulting from the adoption of MAS 
recommendations contained in its studies and analysis; 
Examples: MAS estimated that its recommendations on restriction levels 
for a certain health and safety rule resulted in a savings of $287 
million to industry over what had been originally proposed.[B]. 

Source: GAO analysis of MAS information and data. 

[A] See appendix III. 

[B] Generally, MAS uses data on costs before and after its 
contribution, based on the agency's Regulatory Impact Analysis. It 
uses the decrease in costs after MAS's suggested change to measure the 
value of its impact on the regulation. 

[End of table] 

Table 6: MAS Objectives and Internal Performance Measures to Enhance 
U.S. Competitiveness in International Markets: 

Objective: Enhance public and private partnerships; 
Performance measure: Total annual exports generated by the Market 
Development Cooperator Program public/private partnerships; 
Description: The measure includes, among other things, the estimated 
exports attributable to the partnership's activities. 

Objective: Enhance public and private partnerships; 
Performance measure: Exports generated annually by export-trading 
companies; 
Description: Each export-trading company submits an annual report that 
includes data on the exports it generated. 

Source: GAO analysis of MAS information and data. 

[End of table] 

MAS's fiscal year 2011 budget justification stated that one limitation 
to its meeting its performance targets is that many factors--including 
U.S. business cooperation, global trade trends, political 
developments, and the extent to which foreign governments create 
barriers or act inconsistently with trade obligations--affect the 
number of barriers removed. MAS's performance-measurement process 
attempts to address this challenge by breaking its outcome-based 
measures into specific milestones, according to officials. The 
specific milestones--such as identifying market-access issues of 
interest to U.S. industry or industry-specific opportunities resulting 
from a trade agreement--are analyses or industry-outreach steps that 
MAS itself can undertake and complete, even though MAS cannot control 
the ultimate impact of those actions. MAS sets targets for its 
performance measures annually. These milestones, while more specific 
than the overall performance measures, are nonetheless qualitative 
measures. 

In Commerce's fiscal year 2010 Performance and Accountability report, 
MAS reported that it had met or exceeded all of its targets for its 
four performance measures.[Footnote 13] For example, MAS reported that 
it had met its target of removing or preventing 30 percent of the 
industry-specific trade barriers it addressed. In both 2008 and 2009, 
Commerce's Performance and Accountability reports stated that MAS 
exceeded three of its targets and did not meet its target for its work 
on trade agreements, because the Administration suspended work on two 
trade agreements MAS was working on. 

MAS Does Not Systematically Obtain Feedback from All Its Clients or 
Track Its Contributions to Policy Decisions Not Covered by Its 
Performance Measures: 

MAS does not systematically obtain feedback on its performance from 
all its clients on whether or not it is meeting their individual 
needs. In previous work, we stated that it is important for agency 
managers to collect performance data that are sufficient to support 
decision making.[Footnote 14] A MAS official stated it does not have 
the resources to systematically survey its clients about their 
satisfaction with MAS's activities. In addition, MAS officials stated 
they do not view administering a survey to obtain feedback as feasible 
since many of their clients are senior policy makers. MAS officials 
said that if their clients were not satisfied with their work, the 
clients would not continue to request analysis and information. 
Officials stated they do obtain feedback from its ITA clients through 
periodic meetings with managers in the other ITA business units. 

Although MAS does not obtain systematic feedback from all its clients, 
officials from other government agencies told us that while there is a 
great deal of industry expertise in critical areas within MAS, the 
level of expertise varies by sector, and some gaps do exist. Officials 
from the Departments of State and Treasury stated that MAS provided 
valuable analysis on export financing for airplanes for the 
Organisation for Economic Cooperation and Development interagency 
delegation on export financing. In addition, officials from the 
Department of Transportation stated that MAS's knowledge of trade 
policy complemented its transportation-policy expertise and its 
technical understanding of engineering and infrastructure, allowing it 
to better serve industry. However, officials from State and USTR noted 
that the level of expertise in MAS is not consistent across all 
sectors and, consequently, the usefulness and relevance of MAS input 
can be uneven. In addition, an Import Administration official stated 
that while it relies on MAS to assist with industry analysis of 
foreign trade zone applicants, the coverage of some sectors is uneven. 
MAS officials recognized there is unevenness in the level of expertise 
across sectors and said they are trying to address the issue as part 
of its internal-review process and by providing better training for 
analysts. 

Some of MAS's activities fall outside its external and internal 
measures. For example, MAS officials stated it is difficult to measure 
some of the economic analysis work that does not contribute directly 
to breaking down trade barriers or toward developing a trade 
agreement. Some of this work is used by senior government officials in 
Commerce and other parts of the Executive Branch. Further, MAS 
activities that contribute to the performance measures of other parts 
of ITA are reported not by MAS, but by the unit with primary 
responsibility for each specific performance measure. MAS's strategic 
plan includes performance measures related to the goals and objectives 
that other ITA units have primary responsibility for and on which it 
does not report. As a result, the performance measures MAS reports on 
do not include its contributions to the other ITA units' goals. For 
example, MAS's contributions to antidumping and countervailing duty 
proceedings are reported by Import Administration. 

Responding to our request, MAS officials compiled two large volumes of 
examples (i.e., analysis documents, information used in trade 
negotiations, and regulatory cost analyses) illustrating MAS 
activities over the past few years. MAS officials told us this was not 
an exercise the office conducts on a regular basis, and that it was 
very useful. The officials said that it provided a way for staff to 
link their activities to broad outcomes separately from the overall 
performance measures. However, they added that the exercise was 
resource intensive, and they do not have plans to regularly repeat 
this type of effort. 

Conclusions: 

At a time of heightened interest in both expanding U.S. exports and 
streamlining government operations to lower costs and avoid 
inefficiencies, the role and effectiveness of MAS within ITA is of 
particular interest. Created out of an existing Commerce unit in 2004 
to more explicitly focus on U.S. competitiveness, MAS's services are 
primarily provided to government clients. Unlike other Commerce 
offices such as Commercial Service and the Import Administration, or 
independent agencies such as USITC, MAS functions largely as an 
internal consulting group for government trade policy. MAS's clients 
report that MAS provides analysis not readily available elsewhere in 
the government. 

Because of the reduced visibility that accompanies this role, it is 
important for MAS to clearly define its contribution to the 
Administration's trade and economic policy. We found that MAS 
continues to refine its mission and develop decision criteria to 
prioritize its activities, and enhancements are still undergoing 
departmental review. Given that MAS does not face a market test for 
its services, a clear set of priorities could help it meet its 
clients' needs. 

MAS faces challenges in measuring its contributions to trade policy, 
because as a policy support organization, MAS may have difficulty 
isolating its specific contributions to the trade policy process. MAS 
has established a detailed process to measure its performance, but the 
office does not systematically obtain feedback from all its clients or 
track its contributions to major policy decisions that fall outside 
its performance measures. This makes it difficult for MAS to 
accurately determine the extent to which it adds value or to identify 
opportunities for improvement. 

In terms of communication, MAS also faces challenges in creating 
transparency because of the nature of its activities. Because MAS 
provides industry and trade policy expertise, seldom through products 
that are publicly attributable to MAS, there is limited visibility of 
MAS's contributions in key work areas. Its Web site could be a useful 
communication tool, but as part of ITA, MAS relies on ITA-level 
support for management of the Web site. Nonetheless, since its support 
functions are central to its contributions, presenting them more 
clearly would be useful for congressional and stakeholder oversight of 
its activities. 

MAS is in the process of finalizing its mission statement and decision 
criteria and is taking steps to more clearly prioritize its activities 
and better align its resources to meet the goals of the 
Administration's National Export Initiative. Moving this initiative 
forward within Commerce will be an important step. 

Recommendations for Executive Action: 

To better assure MAS is meeting the needs of its clients, we recommend 
that the Secretary of Commerce, in concert with MAS management, take 
the following four actions: 

1. To facilitate MAS's efforts to prioritize its activities, establish 
time frames to finalize the clarification of MAS's mission and 
decision criteria. 

2. To better enable MAS to target its resources, ensure MAS has a way 
to more systematically monitor how staff time is allocated across 
various efforts. 

3. To improve transparency and ensure that priorities are consistent 
with those of key stakeholders, explore methods for MAS to more 
clearly communicate its mission, priorities, and activities to 
clients, stakeholders, the public, and Congress. These methods could 
include, among others, working with ITA leadership to develop a 
strategic plan with associated time frames to improve ITA's web 
presence and management. 

4. In order to ascertain whether MAS is meeting the needs of its 
government clients involved in the trade policy process, explore ways 
to more systematically obtain information on the value it is adding. 
This could include collecting feedback from its clients on its 
activities more systematically and tracking the outcomes of the 
analyses it provides for major trade policy decisions. 

Agency Comments and Our Evaluation: 

We requested comments on a draft of this report from Commerce. In its 
comment letter, Commerce stated that it fully concurred with our 
findings and recommendations. The letter also said that MAS's current 
redefinition plan is expected to be completed by October 2011. 
Commerce's complete letter is reprinted in appendix V. 

As agreed with your offices, unless you publicly release the contents 
of the report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to interested congressional committees and the Secretary of Commerce. 
In addition, this report will be available at no charge on the GAO Web 
site at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-4347 or yagerl@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Other GAO contact and staff 
acknowledgments are listed in appendix VI. 

Signed by: 

Loren Yager: 
Director, International Affairs and Trade: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

The objectives of this report were to examine (1) the Office of 
Manufacturing and Services's (MAS) goals and activities, and how the 
types of analysis and expertise it provides compare with those 
provided by other government entities; (2) how MAS prioritizes its 
activities and targets its resources; and (3) the extent to which MAS 
tracks and reports its contributions to increasing U.S. 
competitiveness and trade. 

To assess MAS's activities and how they compare with the types of 
analysis and expertise provided by other government entities, we 
reviewed relevant documents, including legislative authority, 
Department of Commerce's (Commerce) 2004 Manufacturing in America 
report, National Export Initiative documents, and budget and staffing 
information. We reviewed the International Trade Administration's 
(ITA) strategic plan and Web site to evaluate how the type of work MAS 
undertakes compares to that conducted by the other ITA business units. 
Additionally, we reviewed information on other agencies' Web sites to 
obtain information on the types of analysis and expertise they offer 
and initiatives the agencies participated in with MAS. We discussed 
similarities and differences in the types of work that MAS's 
government clients conduct with officials with knowledge of the unit. 
We interviewed Commerce officials from the Office of the Secretary and 
National Institute of Standards and Technology and representatives 
from the other ITA business units--Commercial Service, Market Access 
and Compliance, and Import Administration. We also interviewed 
officials from other U.S. government agencies, including International 
Trade Commission, Office of the United States Trade Representative, 
the Departments of State, Energy, Transportation, Treasury, 
Environmental Protection Agency, and Office of Management and Budget 
(OMB). Additionally, we interviewed the Industry Trade Advisory 
Committees' designated federal officers (DFO), representatives from 
two industry associations, and the chairman of one of the committees. 
To gain additional information on MAS's activities, we also attended 
multiple MAS events, including its Manufacture America conferences in 
Pittsburgh, Pennsylvania, and Chicago, Illinois; a meeting of the U.S. 
government's Manufacturing Council; and a congressional event in 
Washington D.C., for ITA's Market Development Cooperator Program. We 
also reviewed documents provided by MAS containing examples of how its 
work has been used by other parts of Commerce and other U.S. 
government agencies over the last 5 years. 

To obtain information on how MAS prioritizes its activities and 
targets its resources, we reviewed documents related to MAS's proposed 
decision-making criteria and revised mission and discussed them with 
MAS officials. Additionally, to assess the availability of information 
to the public about MAS's role in the U.S. government, we reviewed the 
Commerce Inspector General's 2007 report on trade coordination 
efforts[Footnote 15] and met with ITA's Web Governance Board. In order 
to understand any past and current issues related to MAS's priorities, 
we reviewed OMB's 2006 Program Assessment Rating Tool (PART) report 
and National Export Initiative documents. We also interviewed MAS 
leadership from the offices of the Assistant Secretary and Planning, 
Coordination, and Management; officials from its offices of 
Manufacturing, Services, and Industry Analysis; the administrators of 
MAS's assignment tasker system; and ITA's Deputy chief financial 
officer. 

To assess the extent to which MAS tracks and reports its contributions 
to increasing U.S. competitiveness and trade, we reviewed documents 
related to its performance measurement system, including MAS's 
industry assessments, business plans, performance targets, and 
Commerce's fiscal year 2010 Performance and Accountability Report. We 
also reviewed past GAO work on the principles of effective performance 
measurement. In order to ensure consideration of any past issues 
concerning MAS's performance measurement, we reviewed OMB's 2006 PART 
report. We also discussed MAS's performance measurement with 
knowledgeable officials from MAS, ITA, and OMB. 

In order to present information on manufacturing's share of U.S. gross 
domestic product (GDP), employment, and exports, we relied on data 
from Commerce. Information on GDP and employment was obtained from the 
Bureau of Economic Analysis (BEA). We used calculations of hours 
worked to report shares of employment. To report the numbers of 
employees in the U.S. economy, we computed full-time equivalents, 
assuming 2,080 hours worked in each calendar year. Information on 
manufacturing exports was obtained from MAS's TradeStats Express. To 
compute the U.S. share of world-wide production and exports in 
manufacturing data, we relied on the World Bank's Data Bank. To assess 
the reliability of the World Bank and Commerce data, we interviewed 
knowledgeable agency officials. To the extent possible, we compared 
values against alternative sources. We found that the data were 
sufficiently reliable for the purposes of presenting historic trends 
on manufacturing production, exports, and employment. 

We conducted this performance audit from August 2010 to June 2011 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Manufacturing's Role in the U.S. Economy and Exports: 

Manufacturing's Share of U.S. GDP Has Declined, but the United States 
Remains a Leading Manufacturer: 

Over the past two decades, manufacturing's share of the output of the 
U.S. economy has fallen.[Footnote 16] In 1989, manufacturing's output 
expressed in constant 2009 dollars to correct for inflation was 
approximately $1.5 trillion, while total output was approximately $8.6 
trillion.[Footnote 17] By 2009, while manufacturing output had grown 
to $1.6 trillion, total output had grown to more than $14 trillion. 
Using data from BEA, figure 3 shows manufacturing's share of total 
U.S. output, measured by GDP. As the figure shows, from 1989 to 2009, 
U.S. manufacturing as a share of GDP declined from a peak of about 17 
percent to about 11 percent, and has generally displayed a steady 
decline.[Footnote 18] 

Figure 3: U.S. Share of Nominal GDP Represented by Manufacturing, 1989-
2009: 

[Refer to PDF for image: line graph] 

Year: 1989; 
Percentage of GDP: 17.3%. 

Year: 1993; 
Percentage of GDP: 15.9%. 

Year: 1997; 
Percentage of GDP: 15.3%. 

Year: 2001; 
Percentage of GDP: 13.1%. 

Year: 2005; 
Percentage of GDP: 12.4%. 

Year: 2006; 
Percentage of GDP: 	12.3%. 

Year: 2007; 
Percentage of GDP: 	12.1%. 

Year: 2008; 
Percentage of GDP: 	11.5%. 

Year: 2009; 
Percentage of GDP: 11.2%. 

Source: GAO analysis of BEA data. 

Note: Figure shows the ratio of the value added in Manufacturing over 
nominal GDP. Correcting for inflation would not change the share if 
the same inflation factor were applied to the numerator (manufacturing 
GDP) and the denominator (total GDP). However, analysts sometimes 
adjust manufacturing output by a different inflation factor that 
reflects slower rises in the prices of manufacturing goods and 
productivity gains. Using that inflation factor, manufacturing's share 
of real output would have remained roughly constant over this period. 

[End of figure] 

While the share of U.S. economic output devoted to manufacturing has 
fallen, the United States remains a leading producer of manufactured 
goods. Table 7 uses data from the World Bank to compare selected 
countries' proportions of world production in manufacturing in 2000 
and 2008. These four countries collectively represent more than 50 
percent of world manufacturing. As the table shows, the U.S. share of 
world production in manufacturing fell from about 26 percent to about 
18 percent. During the same period, China's share increased from about 
7 percent to about 15 percent. 

Table 7: Value of Manufacturing GDP and Percentage of World 
Manufacturing GDP for Selected Countries, 2000 and 2008: 

Country: United States; 
2000: Value of manufacturing output: $1.8 trillion; 
2000: Percentage of world manufacturing output: 26%; 
2008: Value of manufacturing output: $1.8 trillion; 
2008: Percentage of world manufacturing output: 18%. 

Country: Germany; 
2000: Value of manufacturing output: $485.3 billion; 
2000: Percentage of world manufacturing output: 6.8%; 
2008: Value of manufacturing output: $745.5 billion; 
2008: Percentage of world manufacturing output: 7.6%. 

Country: Japan; 
2000: Value of manufacturing output: $1.3 trillion; 
2000: Percentage of world manufacturing output: 18%; 
2008: Value of manufacturing output: $979.3 billion; 
2008: Percentage of world manufacturing output: 10%. 

Country: China; 
2000: Value of manufacturing output: $476.0 billion; 
2000: Percentage of world manufacturing output: 6.7%; 
2008: Value of manufacturing output: $1.5 trillion; 
2008: Percentage of world manufacturing output: 15%. 

World: 
2000: Value of manufacturing output: $7.1 trillion; 
2000: Percentage of world manufacturing output: 100%; 
2008: Value of manufacturing output: $9.8 trillion; 
2008: Percentage of world manufacturing output: 100%. 

Source: GAO analysis of World Bank data. 

Note: Dollar values have been adjusted using the U.S. GDP price 
deflator, with 2009 as the base year. 

[End of table] 

Manufacturing Exports Remain a Chief Component of Total U.S. Exports: 

Over the past 20 years, the percentage of U.S. exports represented by 
manufacturing has remained largely unchanged. In 1989, correcting for 
inflation, the United States exported approximately $800 billion of 
goods and services, of which about $450 billion were manufactured 
goods, according to BEA and MAS data.[Footnote 19] In 2009, the United 
States exported approximately $1.6 trillion, of which about $917 
billion were manufactured goods. Figure 4 shows the share of total 
exports that were in manufacturing. Over this time manufacturing's 
share of exported goods and services has stayed between 58 and 65 
percent. 

Figure 4: U.S. Manufacturing Exports as a Percentage of Total U.S. 
Exports: 

[Refer to PDF for image: line graph] 

Year: 1989; 
Percentage of total exports: 58.7%. 

Year: 1990; 
Percentage of total exports: 61.4%. 

Year: 1991; 
Percentage of total exports: 62.6%. 

Year: 1992; 
Percentage of total exports: 62.6%. 

Year: 1993; 
Percentage of total exports: 63.0%. 

Year: 1994; 
Percentage of total exports: 63.8%. 

Year: 1995; 
Percentage of total exports: 64.0%. 

Year: 1996; 
Percentage of total exports: 64.2%. 

Year: 1997; 
Percentage of total exports: 65.7%. 

Year: 1998; 
Percentage of total exports: 65.7%. 

Year: 1999; 
Percentage of total exports: 65.1%. 

Year: 2000; 
Percentage of total exports: 66.1%. 

Year: 2001; 
Percentage of total exports: 65.3%. 

Year: 2002; 
Percentage of total exports: 63.7%. 

Year: 2003; 
Percentage of total exports: 63.4%. 

Year: 2004; 
Percentage of total exports: 62.7%. 

Year: 2005; 
Percentage of total exports: 62.8%. 

Year: 2006; 
Percentage of total exports: 62.9%. 

Year: 2007; 
Percentage of total exports: 61.1%. 

Year: 2008; 
Percentage of total exports: 60.4%. 

Year: 2009; 
Percentage of total exports: 58.4%. 

Year: 2010; 
Percentage of total exports: 59.9%. 

Source: GAO analysis of MAS and BEA data. 

Note: Figure shows manufacturing's share of total U.S. exports, 
calculated using nominal data for export values. If we had presented 
the share of exports correcting for inflation, the share would be 
identical because the same inflation factor would apply to the 
numerator (manufacturing exports) and the denominator (total exports). 

[End of figure] 

The U.S. share of world-wide exported manufactured goods has remained 
consistent over the past decade. Table 8 shows manufacturing exports 
for selected countries in 2000 and in 2009 using World Bank data. 
[Footnote 20] In 2000, the United States represented about 13 percent 
of manufactured merchandise exported, which declined to about 8 
percent in 2009. During this period, China's contribution to world 
manufacturing rose from about 5 percent in 2000 to about 13 percent in 
2009. 

Table 8: Value of Manufacturing Exports and Percentage of World 
Manufacturing Exports for Selected Countries, 2000 and 2009: 

Country: United States; 
2000: Value of manufacturing exports: $800.0 billion; 
2000: Percentage of world manufacturing exports: 13%; 
2009: Value of manufacturing exports: $705.3 billion; 
2009: Percentage of world manufacturing exports: 8.1%. 

Country: Germany; 
2000: Value of manufacturing exports: $570.9 billion; 
2000: Percentage of world manufacturing exports: 9.6%; 
2009: Value of manufacturing exports: $918.5 billion; 
2009: Percentage of world manufacturing exports: 11%. 

Country: Japan; 
2000: Value of manufacturing exports: $556.3 billion; 
2000: Percentage of world manufacturing exports: 9.3%; 
2009: Value of manufacturing exports: $511.2 billion; 
2009: Percentage of world manufacturing exports: 5.9%. 

Country: China; 
2000: Value of manufacturing exports: $271.8 billion; 
2000: Percentage of world manufacturing exports: 4.6%; 
2009: Value of manufacturing exports: $1.1 trillion; 
2009: Percentage of world manufacturing exports: 13%. 

World: 
2000: Value of manufacturing exports: $4.8 trillion; 
2000: Percentage of world manufacturing exports: 100%; 
2009: Value of manufacturing exports: $8.7 trillion; 
2009: Percentage of world manufacturing exports: 100%. 

Source: GAO analysis of World Bank Data. 

Note: Dollar values have been adjusted using the U.S. GDP price 
deflator, with 2009 as the base year. 

[End of table] 

Over the Past Two Decades, Manufacturing's Share of Employment Has 
Fallen: 

From 1989 to 2009, manufacturing's share of employment has fallen. In 
1989, measured by hours worked by full-and part-time employees, there 
were approximately 18 million U.S. workers in manufacturing and 
approximately 94 million in the entire U.S. economy.[Footnote 21] In 
2009, the number employed in manufacturing had fallen to approximately 
11 million, while the number employed in the United States had grown 
to about 107 million. Figure 5 shows the share of hours worked in 
manufacturing, which fell from almost 20 percent in 1989 to about 10 
percent in 2009.[Footnote 22] 

Figure 5: Manufacturing's Share of U.S. Employment: 

[Refer to PDF for image: line graph] 

Year: 1989; 
Percentage: 19.4%. 

Year: 1993; 
Percentage: 18.1%. 

Year: 1997; 
Percentage: 17.1%. 

Year: 2001; 
Percentage: 13.9%. 

Year: 2005; 
Percentage: 12.0%. 

Year: 2006; 
Percentage: 11.8%. 

Year: 2007; 
Percentage: 11.4%. 

Year: 2008; 
Percentage: 11.1%. 

Year: 2009; 
Percentage: 10.2%. 

Source: GAO analysis of BEA data. 

Note: Figure shows manufacturing's share of total hours worked by 
full- and part-time employees. 

[End of figure] 

Over the past 10 years, the drop in manufacturing employment has been 
matched by an increase in the share of employment in services. Table 9 
shows employment in the United States by sector for 2000 and 2009. As 
the table shows, over this period manufacturing's share has fallen by 
about 5 percentage points, while the service industry's share has 
increased by about 4 percentage points. 

Table 9: Number and Percentage of U.S. Workers Employed in Various 
Sectors, 2000 and 2009: 

Sector: Manufacturing; 
2000: Employment: 16.3 million; 
2000: Percentage of U.S. employment: 15%; 
2009: Employment: 10.9 million; 
2009: Percentage of U.S. employment: 10%. 

Sector: Services; 
2000: Employment: 70.1 million; 
2000: Percentage of U.S. employment: 63.2%; 
2009: Employment: 72.1 million; 
2009: Percentage of U.S. employment: 67.2%. 

Sector: Other goods; 
2000: Employment: 8.4 million; 
2000: Percentage of U.S. employment: 8%; 
2009: Employment: 7.6 million; 
2009: Percentage of U.S. employment: 7%. 

Sector: Government; 
2000: Employment: 16.5 million; 
2000: Percentage of U.S. employment: 15%; 
2009: Employment: 17.6 million; 
2009: Percentage of U.S. employment: 16.4%. 

Sector: Total; 
2000: Employment: 110.9 million; 
2000: Percentage of U.S. employment: 100%; 
2009: Employment: 107.2 million; 
2009: Percentage of U.S. employment: 100%. 

Source: GAO analysis of BEA data. 

Note: Other goods-producing industries are agriculture, forestry, 
fishing, and hunting; mining; and construction. Services-producing 
industries consist of utilities; wholesale trade; retail trade; 
transportation and warehousing; information; finance and insurance; 
real estate and rental and leasing; professional, scientific, and 
technical services; management of companies and enterprises; 
administrative and waste management services; educational services; 
health care and social assistance; arts, entertainment, and 
recreation; accommodation and food services; and other services, 
except government. 

[End of table] 

[End of section] 

Appendix III Industry-specific Trade Barriers MAS Addressed in Fiscal 
Year 2010: 

Manufacturing: 
Access to China's electronics recycling market; 
Anticounterfeit medical products; 
Asia-Pacific Economic Cooperation (APEC) automotive customs 
transactions cost reduction; 
APEC cross-border privacy; 
APEC life sciences innovation forum; 
Automotive standards harmonization; 
Canada and Mexico CITEL Mutual Recognition Agreement implementation; 
Cement Asia-Pacific; 
China automotive trade barriers; 
China general aviation tariffs; 
China illegal logging; 
China Joint Commission on Commerce and Trade health; 
China large motorcycle restrictions; 
China raw materials; 
Environmental trade liberalization World Trade Organization; 
European Union (EU) access for U.S. wine (Phase II); 
India general aviation tariffs; 
India motorcycle tariffs; 
Japan boats; 
Japan market access for information technology (IT) and E-Commerce; 
Japan mobile competition; 
Korea automotive trade barriers; 
Medical device global harmonization; 
Nuclear industry-specific trade barriers; 
Privacy framework standard International Organization for 
Standardization 29100; 
Russia import duty on large civil aircraft; 
Trans-Pacific Partnership--telecom services and E-Commerce; 
U.S. cybersecurity policy; 
U.S. Internet policy on privacy and innovation; 
U.S.-EU safe harbor; 
U.S.-EU World Trade Organization IT agreement tariff dispute; 
Vietnam telecom and e-Commerce; 
World wine group (Phase II). 

Services: 
China insurance branching and licensing; 
Japan postal insurance (new); 
Universal postal union postal financial services; 
U.S.-Japan air services agreement. 

Source: MAS, Fiscal Year 2010 List of Industry-Specific Trade Barriers 
(Washington, D.C., 2010). 

[End of table] 

[End of section] 

Appendix IV: MAS Created a New Sector Strategy Document in Response to 
the National Export Initiative: 

Recently, in response to the National Export Initiative, MAS began to 
prepare "global sector strategies," which, according to MAS officials, 
identify and provide information on potential export markets for high- 
priority sectors; identify obstacles and risks associated with the 
sector; and provide policy recommendations for decision makers. Agency 
officials stated that the global sector strategies are based on a 
common template and will be MAS's signature product, with portions 
available to the public. 

Currently, one strategy, for aerospace, has been completed. An excerpt 
is reproduced in figure 6. The other 14 strategies that are listed 
below are in various stages of completion: 

* Automotive;
* Basic chemicals;
* Civil nuclear;
* Travel and tourism;
* Professional services;
* Digital content;
* Medical technologies;
* Building products;
* Semiconductor industry;
* Franchising/distribution;
* Renewable energy;
* Supply chain and logistics;
* Architecture, engineering, and construction; and:
* Insurance and asset management. 

Figure 6: MAS Sector Strategy Example--Excerpt from Aerospace Sector 
Strategy: 

[Refer to PDF for image: illustration] 

Industry overview: Aerospace Manufacturing (1/4): 

Overview: 

High Level Description:	
Manufacturing of civil and military aircraft, missiles, space and 
parts of all of the foregoing. 

Overview:	
1. Opportunities: Largest trade surplus of all manufacturing sectors. 
2. Challenges: Transition from duopoly (Boeing/Airbus) to global 
market with multiple new entrants (Canada, Brazil, China, Russia, 
India, Japan) and global supply chains. 
3. Top Target Markets: India, Brazil, China, Canada, Korea, EU, Middle 
East/N. Africa (MENA). 

Important statistics: 
Size of Global Import Market (2009) excluding US: $188.7 billion[1]; 
Growth: CAGR 2000-2009: 8.0%; 
World Imports from U.S./U.S. imports from World (2009)=	$85.8B/$33.3 
B = 2.6x; 
Job intensity: $178.98 of production (domestic shipments and exports) 
that directly support roughly 500K U.5. jobs.[2] 

[End of Overview] 

U.S. Industry: 

U.S. Competitiveness:	
* U.S. Share of World Import Market excluding US, UN data, 2009 = 
45.5%, in most major markets,	US share >50%; 
* Top Importer Countries and U.S. share(2009): US (NA), Germany 
(21.4%), France (43,9%), China (49.5%), Singapore (48.0%); 
* Current US Aerospace (NAICS 3364) production for 2009: $178.99.	 

Jobs: 
* Wages: Aero production workers earn 80% more than manufacturing 
workers generally. 

Other characteristics: 
* Supply chain: Includes thousands of SMEs, many of which also supply 
foreign aerospace manufacturers; 
* SME Share of Export Value (2008): 15.9%. Number of Exporters of 
aerospace products in NAICS 3364 = 9,754 companies, 91% of which are 
SMEs[3]; 
* Major US companies: Boeing (large jetliners); Cessna, Gulfstream, 
Hawker Beechcraft and Piper (general aviation aircraft); GE Aviation 
and United Technologies/Pratt & Whitney (aircraft engines); Boeing, 
Lockheed Martin and Textron (military aircraft); 
* Buyers/Other Information: U.S. defense industrial base increasingly 
reliant on civil aero manufacturing (e.g., Air Force procurement of in-
flight refueling tanker). 

[End of U.S. Industry] 

Market: 

Major Markets Growth Factors:	
* Growth factors: Airline traffic (passengers and cargo volume) and 
GDP growth; new model innovation (increased fuel efficiencies); 
government policy (Open Skies Agreements); business/private usage; 
airline fleet replacement[4]. 

Figure: Import Growth of Leading Importing Countries: 

[Refer to PDF for image: stacked vertical bar graph] 

2000-2009 CAGR: 

United States: 1.34%; 
Germany: 6.10%; 
France: 7.65%; 
China: 20.72%; 
Singapore: 24.35%; 
Other: 6.76%. 

[End of figure] 

Figure: Historic Global Import Market: 

[Refer to PDF for image: multiple line graph] 

Graph depicts the following for years 1990-2009: 
Global market: 
Global market, less U.S. 

[End of figure] 

[End of Market] 

Obstacles, Risks and Policy Actions: 

Potential Export Challenges: 
* U.S. Policy—-Export controls; Safety Management Systems; lack of 
permanent U.S. R&D tax credit; agency resources; STEM; 
* Tariff/Quotas: Tariff/tax combinations in India, China, Russia, and 
elsewhere; 
* Non Tariff Barriers: Offset requirements in multiple countries; 
government interference in procurement; inadequate aerospace 
infrastructure (India, China, Japan); 
* International/Multilateral Policy: Brazil, Russia, India, and China 
not signatories to WTO; 
* Agreement on Trade in Civil Aircraft (ATCA); official export credit 
agency financing for aircraft purchases; 
* Other: Government financial for development (EU, Canada, China, Russia, 
Korea). 
		
Potential Policy Actions: 
* Implement reform of U.S. export controls; 
* Continue to pursue Subsidies/WTO case; 
* Harmonize Safety Management Systems;	
* Improvements to Agreement on Trade in Civil Aircraft (ATCA), expand 
membership, product coverage; 
* Bilateral action to eliminate tariffs in selected markets; 
* KORUS approval; 
* Upgrading/expansion of airport infrastructure in India, Brazil. 		
	
[End of Obstacles, Risks and Policy Actions] 
	
Footnotes: Sources are (1) UN COMTRADE; (2) Census Bureau; (3) 
Exporter database; (4) ITA/Aerospace Team. 

Source: Reprint of MAS product. 

[End of figure] 

[End of section] 

Appendix V: Comments from the Department of Commerce: 

United States Department Of Commerce: 
The Secretary of Commerce: 
Washington, D.C. 20230 

May 25, 2011: 

Dr. Loren Yager: 
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
Washington, DC 20548: 

Dear Dr. Yager: 

Thank you for providing us with the draft report, "Office of 
Manufacturing and Services Could Better Measure and Communicate its 
Contributions to Trade Policy" (GA0-11-583). In	this report, the 
Government Accountability Office (GAO) assessed the objectives, goals, 
and activities of the Department of Commerce's Office of Manufacturing 
and Services (MAS). 

Specifically, the GAO examined (1) how MAS targets its resources and 
measures its progress, (2) what challenges it faces, and (3) how the 
goals and activities of MAS relate to other manufacturing-related 
efforts within the Department and the Executive Branch.	 

The Department fully concurs with the overall findings and 
recommendations of your	report. I support MAS' plan to refocus its 
mission and priorities, including enhanced monitoring of its workload, 
and to more systematically obtain and communicate the value MAS adds 
to the	trade policy process, as the GAO suggests. The Department has 
been making every effort to implement the MAS redefinition plan, and I 
expect your recommended changes to be fully implemented by October 1, 
2011.	 

Thank you for producing a balanced and comprehensive assessment of 
this complex	organization. The Department of Commerce plays a critical 
role in executing President Obama's National Export Initiative. Your 
report validates that the strategic and analytical work of one of our 
leading units is a valuable contribution to this and other policymaking 
efforts. 

Sincerely, 

Signed by: 

Gary Locke: 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Loren Yager, (202) 512-4347, yagerl@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Celia Thomas, Assistant 
Director; Christina Werth; Benjamin Bolitzer; Jacob Beier; Gezu 
Bekele; and Margaret McKenna made key contributions to this report. 
Other contributors include Karen Deans, Ernie Jackson, David Dornisch, 
Elizabeth Curda, Kim Frankena, Etana Finkler, Rob Ball, and Joe Carney. 

[End of section] 

Footnotes: 

[1] Executive Order 13534, Mar. 16, 2010. 

[2] ITA has six long-term performance goals to which its business 
units contribute: (1) advance U.S. international and commercial 
strategic interests; (2) enhance U.S. competitiveness in domestic and 
international markets; (3) broaden and deepen the U.S. exporter base; 
(4) identify and resolve unfair trade practices; (5) foster excellent 
relationships with customers and stakeholders; and (6) achieve 
organizational and management excellence. 

[3] House Report No. 108-221, 108TH Cong., 1ST Sess. (2003), pp. 68-70. 

[4] Consolidated Appropriations Act, 2004 (Pub. L. No. 108-199, Div. 
B, Title II, 118 Stat 3 at 65); ITA Organization and Function Order 41-
1, Aug. 18, 2005. 

[5] Executive Order 13534. 

[6] MAS's primary goal aligns with ITA's second long-term goal-- 
enhancing U.S. competitiveness in domestic and international markets. 

[7] MAS contributes to some ITA trade promotion efforts by, for 
example, managing the programmatic aspects of ITA's Market Development 
Cooperator Program (MDCP), which awards funds annually to industry 
associations and nonprofit organizations, rather than individual 
companies. Additionally, in response to the expectation expressed in a 
House of Representatives report that MAS would redirect industry 
experts to the field to focus on the needs of local industries, MAS 
initiated a pilot Field Assignment program in June 2004. MAS sent 
multiple industry specialists to the field temporarily to cover 
numerous industries. The program ended in March 2005, and, according 
to agency officials, was not continued due to competing priorities and 
resource constraints. 

[8] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November, 1999). 

[9] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[10] Commerce Office of Inspector General, International Trade 
Administration: Commerce Can Further Assist U.S. Exporters by 
Enhancing Its Trade Coordination Efforts, Final Inspection Report No. 
IPE-18322 (Washington, D.C., March 2007). 

[11] In 2006, OMB found that MAS's annual strategic planning process 
links its budget process to goals, objectives, and results. 

[12] MAS has both Government Performance and Results Act measures, 
which it reports externally, and performance measures that it uses 
internally but does not report externally. These objectives and 
performance measures were initially laid out in MAS's strategic plan 
for fiscal years 2007-2012, created in preparation for the OMB Program 
Assessment Rating Tool (PART) review in 2006. 

[13] Although, as previously noted, MAS has five performance measures 
related to the Government Performance and Accountability Act, 
Commerce's Performance and Accountability report does not always 
include results for all five measures. While the reports for fiscal 
years 2006 and 2007 included the measure on reduction in costs of data 
distribution, it has not been included in subsequent Performance and 
Accountability reports, although MAS officials stated they continue to 
track this measure and report on it to OMB. 

[14] GAO, Executive Guide: Effectively Implementing the Government 
Performance and Results Act, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June 
1996). 

[15] Commerce, Office of Inspector General, International Trade 
Administration: Commerce Can Further Assist U.S. Exporters by 
Enhancing Its Trade Coordination Efforts, Final Inspection Report No. 
IPE-18322 (Washington, D.C., March 2007). 

[16] According to the North American Industrial Classification System, 
the manufacturing sector comprises establishments engaged in the 
mechanical, physical, or chemical transformation of materials, 
substances, or components into new products. Establishments in the 
manufacturing sector are generally plants, factories, or mills that 
characteristically use power-driven machines and materials-handling 
equipment. 

[17] The trend of the past 20 years is consistent with a larger trend. 
In 1969, the total value of manufacturing output was about $ 1.1 
trillion, or about 24 percent of the entire economy's $4.7 trillion. 
Manufacturing output has been adjusted to reflect 2009 prices, using 
BEA's GDP price deflator. 

[18] Declining shares of manufacturing in GDP are not unique to the 
United States. According to data from the World Bank, manufacturing's 
share of world GDP was about 20 percent in 1993, and about 16 percent 
in 2009. For calculating manufacturing GDP, the World Bank uses 
industries belonging to International System of Industrial 
Classification codes 15-37. 

[19] Figures have been adjusted for inflation using BEA's GDP price 
deflator with 2009 as the base year. 

[20] The World Bank defines manufacturing using the Standard 
International Trade Classification system. According to MAS officials, 
the World Bank data is more limited, as it excludes processed food and 
petroleum products. 

[21] Figures are full-time equivalents that assume a work year of 
2,080 hours. 

[22] In 1969, manufacturing's share of U.S. employment was 
approximately 28 percent. 

[End of section] 

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