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Service Should Improve Performance and Resource Allocation Management' 
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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

September 2011: 

National Export Initiative: 

U.S. and Foreign Commercial Service Should Improve Performance and 
Resource Allocation Management: 

GAO-11-909: 

GAO Highlights: 

Highlights of GAO-11-909, a report to congressional requesters. 

Why GAO Did This Study: 

Recognizing the potential of increased exports to drive economic 
growth and create jobs, President Obama in 2010 launched the National 
Export Initiative (NEI), aimed at doubling the dollar value of U.S. 
exports by the end of 2014. As requested, GAO examined the extent to 
which (1) the goals and activities of the U.S. and Foreign Commercial 
Service (CS) support the NEI, (2) CS performance measures accurately 
reflect its activities and align with the NEI, and (3) CS incorporates 
relevant data in allocating resources to help achieve its strategic 
goals. 

GAO interviewed Department of Commerce (Commerce) officials, 
particularly from CS, and CS staff and officials at six overseas 
posts. GAO analyzed the NEI’s priorities, and documents and data 
related to CS activities and performance. 

What GAO Found: 

CS’s goals and activities generally support NEI priorities by, for 
example, arranging trade missions, assisting U.S. exporters with trade 
problems, and advocating on behalf of U.S. firms competing for foreign 
government contracts. The NEI has not required CS to undertake new 
activities; however, it has prompted CS to direct more of its efforts 
toward certain markets, activities, and sectors and to shift its focus 
from firms that are new to exporting to firms already exporting, as 
firms exporting to new markets or increasing exports to markets in 
which they are already active produce the greatest share of export 
successes (see figure). 

Figure: Share of CS Export Successes by Type of Firm, Fiscal Years 
2008-2010: 

[Refer to PDF for image: pie-chart] 

Increase-to-market: 22,372; 60%; Companies increasing exports in a 
market where they already export. 

New-to-market: 13,246; 35%; Companies expanding exports into an 
additional market. 

New-to-export: 1,732; 5%; Firms making their first sale to a customer 
outside the United States. 

Source: GAO analysis of CS data. 

[End of figure] 

In fiscal year 2012, CS will implement revised performance measures 
that align more closely with the NEI. Although CS did not meet four of 
its six performance targets in 2010, it achieved increases in most of 
its measures as it shifted to address NEI priorities. CS’s revised 
performance measures for fiscal year 2012 address some past 
weaknesses; however, some weaknesses will remain—for example, the lack 
of a measure for customer-service satisfaction and the clients’ 
underreporting of export successes, especially with regard to dollar 
value. CS’s new measures necessitate that export success data be 
complete and accurate; otherwise, CS’s efforts to support the NEI goal 
will be undervalued and policymakers will not have an accurate picture 
of CS’s performance. 

CS’s resource allocation management process does not make full use of 
relevant information to guide its decisions. CS is using a data-driven 
process to prioritize foreign markets (and domestic locations) and to 
help it allocate staff and other resources to meet its performance 
goals and support NEI objectives. GAO’s analysis of the quantitative 
parts of the process, however, found that there may be opportunities 
to reallocate overseas resources to better reflect NEI priorities and 
better achieve CS’s new performance goals. The overseas model, 
designed to reflect export potential of partner countries, currently 
gives greater weight to historical variables that have a high degree 
of overlap with the other historical inputs in the resource allocation 
process. Also, the process does not systematically consider important 
available data on commercial diplomacy and advocacy, which are related 
to CS performance goals, and program activity data on how CS staff 
divide their time. Including such data in the process would help 
Commerce managers make decisions informed by the best available 
information. 

What GAO Recommends: 

GAO recommends that the Department of Commerce (1) take steps to 
improve the CS customer-service survey response rate and include 
customer-service-related data in its performance measures, (2) take 
further steps to achieve greater cooperation by CS clients in 
reporting the dollar value of export successes, (3) review CS’s 
Overseas Resource Allocation Model to determine whether its variables 
and structure best incorporate available indicators of potential U.S. 
exports, (4) include commercial diplomacy and advocacy data in 
evaluating cost-benefit ratios of CS locations, and (5) systematically 
include activity data in making resource allocation decisions. 

Commerce welcomed and generally agreed with the overall findings and 
recommendations in the report. 

View [hyperlink, http://www.gao.gov/products/GAO-11-909] or key 
components. For more information, contact Loren Yager at (202) 512-
4347 or yagerl@gao.gov. [End of section] 

Contents: 

Letter: 

Background: 

Commercial Service's Goals and Activities Support the National Export 
Initiative: 

Commercial Service Is Modifying Performance Measures to Align More 
Closely with the NEI: 

Commercial Service's Resource Allocation Process Does Not Make Full 
Use of Relevant Information to Guide Its Decisions: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Distribution of Domestic CS Staff in U.S. Export 
Assistance Centers by State, Fiscal Year 2010: 

Appendix III: Country Groupings and Allocation of Overseas CS Staff in 
Fiscal Year 2010: 

Appendix IV: Locations of State Department Partnership Posts Providing 
Export Promotion Services: 

Appendix V: Country Groupings and U.S. Exports, Calendar Years 2008-
2010: 

Appendix VI: Example of Network Analysis of CS Fee-for-Service 
Activities: 

Appendix VII: Comments from the Department of Commerce: 

Appendix VIII: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: CS Activities Align with NEI Priorities: 

Table 2: CS Fiscal Year 2010 Performance Measure Targets versus Actual 
Performance: 

Table 3: Changes in CS Performance Measures, Fiscal Year 2010 versus 
2012: 

Table 4: CS Fiscal Year 2012 Performance Measures and Targets: 

Figures: 

Figure 1: Average Time Frames Associated with Achieving Export 
Successes by Type of Exporter: 

Figure 2: Share of Export Successes by Exporter Type, Fiscal Years 
2008-2010: 

Figure 3: Fiscal Year 2011 Market Potential Scores by Market Group: 

Figure 4: Cost-Benefit Scores by Market Group, Annual Average, Fiscal 
Years 2006-2009: 

Figure 5: Number of Export Successes by Market Group, Annual Average, 
Fiscal Years 2008-2010: 

Figure 6: Total CS Staff by Market Group, Annual Average, Fiscal Years 
2008-2010: 

Figure 7: Total CS Budget by Market Group, Annual Average, Fiscal 
Years 2008-2010: 

Figure 8: Distribution of Individual Country CS Market Potential 
Scores, Fiscal Year 2011: 

Figure 9: Number of Commercial Diplomacy Successes, Annual Average, 
Fiscal Years 2008-2010: 

Figure 10: Value of Advocacy Wins by Market Group, Annual Average, 
Fiscal Years 2008-2010: 

Figure 11: Number of Export Promotion Fee-based Services Sold by 
Market Group, Annual Average, Fiscal Years 2008-2010: 

Figure 12: Average Annual Sales per Country Staff by Market Group, 
Fiscal Years 2008-2010: 

Figure 13: Network of Strongest Relationships between Domestic and 
International CS Offices, Fiscal Years 2008-2010: 

Abbreviations: 

Commerce: U.S. Department of Commerce: 

CS: U.S. and Foreign Commercial Service: 

GDP: gross domestic product: 

FTA: free trade agreement: 

GPRA: Government Performance and Results: 

MSA: Metropolitan Statistical Area: 

NEI: National Export Initiative: 

SME: small and medium-sized enterprise: 

State: U.S. Department of State: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 29, 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: 

In the wake of the recent global recession, high unemployment rates in 
the United States have persisted, motivating U.S. policymakers to 
intensify efforts to grow the economy and create jobs. With 95 percent 
of the world's consumers living outside U.S. borders, a crucial focus 
of these efforts is to increase exports. At present, less than 1 
percent of all U.S. companies export, largely due to the challenges of 
international trade, particularly for small and medium-sized 
businesses. Recognizing the potential of exports to help the United 
States solidify the recovery and accelerate job growth, on March 11, 
2010, President Obama signed an executive order creating the National 
Export Initiative (NEI), which established the Export Promotion 
Cabinet to oversee U.S. trade promotion activities and set a goal of 
doubling the dollar value of exports in the next 5 years.[Footnote 1] 
The Secretary of Commerce committed to supporting the NEI's goal by 
directing the department's U.S. and Foreign Commercial Service (CS) to 
focus on key elements of the initiative, including advocating on 
behalf of U.S. exporters to help U.S. companies competing for 
international contracts and increasing the number of trade missions 
and other matchmaking efforts that bring U.S. sellers and foreign 
buyers together. 

As requested, in this report we examined the extent to which (1) the 
goals and activities of the U.S. and Foreign Commercial Service 
support the NEI, (2) CS performance measures accurately reflect its 
activities and align with the NEI, and (3) CS incorporates relevant 
data in allocating resources to help achieve its strategic goals. 

To determine CS's export promotion role and the extent to which its 
goals and activities support the NEI's priorities, we reviewed CS's 
statutory mission, CS services and activity information, and the 
Report to the President on the National Export Initiative.[Footnote 2] 
We also met with CS officials in Washington, D.C., who are responsible 
for managing CS. We also traveled to six overseas posts (Brazil, 
Chile, China, El Salvador, Thailand, and Vietnam) and interviewed CS 
commercial officers and locally employed staff who carry out CS's 
mission. The posts we visited differed in staff size (small, medium, 
and large) and included posts considered to be key markets (Brazil and 
China) or designated as an NEI priority market (Vietnam). Information 
from the six posts is not generalizable but was used to understand how 
activity data are collected, input, and used at posts and in 
headquarters, as well as to identify any potential problems with the 
data--topics also discussed in interviews with CS officials in 
Washington, D.C. 

To determine how CS measures progress toward its goals and the extent 
to which its performance measures accurately reflect its activities 
and align with the NEI, we reviewed CS's performance measures as 
documented in Department of Commerce (Commerce) annual performance and 
accountability reports for fiscal years 2008 through 2010, as well as 
Commerce's congressional budget submissions for fiscal years 2011 and 
2012. Additionally, we reviewed CS's annual reports for fiscal years 
2009 and 2010 to determine what performance measures CS reported 
publicly, and interviewed CS officials responsible for developing and 
tracking CS's performance measures to learn about the development of 
the fiscal year 2010 and 2012 measures. Additionally, we reviewed data 
CS provided us on performance measures it tracks for its own use and 
that are not reported in the performance and accountability reports. 

To determine the extent to which CS uses relevant data in allocating 
its resources to help achieve its strategic goals, we interviewed CS 
officials about its resource allocation process, including the use of 
the Overseas Resource Allocation Model, cost-benefit analysis, and 
other factors CS considers when making resource allocation decisions. 
We also analyzed CS activity data in conjunction with its domestic and 
foreign office staffing and budgets from 2008 through 2010. We 
analyzed the fiscal year 2011 Overseas Resource Allocation Model, 
examining the impact of market size and market structure weighting, as 
well as the weighting of the 20 individual variables used in the model 
to determine country ranking. In addition, we analyzed CS's cost-
benefit model in conjunction with staffing and activity data. We 
determined that the CS data on activities (including fee for service), 
events, budget and staffing, and performance measures were 
sufficiently reliable for the purposes of this engagement. 

We conducted this performance audit from September 2010 to September 
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. Appendix I 
contains additional details about our scope and methodology. 

Background: 

The Department of Commerce chairs the coordinating committee of 
federal trade promotion and finance agencies charged with implementing 
the NEI. CS is one of four business units within Commerce's 
International Trade Administration. The other units are Market Access 
and Compliance, Manufacturing and Services, and Import Administration. 
[Footnote 3] CS is the largest unit in terms of budget and staff, and 
about two-thirds of its staff work at posts outside the United States. 
CS's statutory purpose is to promote the export of goods and services 
from the United States, particularly by small and medium-sized 
enterprises (SME), and to advance and protect United States business 
interests abroad.[Footnote 4] While CS's mission specifically 
identifies SMEs, CS assists companies of all sizes. According to the 
U.S. Census Bureau, in calendar year 2009, the total number of 
identified U.S. export firms was about 276,000, of which over 97 
percent were SMEs. The dollar value of exports associated with the 
efforts of SMEs that year amounted to about $308 billion, which 
represented approximately one-third of the $939 billion in exports. 
[Footnote 5] 

CS Has a Global Network That Includes Domestic and Overseas Posts: 

CS employs a variety of staff in its global network. Domestically, CS 
had about 500 staff working in Washington, D.C., and throughout the 
United States in 2010. Overseas, CS mainly employs Foreign Service 
officers[Footnote 6] and locally employed staff. In 2010, CS had over 
900 staff overseas, including both Foreign Service officers and 
locally employed staff. 

* CS operates 108 domestic offices referred to as U.S. Export 
Assistance Centers. Staffed by trade specialists, and Foreign Service 
officers on domestic tours, the centers deliver the full range of 
export promotion services to U.S. companies and connect to CS's global 
network of overseas offices. The centers work cooperatively with key 
partner agencies and organizations, especially the Export-Import Bank, 
the Small Business Administration, and state trade offices. (See 
appendix II for the allocation of domestic CS staff in fiscal year 
2010, by state.) 

* CS's 125 offices in more than 75 countries promote U.S. exports and 
defend U.S. commercial interests, implementing the full range of 
Department of Commerce overseas commercial services. Foreign Service 
officers, referred to as commercial officers, manage the overseas 
offices and engage in activities requiring a U.S. official. Locally 
engaged staff, consisting of commercial specialists and commercial 
assistants, provide export promotion services to U.S. companies and 
support the commercial officers in other activities. (See appendix III 
for a table of country groupings and allocation of overseas CS staff 
in fiscal year 2010.) 

* In 45 countries where the CS has no presence, it engages in a 
Partnership Program with the State Department (State) under which 
State Foreign Service officers and locally employed staff provide some 
export promotion assistance. In September 2011, the Departments of 
Commerce and State agreed to expand the program to an additional 11 
countries. The formal Partnership Program began in January 2009; 
however, CS and State have a long history of working together because, 
for many years, commercial officers were part of State until the 
Commercial Service was established as a separate entity under Commerce 
in 1980. (See appendix IV for the locations of State Department 
partnership posts providing export promotion services.) 

* CS also operates a Trade Information Center, which serves as a 
central point of contact for U.S. exporters seeking export advice such 
as how to begin exporting; complying with trade documentation 
requirements, standards, and regulations; and accessing other U.S. 
government trade programs and resources. Additionally, CS's Advocacy 
Center, in Washington, D.C., with support from CS offices abroad, 
assists individual firms in various industry sectors competing for 
foreign government contracts. 

Commercial Service's Goals and Activities Support the National Export 
Initiative: 

CS Provides Services to U.S. Exporters, Particularly to SMEs: 

The goals and activities of the U.S. and Foreign Commercial Service 
contribute to the National Export Initiative (NEI) goal of doubling 
the dollar value of U.S. exports from $1.57 trillion in 2009 to $3.14 
trillion by the end of 2014. CS's strategic goals include expanding 
the exports of U.S. goods and services, removing obstacles to 
exporting, particularly for small and medium-sized companies, and 
advancing U.S. business interests abroad by advocating on their behalf 
and helping to remove foreign trade barriers. CS conducts a variety of 
activities to advance these goals, generally falling into four broad 
categories: (1) trade counseling, (2) fee-for-service activities, (3) 
commercial diplomacy, and (4) advocacy. In addition to these core 
activities, CS assists other U.S. agencies overseas involved in trade-
related activities, mainly at overseas posts. Our interviews with 
Foreign Service officers and locally employed staff at the six posts 
we visited indicate that counseling and fee-for-service activities are 
the primary focus of their day-to-day activities and take most of 
their time. However, CS also promotes the export success of U.S. firms 
and advances U.S. business interests abroad by helping firms overcome 
obstacles in specific markets through commercial diplomacy and by 
advocating on their behalf for foreign government contracts. When any 
CS trade-promotion activity successfully assists a U.S. company to 
export a product or service, CS staff document an "export success" 
that is verified by CS management. An export success is defined as a 
CS service, rendered by locally employed staff, Foreign Service 
officers, or U.S. Export Assistance Centers, that facilitates (1) a 
sale of a product or service; (2) a commercial agreement 
(distribution, wholesale, or joint venture); or (3) an overseas 
activity resulting in revenue for a U.S. company or its affiliate or 
subsidiary.[Footnote 7] 

Trade Counseling: 

Trade counseling involves assisting U.S. businesses in understanding 
foreign markets and developing export marketing plans, as well as 
providing information about export finance and public and private 
export promotion assistance. CS counsels thousands of firms each year, 
particularly SMEs. CS counsels firms that have never exported, as well 
as firms already exporting that want to expand their efforts to one or 
more new markets or to increase their exports to one or more markets 
where they already have a presence. (CS categorizes these types of 
firms, respectively, as new-to-export, new-to-market, and increase-to- 
market.) From 2008 through 2010, according to CS, it had approximately 
68,000 clients, and counseling activities were the primary service 
provided in over 18,000 export successes during that period. 

Fee-for-Service Activities: 

CS's fee-for-service activities include standardized services such as 
matchmaking, which CS generally refers to as a Gold Key--introducing 
U.S. businesses to qualified buyers overseas--and providing market 
intelligence such as reports on a specific foreign company, which CS 
refers to as International Company Profiles. CS also provides 
customized services such as Business Facilitation Services, Single 
Company Promotions, Customized Market Research, Trade Missions, and 
Webinars, among others. CS is authorized to charge a user fee for its 
export promotion services. Since May 2008, its standardized fees have 
been based on full-cost recovery for large companies and a lower 
amount for new-to-export SMEs. Fees for customized services also vary 
based on company size, with large companies paying more than SMEs. 
Large companies pay 100 percent of both direct and indirect costs, 
whereas SMEs pay 100 percent of direct costs but 35 percent of 
indirect costs.[Footnote 8] From fiscal year 2008 through 2010, U.S. 
firms purchased a total of 27,076 services from CS, of which 
approximately 68 percent[Footnote 9] were purchased by SMEs. CS 
collected approximately $19 million in fees for these services. 

Commercial Diplomacy: 

CS addresses a wide variety of obstacles that U.S. companies may face 
in specific markets by conducting commercial diplomacy on their 
behalf, as well as by assisting with formal efforts by the 
International Trade Administration's Market Access and Compliance unit 
to remove government-imposed barriers such as standards or technical 
barriers and subsidies. Overall, from fiscal year 2008 through 2010, 
CS successfully assisted 486 companies through commercial diplomacy 
efforts, resulting in at least $17 billion in exports.[Footnote 10] 
Commercial diplomacy occurs when CS's interactions with foreign 
governments contribute to achieve one or more of the following 
outcomes: 

* reduce, eliminate, or prevent a foreign trade barrier; 

* comply with a bilateral or multilateral trade agreement; 

* eliminate or reduce a threat to U.S. business interests; and: 

* create market opportunities. 

For example, if a company comes to CS indicating that a shipment of 
mackerel valued at $100,000 is being held by customs in a particular 
European country due to a regulation that is inconsistent with its 
international trade obligations, CS may assist the company by engaging 
the foreign government to advocate that the regulation--in this case 
requiring a European Union health certificate--is inconsistent with a 
bilateral trade agreement. If CS's diplomacy efforts are successful in 
this case, the European Union member would rescind the regulation and 
release the shipment from customs. CS could then count this case as a 
commercial diplomacy success. 

CS also assists Market Access and Compliance led teams in overcoming 
existing or potential trade barriers facing U.S. companies or 
exporters. Because of their overseas presence, CS commercial officers 
on these teams generally represent U.S. interests in interactions with 
foreign governments. In addition, these teams may work to ensure that 
U.S. exporters receive benefits of a trade agreement or avoid 
potential inconsistencies in the implementation of an agreement. For 
example, CS, in collaboration with Market Access and Compliance, might 
help a U.S. firm that is stymied by a country's arbitrary customs 
valuations that would lead to excessive tariffs on the firm's 
products. The Market Access and Compliance team, with CS playing a key 
role, would advocate on behalf of such a company in a concerted effort 
to get the country to honor its commitments under the World Trade 
Organization's Customs Valuation Agreement. From fiscal year 2008 
through 2010, Market Access and Compliance initiated 664 such cases 
and reported that it successfully resolved 248 cases with CS 
assistance. The average annual percentage of cases undertaken on 
behalf of SMEs during that period was 36 percent, and the total export 
value of the successfully closed cases was about $59 billion, 
according to Market Access and Compliance. 

Advocacy: 

CS also advocates on behalf of U.S. companies interested in competing 
for government contracts in foreign countries. This type of activity 
involves educating U.S. companies about major overseas projects and 
procurements and advocating with the foreign government on behalf of 
U.S. companies wanting to bid on such projects. As of February 2011, 
CS had a 20-person Advocacy Center in Washington, D.C., but much of 
the work takes place in the field.[Footnote 11] Advocacy activities 
are often joint efforts with the State Department because CS regularly 
engages U.S. ambassadors and other U.S government officials in efforts 
to win foreign government contracts. CS data indicate that advocacy 
efforts resulted in 108 successful outcomes out of 1,239 cases, and 
the total value of the U.S. export content of those "advocacy wins" 
was about $44 billion from fiscal year 2008 through fiscal year 2010. 

While CS advocates on behalf of companies of all sizes, advocacy 
results are mainly from large companies. For example, in fiscal year 
2010, CS advocated successfully on behalf of 50 U.S. firms, of which 6 
were SMEs. The total U.S. export content value of the 50 advocacy wins 
was about $17.1 billion, of which approximately $274 million (less 
than 1 percent of the total) reflected exports by SMEs. According to 
CS officials, SMEs generally do not seek out advocacy because the 
large government contracts are beyond their capabilities; however, 
many SMEs benefit from advocacy wins because they provide goods and 
services required by the large companies that win the contracts. 

Other Supporting-Role Activities: 

In addition to its export promotion and advocacy efforts, CS also 
supports other trade-related agencies' efforts--for example, assisting 
the U.S. Trade and Development Agency, the U.S. Trade Representative, 
and the Export-Import Bank at overseas posts. CS overseas posts also 
host important delegations, including high-level federal agency 
officials, state trade offices and associations, and congressional 
delegations, and help host other official visits. CS overseas posts 
assisted a total of 1,203 important delegations for fiscal years 2008 
through 2010. 

Important delegations of U.S. and foreign officials also visit sites 
within the United States, supported by CS's domestic staff. The U.S. 
Export Assistance Centers supported 53 visits by foreign government 
officials and 208 visits by U.S. officials from 2008 through 2010. 
[Footnote 12] The centers also direct potential exporters to other 
U.S. government assistance, such as loans provided by the Small 
Business Administration and the U.S. Export-Import Bank. In addition, 
the centers work with District Export Councils throughout the United 
States--organizations of volunteer leaders from the local business 
community, appointed by the Secretary of Commerce, including exporters 
and export service providers, who assist the centers in export 
outreach and counseling to U.S. businesses and promote numerous trade-
related activities. 

CS Goals and Activities Align with NEI Priorities, but NEI Prompted 
New Areas of Emphasis: 

We found that CS activities align with six of the NEI's eight trade 
promotion priorities, as shown in table 1. (Two other NEI priorities 
are not directly related to export promotion: increasing export credit 
and macroeconomic rebalancing, areas in which CS has no direct role.) 

Table 1: CS Activities Align with NEI Priorities: 

NEI priorities: Exports by SMEs-broadening SME awareness of and 
facilitating access to U.S. government trade promotion programs and 
services, identifying SMEs that can begin or expand exporting, 
preparing SMEs to export successfully, connecting SMEs to export 
opportunities, and supporting SMEs once they find opportunities; 
CS activities supporting NEI: Outreach activities and trade counseling-
educating firms about export opportunities and CS services, helping 
firms develop and execute international sales strategies, providing 
firms with market research and trade leads, arranging matchmaking 
meetings, and assisting firms in finding qualified agents or 
distributors. In FY 2010, more than 85 percent of companies assisted 
by CS were SMEs. 

NEI priorities: Federal export assistance-creating more opportunities 
for U.S. exporters to meet with foreign buyers either in the United 
States or overseas; 
CS activities supporting NEI: International Buyer Program-recruiting 
international buyers and distributors to attend U.S. trade shows and 
finding new international business partners for U.S. firms to meet 
with. Trade Fair Certification-certifying foreign trade fairs, and 
providing services ranging from receptions to matchmaking with foreign 
buyers. 

NEI priorities: Trade missions-increasing the number of trade missions 
(held abroad) and reverse trade missions (held in the United States); 
CS activities supporting NEI: Trade missions-CS trade professionals 
lead delegations of U.S. businesses to meet face to face with 
prescreened international business contacts overseas. 

NEI priorities: Commercial advocacy-helping level the playing field 
for U.S. businesses competing for international contracts; 
CS activities supporting NEI: Commercial advocacy-helping to level the 
playing field by assisting firms on a case-by-case basis pursue 
foreign government procurements or projects. 

NEI priorities: Reducing barriers to trade-improving market access 
overseas by opening new markets, identifying and reducing significant 
barriers to exports, and robustly enforcing trade agreements; 
CS activities supporting NEI: Reducing barriers to trade-assisting 
with formal efforts by the International Trade Administration's Market 
Access and Compliance to remove government-imposed barriers such as 
standards or technical barriers and subsidies. 

NEI priorities: Export promotion of services-building on the other 
priorities with enhanced focus on services; 
CS activities supporting NEI: Export promotion of services-
implementing an export promotion plan targeted at top services sectors 
in export value. 

Source: Commerce. 

Note: The priorities are identified in The Report to the President on 
the National Export Initiative. 

[End of table] 

Supporting the NEI has not required CS to undertake any new 
activities; however, it has prompted CS to direct more of its efforts 
toward certain markets, specific kinds of activities, NEI-priority 
sectors such as services and clean-energy technology, and firms 
currently exporting to one or two markets but capable of expanding 
into additional markets. 

* The NEI highlighted a desire to focus more U.S. export promotion 
efforts in high-growth markets in Brazil, China, and India, and next- 
tier emerging markets in Colombia, Indonesia, Saudi Arabia, South 
Africa, Turkey, and Vietnam. These were markets where CS already had a 
presence. Nevertheless, in response to the NEI, CS arranged trade 
missions to several of these markets and indicated that it would also 
increase its staff in these markets.[Footnote 13] 

* CS has also given increased attention to certain of its routine 
activities that the NEI identified as priorities; for example, CS 
increased trade missions abroad and expanded its International Buyer 
Program, which recruits qualified foreign buyers, sales 
representatives, and distributors to attend U.S. trade shows each 
year. For example, U.S. companies participating in CS trade missions 
increased from 210 in 2008 to 292 in 2010, and the number of 
International Buyer Program participants increased from 959 in 2008 to 
1,005 in 2010. CS also provided additional funds in support of these 
activities. For example, a CS official stated that Brazil--an NEI 
priority country--received additional funds to support the 
International Buyer Program. 

* The NEI also prioritized the services sector and clean-energy 
technology. In response, CS led several trade missions focused 
specifically on clean energy to China, India, Indonesia, and Mexico in 
2010. While CS has always assisted the services sector, including 
companies exporting services in information and communication 
technology, banking and finance, and logistics, the International 
Trade Administration developed an export expansion plan focusing on 
service exports to high-growth countries such as Brazil, China, and 
India and targeting the top services sectors in terms of export dollar 
value, such as construction and travel and tourism services.[Footnote 
14] 

* The NEI prompted CS to shift its focus from helping first-time 
exporters to encouraging firms already exporting, which supports NEI's 
goal of doubling the dollar value of exports in 5 years. On average, 
according to CS, achieving an export success takes longer when it 
assists new-to-export firms than when it helps new-to-market or 
increase-to-market companies expand their exporting.[Footnote 15] (See 
figure 1 for the different time frames CS estimates for achieving 
export success depending on the experience level of the exporter.) As 
a result, CS has placed more emphasis on its New Market Exporter 
Initiative, which it began in 2008.[Footnote 16] 

Figure 1: Average Time Frames Associated with Achieving Export 
Successes by Type of Exporter: 

[Refer to PDF for image: horizontal bar graph] 

Achieving export success: 
Higher 12-month yield: short time frame; 
Lower 12-month yield: longer time frame. 

Exporter by type: New-to-export: Firms making their first sale to a 
customer outside the United States; 
Time frame: approximately 26 months. 

Exporter by type: New-to-market: Companies expanding exports into an 
additional market; 
Time frame: approximately 17 months. 

Exporter by type: Increase-to-market: Companies increasing exports in 
a market where they already export; 
Time frame: approximately 10 months. 

Source: Commerce. 

[End of figure] 

Through the New Market Exporter Initiative, CS obtains information 
from partner firms that provide exporting services, such as FedEx, 
United Parcel Service, the U.S Postal Service, and the National 
Association of Manufacturers. Partner firms refer SMEs that are 
already exporting in one market to CS. CS then works with those SMEs 
to expand exporting to a second or additional market. CS has indicated 
that there are opportunity costs associated with shifting its focus in 
this way, including (1) loss of new-to-export activity in the short 
term and (2) a reduced pipeline of export-ready companies. However, to 
address these opportunity costs, CS is leveraging the resources of the 
Small Business Administration and District Export Councils by having 
them work with and support companies that are new-to-export. CS data 
indicate that the greatest number of CS export successes have come 
from firms that were increasing exports into markets where the firms 
were already exporting (increase-to-market firms). For fiscal years 
2008 through 2010, increase-to-market firms accounted for 22,372 
export successes, 60 percent of the total (see figure 2). During the 
same period, new-to-market firms produced 13,246 export successes (35 
percent), and firms that were new to exporting produced 1,732 export 
successes (5 percent). 

Figure 2: Share of Export Successes by Exporter Type, Fiscal Years 
2008-2010: 

[Refer to PDF for image: pie-chart] 

Increase-to-market: 22,372; 60%; 
New-to-market: 13,246; 35%; 
New-to-export: 1,732; 5%. 

Source: GAO analysis of CS data. 

[End of figure] 

Commercial Service Is Modifying Performance Measures to Align More 
Closely with the NEI: 

In fiscal year 2012, CS will implement revised performance measures 
that align more closely with the NEI. Although CS did not meet four of 
six performance targets in fiscal year 2010, its efforts resulted in 
increases for most of its measures as it shifted to address NEI 
priorities. CS's new revised set of performance measures for fiscal 
year 2012 addresses some past weaknesses; however, some weaknesses 
will remain--for example, underreporting of export successes, 
especially with regard to their dollar value. Accurately measuring 
performance is crucial to results-oriented management. Performance 
measures enable an organization to track progress toward its goals and 
give managers key information that can be used, among other things, to 
identify problems and take corrective action, develop strategy and 
allocate resources, recognize and reward performance, and identify and 
share effective approaches. In short, performance measures provide 
powerful incentives to influence organizational and individual 
behavior. The Government Performance and Results Act (GPRA) of 1993 
laid the foundation for results-oriented agency planning, measurement, 
and reporting in the federal government, highlighting the important 
role performance information plays in improving the efficiency and 
effectiveness of an agency.[Footnote 17] The GPRA Modernization Act of 
2010 reinforces these principles.[Footnote 18] 

CS Exceeded Past Performance for Effectiveness but Did Not Meet Most 
Targets in Fiscal Year 2010: 

CS tracked six performance measures to report on progress toward its 
goals in the Department of Commerce's Fiscal Year 2010 Performance and 
Accountability Report, as required by GPRA.[Footnote 19] CS reported 
that it exceeded targets for two of its six performance measures, 
including the measure for overall effectiveness, while it failed to 
meet targets for the other four measures (see table 2 for CS's fiscal 
year 2010 performance targets versus actual performance).[Footnote 20] 
Although CS did not meet most of its 2010 performance targets, its 
efforts still resulted in increases in the dollar value of some types 
of export successes, in the number of successes, or both. For example, 
CS reported that while it did not reach the target increase for the 
number of commercial diplomacy successes in 2010, the overall dollar 
value of those successes increased from $974 million in fiscal year 
2009 to $4.56 billion in fiscal year 2010. Likewise, although CS did 
not meet its target for advocacy wins, the number of wins increased 
from 26 in fiscal year 2009 to 50 in fiscal year 2010. CS reported 
that it missed the new-to-export target due to its shift in focus 
toward new-to-market exporters in support of the NEI's goal of 
doubling exports. Commerce noted that new exporters remain a priority 
of CS and the U.S. government. CS reported it is now referring these 
clients to the Small Business Administration and other partners so 
that CS can focus its efforts where it can best contribute to the 
goals of the NEI. 

Table 2: CS Fiscal Year 2010 Performance Measure Targets versus Actual 
Performance: 

Performance measure: 1. CS overall effectiveness (percent) (number of 
total firms CS assisted to achieve export success divided by number of 
CS active clients); 
Target: 11.0; 
Actual: 29.1; 
Status: Exceeded. 

Performance measure: 2. CS SME new-to-export effectiveness (percent) 
(number of SME new-to-export firms CS assisted to achieve export 
success divided by total change in SME exporters nationwide based on 
most recent Census data); 
Target: 12.74; 
Actual: 2.28; 
Status: Not Met. 

Performance measure: 3. CS SME new-to-market effectiveness (percent) 
(number of SME new-to-market firms CS assisted to achieve export 
success divided by number of SME firms exporting to two to nine 
markets as reported in most recent Census data); 
Target: 3.92; 
Actual: 3.11; 
Status: Not Met. 

Performance measure: 4. Number of commercial diplomacy successes; 
Target: 166; 
Actual: 112; 
Status: Not Met. 

Performance measure: 5. Increase in percent of SME firms that export 
(increase in annual growth rate of SME exporters as determined from 
Census data); 
Target: 2.80; 
Actual: 6.42; 
Status: Exceeded. 

Performance measure: 6. Percentage of advocacy bids won (number of 
advocacy wins divided by CS average annual advocacy caseload); 
Target: 17; 
Actual: 9; 
Status: Not Met. 

Source: Commerce. 

[End of table] 

Changes in Fiscal Year 2012 Performance Measures Reflect NEI Goal of 
Doubling Exports within 5 Years: 

For fiscal year 2012, CS reconfigured its 2010 GPRA measures, reducing 
the total from six to five by eliminating two measures and adding one. 
In addition to dropping the growth rate of SME exporters as determined 
by Census data, CS dropped its sole measure related to tracking new-to-
export firms, as the organization shifted its focus to new-to-market 
firms. CS also eliminated reliance on Census data for the 2012 measure 
related to new-to-market firms and modified two other measures from 
2010. One retained measure remained unchanged--the number of 
commercial diplomacy cases resolved. Finally, CS added a performance 
measure it had previously only tracked for internal reporting 
purposes: the ratio of CS export value to CS costs. (See table 3 for a 
summary of changes to CS's performance measures for 2012.) 

Table 3: Changes in CS Performance Measures, Fiscal Year 2010 versus 
2012: 

2010 measures: N/A; 
2012 measures: Ratio of CS export value to CS costs; 
Difference: New in 2012. 

2010 measures: Number of commercial diplomacy successes; 
2012 measures: Number of commercial diplomacy successes; 
Difference: Unchanged. 

2010 measures: Percentage of advocacy bids won; 
2012 measures: Dollar value of U.S. export content in advocacy cases 
won; 
Difference: Modified (changed ratio of wins/cases to dollar value of 
cases won). 

2010 measures: CS overall effectiveness; 
2012 measures: Number of clients assisted by CS; 
Difference: Modified (changed from percentage of active clients CS 
helped to achieve an export success). 

2010 measures: CS SME new-to-market effectiveness; 
2012 measures: Annual number of SMEs CS assists in exporting to a 
second or additional country; 
Difference: Modified (left out Census data as basis for comparison in 
calculating a percentage). 

2010 measures: CS SME new-to-export effectiveness; 
2012 measures: N/A; 
Difference: Eliminated. 

2010 measures: Increase in percentage of SME firms that export; 
2012 measures: N/A; 
Difference: Eliminated. 

N/A = Not applicable: 

Source: Commerce. 

[End of table] 

NEI's overarching goal is to double the total value of U.S. exports in 
5 years. The baseline against which the NEI's success is being 
measured is $1.57 trillion, which was the level of goods and services 
exported by U.S. companies in 2009; the NEI goal is to reach $3.14 
trillion in U.S. exports by the end of 2014. In February 2011, the 
Secretary of Commerce reported that exports in 2010 had increased 16.6 
percent over 2009 levels, putting the U.S. on track to achieve the 
NEI's goal. CS export promotion activities alone cannot achieve the 
NEI goal of doubling U.S. exports by the end of 2014. In 2010 CS 
export promotion activities (which do not include agriculture or 
export financing) resulted in $18.7 billion in export value. However, 
this represents about 1 percent of the $1.8 trillion in U.S. exports 
that year. Advocacy activities in which CS participated resulted in 
$17.1 billion in export value or about another 1 percent of U.S. 
exports.[Footnote 21] Commercial diplomacy contributes another $4.6 
billion in exports.[Footnote 22] Other CS statistics show that they 
support about 18,000 clients annually, which is about 7 percent of the 
approximately 276,000 firms that export, and about 1 percent of the 
approximately 27.5 million businesses in the United States. 

Compared with its 2010 performance measures, CS's 2012 measures shift 
its emphasis in two ways that are consistent with the overarching NEI 
goal of doubling the total value of U.S. exports: First, the 2012 
measures put new focus on the dollar value generated by CS's export 
promotion activities and on helping firms already exporting to expand 
to new markets rather than on helping new-to-export clients. Second, 
by tracking the number of clients assisted, CS reported that it will 
capture data reflecting its total export counseling and assistance 
efforts. These counseling and assistance efforts are a significant CS 
activity, but they may not produce an immediate export success or have 
a dollar amount attributed to them, though they often lead to CS- 
assisted export successes. (See table 4 for CS's 2012 performance 
measures with targets.) 

Table 4: CS Fiscal Year 2012 Performance Measures and Targets: 

Performance measure: 1. Ratio of CS export value to CS costs[A]; 
Target: $140. 

Performance measure: 2. Number of commercial diplomacy successes[B]; 
Target: 152. 

Performance measure: 3. Dollar value of U.S. export content in 
advocacy cases won[C]; 
Target: $19 billion. 

Performance measure: 4. Number of clients assisted by CS[C]; 
Target: 20,709. 

Performance measure: 5. Annual number of SMEs CS assists in exporting 
to a second or additional country[C]; 
Target: 3,307. 

Source: International Trade Administration. 

[A] This is a new GPRA measure for CS in fiscal year 2012; previously, 
it was tracked internally as a measure but was not included in GPRA- 
required reports. 

[B] This measure was left unchanged from CS's 2010 performance 
measures. 

[C] These measures were modified from CS's 2010 performance measures. 
See table 3. 

[End of table] 

In giving greater emphasis to the dollar value of export sales 
attributable to its assistance, CS's new measures may motivate staff 
to prioritize activities that are more likely to produce significant 
dollar value of exports. Two of CS's fiscal year 2012 measures are 
based on dollar values, whereas none of its six measures for fiscal 
year 2010 reflected dollar values. In addition, we believe the fiscal 
year 2012 measures may lessen CS's emphasis on helping SMEs. Whereas 
three out of six of CS's fiscal year 2010 measures focused primarily 
on helping SMEs, which is one piece of CS's broad statutory mission, 
only one of CS's five measures for fiscal year 2012 focuses on SMEs. 
Moreover, because advocacy and the activities of large firms generate 
a much higher dollar value of exports than export promotion activities 
of SMEs, the focus on export value also means less focus on SMEs. For 
example, in fiscal year 2010, CS data indicate that 50 advocacy wins 
generated $17.1 billion in exports and 86 percent of the wins were for 
large companies. Additionally, of the approximately 12,300 export 
successes that generated $18.7 billion in exports in 2010, about 88 
percent of the overall dollar value of those successes was for large 
companies. 

The new emphasis in CS's fiscal year 2012 performance measures 
necessitates that CS obtain the dollar value of the export successes 
that it claims. While seeking this information is not new for CS, 
previously it was not used to measure the organization's performance. 
The accuracy of this information thus takes on greater importance 
because it is now being used as a performance measure and helps 
measure CS's contribution toward the NEI's goal of doubling the value 
of U.S. exports. 

Performance Measures for Fiscal Year 2012 Partially Address Some 
Weaknesses: 

CS has implemented key elements of good performance management 
systems, including defining measures that reflect its goals, ensuring 
the accuracy of the data used in its performance reporting, and 
refining or changing performance measures in response to recognized 
weaknesses with them or because of changing priorities. For example, 
export successes, a fundamental measure of CS's performance, go 
through a multistage internal review process: Initial reviews are 
conducted in the domestic and international offices, respectively, and 
CS headquarters conducts a second review of all export successes over 
$500,000 in value on a quarterly basis. This process aims to ensure 
that each reported case meets CS's criteria for "success." CS 
management also recognizes the importance of communication as an 
important element of performance management, which it demonstrates by 
communicating its goals to staff and setting performance expectations 
in support of those goals. 

While CS's performance management system exhibits important elements 
of a good system, we also found that CS's fiscal year 2010 performance 
measures exhibit three weaknesses: (1) the use of outdated Census 
data, (2) the underreporting of export successes, and (3) the lack of 
a performance measure tied to governmentwide customer service 
standards. Below, we describe these weaknesses and the steps CS has 
taken to address the first two, while also identifying the weaknesses 
that remain in CS's modified performance measures for fiscal year 2012. 

Outdated Census Data to Compute Performance Measures: Addressed: 

Three of its fiscal year 2010 measures tied CS's success at meeting 
performance targets to volatile national economic trends, as measured 
by Census data. (See measures 2, 3, and 5 in table 2.) According to CS 
documents, the 2-year lag in available Census data caused the affected 
measures to systematically understate CS's fulfillment of its mission 
and its contribution to the U.S. government's export promotion agenda. 
CS's fiscal year 2012 performance measures eliminate this weakness; 
the fiscal year 2012 measures do not use Census data from prior years 
for comparison but rather rely solely on performance information 
generated within CS. 

Underreporting of Export Successes: Partially Addressed: 

Four of CS's fiscal year 2010 measures were calculated using export 
success data (see measures 1 to 4 in table 2). CS acknowledged that 
export successes were underreported to some extent. Underreporting 
occurred at least in part because of the difficulty of getting clients 
to provide CS information on their sales. Additionally, technical 
problems associated with Commerce's client tracking system made 
inputting export successes cumbersome and time consuming; as a result, 
some CS staff stated that they input only the minimum number of 
successes needed to meet their performance goals. Some CS staff also 
told us that, in an effort to balance administrative and client 
responsibilities, they did not always follow up with exporters to 
capture all export successes. 

CS has taken steps to address the underreporting of export successes 
and problems with its client tracking system that it hopes will make 
capturing this information easier. In May 2011, CS finalized new 
export success policy guidelines that simplify export success 
reporting by eliminating the requirement for a staff-written narrative 
and replacing it with verification from the U.S. client or foreign 
buyer to document the success. Doing so puts the responsibility on the 
clients to confirm the assistance and value that CS provides. CS also 
created a standardized reporting format to capture the relevant export 
success information. In response to identified weaknesses with its 
client tracking system, the International Trade Administration 
reported it plans to address identified problems with the system, 
although it has not begun this effort. These steps alone, however, do 
not eliminate the potential for underreporting of the dollar value of 
export successes, which assumes new importance in CS's fiscal year 
2012 performance measures. 

CS has also taken steps to prompt clients to provide sales information 
from export successes. Historically, CS has had difficulty obtaining 
the dollar value of all export successes, although clients agree to 
provide this information when signing a purchase agreement for a CS 
service. Collecting this information is wholly dependent on a client's 
willingness to provide such information. At several of the posts we 
visited, CS staff told us that some companies are reluctant to provide 
the dollar value of export successes, considering that information to 
be proprietary. To overcome the reluctance of companies to provide the 
dollar value of CS-assisted exports, CS developed a new client intake 
form, which it began using in April 2011. The form, like the purchase 
agreement, contains a statement indicating that CS "expects" clients 
to report export sales related to CS assistance. While this may 
improve the situation because the statement is up-front and explicit, 
the problem may persist for several reasons. First, this statement on 
the intake form is not a binding requirement. Second, CS data indicate 
approximately 34 percent of CS's export successes from 2008 through 
2010 had no dollar value; nearly 25 percent of these export successes 
were attributed solely to counseling, for which CS does not collect a 
fee. Thus, the clients receiving counseling would not see or sign the 
new intake form. And third, although clients obtaining fee-based 
services from CS sign a purchase agreement, which includes a clause 
about reporting export results or feedback, many companies have not 
complied with the requirement, and CS has not strictly enforced it as 
businesses are sensitive about disclosing such information. Therefore, 
it is unclear that the new effort to collect this information will 
produce any change, and the problem of underreporting the value of 
CS's export assistance through fee-based services may remain. 

Reporting on Customer Service Satisfaction: Partially Addressed: 

None of CS's fiscal year 2010 GPRA performance measures reflected 
governmentwide management priorities, such as quality, timeliness, 
cost of service, and customer and employee satisfaction. Internally, 
CS tracks survey data from its customers regarding their satisfaction 
with its fee-for-service and counseling activities. For example, CS's 
annual customer satisfaction survey in 2009 and 2010 indicated that 84 
percent and 82 percent of respondents, respectively, were very 
satisfied or satisfied with the service they received from CS, 
although the response rates to its surveys were low--10 percent and 19 
percent, respectively. CS reported this information in its annual 
report for 2010; however, it omitted the margin of error and 
confidence level along with the low response rate, potentially 
misleading readers of its report about clients' level of satisfaction 
with CS services. One of CS's new measures for fiscal year 2012 
includes a cost component--reporting the ratio of export value to 
costs of export promotion efforts, which creates a cost-versus-benefit 
measure. If the measure reported a ratio of number of services 
relative to costs, it would be an efficiency measure reflecting total 
cost of service.[Footnote 23] 

Recently, both Congress and the President have made customer service a 
governmentwide priority. The GPRA Modernization Act of 2010, which 
became effective in January 2011 and is being fully implemented 
starting in fiscal year 2012, requires that agencies establish a 
balanced set of performance indicators including, as appropriate, 
customer service standards.[Footnote 24] On April 27, 2011, the 
President directed agencies of the U.S. government to put more 
emphasis on streamlining service delivery and improving customer 
service.[Footnote 25] Among other requirements, the executive order 
directs agencies to set clear customer service standards and 
expectations, including, where appropriate, performance goals for 
customer service required by the GPRA Modernization Act of 2010. CS is 
aware of this new requirement, although its 2012 GPRA performance 
measures currently do not include a metric addressing the requirement. 

Commercial Service's Resource Allocation Process Does Not Make Full 
Use of Relevant Information to Guide Its Decisions: 

Systematic use of economic, performance, and activity data can help CS 
allocate resources to achieve its goals more efficiently and 
effectively. In general, optimal resource allocation requires that 
managers monitor the economic environment, operational costs, and 
performance to identify strategic advantages that can be gained by 
realigning resources.[Footnote 26] In keeping with good management 
practices when making resource allocation decisions, CS is using a 
data-driven process to prioritize foreign markets (and domestic 
locations) and to help it allocate its staff and other resources to 
meet its performance goals and to support NEI objectives. CS is in the 
process of adjusting to staff levels that are significantly smaller 
than in 2004 and addressing resource management challenges. Our 
analysis of the quantitative parts of the process found that there may 
be opportunities to reallocate overseas resources to better reflect 
NEI priorities and better achieve CS's new performance goals. 
Furthermore, important available data related to some CS performance 
goals and activities are not systematically considered in the current 
process. 

CS Has a Data-Driven Process to Inform Its Resource Allocation 
Decisions: 

In making resource allocation decisions, CS management considers a 
combination of quantitative and qualitative factors to determine the 
number and type of staff at overseas posts and domestic offices. In 
response to our previous report, CS is updating and reinstituting a 
data-driven process that it last used in fiscal year 2007.[Footnote 
27] CS management does not have a formal process for analyzing how CS 
staff should be allocated between the overseas, domestic, and 
headquarters locations. The overall needs of the organization are 
assessed as part of general workforce planning, which is undergoing 
changes in response to our recommendations in 2010. CS management has 
reviewed the budget and activities of its headquarters units as part 
of its ongoing efforts to improve operations. About 70 percent of CS 
staff is located overseas, about 17 percent is in domestic field 
offices, and about 12 percent is at headquarters in Washington, D.C. 

Overseas Resource Allocation Process: 

With regard to overseas field staff, CS starts with its existing 
allocation of more than 900 staff across the more than 75 countries 
and then goes through a three-step process to adjust the allocation of 
staff depending on available resources. CS managers first consider an 
Overseas Resource Allocation Model that assesses market potential; the 
model ranks countries and is the starting point for CS management 
prioritizing which staff and posts should get more resources and which 
ones could be cut. Second, CS managers then consider a cost-benefit 
model that also produces rankings to ascertain how posts compare in 
terms of relative expense and productivity. Third, CS management 
additionally evaluates qualitative factors such as foreign and trade 
policy priorities in making adjustments to the models' strictly 
quantitative rankings. CS managers use their professional judgment in 
balancing the results of the three-step process, arriving at a final 
proposal that is sent to the management of the International Trade 
Administration. It is not clear how managers balance the market 
potential and cost-benefit rankings; however, our discussions with a 
high-ranking CS official indicated that cost-benefit rankings were 
given less weight. All decisions to hire new staff and where to place 
them are reviewed by the International Trade Administration. Proposals 
to open and close posts are reviewed by the International Trade 
Administration and at the department level and then by the Office of 
Management and Budget, as part of the annual appropriation process. 
Furthermore, changes in the number of CS officers or locally engaged 
staff at a post must be approved by the Chief of Mission to a foreign 
country, who has responsibilities for managing and supporting U.S. 
government personnel overseas. 

* Overseas model. The Overseas Resource Allocation Model includes 
factors associated with market structure and size. Market structure 
captures the impact of variables representing such factors as the 
openness of a market, the level of development and country risk, and 
other factors that measure the level of difficulty that U.S. 
businesses may have in marketing their goods and services. The more 
open a country's market structure, the higher its ranking and the more 
likely it is to get resources. Market size relates to the scale of 
export opportunity for U.S. firms related to a particular country and 
includes such measures as a country's total imports, gross domestic 
product, and investment flows. Larger markets are generally ranked 
higher. In general, CS's model is weighted 60 percent toward market 
structure and 40 percent toward market size. While most of the model's 
20 variables are based on historical trade data, a few are based on 
projections, including estimates of future imports by a trading 
partner.[Footnote 28] A score for each country is computed based on a 
percentage of the total market potential, and the countries are ranked 
accordingly. (See appendix V for the average annual U.S. exports to 
partner countries for calendar years 2008 through 2010, by country 
groupings.) 

We analyzed the degree to which the overseas model's export potential 
scores were generally consistent with NEI priorities. While the NEI 
gives highest priority to high-growth and next-tier emerging markets, 
the outcome of the fiscal year 2011 Overseas Resource Allocation Model 
showed that traditional markets--the European Union 15 and 
Japan,[Footnote 29] and free trade agreement (FTA) countries--still 
represent high export potential for U.S. companies (see figure 3); 
this can be seen in terms of average country scores (1.39 and 0.84, 
respectively) and in the combined shares of the traditional market 
groups (35 percent in the pie chart in figure 3). It also showed that 
on average the next-tier emerging markets have a lower market 
potential score (0.67), and thus may require a longer-term outlook and 
would contribute less toward short-term goals like doubling U.S. 
exports by 2014. All "other" countries ranked in the model also had 
low average scores, though as a grouping they account for a large 
share of the total (54 percent) because of the large number of 
countries in the group. The overlapping ranges of individual country 
scores show that the market potential within many groupings varies 
significantly. 

Figure 3: Fiscal Year 2011 Market Potential Scores by Market Group: 

[Refer to PDF for image: plotted point graph and pie-chart] 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Average percentage score: 1.68%; 
Share of total: 7%. 

Next-tier emerging markets (6 countries); 
Average percentage score: 0.67%; 
Share of total: 4%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Average percentage score: 0.84%; 
Share of total: 14%. 

EU 15 and Japan (15 countries); 
Average percentage score: 1.39%; 
Share of total: 21%. 

Export market group: Other: 

Other CS posts (39 countries); 
Average percentage score: 0.69%; 
Share of total: 27%. 

Other State Department partnership posts (41 countries); 
Average percentage score: 0.51%; 
Share of total: 21%. 

Market without CS or State Dept. partnerships (13 countries); 
Average percentage score: 0.48%; 
Share of total: 6%. 

* High-growth and EU15 and Japan have highest average market potential; 
* Significant overlap in range of High-growth and Traditional markets 
shows similar export potential; 
* Traditional markets comprise a much larger share than NEI priority; 
* Cumulative potential score of Other 93 markets is largest share. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group indicates the 
number for which CS scored in its model. 

[End of figure] 

* Cost-benefit model. CS's cost-benefit model seeks to measure the 
cost effectiveness of posts in the more than 75 countries where CS 
operates. In contrast to the Overseas Resource Allocation Model, which 
seeks to establish market potential, this model seeks to capture 
actual CS results. A cost-benefit score is calculated using a weighted 
measure based on the number and value of export successes in each 
country, as well as the cost of operating in that country over a 5-
year period. Costs of CS posts, which include operational and 
administrative costs such as salaries, rents, and utilities, can vary 
considerably by country. The benefit component of the model gives four 
times more weight to the number of export successes than to their 
dollar value because not every export success has a dollar value 
associated with it. CS management uses the cost-benefit model's 
rankings to ascertain how posts compare in terms of relative expense 
and productivity. 

We analyzed the cost-benefit scores used by CS in fiscal years 2006- 
2009. Next-tier emerging markets have better (higher) cost-benefit 
scores on average (1.93) when compared with other groups (see figure 
4). Average scores for the other country groupings are lower, and 
there is a wide range of scores for the 37 other CS posts, with the 
United Arab Emirates ranking highest in the group (9.44 percent) and 
Libya lowest (0.13 percent). We also looked at costs and benefits 
separately. The average number of export successes in high-growth 
countries reported by CS (485 successes) was at least twice as large 
as the average for any other market group, but there was also a wide 
range among countries in several of the groups (see figure 5). The 
share of total export successes (26 percent) was lowest for NEI 
priority (high-growth and next-tier) markets and highest for 
traditional markets (38 percent). We discuss costs later in this 
report. 

Figure 4: Cost-Benefit Scores by Market Group, Annual Average, Fiscal 
Years 2006-2009: 

[Refer to PDF for image: plotted point graph] 

Higher percentage is better: 

Export market group: NEI priority: 

High-growth markets (4 countries); 
Average percentage score: 1.14%. 

Next-tier emerging markets (6 countries); 
Average percentage score: 1.93%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Average percentage score: 1.09%. 

EU15 and Japan (15 countries); 
Average percentage score: 0.67%. 

Export market group: Other: 

Other CS posts (39 countries); 
Average percentage score: 1.54%. 

* Next-tier emerging markets have highest average cost-benefit scores; 
* EU15 and Japan have the lowest average cost-benefit scores; 
* Some countries in Other CS markets have very high cost-benefit 
scores. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group indicates the 
number for which CS scored in its model. 

[End of figure] 

Figure 5: Number of Export Successes by Market Group, Annual Average, 
Fiscal Years 2008-2010: 

[Refer to PDF for image: plotted point graph and pie-chart] 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Number of export successes: 485; 
Share of total: 16%. 

Next-tier emerging markets (6 countries); 
Number of export successes: 195; 
Share of total: 10%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Number of export successes: 147; 
Share of total: 20%. 

EU 15 and Japan (15 countries); 
Number of export successes: 148; 
Share of total: 18%. 

Export market group: Other: 

Other CS posts (39 countries); 
Number of export successes: 107; 
Share of total: 34%. 

Other State Department partnership posts (41 countries); 
Number of export successes: 6; 
Share of total: 2%. 

Market without CS or State Dept. partnerships (13 countries); 
Number of export successes: 4. 

* High-growth markets produce at least twice as many export successes 
on average as any other group; 
* Other markets produce the lowest number of export successes on 
average, but the range among individual countries is great; 
* The share of export successes was lowest for NEI priority markets. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group indicates the 
number for which CS had data. 

[End of figure] 

* Qualitative factors (overseas). CS considers various qualitative 
factors, including foreign policy and trade policy priorities, level 
of economic development, geographic coverage, and commercial 
environment. For example, CS opened an office in Afghanistan in 2010 
in order to help support U.S. foreign policy efforts to develop the 
local economy. 

Domestic Resource Allocation Process: 

CS managers go through a similar process for allocating over 280 staff 
among 108 domestic offices in all 50 states except Delaware and 
Wyoming. Puerto Rico, a U.S. territory, is also included as a domestic 
location. A quantitative domestic model ranks locations to identify 
those with the highest export potential. CS then considers qualitative 
factors. While the model takes into account export successes (a 
measure of benefit), there is no similar consideration of costs in the 
domestic resource allocation process. 

* Domestic model. The Domestic Resource Allocation Model uses a mix of 
quantitative factors to rank the U.S. metropolitan statistical areas 
(MSA)[Footnote 30] based on the export potential of the small and 
medium-sized businesses located in each area. The model relies 
primarily on an export intensiveness factor calculated for each of 60 
industry sectors based on each industry's level of exporting activity, 
with greater weight given to industries with higher levels of 
exporting. Two other variables are also used in the model--the SME 
percent growth indicator and SME absolute growth indicator, both of 
which are based on forecasted data at the MSA level. The model then 
uses Census Bureau county-level data on small and medium-sized 
businesses--including both manufacturing and services, as well as 
exporters and nonexporters--and applies export intensiveness factors 
to the industry groups within each MSA. The MSAs are then ranked by 
the resulting weighted SME count. 

* Qualitative factors (domestic). CS considers policy priorities, 
whether a location is a hub for international business activity, 
availability of alternative services, and whether a location 
encompasses an industry that the International Trade Administration or 
the administration has identified as a priority. In some cases, these 
qualitative factors lead CS to change how resources would be allocated 
based strictly on the quantitative results of the Domestic Resource 
Allocation Model. 

CS Is Still Responding to Resource Management Challenges: 

Given the current budget pressures of the federal government, CS 
management faces tough decisions about how best to allocate existing 
resources. We previously reported that CS had management control 
weaknesses with regard to its resources from 2004 to 2009. During that 
period, CS's budgets remained essentially flat while per capita 
personnel costs and administrative costs increased. CS's workforce 
declined almost 14 percent through attrition, and, in response to the 
"crisis" situation, hiring, travel, training, and supplies were 
frozen, compromising CS's ability to conduct its core business. 
[Footnote 31] Requested funding increases never materialized, and CS 
has not been able to rebuild its workforce as it had planned. 

As a result, CS's current distribution of overseas resources in fiscal 
year 2010 largely reflects this attrition and its 2007 
Transformational Commercial Diplomacy initiative, which emphasized 
emerging markets. The focus under Transformational Commercial 
Diplomacy was to move resources from well-developed markets to high-
growth markets such as Brazil, China, and India that would be 
increasingly important to future opportunities for U.S. business. 
Under the initiative, 23 offices, mainly in Europe, were closed, but 
the overall size of CS remained the same as it shifted resources to 
emerging markets. CS's constrained resources limited its ability to 
continue moving staff. However, in an effort to support the NEI, CS 
moved 15 staff from headquarters to domestic offices. Though CS also 
hired 17 new Foreign Service officers in 2010, it has not been able to 
fully staff all of its posts even in high-priority countries. For 
example, CS China had a 27 percent vacancy rate in 2010. CS received 
its fiscal year 2011 funding in April, and officials were considering 
what reallocations could be made before the end of the fiscal year. CS 
is also considering whether it could sustain a presence in more than 
75 countries given its level of resources. CS's fiscal year 2012 
funding is still under consideration in Congress. A senior CS official 
told us they plan to have its repositioning strategy implemented in 
fiscal year 2012 and its new structure in place in fiscal year 2013. 
[Footnote 32] 

CS's distribution of staff shows that a significant proportion of its 
staff resources go to countries that are not NEI priority countries; 
currently, about one-third of CS's overseas staff is in NEI priority 
countries, a little over a third is in traditional markets, and one- 
third is in "other" countries (see pie chart in figure 6). High-growth 
markets have the most average staff per country (41). We found that 
the current distribution of CS staff closely mirrors key indicators of 
market size--U.S. exports to a trading partner and total imports by 
the trading partner. As noted, the Overseas Resource Allocation Model 
gives greater weight to market structure variables, and therefore, CS 
decisions to shift resources in the future may favor countries with 
higher market structure rankings. 

Figure 6: Total CS Staff by Market Group, Annual Average, Fiscal Years 
2008-2010: 

[Refer to PDF for image: plotted point graph and pie-chart] 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Number: 41; 
Share of total: 21%. 

Next-tier emerging markets (6 countries); 
Number: 13; 
Share of total: 10%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Number: 8; 
Share of total: 17%. 

EU 15 and Japan (15 countries); 
Number: 10; 
Share of total: 20%. 

Export market group: Other: 

Other CS posts (39 countries); 
Number: 6; 
Share of total: 32%. 

* High-growth markets have the most CS staff on average; 
* Total CS staff are more or less evenly split between NEI priority, 
Traditional markets, and Other. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group includes those 
without CS staff. Such countries were given a zero value. 

[End of figure] 

CS's resources include more than staff, though they are the biggest 
component of the CS budget, and human capital costs vary by location. 
Thus, we also reviewed the distribution of CS's overseas funding and 
found that it follows a different pattern from staffing. High-growth 
markets get the largest average budgets ($3.2 million). Almost half of 
total CS post funding goes to traditional markets, and less than one- 
third goes to NEI priority markets (see pie chart in figure 7). The 
upper ranges of traditional export markets show that some of these 
countries have relatively high costs. These results suggest that CS 
management may need to give more consideration to what proportion of 
their staff and funding should be allocated to NEI priority countries 
and traditional markets versus other CS countries. 

Figure 7: Total CS Budget by Market Group, Annual Average, Fiscal 
Years 2008-2010: 

[Refer to PDF for image: plotted point graph and pie-chart] 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Budget: $3.2 million; 
Share of total: 19%. 

Next-tier emerging markets (6 countries); 
Budget: $1.0 million; 
Share of total: 9%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Budget: $0.6 million; 
Share of total: 15%. 

EU 15 and Japan (15 countries); 
Budget: $1.5 million; 
Share of total: 33%. 

Export market group: Other: 

Other CS posts (39 countries); 
Budget: $0.4 million; 
Share of total: 25%. 

* High-growth markets had the highest average budgets; 
* 48% of CS’s budget went to Traditional markets, which was the 
largest share; 
* 28% of CS’s budget went to NEI priority markets. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group includes those 
without a CS budget. Such countries were given a zero value. 

[End of figure] 

Additional Data Are Available to Improve Resource Allocation Decisions: 

We found that CS's resource allocation decision making could be 
enhanced by including three types of relevant information. First, 
refined and simplified data variables could be added to the Overseas 
Resource Allocation Model to differentiate more sharply among 
countries when ranking countries by U.S. export promotion potential. 
Second, data on commercial diplomacy successes and advocacy wins would 
add relevant information when considering costs and benefits at 
various posts; these benefits are not systematically considered in 
resource allocation decision making, even though they are integrated 
into CS objectives and performance measures. And third, to enable 
managers to assess relative workloads and efficiency in making 
resource allocation decisions and calculating costs, CS could include 
data on activities that consume considerable staff time and resources, 
including fee-for-service sales, trade-counseling sessions, requests 
for advocacy and commercial diplomacy, and other support functions 
such as organizing and hosting visits by delegations to overseas posts 
and domestic locations. 

Refined Data Variables for the Overseas Resource Allocation Model to 
Capture Export Potential: 

CS uses its Overseas Resource Allocation Model to reflect the 
potential of export markets, which it considers in conjunction with 
the historical information on the performance of each overseas post in 
the cost-benefit model. We assessed the fiscal year 2011 Overseas 
Resource Allocation Model and found that the rankings generated by the 
model closely approximated the rankings obtained using only the 
historical imports variable for each country. The overseas model as 
currently constructed includes 5 of 20 variables that are designed to 
incorporate projections of future conditions, but these variables 
comprise only 25 percent of the market potential score in the model. 
In addition, these 5 variables only project a maximum of 3 years into 
the future. While projections and indicators of the future economic 
performance of countries necessarily involve uncertainty, the Overseas 
Resource Allocation Model, though designed to reflect export 
potential, currently gives greater weight to historical variables that 
have a high degree of overlap with the other historical inputs in the 
resource allocation process. 

In addition, the large number of variables also creates complexity 
without obvious benefits, as we found a significant statistical 
correlation (covariance) among the overseas model's 20 variables, such 
as between U.S. market share, average fixed investment, average annual 
gross domestic product (GDP), and per capita GDP. Four variables were 
statistically insignificant regarding their individual impact on a 
country's export-potential ranking. Furthermore, the current 
selection, number, and weighting of the variables result in a tight 
distribution of country scores. Over half the countries ranked by CS 
have scores of less than one-half a percent and are within one-quarter 
percent of each other's scores. (See figure 8.) CS management told us 
CS uses the model to help it differentiate the export potential of its 
overseas locations, especially those with lower rankings, but the 
current model provides limited differentiation of those countries 
where CS told us the model would be of most value. 

Figure 8: Distribution of Individual Country CS Market Potential 
Scores, Fiscal Year 2011: 

[Refer to PDF for image: plotted point graph] 

Country: China; 
Market potential score: 2.84%. 

Country: United Kingdom; 
Market potential score: 2.79%. 

Country: Japan; 
Market potential score: 2.52%. 

Country: Canada; 
Market potential score: 2.43%. 

Country: Germany; 
Market potential score: 2.33%. 

Country: France; 
Market potential score: 1.89%. 

Country: Netherlands; 
Market potential score: 1.77%. 

Country: Hong Kong; 
Market potential score: 1.64%. 

Country: Singapore; 
Market potential score: 1.62%. 

Country: Mexico; 
Market potential score: 1.46%. 

Country: Switzerland; 
Market potential score: 1.43%. 

Country: Korea (South); 
Market potential score: 1.3%. 

Country: India; 
Market potential score: 1.28%. 

Country: Australia; 
Market potential score: 1.23%. 

Country: Taiwan; 
Market potential score: 1.17%. 

Country: Italy; 
Market potential score: 1.14%. 

Country: Belgium; 
Market potential score: 1.14%. 

Country: Sweden; 
Market potential score: 1.1%. 

Country: Spain; 
Market potential score: 1.08%. 

Country: United Arab Emirates; 
Market potential score: 1.06%. 

Country: Norway; 
Market potential score: 1.05%. 

Country: Ireland; 
Market potential score: 1.04%. 

Country: Austria; 
Market potential score: 1.04%. 

Country: Qatar; 
Market potential score: 0.97%. 

Country: Denmark; 
Market potential score: 0.97%. 

Country: Brazil; 
Market potential score: 0.96%. 

Country: Malaysia; 
Market potential score: 0.9%. 

Country: Russia; 
Market potential score: 0.89%. 

Country: Saudi Arabia; 
Market potential score: 0.85%. 

Country: Finland; 
Market potential score: 0.85%. 

Country: New Zealand; 
Market potential score: 0.83%. 

Country: Thailand; 
Market potential score: 0.82%. 

Country: Chile; 
Market potential score: 0.81%. 

Country: Poland; 
Market potential score: 0.79%. 

Country: Israel; 
Market potential score: 0.77%. 

Country: Panama; 
Market potential score: 0.76%. 

Country: Iceland; 
Market potential score: 0.76%. 

Country: Slovak Republic; 
Market potential score: 0.76%. 

Country: Czech Republic; 
Market potential score: 0.75%. 

Country: Hungary; 
Market potential score: 0.74%. 

Country: Kuwait; 
Market potential score: 0.74%. 

Country: Turkey; 
Market potential score: 0.73%. 

Country: Oman; 
Market potential score: 0.72%. 

Country: Bahrain; 
Market potential score: 0.71%. 

Country: Slovenia; 
Market potential score: 0.71%. 

Country: Estonia; 
Market potential score: 0.69%. 

Country: Tunisia; 
Market potential score: 0.67%. 

Country: Portugal; 
Market potential score: 0.65%. 

Country: Trinidad and Tobago; 
Market potential score: 0.65%. 

Country: Lithuania; 
Market potential score: 0.65%. 

Country: Indonesia; 
Market potential score: 0.64%. 

Country: Philippines; 
Market potential score: 0.63%. 

Country: South Africa; 
Market potential score: 0.62%. 

Country: Cyprus; 
Market potential score: 0.62%. 

Country: Brunei; 
Market potential score: 0.61%. 

Country: Bahamas; 
Market potential score: 0.61%. 

Country: Peru; 
Market potential score: 0.61%. 

Country: Latvia; 
Market potential score: 0.6%. 

Country: Vietnam; 
Market potential score: 0.6%. 

Country: Barbados; 
Market potential score: 0.6%. 

Country: Mauritius; 
Market potential score: 0.6%. 

Country: Mongolia; 
Market potential score: 0.59%. 

Country: Botswana; 
Market potential score: 0.59%. 

Country: Egypt; 
Market potential score: 0.59%. 

Scores between 0.58 and 0.33: About half of all countries ranked have 
scores within 0.25 of each other. The concentration of countries in 
this range makes it difficult to discriminate between these countries 
using just their market potential scores. 

Country: Colombia; 
Market potential score: 0.58%. 

Country: Bulgaria; 
Market potential score: 0.58%. 

Country: Morocco; 
Market potential score: 0.58%. 

Country: Malta; 
Market potential score: 0.56%. 

Country: Jordan; 
Market potential score: 0.56%. 

Country: Romania; 
Market potential score: 0.56%. 

Country: Libya; 
Market potential score: 0.56%. 

Country: Costa Rica; 
Market potential score: 0.55%. 

Country: Iraq; 
Market potential score: 0.55%. 

Country: Kazakhstan; 
Market potential score: 0.55%. 

Country: Namibia; 
Market potential score: 0.55%. 

Country: Georgia; 
Market potential score: 0.55%. 

Country: Ghana; 
Market potential score: 0.55%. 

Country: Ukraine; 
Market potential score: 0.55%. 

Country: Croatia; 
Market potential score: 0.54%. 

Country: Turkmenistan; 
Market potential score: 0.54%. 

Country: Angola; 
Market potential score: 0.54%. 

Country: Uruguay; 
Market potential score: 0.54%. 

Country: Cambodia; 
Market potential score: 0.53%. 

Country: Nigeria; 
Market potential score: 0.52%. 

Country: Azerbaijan; 
Market potential score: 0.52%. 

Country: Greece; 
Market potential score: 0.52%. 

Country: Zambia; 
Market potential score: 0.52%. 

Country: Liberia; 
Market potential score: 0.52%. 

Country: Congo (Democratic Republic); 
Market potential score: 0.51%. 

Country: Venezuela; 
Market potential score: 0.51%. 

Country: Fiji; 
Market potential score: 0.51%. 

Country: Montenegro; 
Market potential score: 0.51%. 

Country: Albania; 
Market potential score: 0.5%. 

Country: Argentina; 
Market potential score: 0.5%. 

Country: Gabon; 
Market potential score: 0.5%. 

Country: Macedonia; 
Market potential score: 0.5%. 

Country: Algeria; 
Market potential score: 0.5%. 

Country: Dominican Republic; 
Market potential score: 0.5%. 

Country: Gambia; 
Market potential score: 0.49%. 

Country: Serbia; 
Market potential score: 0.49%. 

Country: Honduras; 
Market potential score: 0.48%. 

Country: Lebanon; 
Market potential score: 0.48%. 

Country: Paraguay; 
Market potential score: 0.47%. 

Country: El Salvador; 
Market potential score: 0.47%. 

Country: Bolivia; 
Market potential score: 0.47%. 

Country: Senegal; 
Market potential score: 0.46%. 

Country: Belize; 
Market potential score: 0.45%. 

Country: Mozambique; 
Market potential score: 0.45%. 

Country: Guatemala; 
Market potential score: 0.45%. 

Country: Cote d'Ivoire; 
Market potential score: 0.45%. 

Country: Mauritania; 
Market potential score: 0.45%. 

Country: Sri Lanka; 
Market potential score: 0.45%. 

Country: Mali; 
Market potential score: 0.44%. 

Country: Rwanda; 
Market potential score: 0.44%. 

Country: Cameroon; 
Market potential score: 0.44%. 

Country: Pakistan; 
Market potential score: 0.44%. 

Country: Benin; 
Market potential score: 0.44%. 

Country: Afghanistan; 
Market potential score: 0.44%. 

Country: Uzbekistan; 
Market potential score: 0.44%. 

Country: Kenya; 
Market potential score: 0.43%. 

Country: Bosnia and Herzegovina; 
Market potential score: 0.43%. 

Country: Bangladesh; 
Market potential score: 0.43%. 

Country: Tanzania; 
Market potential score: 0.43%. 

Country: Swaziland; 
Market potential score: 0.42%. 

Country: Jamaica; 
Market potential score: 0.42%. 

Country: Lesotho; 
Market potential score: 0.42%. 

Country: Burkina Faso; 
Market potential score: 0.41%. 

Country: Uganda; 
Market potential score: 0.4%. 

Country: Ecuador; 
Market potential score: 0.4%. 

Country: Madagascar; 
Market potential score: 0.38%. 

Country: Nicaragua; 
Market potential score: 0.38%. 

Country: Haiti; 
Market potential score: 0.36%. 

Country: Guinea; 
Market potential score: 0.35%. 

Country: Malawi; 
Market potential score: 0.35%. 

Country: Ethiopia; 
Market potential score: 0.33%. 

Source: GAO analysis of Department of Commerce data. 

[End of figure] 

Data on Commercial Diplomacy Successes and Advocacy Wins: 

We found that CS does not systematically use available data on the 
number and value of commercial diplomacy successes or advocacy wins in 
considering costs and benefits at various posts. These are important 
benefits and are reflected in CS objectives and performance measures, 
but they are not systematically considered in CS's resource allocation 
decision-making process. Only export successes are considered in 
measuring the benefits a CS country generated. In 2010, CS reported 
112 commercial diplomacy successes valued at $4.6 billion in exports, 
approximately 50 advocacy wins valued at $17.1 billion, and 12,300 
export successes valued at $18.7 billion. Because of their high dollar 
value relative to export successes, including commercial diplomacy 
successes and advocacy wins could have a large impact on CS 
management's cost-benefit calculations and therefore potentially 
affect its decisions on allocating resources among posts and whether a 
post is worth the expense of operating it. High-growth markets showed 
the highest average number of commercial diplomacy successes per year 
(5), as shown in figure 9. However, though the average for the EU15 
and Japan was lower (3), the range in that market group was large, and 
Japan had the highest number per year (18) of all countries.[Footnote 
33] Nevertheless, the largest share of commercial diplomacy successes 
comes from the 39 "other" CS post countries (see the pie chart in 
figure 9); for advocacy wins, however, next-tier emerging markets, on 
average, showed the largest dollar value of advocacy wins ($844 
million), followed by high-growth and "other" CS countries (see figure 
10). While countries in the "other" categories might not be ranked 
highly in the Overseas Resource Allocation Model, they accounted for 
55 percent of advocacy wins by country group over the same period. 
Thus, if advocacy wins are factored into resource allocation decision 
making, the importance and value of some "other" CS markets may 
increase. 

Figure 9: Number of Commercial Diplomacy Successes, Annual Average, 
Fiscal Years 2008-2010: 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Number: 5; 
Share of total: 13%. 

Next-tier emerging markets (6 countries); 
Number: 3; 
Share of total: 10%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Number: 1; 
Share of total: 15%. 

EU 15 and Japan (15 countries); 
Number: 2; 
Share of total: 18%. 

Export market group: Other: 

Other CS posts (39 countries); 
Number: 2; 
Share of total: 41%. 

* High-growth markets have the highest average of commercial diplomacy 
successes; 
* The largest share of Commercial Diplomacy Successes come from Other 
CS Posts. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group includes those 
without commercial diplomacy successes. Such countries were given a 
zero value. 

[End of figure] 

Figure 10: Value of Advocacy Wins by Market Group, Annual Average, 
Fiscal Years 2008-2010: 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Value: $300; 
Share of total: 7%. 

Next-tier emerging markets (6 countries); 
Value: $844; 
Share of total: 29%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Value: $82; 
Share of total: 8%. 

EU 15 and Japan (15 countries); 
Value: $16; 
Share of total: 1%. 

Export market group: Other: 

Other CS posts (39 countries); 
Value: $145; 
Share of total: 32%. 

Other State Department partnership posts (41 countries); 
Value: $75; 
Share of total: 17%. 

Market without CS or State Dept. partnerships (13 countries); 
Value: $82; 
Share of total: 6%. 

* NEI priority markets had the highest value advocacy wins on average; 
* The range within Other CS and Other State Department partnership 
posts is very high; 
* Traditional markets have a small share of the total value of 
advocacy wins. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group includes those 
without advocacy wins. Such countries were given a zero value. 

[End of figure] 

Activity Data: 

In making resource allocation decisions, CS does not systematically 
consider activity data, including data on fee-based services such as 
trade missions, trade-counseling sessions, requests for advocacy and 
commercial diplomacy, hosting official visits, and supporting other 
trade-related agencies. CS does not collect systematic information on 
how CS staff divide their time to carry out mission-critical 
activities. Such information would enable managers to assess relative 
workloads and efficiency in making resource allocation decisions and 
calculating program costs.[Footnote 34] This information could also be 
used to inform management decisions about setting performance targets, 
determining the best mix of staff (Foreign Service officers versus 
locally employed staff) at specific posts, prioritizing cost 
reductions, and deciding what fees should be charged for which 
services. For example, if CS determined that a post had a high need 
for services and little need for advocacy on behalf of U.S. companies, 
the post could be staffed with more locally employed personnel and 
fewer Foreign Service officers, thus reducing the cost of the office 
while maintaining, or improving, its productivity.[Footnote 35] 

Five examples follow to illustrate how activity data could help inform 
resource management decisions. First, CS's fee-for-service data could 
be used to determine whether resources should be shifted to markets 
with growing demand, regardless of whether those markets are 
designated as NEI priorities. CS data we analyzed showed that about 
three-fourths of services are sold to non-NEI priority countries (see 
figure 11). However, it is not clear whether these data reflect 
customer demand alone, or whether to some extent they also reflect 
demand resulting from customers who were redirected to countries where 
CS had available resources, when the customers' initially requested 
country could not accommodate their request for assistance. Some staff 
in our field visits told us there are times they have to delay or turn 
away a request for services, like a Gold Key (introducing U.S. 
businesses to qualified buyers overseas), and that sometimes staff at 
a U.S. Export Assistance Center will then refer the exporter to 
another country where CS staff are not as busy. High-growth markets 
averaged 309 services sold per country, while the free trade agreement 
partners averaged about 101 and the EU15 and Japan averaged about 71 
services sold per country (see figure 11). However, when evaluating 
average sales per each country's staff, free trade agreement countries 
(15 products sold per staff) are by far more productive than high-
growth markets (see figure 12), which have many more staff per post. 
Analyzing data on fee-for-service activities could help CS management 
understand these productivity differences and the capacity of 
particular posts to deliver certain services, and the analysis in turn 
could help CS determine where its limited resources should be focused 
to increase sales of fee-based services. 

Figure 11: Number of Export Promotion Fee-based Services Sold by 
Market Group, Annual Average, Fiscal Years 2008-2010: 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Number: 309; 
Share of total: 17%. 

Next-tier emerging markets (6 countries); 
Number: 108; 
Share of total: 9%. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Number: 101; 
Share of total: 23%. 

EU 15 and Japan (15 countries); 
Number: 71; 
Share of total: 14%. 

Export market group: Other: 

Other CS posts (39 countries); 
Number: 70; 
Share of total: 36%. 

Other State Department partnership posts (41 countries); 
Number: 1; 
Share of total: 1%. 

Market without CS or State Dept. partnerships (13 countries); 
Number: 0. 

* High-growth markets have the highest average sales; 
* The range of sales in Other CS posts is the largest; 
* 37% of CS services are sold outside NEI priority and Traditional 
markets; 
* Only 9% of CS services are sold to Next-tier emerging markets. 

Source: GAO analysis of Department of Commerce data. 

Note: Number of countries in each export market group includes those 
without fee-for-service sales. Such countries were given a zero value. 

[End of figure] 

Figure 12: Average Annual Sales per Country Staff by Market Group, 
Fiscal Years 2008-2010: 

Export market group: NEI Priority: 

High-growth markets (4 countries); 
Number: 8. 

Next-tier emerging markets (6 countries); 
Number: 9. 

Export market group: Traditional: 

Free trade agreement partners (17 countries); 
Number: 15. 

EU 15 and Japan (15 countries); 
Number: 8. 

Export market group: Other: 

Other CS posts (39 countries); 
Number: 11. 

* The range within FTA partners and Other CS posts is very high; 
* Some FTA partner countries and Other CS posts generate many more 
sales per staff. 

Source: GAO analysis of Department of Commerce data. 

Notes: Number of countries in each export market group includes those 
without fee-for-service sales. Such countries were given a zero value. 

[End of figure] 

Countries without staff are not included. 

Second, data on trade counseling could also be used to determine 
demand for this activity, which, although it does not generate revenue 
directly, represented about 50 percent of the services CS provided 
exporters and also resulted in approximately 30 percent of its export 
successes for fiscal years 2008 through 2010. However, counseling data 
are not as complete as data on fee-for-service activities because 
there is no purchase agreement for counseling. CS guidelines indicate 
that only value-added counseling must be tracked in CS's client 
tracking system.[Footnote 36] Also, CS staff told us in interviews 
that they do not record all of their counseling sessions in the client 
tracking system because of difficulties with the system. CS therefore 
does not know the true demand for counseling or how much staff time is 
spent on this activity. A better understanding of the types of 
counseling provided and how much time and effort each type takes would 
enable CS to make more informed decisions about how staff should 
prioritize their time. It would also enable CS to evaluate the degree 
to which charging fees for counseling services could provide 
additional revenue to the organization. We found that fee-for-service 
income was very important to the operations of some of the overseas 
posts we visited. In order to help fund export promotion activities in 
the face of resource constraints, several senior CS officials told us 
they felt it necessary to make the selling of CS fee-based services a 
local performance target and tried to create incentives for their 
staff to sell such services. 

Third, both fee-for-service and counseling data could be used to 
assess patterns of collaboration between domestic and international 
field offices through a network analysis.[Footnote 37] Such analysis 
would enable CS to identify key hubs that work with a broad array of 
offices in the global CS network and less central offices working with 
a narrower set of countries. Furthermore, it can be used to identify 
weak or missing collaboration between offices to better serve U.S. 
exporters. (See appendix VI for an example based on our network 
analysis of these data.) 

Fourth, commercial diplomacy and advocacy are significant activities, 
especially for Foreign Service officers, because these activities 
involve government-to-government discussions. For example, Advocacy 
Center officials stated that the center receives about 500-600 
requests for assistance a year, of which they accept about 400 cases. 
While cases are initiated in Washington, D.C., the majority of the 
work on the ground is led by Foreign Service officers at the post 
where the competition for the contract occurs, and it may take years 
before the pursued contract is awarded. Although requests from 
companies for commercial diplomacy and advocacy services are related 
to NEI priorities, CS data on these activities are not systematically 
considered when setting resource allocation priorities. CS officials 
told us that when they make staffing decisions, they consider workload 
factors such as demand for commercial diplomacy and advocacy in 
particular markets; however, their process for considering these 
activities is not systematic across all posts and is not documented. 

Finally, some posts have significant responsibilities for supporting 
other agencies and important delegations. These important activities 
are counted in CS highlights--weekly reporting on noteworthy events or 
successes in a country or region--but are not systematically 
considered when determining resource needs.[Footnote 38] For fiscal 
years 2008 through 2010, CS overseas posts assisted with a total of 
1,203 important delegations, and CS's domestic offices supported 53 
visits by foreign governments and 208 visits by U.S. officials during 
the same period.[Footnote 39] At several of the posts we visited, CS 
Foreign Service officers and locally employed staff described the 
demands that these visits place on their time. These supporting-role 
functions should be taken into account when allocating resources; 
moreover, data on staff time and effort should be analyzed to 
determine the extent to which these important but ancillary activities 
may detract from CS's primary export promotion objectives. 

Conclusions: 

The National Export Initiative lays out a comprehensive strategy for 
marshaling the nation's export promotion resources with the goal of 
doubling the dollar value of U.S. exports by the end of 2014. The U.S. 
Foreign and Commercial Service (CS) is a critically important agent in 
executing the NEI strategy and six of its eight priorities. The NEI 
targets specific activities, such as advocacy and trade missions, that 
may require changes in CS's current structure, staffing, and 
activities and services. Trade-offs CS faces also have implications 
for how it allocates resources between (1) small and medium-sized 
enterprises versus large companies, (2) short-term export generation 
activities versus long-term market development efforts, (3) new-to-
export companies versus experienced exporters, (4) traditional and FTA 
markets versus high-growth and next-tier emerging markets, and (5) 
services that yield high-dollar exports and reach multiple exporters 
versus customized services for single exporters. 

CS's revised set of performance measures for fiscal year 2012 gives 
greater emphasis to the dollar value of export sales attributable to 
its assistance, prioritizing activities that are more likely to 
produce significant dollar value of exports. Moreover, because 
advocacy and the activities of large firms generate a much higher 
dollar value of exports than the export promotion activities serving 
small and medium-sized enterprises, the new measures' emphasis on 
export dollar value also is likely to shift the focus to efforts that 
contribute to doubling exports but may result in less focus on smaller 
firms. While our analysis shows that the fiscal year 2012 performance 
measures address some problems that we found with CS's fiscal year 
2010 measures, some issues remain--for example, underreporting of 
export successes, especially with regard to their dollar value. Taking 
further steps to address these issues is particularly important given 
this metric's greater importance to the NEI. Additionally, though CS 
has a role that is inherently customer focused, CS's survey to measure 
customer service satisfaction has a low response rate, making it 
difficult to accurately assess client satisfaction with its services, 
and customer service satisfaction is currently not a CS GPRA 
performance measure. 

To maximize its value in this time of increasing pressure on 
government budgets, CS needs to ensure that its resource allocation 
decision makers take into account the most complete and accurate 
economic, performance, and activity data available. Currently, CS 
allocates its resources (about 1,400 employees and a budget of about 
$260 million) to more than 75 countries around the world based on 
various quantitative and qualitative factors, but we found that CS 
does not systematically consider certain important activities when 
calculating the export potential and cost-benefit ratios used to rank 
locations. CS plans to implement a repositioning strategy in fiscal 
year 2013. Financial constraints will require tough resource 
allocation decisions based on analyses of trade-offs that should 
include weighing the costs and benefits of operating in particular 
markets and taking steps to maximize income and eliminate high-
cost/low-yield export promotion activities versus providing a wide 
range of affordable services to any exporter seeking assistance. 
Although CS has reinstituted its Overseas Resource Allocation Model, 
limitations with the model that we identified reduce its ability to 
reflect key changes in the global economic outlook and, therefore, in 
potential U.S. exports to various countries, thus reducing the model's 
usefulness in helping CS make these difficult decisions. Additionally, 
CS needs to systematically incorporate relevant data such as advocacy 
wins and program activity data to better understand all of the 
benefits that its activities create and the full range of workload 
demands on its staff. Finally, such data can also inform other 
important management decisions such as setting priorities for 
particular posts and groups of posts, and identifying opportunities 
for increasing fee income or eliminating marginally productive export 
promotion services. 

Recommendations for Executive Action: 

We recommend that the Secretary of Commerce direct the Under Secretary 
for International Trade and the Assistant Secretary for Trade 
Promotion to take the following five actions: 

* In order for policymakers to have accurate and complete information 
to make performance management and resource allocation decisions, take 
further steps to achieve greater cooperation by CS clients in 
reporting the dollar value of export successes. 

* To improve government services in keeping with the Government 
Performance and Results Modernization Act of 2010, take steps as 
appropriate to improve the CS customer-service survey response rate 
and include the measure in its GPRA-related reporting. 

* To improve program management and the information that CS resource 
allocation decisions are based upon, 

- review the Overseas Resource Allocation Model to determine whether 
the variables and structure best incorporate available indicators of 
potential U.S. exports, 

- include commercial diplomacy and advocacy data in evaluating cost- 
benefit ratios of CS locations, and: 

- systematically include program activity data in making resource 
allocation decisions. 

Agency Comments and Our Evaluation: 

Commerce provided written comments on a draft of this report. We have 
reprinted their comments in appendix VII. Commerce also provided 
technical comments and updated information, which we have incorporated 
throughout the report, as appropriate. 

In its written comments, Commerce welcomed and generally agreed with 
our overall findings and recommendations. Commence noted that CS has 
undertaken an initiative to better focus its strategic planning and 
alignment of its resources with its mission and the NEI and has 
improved its analytical tools and processes, which--as noted in our 
report--can be further enhanced. Commerce also stated that corrective 
actions begun during the course of our study would benefit from 
guidance provided by our recommendations, such as CS's plan to 
incorporate customer-service data into its performance measures and 
its effort to increase cooperation from clients in reporting the 
dollar value of export successes. 

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

If you or your staff 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. GAO staff who made major contributions 
to this report are listed in appendix VIII. 

Signed by: 

Loren Yager: 
Director, International Affairs and Trade: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the U.S. and Foreign Commercial Service (CS) export 
promotion role and the extent to which its goals and activities 
support the National Export Initiative (NEI) priorities, we reviewed 
CS's statutory mission, CS services and activity information, and the 
Report to the President on the National Export Initiative.[Footnote 
40] We also met with CS officials in Washington, D.C., who are 
responsible for managing CS and ensuring it has the necessary 
resources to meet its mission and support the NEI, as well as the 
International Trade Administration's Deputy Under Secretary, 
Department of Commerce's NEI Director, and the Director of the Trade 
Promotion Coordinating Committee. In addition, we met with officials 
from CS's Advocacy Center and from Commerce's Market Access and 
Compliance unit, as both contribute to CS's success in meeting its 
goals and the goals of the NEI. To determine the types of services and 
activities CS undertook from 2008 through 2010, we analyzed CS fee-for-
service activity and performance data for all of CS's 125 offices in 
more than 75 countries and its 108 domestic offices for fiscal years 
2008 through 2010, as well as data from the Advocacy Center for the 
same time period, to ascertain the size of companies that CS assists 
and the types of fee-for-service activities its clients purchase. 
Market Access and Compliance also provided data on the number of cases 
it initiated and successfully closed as well as the dollar value of 
those cases from 2008 through 2010. We also reviewed CS guidance 
related to capturing and verifying data on export successes, 
commercial diplomacy successes, and advocacy wins, as well as on 
documenting Market Access and Compliance and advocacy-related cases. 
We traveled to six overseas posts (Brazil, Chile, China, El Salvador, 
Thailand, and Vietnam) and interviewed CS commercial officers and 
locally employed staff who carry out CS's mission. The posts we 
visited differed in staff size (small, medium, and large) and included 
posts considered to be key markets (Brazil and China) or designated as 
an NEI priority market (Vietnam). Information from the six posts is 
not generalizable but was used to understand how activity data are 
collected, input, and used at posts and in headquarters, as well as to 
identify potential problems with the data and to learn about data-
audit procedures, topics also discussed in interviews with CS 
officials in Washington, D.C. 

To determine if CS performance measures accurately reflect its 
activities and align with the NEI, we reviewed CS's fiscal year 2010 
performance measures and assessed its 2012 performance measures to see 
if they changed to align with the NEI. We also reviewed Commerce's 
annual performance and accountability reports from 2008 through 2010. 
In addition, we reviewed Commerce's congressional budget submissions 
for 2011 and 2012 to identify upcoming changes to CS's performance 
measures. Additionally, we reviewed CS's annual reports for fiscal 
year 2009 and 2010 to determine what performance measures CS reported 
publicly. We also reviewed data CS provided to us on performance 
measures it tracks for its own use but that are not reported in its 
annual performance and accountability reports. Since we had CS data on 
its activities, including export successes, commercial diplomacy 
successes, and advocacy wins, we attempted to verify the data CS 
reported and found some discrepancies. (See related discussion below 
on data reliability.) We also interviewed the CS officials responsible 
for developing and tracking CS's performance measures to learn about 
the development of the 2010 and 2012 measures. 

To determine the extent to which CS uses relevant data in allocating 
its resources to help achieve its strategic goals, we interviewed CS 
officials about its resource allocation process, including the use of 
the Overseas Resource Allocation Model, the cost-benefit model, and 
other qualitative factors CS considers when making resource allocation 
decisions. We also analyzed factors associated with market structure 
and size, and overall ranking of CS posts in the Overseas Resource 
Allocation Model and the degree to which the model's export potential 
scores were consistent with NEI priorities. We also performed a 
statistical analysis of the model's variables to evaluate the model's 
ability as to reflect key changes in the economic outlook and, 
therefore, potential U.S. exports to various nations, and we assessed 
the fiscal year 2011 model's ability to differentiate the export 
potential of overseas locations, especially those with lower ranking. 
In addition, we analyzed the cost-benefit scores used by CS in an 
attempt to show whether NEI priority markets have better (higher) cost-
benefit scores on average when compared with other export market 
groups. We also looked at costs and benefits separately and analyzed 
the number of export successes and CS's distribution of staff and 
funding among its posts. We reviewed how each variable contributes to 
the overall score and correlation among variables. We reviewed data on 
commercial diplomacy successes and advocacy wins that would add 
relevant information when considering costs and benefits at various 
posts, as well as factors that could enable managers to assess 
relative workloads and efficiency in making resource allocation 
decisions and calculating costs. 

To assess the reliability of the data on CS activities (export and 
commercial diplomacy success), fees-for-service, official events, and 
advocacy wins data we (1) interviewed knowledgeable technical and 
management personnel at CS, (2) reviewed documentation related to 
these data sources such as manuals and other guidance, and (3) 
performed a variety of electronic data testing procedures to check for 
the internal consistency, completeness, and accuracy of the data. 

Regarding the CS activities data (export success and commercial 
diplomacy success), we identified a number of limitations, 
particularly regarding potential incompleteness and inaccuracy in 
these data. In particular, not all export successes are entered by 
staff in to the CS data system and in some cases the dollar value of 
export successes is not entered. 

Regarding CS's commercial diplomacy success data, we also noted a 
considerable number of instances of missing data on the dollar totals 
of specific commercial diplomacy successes. We also found some 
discrepancies; for example, CS's commercial diplomacy dollar value was 
sometimes reported as the value of assistance, which amounted to the 
total dollar value of the commercial diplomacy success, and sometimes 
as the export success value of the U.S. export. According to a CS 
official, guidance at the time allowed for such reporting. CS, 
however, now plans to report only the value of the U.S. exports 
resulting from commercial diplomacy successes. To assess the 
reliability of the CS staffing data, we confirmed there were no 
significant changes to the way the data were compiled by CS since we 
last requested, reviewed, and confirmed the reliability of the data in 
our previous report. 

We determined that the CS data on activities (including fee-for-
service activities), export and commercial diplomacy success, official 
events, and advocacy wins data were sufficiently reliable for the 
purposes of this engagement, in particular to provide information on 
overall levels of export and commercial diplomacy success, fees-for-
service, advocacy wins, and official events counts and dollar totals, 
as well as to provide information on trends in these levels between 
2008 and 2010. We also determined that the budget and staffing and 
performance data were sufficiently reliable for the purposes of this 
engagement. We conducted this performance audit from September 2010 to 
September 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: Distribution of Domestic CS Staff in U.S. Export 
Assistance Centers by State, Fiscal Year 2010: 

State: California; 
Number of U.S. export assistance centers: 14; 
CS staff: 46. 

State: Texas; 
Number of U.S. export assistance centers: 8; 
CS staff: 20. 

State: New York; 
Number of U.S. export assistance centers: 6; 
CS staff: 19. 

State: Ohio; 
Number of U.S. export assistance centers: 4; 
CS staff: 14. 

State: Florida; 
Number of U.S. export assistance centers: 6; 
CS staff: 13. 

State: Illinois; 
Number of U.S. export assistance centers: 4; 
CS staff: 13. 

State: Michigan; 
Number of U.S. export assistance centers: 4; 
CS staff: 11. 

State: North Carolina; 
Number of U.S. export assistance centers: 3; 
CS staff: 11. 

State: Pennsylvania; 
Number of U.S. export assistance centers: 3; 
CS staff: 11. 

State: Missouri; 
Number of U.S. export assistance centers: 2; 
CS staff: 10. 

State: Arizona; 
Number of U.S. export assistance centers: 3; 
CS staff: 8. 

State: New Jersey; 
Number of U.S. export assistance centers: 2; 
CS staff: 8. 

State: Washington; 
Number of U.S. export assistance centers: 2; 
CS staff: 8. 

State: Colorado; 
Number of U.S. export assistance centers: 1; 
CS staff: 8. 

State: Maryland; 
Number of U.S. export assistance centers: 1; 
CS staff: 8. 

State: Georgia; 
Number of U.S. export assistance centers: 2; 
CS staff: 7. 

State: Virginia; 
Number of U.S. export assistance centers: 2; 
CS staff: 7. 

State: Massachusetts; 
Number of U.S. export assistance centers: 1; 
CS staff: 7. 

State: Minnesota; 
Number of U.S. export assistance centers: 1; 
CS staff: 6. 

State: South Carolina; 
Number of U.S. export assistance centers: 3; 
CS staff: 5. 

State: Tennessee; 
Number of U.S. export assistance centers: 3; 
CS staff: 5. 

State: Louisiana; 
Number of U.S. export assistance centers: 2; 
CS staff: 5. 

State: Oregon; 
Number of U.S. export assistance centers: 1; 
CS staff: 5. 

State: Kentucky; 
Number of U.S. export assistance centers: 2; 
CS staff: 4. 

State: Nevada; 
Number of U.S. export assistance centers: 2; 
CS staff: 4. 

State: Oklahoma; 
Number of U.S. export assistance centers: 2; 
CS staff: 4. 

State: Connecticut; 
Number of U.S. export assistance centers: 1; 
CS staff: 4. 

State: Indiana; 
Number of U.S. export assistance centers: 1; 
CS staff: 4. 

State: Alabama; 
Number of U.S. export assistance centers: 1; 
CS staff: 3. 

State: Arkansas; 
Number of U.S. export assistance centers: 1; 
CS staff: 3. 

State: Mississippi; 
Number of U.S. export assistance centers: 1; 
CS staff: 3. 

State: Wisconsin; 
Number of U.S. export assistance centers: 1; 
CS staff: 3. 

State: West Virginia; 
Number of U.S. export assistance centers: 2; 
CS staff: 2. 

State: Iowa; 
Number of U.S. export assistance centers: 1; 
CS staff: 2. 

State: New Hampshire; 
Number of U.S. export assistance centers: 1; 
CS staff: 2. 

State: Puerto Rico; 
Number of U.S. export assistance centers: 1; 
CS staff: 2. 

State: Utah; 
Number of U.S. export assistance centers: 1; 
CS staff: 2. 

State: Hawaii; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Idaho; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Kansas; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Maine; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Montana; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Nebraska; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: New Mexico; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: North Dakota; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Rhode Island; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: South Dakota; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Vermont; 
Number of U.S. export assistance centers: 1; 
CS staff: 1. 

State: Alaska[A]; 
Number of U.S. export assistance centers: 1; 
CS staff: 0. 

State: Delaware; 
Number of U.S. export assistance centers: 0; 
CS staff: 0. 

State: Wyoming; 
Number of U.S. export assistance centers: 0; 
CS staff: 0. 

Source: Commerce. 

Note: Puerto Rico, a U.S. territory, is included as a domestic 
location. 

[A] Alaska is staffed by a contractor. 

[End of table] 

[End of section] 

Appendix III: Country Groupings and Allocation of Overseas CS Staff in 
Fiscal Year 2010: 

Export market group: NEI priority markets: 

Partner group: High-growth markets; 

Partner: China; 
CS officers FY2010: 18; 
Locally employed staff FY2010: 69; 
2010 posts: 6. 

Partner: India; 
CS officers FY2010: 7; 
Locally employed staff FY2010: 48; 
2010 posts: 7. 

Partner group: Next-tier emerging markets: 

Partner: Brazil; 
CS officers FY2010: 6; 
Locally employed staff FY2010: 36; 
2010 posts: 6. 

Partner: Hong Kong; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 11; 
2010 posts: 1. 

Partner group: Next-tier emerging markets: 

Partner: Vietnam; 
CS officers FY2010: 4; 
Locally employed staff FY2010: 17; 
2010 posts: 2. 

Partner: Saudi Arabia; 
CS officers FY2010: 5; 
Locally employed staff FY2010: 15; 
2010 posts: 3. 

Partner: Indonesia; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 14; 
2010 posts: 1. 

Partner: South Africa; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 13; 
2010 posts: 2. 

Partner: Turkey; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 9; 
2010 posts: 3. 

Partner: Colombia; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 8; 
2010 posts: 1. 

Export market group: Traditional markets: 

Partner group: Free trade agreement: 

Partner: Mexico; 
CS officers FY2010: 7; 
Locally employed staff FY2010: 37; 
2010 posts: 4. 

Partner: Canada; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 15; 
2010 posts: 5. 

Partner: Australia; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 10; 
2010 posts: 2. 

Partner: Israel; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 10; 
2010 posts: 2. 

Partner: Singapore; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 10; 
2010 posts: 1. 

Partner: Chile; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 9; 
2010 posts: 1. 

Partner: Dominican Republic; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 7; 
2010 posts: 1. 

Partner: Peru; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 7; 
2010 posts: 1. 

Partner: El Salvador; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 6; 
2010 posts: 1. 

Partner: Costa Rica; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 5; 
2010 posts: 1. 

Partner: Morocco; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 5; 
2010 posts: 1. 

Partner: Guatemala; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Partner: Honduras; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Partner: Jordan; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 2; 
2010 posts: 1. 

Partner group: EU 15 + Japan: 

Partner: Japan; 
CS officers FY2010: 9; 
Locally employed staff FY2010: 28; 
2010 posts: 4. 

Partner: Germany; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 24; 
2010 posts: 4. 

Partner: Italy; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 16; 
2010 posts: 3. 

Partner: France; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 14; 
2010 posts: 1. 

Partner: United Kingdom; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 10; 
2010 posts: 1. 

Partner: Belgium; 
CS officers FY2010: 5; 
Locally employed staff FY2010: 10; 
2010 posts: 2. 

Partner: Greece; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 7; 
2010 posts: 1. 

Partner: Netherlands; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 6; 
2010 posts: 1. 

Partner: Sweden; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 6; 
2010 posts: 1. 

Partner: Portugal; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 5; 
2010 posts: 1. 

Partner: Austria; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Finland; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Denmark; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Ireland; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Export market group: Other: 

Partner group: Other CS posts: 

Partner: Russia; 
CS officers FY2010: 6; 
Locally employed staff FY2010: 19; 
2010 posts: 3. 

Partner: Taiwan; 
CS officers FY2010: 5; 
Locally employed staff FY2010: 17; 
2010 posts: 2. 

Partner: Korea; 
CS officers FY2010: 4; 
Locally employed staff FY2010: 13; 
2010 posts: 1. 

Partner: Philippines; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 14; 
2010 posts: 1. 

Partner: Argentina; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 13; 
2010 posts: 1. 

Partner: Thailand; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 13; 
2010 posts: 1. 

Partner: Poland; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 12; 
2010 posts: 1. 

Partner: Nigeria; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 10; 
2010 posts: 1. 

Partner: Egypt; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 9; 
2010 posts: 2. 

Partner: Malaysia; 
CS officers FY2010: 3; 
Locally employed staff FY2010: 7; 
2010 posts: 1. 

Partner: Kenya; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 8; 
2010 posts: 1. 

Partner: Romania; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 7; 
2010 posts: 1. 

Partner: Ukraine; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 7; 
2010 posts: 1. 

Partner: Hungary; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 6; 
2010 posts: 1. 

Partner: United Arab Emirates; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 6; 
2010 posts: 2. 

Partner: Czech Republic; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 6; 
2010 posts: 1. 

Partner: Kazakhstan; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 6; 
2010 posts: 1. 

Partner: Kuwait; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 5; 
2010 posts: 1. 

Partner: Bulgaria; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Croatia; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Ecuador; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Panama; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Norway; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 4; 
2010 posts: 1. 

Partner: Qatar; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Partner: Serbia; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Partner: Slovak Republic; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Partner: Switzerland; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 3; 
2010 posts: 1. 

Partner: Pakistan; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 3; 
2010 posts: 2. 

Partner: Ghana; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 2; 
2010 posts: 1. 

Partner: Libya; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 2; 
2010 posts: 1. 

Partner: Senegal; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 2; 
2010 posts: 1. 

Partner: Iraq; 
CS officers FY2010: 2; 
Locally employed staff FY2010: 1; 
2010 posts: 2. 

Partner: Algeria; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 2; 
2010 posts: 1. 

Partner: Lebanon; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 2; 
2010 posts: 1. 

Partner: Afghanistan; 
CS officers FY2010: 1; 
Locally employed staff FY2010: 1; 
2010 posts: 1. 

Partner: New Zealand; 
CS officers FY2010: 0; 
Locally employed staff FY2010: 1; 
2010 posts: 1. 

Source: GAO analysis of Commerce data. 

[End of table] 

[End of section] 

Appendix IV: Locations of State Department Partnership Posts Providing 
Export Promotion Services: 

[Figure: world map] 

Map depicts locations of the following: 

State Department partnership post (45); 
Commercial Service post (75+). 

Note: In September 2011, the Departments of Commerce and State agreed 
to expand the program to an additional 11 countries: Albania, 
Azerbaijan, Bangladesh, Belize, Cambodia, Georgia, Haiti, Malta, 
Paraguay, Turkmenistan, and Uzbekistan. 

[End of figure] 

[End of section] 

Appendix V: Country Groupings and U.S. Exports, Calendar Years 2008- 
2010: 

Dollars in millions: 

Export market group: NEI priorities: 

Partner group: High-growth markets: 

Partners: China; 
U.S. exports: 2008-2010: Annual average: $144,111; 
U.S. exports: 2008-2010: Rank: 3. 

Partner: Brazil; 
U.S. exports: 2008-2010: Annual average: $53,711; 
U.S. exports: 2008-2010: Rank: 9. 

Partners: Hong Kong; 
U.S. exports: 2008-2010: Annual average: $33,483; 
U.S. exports: 2008-2010: Rank: 16. 

Partners: India; 
U.S. exports: 2008-2010: Annual average: $31,573; 
U.S. exports: 2008-2010: Rank: 17. 

Partner group: Next-tier emerging markets: 

Partner: Saudi Arabia; 
U.S. exports: 2008-2010: Annual average: $21,859; 
U.S. exports: 2008-2010: Rank: 20. 

Partner: Colombia; 
U.S. exports: 2008-2010: Annual average: $20,202; 
U.S. exports: 2008-2010: Rank: 22. 

Partner: Turkey; 
U.S. exports: 2008-2010: Annual average: $17,999; 
U.S. exports: 2008-2010: Rank: 26. 

Partner: Indonesia; 
U.S. exports: 2008-2010: Annual average: $11,470; 
U.S. exports: 2008-2010: Rank: 35. 

Partners: South Africa; 
U.S. exports: 2008-2010: Annual average: $10,429; 
U.S. exports: 2008-2010: Rank: 37. 

Partners: Vietnam; 
U.S. exports: 2008-2010: Annual average: $6,112; 
U.S. exports: 2008-2010: Rank: 45. 

Export market group: Traditional markets: 

Partner group: Free trade agreement markets: 

Partners: Canada; 
U.S. exports: 2008-2010: Annual average: $399,719; 
U.S. exports: 2008-2010: Rank: 1. 

Partner: Mexico; 
U.S. exports: 2008-2010: Annual average: $245,617; 
U.S. exports: 2008-2010: Rank: 2. 

Partner: Singapore; 
U.S. exports: 2008-2010: Annual average: $47,285; 
U.S. exports: 2008-2010: Rank: 11. 

Partner: Australia; 
U.S. exports: 2008-2010: Annual average: $39,482; 
U.S. exports: 2008-2010: Rank: 14. 

Partner: Chile; 
U.S. exports: 2008-2010: Annual average: $19,805; 
U.S. exports: 2008-2010: Rank: 25. 

Partner: Israel; 
U.S. exports: 2008-2010: Annual average: $15,299; 
U.S. exports: 2008-2010: Rank: 27. 

Partner: Dominican Republic; 
U.S. exports: 2008-2010: Annual average: $11,674; 
U.S. exports: 2008-2010: Rank: 34. 

Partner: Peru; 
U.S. exports: 2008-2010: Annual average: $10,743; 
U.S. exports: 2008-2010: Rank: 36. 

Partner: Costa Rica; 
U.S. exports: 2008-2010: Annual average: $9,439; 
U.S. exports: 2008-2010: Rank: 39. 

Partner: Honduras; 
U.S. exports: 2008-2010: Annual average: $8,268; 
U.S. exports: 2008-2010: Rank: 41. 

Partner: Guatemala; 
U.S. exports: 2008-2010: Annual average: $8,172; 
U.S. exports: 2008-2010: Rank: 42. 

Partner: El Salvador; 
U.S. exports: 2008-2010: Annual average: $4,321; 
U.S. exports: 2008-2010: Rank: 54. 

Partner: Morocco; 
U.S. exports: 2008-2010: Annual average: $3,309; 
U.S. exports: 2008-2010: Rank: 61. 

Partner: Oman; 
U.S. exports: 2008-2010: Annual average: $2,341; 
U.S. exports: 2008-2010: Rank: 68. 

Partner: Jordan; 
U.S. exports: 2008-2010: Annual average: $2,137; 
U.S. exports: 2008-2010: Rank: 71. 

Partners: Nicaragua; 
U.S. exports: 2008-2010: Annual average: $1,758; 
U.S. exports: 2008-2010: Rank: 74. 

Partners: Bahrain; 
U.S. exports: 2008-2010: Annual average: $1,741; 
U.S. exports: 2008-2010: Rank: 75. 

Partner group: EU 15 + Japan: 

Partner: Japan; 
U.S. exports: 2008-2010: Annual average: $108,446; 
U.S. exports: 2008-2010: Rank: 4. 

Partner: United Kingdom; 
U.S. exports: 2008-2010: Annual average: $89,915; 
U.S. exports: 2008-2010: Rank: 5. 

Partner: Germany; 
U.S. exports: 2008-2010: Annual average: $89,703; 
U.S. exports: 2008-2010: Rank: 6. 

Partner: Netherlands; 
U.S. exports: 2008-2010: Annual average: $64,682; 
U.S. exports: 2008-2010: Rank: 7. 

Partner: France; 
U.S. exports: 2008-2010: Annual average: $50,109; 
U.S. exports: 2008-2010: Rank: 10. 

Partner: Belgium; 
U.S. exports: 2008-2010: Annual average: $45,100; 
U.S. exports: 2008-2010: Rank: 12. 

Partner: Italy; 
U.S. exports: 2008-2010: Annual average: $25,397; 
U.S. exports: 2008-2010: Rank: 18. 

Partner: Spain; 
U.S. exports: 2008-2010: Annual average: $19,917; 
U.S. exports: 2008-2010: Rank: 24. 

Partner: Ireland; 
U.S. exports: 2008-2010: Annual average: $13,630; 
U.S. exports: 2008-2010: Rank: 29. 

Partner: Sweden; 
U.S. exports: 2008-2010: Annual average: $8,681; 
U.S. exports: 2008-2010: Rank: 40. 

Partner: Austria; 
U.S. exports: 2008-2010: Annual average: $4,667; 
U.S. exports: 2008-2010: Rank: 51. 

Partner: Finland; 
U.S. exports: 2008-2010: Annual average: $4,440; 
U.S. exports: 2008-2010: Rank: 53. 

Partner: Denmark; 
U.S. exports: 2008-2010: Annual average: $4,195; 
U.S. exports: 2008-2010: Rank: 55. 

Partners: Greece; 
U.S. exports: 2008-2010: Annual average: $3,539; 
U.S. exports: 2008-2010: Rank: 60. 

Partners: Portugal; 
U.S. exports: 2008-2010: Annual average: $3,019; 
U.S. exports: 2008-2010: Rank: 64. 

Export market group: Other: 

Partner group: Other CS posts: 

Partners: Korea (South); 
U.S. exports: 2008-2010: Annual average: $64,526; 
U.S. exports: 2008-2010: Rank: 8. 

Partner: Taiwan; 
U.S. exports: 2008-2010: Annual average: $42,625; 
U.S. exports: 2008-2010: Rank: 13. 

Partner: Switzerland; 
U.S. exports: 2008-2010: Annual average: $35,703; 
U.S. exports: 2008-2010: Rank: 15. 

Partner: United Arab Emirates; 
U.S. exports: 2008-2010: Annual average: $23,309; 
U.S. exports: 2008-2010: Rank: 19. 

Partner: Malaysia; 
U.S. exports: 2008-2010: Annual average: $21,614; 
U.S. exports: 2008-2010: Rank: 21. 

Partner: Venezuela; 
U.S. exports: 2008-2010: Annual average: $19,996; 
U.S. exports: 2008-2010: Rank: 23. 

Partner: Thailand; 
U.S. exports: 2008-2010: Annual average: $15,228; 
U.S. exports: 2008-2010: Rank: 28. 

Partner: Philippines; 
U.S. exports: 2008-2010: Annual average: $13,499; 
U.S. exports: 2008-2010: Rank: 30. 

Partner: Russia; 
U.S. exports: 2008-2010: Annual average: $13,135; 
U.S. exports: 2008-2010: Rank: 31. 

Partner: Argentina; 
U.S. exports: 2008-2010: Annual average: $11,946; 
U.S. exports: 2008-2010: Rank: 32. 

Partner: Egypt; 
U.S. exports: 2008-2010: Annual average: $11,944; 
U.S. exports: 2008-2010: Rank: 33. 

Partner: Panama; 
U.S. exports: 2008-2010: Annual average: $9,530; 
U.S. exports: 2008-2010: Rank: 38. 

Partner: Ecuador; 
U.S. exports: 2008-2010: Annual average: $7,839; 
U.S. exports: 2008-2010: Rank: 43. 

Partner: Nigeria; 
U.S. exports: 2008-2010: Annual average: $7,736; 
U.S. exports: 2008-2010: Rank: 44. 

Partner: Poland; 
U.S. exports: 2008-2010: Annual average: $5,956; 
U.S. exports: 2008-2010: Rank: 46. 

Partner: Norway; 
U.S. exports: 2008-2010: Annual average: $5,897; 
U.S. exports: 2008-2010: Rank: 47. 

Partner: Qatar; 
U.S. exports: 2008-2010: Annual average: $5,478; 
U.S. exports: 2008-2010: Rank: 49. 

Partner: New Zealand; 
U.S. exports: 2008-2010: Annual average: $4,758; 
U.S. exports: 2008-2010: Rank: 50. 

Partner: Kuwait; 
U.S. exports: 2008-2010: Annual average: $4,522; 
U.S. exports: 2008-2010: Rank: 52. 

Partner: Pakistan; 
U.S. exports: 2008-2010: Annual average: $3,550; 
U.S. exports: 2008-2010: Rank: 58. 

Partner: Iraq; 
U.S. exports: 2008-2010: Annual average: $3,546; 
U.S. exports: 2008-2010: Rank: 59. 

Partner: Lebanon; 
U.S. exports: 2008-2010: Annual average: $3,239; 
U.S. exports: 2008-2010: Rank: 62. 

Partner: Ukraine; 
U.S. exports: 2008-2010: Annual average: $2,656; 
U.S. exports: 2008-2010: Rank: 66. 

Partner: Afghanistan; 
U.S. exports: 2008-2010: Annual average: $2,649; 
U.S. exports: 2008-2010: Rank: 67. 

Partner: Algeria; 
U.S. exports: 2008-2010: Annual average: $2,328; 
U.S. exports: 2008-2010: Rank: 69. 

Partner: Czech Republic; 
U.S. exports: 2008-2010: Annual average: $2,199; 
U.S. exports: 2008-2010: Rank: 70. 

Partner: Hungary; 
U.S. exports: 2008-2010: Annual average: $2,113; 
U.S. exports: 2008-2010: Rank: 72. 

Partner: Romania; 
U.S. exports: 2008-2010: Annual average: $1,560; 
U.S. exports: 2008-2010: Rank: 76. 

Partner: Ghana; 
U.S. exports: 2008-2010: Annual average: $1,506; 
U.S. exports: 2008-2010: Rank: 77. 

Partner: Kazakhstan; 
U.S. exports: 2008-2010: Annual average: $1,495; 
U.S. exports: 2008-2010: Rank: 78. 

Partner: Uruguay; 
U.S. exports: 2008-2010: Annual average: $1,464; 
U.S. exports: 2008-2010: Rank: 79. 

Partner: Libya; 
U.S. exports: 2008-2010: Annual average: $1,310; 
U.S. exports: 2008-2010: Rank: 80. 

Partner: Tunisia; 
U.S. exports: 2008-2010: Annual average: $1,029; 
U.S. exports: 2008-2010: Rank: 83. 

Partner: Kenya; 
U.S. exports: 2008-2010: Annual average: $928; 
U.S. exports: 2008-2010: Rank: 85. 

Partner: Slovak Republic; 
U.S. exports: 2008-2010: Annual average: $638; 
U.S. exports: 2008-2010: Rank: 91. 

Partner: Croatia; 
U.S. exports: 2008-2010: Annual average: $624; 
U.S. exports: 2008-2010: Rank: 92. 

Partner: Bulgaria; 
U.S. exports: 2008-2010: Annual average: $573; 
U.S. exports: 2008-2010: Rank: 96. 

Partners: Senegal; 
U.S. exports: 2008-2010: Annual average: $345; 
U.S. exports: 2008-2010: Rank: 105. 

Partners: Serbia; 
U.S. exports: 2008-2010: Annual average: $266; 
U.S. exports: 2008-2010: Rank: 112. 

Partner group: Other State Department partnership posts: 

Partner: Bahamas; 
U.S. exports: 2008-2010: Annual average: $5,539; 
U.S. exports: 2008-2010: Rank: 48. 

Partner: Trinidad and Tobago; 
U.S. exports: 2008-2010: Annual average: $3,874; 
U.S. exports: 2008-2010: Rank: 56. 

Partner: Jamaica; 
U.S. exports: 2008-2010: Annual average: $3,645; 
U.S. exports: 2008-2010: Rank: 57. 

Partner: Angola; 
U.S. exports: 2008-2010: Annual average: $3,093; 
U.S. exports: 2008-2010: Rank: 63. 

Partner: Benin; 
U.S. exports: 2008-2010: Annual average: $1,122; 
U.S. exports: 2008-2010: Rank: 81. 

Partner: Lithuania; 
U.S. exports: 2008-2010: Annual average: $1,071; 
U.S. exports: 2008-2010: Rank: 82. 

Partner: Ethiopia; 
U.S. exports: 2008-2010: Annual average: $879; 
U.S. exports: 2008-2010: Rank: 86. 

Partner: Barbados; 
U.S. exports: 2008-2010: Annual average: $784; 
U.S. exports: 2008-2010: Rank: 87. 

Partner: Iceland; 
U.S. exports: 2008-2010: Annual average: $744; 
U.S. exports: 2008-2010: Rank: 90. 

Partner: Latvia; 
U.S. exports: 2008-2010: Annual average: $616; 
U.S. exports: 2008-2010: Rank: 93. 

Partner: Slovenia; 
U.S. exports: 2008-2010: Annual average: $551; 
U.S. exports: 2008-2010: Rank: 97. 

Partner: Gabon; 
U.S. exports: 2008-2010: Annual average: $455; 
U.S. exports: 2008-2010: Rank: 98. 

Partner: Mozambique; 
U.S. exports: 2008-2010: Annual average: $416; 
U.S. exports: 2008-2010: Rank: 100. 

Partner: Cote d'Ivoire; 
U.S. exports: 2008-2010: Annual average: $404; 
U.S. exports: 2008-2010: Rank: 101. 

Partner: Sri Lanka; 
U.S. exports: 2008-2010: Annual average: $380; 
U.S. exports: 2008-2010: Rank: 102. 

Partner: Estonia; 
U.S. exports: 2008-2010: Annual average: $375; 
U.S. exports: 2008-2010: Rank: 103. 

Partner: Namibia; 
U.S. exports: 2008-2010: Annual average: $359; 
U.S. exports: 2008-2010: Rank: 104. 

Partner: Tanzania; 
U.S. exports: 2008-2010: Annual average: $318; 
U.S. exports: 2008-2010: Rank: 107. 

Partner: Cyprus; 
U.S. exports: 2008-2010: Annual average: $312; 
U.S. exports: 2008-2010: Rank: 108. 

Partner: Liberia; 
U.S. exports: 2008-2010: Annual average: $278; 
U.S. exports: 2008-2010: Rank: 110. 

Partner: Cameroon; 
U.S. exports: 2008-2010: Annual average: $271; 
U.S. exports: 2008-2010: Rank: 111. 

Partner: Brunei; 
U.S. exports: 2008-2010: Annual average: $216; 
U.S. exports: 2008-2010: Rank: 114. 

Partner: Congo (Democratic Republic); 
U.S. exports: 2008-2010: Annual average: $196; 
U.S. exports: 2008-2010: Rank: 115. 

Partner: Madagascar; 
U.S. exports: 2008-2010: Annual average: $191; 
U.S. exports: 2008-2010: Rank: 116. 

Partner: Uganda; 
U.S. exports: 2008-2010: Annual average: $184; 
U.S. exports: 2008-2010: Rank: 117. 

Partner: Guinea; 
U.S. exports: 2008-2010: Annual average: $182; 
U.S. exports: 2008-2010: Rank: 118. 

Partner: Mongolia; 
U.S. exports: 2008-2010: Annual average: $137; 
U.S. exports: 2008-2010: Rank: 120. 

Partner: Botswana; 
U.S. exports: 2008-2010: Annual average: $132; 
U.S. exports: 2008-2010: Rank: 121. 

Partner: Zambia; 
U.S. exports: 2008-2010: Annual average: $123; 
U.S. exports: 2008-2010: Rank: 122. 

Partner: Mauritius; 
U.S. exports: 2008-2010: Annual average: $92; 
U.S. exports: 2008-2010: Rank: 123. 

Partner: Malawi; 
U.S. exports: 2008-2010: Annual average: $80; 
U.S. exports: 2008-2010: Rank: 125. 

Partner: Fiji; 
U.S. exports: 2008-2010: Annual average: $80; 
U.S. exports: 2008-2010: Rank: 126. 

Partner: Mali; 
U.S. exports: 2008-2010: Annual average: $68; 
U.S. exports: 2008-2010: Rank: 127. 

Partner: Montenegro; 
U.S. exports: 2008-2010: Annual average: $65; 
U.S. exports: 2008-2010: Rank: 128. 

Partner: Macedonia; 
U.S. exports: 2008-2010: Annual average: $64; 
U.S. exports: 2008-2010: Rank: 129. 

Partner: Burkina Faso; 
U.S. exports: 2008-2010: Annual average: $62; 
U.S. exports: 2008-2010: Rank: 130. 

Partner: Gambia; 
U.S. exports: 2008-2010: Annual average: $59; 
U.S. exports: 2008-2010: Rank: 131. 

Partner: Rwanda; 
U.S. exports: 2008-2010: Annual average: $54; 
U.S. exports: 2008-2010: Rank: 132. 

Partner: Bosnia and Herzegovina; 
U.S. exports: 2008-2010: Annual average: $51; 
U.S. exports: 2008-2010: Rank: 133. 

Partners: Swaziland; 
U.S. exports: 2008-2010: Annual average: $30; 
U.S. exports: 2008-2010: Rank: 134. 

Partners: Lesotho; 
U.S. exports: 2008-2010: Annual average: $19; 
U.S. exports: 2008-2010: Rank: 135. 

Partner group: Others: 

Partner: Paraguay; 
U.S. exports: 2008-2010: Annual average: $2,959; 
U.S. exports: 2008-2010: Rank: 65. 

Partner: Haiti; 
U.S. exports: 2008-2010: Annual average: $1,918; 
U.S. exports: 2008-2010: Rank: 73. 

Partner: Bangladesh; 
U.S. exports: 2008-2010: Annual average: $961; 
U.S. exports: 2008-2010: Rank: 84. 

Partner: Bolivia; 
U.S. exports: 2008-2010: Annual average: $780; 
U.S. exports: 2008-2010: Rank: 88. 

Partner: Georgia; 
U.S. exports: 2008-2010: Annual average: $745; 
U.S. exports: 2008-2010: Rank: 89. 

Partner: Belize; 
U.S. exports: 2008-2010: Annual average: $580; 
U.S. exports: 2008-2010: Rank: 94. 

Partner: Malta; 
U.S. exports: 2008-2010: Annual average: $578; 
U.S. exports: 2008-2010: Rank: 95. 

Partner: Azerbaijan; 
U.S. exports: 2008-2010: Annual average: $428; 
U.S. exports: 2008-2010: Rank: 99. 

Partner: Uzbekistan; 
U.S. exports: 2008-2010: Annual average: $329; 
U.S. exports: 2008-2010: Rank: 106. 

Partner: Cambodia; 
U.S. exports: 2008-2010: Annual average: $282; 
U.S. exports: 2008-2010: Rank: 109. 

Partner: Turkmenistan; 
U.S. exports: 2008-2010: Annual average: $256; 
U.S. exports: 2008-2010: Rank: 113. 

Partner: Mauritania; 
U.S. exports: 2008-2010: Annual average: $161; 
U.S. exports: 2008-2010: Rank: 119. 

Partners: Albania; 
U.S. exports: 2008-2010: Annual average: $86; 
U.S. exports: 2008-2010: Rank: 124. 

Source: GAO analysis of Commerce data. 

[End of table] 

[End of section] 

Appendix VI: Example of Network Analysis of CS Fee-for-Service 
Activities: 

We conducted network analysis of 3 years of CS's fee-for-service data 
and found that certain domestic field locations tend to have strong 
relationships (as measured by the number of fee-based services jointly 
sold by a domestic and international office) with particular overseas 
posts, while others do not. We examined the pattern of collaboration 
between the three high-growth markets--Brazil, China, and India--and 
the 15 most active U.S. domestic offices.[Footnote 41] Figure 13 shows 
five domestic offices--Chicago, Cleveland, Houston, Newport Beach, and 
Northern Virginia--that each collaborated on a large number of 
participation agreements with each of the three high-growth markets. 
However, other domestic offices have strong relationships with one or 
two of the three high-growth markets, but not with the others. For 
example, San Jose, Milwaukee, and three others have their strongest 
relationships with China and India, but less so with Brazil. Salt Lake 
City, Boston, and Baltimore have only one strong relationship with a 
high-growth market. Such patterns may suggest markets where personnel 
or budgetary resources could be added or moved to expand existing 
relationships or to establish new ones.[Footnote 42] 

Figure 13: Network of Strongest Relationships between Domestic and 
International CS Offices, Fiscal Years 2008-2010: 

[Refer to PDF for image: illustration] 

Domestic CS offices having significant joint sales with: 

All 3 countries: 
Chicago; 
Cleveland; 
Houston; 
Newport Beach; 
Northern Virginia; 
Average of 53 with China; Average of 54 with India; 
Average of 40 with Brazil. 

2 of 3 countries: 
San Jose: 
20 with China; 28 with India; 
Pittsburgh: 
50 with China; 32 with India; 
New York: 
44 with China; 24 with India; 
Minneapolis: 
32 with China; 32 with India; 
Milwaukee: 
36 with China; 26 with India; 
Philadelphia: 
58 with China; 48 with Brazil; 
Fort Lauderdale: 
28 with Brazil; 22 with India. 

1 of 3 countries: 
Boston: 24 with Brazil; 
Baltimore: 24 with India; 
Salt Lake City: 26 with China. 

Sources: Commerce (data); GAO (analysis); Map Resources (maps). 

Note: The numbers in the figure show, for individual domestic offices, 
the number of services sold jointly by the office and the 
corresponding CS offices in Brazil, China, or India; for the one group 
of domestic offices (listed in triangle), the numbers show the group 
average of services sold jointly by offices in the group and CS 
offices in Brazil, China, or India. 

[End of figure] 

[End of section] 

Appendix VII: Comments from the Department of Commerce: 

United States Department Of Commerce: 
The Under Secretary for International Trade: 
Washington, DC 20230: 

September 16, 2011:
 
Dr. Loren Yager: 
Director, International Affairs and Trade: 
U.S, Government Accountability Office: 
Washington, DC 20548:  

Dear Dr. Yager:  

Thank you for the opportunity to review the draft Government 
Accountability Office (GAO) report, National Export Initiative: U.S. 
and Foreign Commercial Service Should Improve Performance and Resource 
Allocation Management (GA0-11-909). In this report, the GAO examined 
the extent to which: (1) the goals and activities of the U.S. and 
Foreign Commercial Service (US&FCS) support the President's National 
Export Initiative (NEI); (2) US&FCS performance measures accurately 
reflect its activities and align with the NEI; and (3) US&FCS 
incorporates relevant data in allocating resources to help achieve its 
strategic goals.  

We welcome and generally agree with the overall findings and 
recommendations in the report. As discussed during the course of your 
study, US&FCS has undertaken a multi-year initiative to better focus 
its strategic planning, the alignment of resources to the mission and 
the NEI, technology investments, budget, and workforce management. As 
noted in the draft report, US&FCS has recently improved its analytical 
tools and processes, including its overseas and domestic resource 
allocation models and, as also noted, those tools and processes can be 
improved and refined even further.  

Your recommendations will help guide US&FCS as it continues in this 
process. For example, US&FCS is already working to incorporate the 
customer-service data in its performance measures, as well as working 
with clients to increase cooperation in reporting the dollar value of 
export successes.  

Technical comments and corrections are enclosed for your 
consideration. Those comments and corrections are intended to provide 
further clarity in the areas of data analysis, US&FCS operations, and 
ongoing efforts to improve performance and strengthen the 
organization.  

We look forward to the final GAO report, and welcome any additional 
steps ITA could take to further facilitate the review process.  

Sincerely,  

Signed by: 

Michelle O'Neill, Acting:  

Enclosure: 

[End of section] 

Appendix VIII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

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

Staff Acknowledgments: 

In addition to the contact named above, Adam Cowles, Assistant 
Director; Julie Hirshen, Analyst-in-Charge; Gezahegne Bekele; David 
Dornisch; David Dayton; Grace Lui; Emily Suarez-Harris; and Amanda 
Weldon made key contributions to this report. Other staff providing 
technical assistance included Kathryn Bernet, Ming Chen, Etana 
Finkler, Mitchell Karpman, and Jena Sinkfield. 

[End of section] 

Footnotes: 

[1] Exec. Order No. 13534, 75 Fed. Reg. 12433 (Mar. 11, 2010). 

[2] Department of Commerce, Report to the President on the National 
Export Initiative: The Export Promotion Cabinet's Plan for Doubling 
U.S. Exports in Five Years (Washington, D.C.: 2010). 

[3] GAO recently completed an evaluation of the Manufacturing and 
Services unit. See Department of Commerce: Office of Manufacturing and 
Services Could Better Measure and Communicate Its Contributions to 
Trade Policy, [hyperlink, http://www.gao.gov/products/GAO-11-583]. 
(Washington, D.C.: June 7, 2011). 

[4] 15 U.S.C. § 4721. 

[5] Department of Commerce, U.S. Census Bureau, A Profile of U.S. 
Exporting Companies, 2008-2009 (Washington, D.C.: 2011). The report 
indicates that the $939 billion is the "known value" of exports in 
calendar year 2009 since not all exports that occur are tracked. 

[6] Some Foreign Service officers are assigned to domestic field 
offices, headquarters, and international development banks. 

[7] Specifically, overseas activities include (1) opening an overseas 
office or making an overseas investment directly supportive of a 
client's export, (2) helping a client avoid harm through due 
diligence, (3) removing a market access barrier, (4) resolving an 
export trade complaint, (5) obtaining foreign publicity for a U.S. 
client that facilitates an export sale, (6) securing product/service 
registration, and (7) securing positive resolution in an advocacy case. 

[8] Direct costs include costs billed by a third party needed to 
deliver a CS product or service, such as ground transportation, 
translators, or airport expediter. Indirect costs include CS resources 
used to provide a service or benefit to a client; these are usually 
calculated based on the number of CS staff hours worked to provide the 
service. 

[9] Large companies purchased 26 percent of CS services, and 6 percent 
of companies purchasing CS services did not identify their company 
size. 

[10] CS uses the export success dollar value to calculate the total 
value of its commercial diplomacy efforts. Not all commercial 
diplomacy successes contain a dollar value when reported; thus, $17 
billion is a conservative estimate of the actual total value. 

[11] The Advocacy Center also has Commercial Service liaisons to five 
multilateral development banks (World Bank, Inter-American Development 
Bank, European Bank for Reconstruction and Development, Africa 
Development Bank, and Asia Development Bank) to assist U.S. firms and 
advocate on their behalf when they compete for bank tenders. 

[12] The number of visits by U.S. officials to the domestic field in 
2008 was unusually high, a total of 142 visits, due to activities 
associated with the Colombia, Panama, and South Korea free trade 
agreements, which the United States has signed but for which Congress 
must enact legislation before they go into effect. 

[13] Since CS's budgets have stayed relatively flat while its costs 
increased, its ability to increase staff in these countries is 
dependent on receiving increased funding or shifting resources from 
elsewhere. 

[14] Goods and services purchased by international travelers visiting 
the United States are considered exports, producing business revenue 
that creates jobs in the United States as well as federal, state, and 
local tax revenue. 

[15] Type of firms includes new-to-export, meaning firms making their 
first export transaction to a foreign market; new-to-market, meaning 
firms exporting to a foreign market to which they had not exported in 
the past; and increase-to-market, meaning firms that increase exports 
in markets where they are already active. 

[16] The New Market Exporter Initiative began under the auspices of 
CS's Strategic Partnership Initiative, which increased collaboration 
with private organizations, state and local governments, trade 
associations, and educational institutions through a range of joint 
activities aimed at engaging more U.S. companies in exporting. 

[17] Pub. L. No. 103-62, 107 Stat. 285 (1993). 

[18] Pub. L. No. 111-352, 124 Stat. 3866 (2011). The GPRA 
Modernization Act of 2010 amends GPRA and is being implemented in 
phases starting in fiscal year 2012 (for reports on fiscal year 2011 
results and fiscal year 2013 performance budgets). 

[19] These measures differed somewhat from the GPRA measures CS used 
in 2008. In fiscal year 2009, CS used nearly the same measures as it 
did in 2010; the only difference was that in 2009 CS used average 
total dollar value of wins over three years, and it did not include 
percentage of advocacy bids won. CS maintained its 2010 measures in 
fiscal year 2011. In addition to its GPRA measures, CS also tracked 
other performance measures that were not publicly reported but were 
used for its own internal purposes. 

[20] In addition to its six GPRA measures, the Commerce Department 
established a 2-year high-priority performance goal in fiscal year 
2009: to increase the number of SMEs that CS successfully assisted in 
exporting to a second or additional country by 2011. In fiscal years 
2009 and 2010, CS did not meet its targets. In 2009, the goal was 
3,130, and CS's actual performance was 2,876; in 2010, the goal was 
3,513, and the actual performance was 2,813. 

[21] Commerce officials told us that CS staff at multilateral 
development banks also facilitated an additional $2.6 million in 
advocacy-related wins. 

[22] Commerce officials reported that these three activities resulted 
in a total export value of $34.8 billion, after correcting for double 
counting. 

[23] With regard to cost of service, we made recommendations to CS in 
2009 to improve its cost accounting for its export promotion services. 
See GAO, Export Promotion: Commerce Needs Better Information to 
Evaluate Its Fee-Based Programs and Customers, [hyperlink, 
http://www.gao.gov/products/GAO-09-144] (Washington, D.C.: Mar. 4, 
2009). 

[24] Pub. L. No. 111-352, § 3. 

[25] Exec. Order No. 13571, 76 Fed. Reg. 24339 (Apr. 27, 2011). 

[26] GAO, Executive Guide: Effectively Implementing the Government 
Performance and Results Act, [hyperlink, 
http://www.gao.gov/products/GGD-96-118] (Washington, D.C.: June 1, 
1996). 

[27] GAO, Export Promotion: Increases in Commercial Service Workforce 
Should Be Better Planned, [hyperlink, 
http://www.gao.gov/products/GAO-10-874] (Washington, D.C.: Aug. 31, 
2010). 

[28] The fiscal year 2011 model mainly uses trade data from 2005 
through 2008. 

[29] The European Union members included in this group are Austria, 
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, 
Netherlands, Portugal, Spain, Sweden, and the United Kingdom. 
Luxembourg is also a member but is not included in our analysis. 

[30] Metropolitan statistical areas are geographic entities defined by 
the U.S. Office of Management and Budget for use by Federal 
statistical agencies in collecting, tabulating, and publishing Federal 
statistics. 

[31] [hyperlink, http://www.gao.gov/products/GAO-10-874]. 

[32] While CS generates plans and proposals, the Office of the Under 
Secretary of Commerce for International Trade reviews and approves 
resource allocation decisions. 

[33] We present the number of commercial diplomacy successes because 
not all such successes are associated with dollar values. 

[34] [hyperlink, http://www.gao.gov/products/GAO-09-144]. 

[35] For example, the NEI highlights high-growth markets (Brazil, 
China, and India) and next-tier emerging markets (Colombia, Indonesia, 
Saudi Arabia, South Africa, Turkey, and Vietnam) as well suited to 
experienced exporters and advocacy work. In these markets, CS needs a 
higher proportion of Foreign Service officers to address demand for 
advocacy and other trade-related duties as well as visits by important 
delegations. However, we found that throughout CS's overseas network, 
the ratio of Foreign Service officers to locally employed staff does 
not vary greatly between countries. In high-growth and next-tier 
emerging markets, the average ratio is 1 to 5; in all other countries 
where CS has posts, the average ratio is approximately 1 to 4. 

[36] CS defines value-added counseling as providing information that 
facilitates exports for U.S. companies and imports of U.S. products 
and services--for example, when CS staff personally assist a U.S. firm 
to identify and communicate with a business contact, or assist a non-
U.S. company to identify and contact a U.S. suppler, or help either 
party execute the purchase of a good or service from the United 
States. CS deems activities such as providing a referral to a caller--
for example, an address to a local bank--or other potential trade 
partner or contact as not providing a value-added service. 

[37] Network analysis is a set of quantitative and graphical methods 
to identify the underlying patterns and structures in a complex set of 
relationships among many entities such as countries, organizations, or 
individuals. 

[38] Events covered include visits by assistant secretaries and above, 
congressional and staff delegations, and upcoming trade events. 

[39] The number of visits by U.S. officials to the domestic field was 
unusually high in 2008--a total of 142 visits--due to interest in 
supporting the free trade agreements with Colombia, Panama, and South 
Korea. 

[40] Department of Commerce, Report to the President on the National 
Export Initiative: The Export Promotion Cabinet's Plan for Doubling 
U.S. Exports in Five Years (Washington, D.C.: 2010). 

[41] Collaboration is measured by the numbers of services sold 
involving domestic and international offices jointly. 

[42] In doing such analysis, other factors such as collaboration, 
international market type, dominant industries, or world region, would 
need to be considered. 

[End of section] 

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