Super Commerce

The U.S. Department of Commerce seems to be back. Long unheralded and led by Secretaries whose names no one could remember , it is suddenly in the spot light as it bursts with energy. Last week, it submitted a major report to the Congress on America’s Competitiveness and Innovation Capacity. Then Commerce Secretary Bryson was named to co-chair an Obama administration inter-agency committee to develop a U.S. manufacturing strategy. Then yesterday came the big announcement that the administration is proposing to make it a super Department by merging a number of other agencies like the Office of the U.S. Trade Representative, the Export/Import Bank, and  the Overseas Private Investment Corporation into it.

In fact, the idea of consolidating all these agencies into one great department is not new. It was one of the early proposals during my time as a U.S. official in the early Reagan administration. It was rejected then, but perhaps its time has finally come now that the United States seems to have a permanent trade deficit of over 3 percent of GDP.

Fundamentally the idea is good and should be adopted. Indeed, the Obama proposal does not go far enough . In addition to the agencies named as candidates for the new department, the Department of Energy, NASA, and the economic agencies of the State Department should also be added. That would make the department comparable to and competitive with the industry and trade ministries of most of the countries who are America’s major economic partners. It would also make the department a front rank agency and thereby give it the resources and weight to enable it to compete on equal terms in the intra-departmental Washington battles with the likes of the Departments of State, Defense, and Treasury.

In the past, the proposal has been defeated on the grounds that it amounts to rearranging the deck chairs on the Titanic, that America doesn’t need more bureaucracy, and that the small, nimble, and purportedly efficient Office of the U.S. Trade Representative (USTR) would be terribly over-shadowed and over-powered by this new super department. As a former high U.S. trade official, I can tell you that these arguments are the sheerest nonsense. For one thing, the United States tends to be out-classed, out-negotiated, and out-thought in international negotiations and in general globalization policy by the likes of China, Japan, South Korea, the EU, and others because its agencies have lacked the resources , talent, and coherence of its overseas competitors. Yes, USTR is small and nimble, but it also has no data gathering or analytical capability . Consequently, it is nimble but poorly informed, dependent on corporations who are interested parties for its data, and without clout in the inter-agency maneuvering in Washington. This explains why it has such a poor record of negotiating deals that actually promote U.S. exports or that reduce U.S. trade deficits.

But don’t worry. The proposal is not going anywhere. Senate Finance Committee Max Baucus (who has oversight over USTR) quickly made it clear that he will not back the proposal as did the Chairman and ranking member of the House Ways and Means committee. Why are they opposing this eminently sensible proposal? Because it would deprive them of oversight of USTR and the other agencies being  consolidated. They would lose some degree of influence and power.

But surely the White House knew the proposal would be opposed before making its announcement. So what’s going on? Easy. The White House is throwing up proposals made previously by Republican administrations but opposed by present Republican members of Comerce just to show how obstructionist and reactionary the Republicans have become.

So it’s all a political game. Too bad because it is a good idea whose time will surely come.