By  on January 13, 2012

WASHINGTON — Apparel importers expressed some concern about President Obama’s proposal to merge the U.S. Trade Representative’s office with the Commerce Department and four other agencies, saying it could eliminate USTR’s ability to respond quickly to issues and proposals that arise during crucial trade negotiations.

Obama said Friday that he is seeking “consolidation authority” from Congress to merge six federal government departments into one new cabinet agency in an effort to curb waste, “redundancy and inefficiency,” and save the government money. The other four agencies are the Small Business Administration, the Export-Import Bank, the Overseas Private Investment Corporation and the U.S. Trade & Development Agency.

“Right now there are six departments and agencies focused primarily on business and trade in the federal government,” he said, pointing to the Commerce Department, USTR and the Small Business Administration. “In this case, six is not better than one.”

Under consolidation authority, the President can propose mergers to save the government money. Congress would have 90 days to vote up or down, and not amend the proposals.

Jeff Zients, federal chief performance officer and deputy director for management at the Office of Management & Budget, said in a conference call that the merger would save $3 billion and eliminate 1,000 to 2,000 jobs through attrition. Zients noted that the integrated department would be led by one secretary, but that the USTR would still be on the president’s cabinet. According to the White House, presidents have had similar authority for the past 50 years until it expired during the presidency of Ronald Reagan in 1984.

Congress must approve the President’s move to streamline the government, which could be difficult in such a polarized environment on Capitol Hill that has led to gridlock on most legislation.

Ron Kirk currently heads the much smaller USTR, which negotiates and enforces trade agreements and rules, and Commerce Secretary John Bryson heads the sprawling agency that oversees a wide range of trade issues, including trade remedy decisions and the Office of Textiles & Apparel.

“If you have an agency [such as USTR] that’s part of a larger bureaucracy, it is harder for them to make decisions and respond to negotiating dynamics and developments that may be quickly moving,” said Stephen Lamar, executive vice president of the American Apparel & Footwear Association.

Lamar noted that the current model has USTR as the lead negotiating agency in pushing for market access around the world for U.S. companies that are backed by the depth of resources at Commerce. Both agencies already work closely together.

“I think having USTR as a separate entity has really worked,” said Julia Hughes, president of the U.S. Association of Importers of Textiles & Apparel. “It allows negotiators to negotiate and other agencies to implement…There is a lot of concern about how will it will function when you don’t have a core of elite negotiators and they are not part of the executive branch.”

David Spooner, an attorney representing importers with law firm Squire Sanders LLP, said USTR’s main role would essentially be eliminated if merged into an integrated agency.

“USTR was created in the 1960s because prior to that, trade policy was a mess,” said Spooner, who has held positions at USTR and Commerce. “You often had a department like agriculture fighting with Commerce, Treasury or State, and you would have stalemates [on important trade matters and negotiations] because each cabinet agency was an equal level. I’m not sure why eliminating USTR would make trade policy more efficient and business friendly.”

The move to merge the departments stems from meetings the administration has had with business owners across the country in the past few months, Obama said.

“There are a whole host of Web sites, all kinds of toll-free numbers, all sorts of customer service centers, but each are offering different assistance — it’s a mess,” Obama said. “If Congress would reinstate the authority that previous presidents have had we would be able to fix this. We would have one department where entrepreneurs can go from the day they come up with an idea and need a patent, to the day they start building a product and need financing for a warehouse, to the day they’re ready to export and need help breaking into new markets overseas.”

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