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Obama’s Budget Boosts Trade Agency Funding

Budget proposal increases funding for agencies that foster international trade, while Obama looks to slash overall spending by $17 billion.

WASHINGTON — The budget proposal President Obama sent to Congress on Thursday increases funding for agencies that foster international trade and cuts some domestic cotton programs.

This story first appeared in the May 8, 2009 issue of WWD.  Subscribe Today.

The $3.55 trillion 2010 fiscal year spending request seeks to eliminate or reduce 121 programs, half of which are defense related, saving $17 billion. Obama said his proposed cost-cutting measures for the fiscal year that begins Oct. 1 are the first step toward reducing a $1 trillion deficit that he has pledged to cut in half by the end of his term.

Democratic leaders in Congress, who control the House and Senate, are crafting their own budget blueprints but are likely to adhere more closely to a Democratic president’s request.

The two biggest trade agencies, the Commerce Department and the U.S. Trade Representative, each received increases in Obama’s budget. USTR, which is responsible for the negotiation of trade deals with other countries and with the World Trade Organization, received a $3 million increase to $48 million.

The Commerce Department’s Import Administration, responsible for monitoring textiles and apparel and investigating antidumping and countervailing duty trade cases, received an additional $2 million to $68 million. The proposal also included increases of $1 million each for Commerce’s manufacturing and services, and market access and compliance programs, to $50 million and $43 million, respectively. The International Trade Commission, which conducts economic investigations and helps decide antidumping and countervailing duty trade cases, would benefit from an increase of $8 million to $83 million.

The administration also increased funding for key programs at the Labor Department. Changes included a $37 million increase to $238 million for the enforcement of wage and hour standards set out by the Fair Labor Standards Act. The funding will support the hiring of more than 200 new investigators for the division. An increase of $6 million to $92 million was included for Labor’s International Labor Affairs division.

U.S. Customs & Border Protection, a division of the Department of Homeland Security, which seizes counterfeit goods shipped through U.S. ports, received a $110 million increase to $9.2 billion. For fiscal year 2008, Customs seized $102.3 million worth of counterfeit shoes, $25.1 million of bogus apparel and $29.6 million of fake handbags, wallets and backpacks. The agency also oversees ports and border entry points and manages a public-private supply chain security initiative in which most retailers and U.S. apparel and footwear brands participate.

The administration highlighted cuts totaling $17 billion that it made in its budget proposal, including the elimination of cotton storage credits that allow domestic producers to store their cotton at a cost to the U.S. government until prices increase. The budget proposal would eliminate all payments for a savings of $52 million in fiscal year 2010, with savings of $570 million expected in the next 10 years.

The increase in funding at USTR and the Import Administration unit could be significant for the domestic industry if used to file trade remedy cases, launch investigations or make it easier for U.S. companies to pursue violations, said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Stephen Lamar, executive vice president of the American Apparel & Footwear Association, said the budget proposal kept the trade agenda fully funded, in keeping with the level of attention afforded to it by previous administrations. Where the Obama administration’s budget proposal is different is in its attention to the Labor Department, Lamar said.

“The last administration would put in a limited budget for Labor and then let Congress increase it,” he said. “Here you have an administration that wants to take ownership for that increased budget themselves.”