As he prepares to give his 2012 State of the Union address next week, President Obama returned to a proposal last week from his 2011 speech.  To make the government leaner and more efficient, President Obama requested “fast track authority” to reorganize and consolidate agencies in the federal bureaucracy, starting with the six agencies that focus primarily on commerce and trade:  the Department of Commerce, Overseas Private Investment Corporation (OPIC), U.S. Trade and Development Agency (USTDA), Office of the U.S. Trade Representative (USTR), Small Business Administration (SBA), and the U.S. Export-Import Bank (EXIM).

Three of these agenices are funded by the International Affairs Budget:

• OPIC, which supports investment in the developing world by providing loans and loan guarantees to small- and medium-sized American businesses,
• USTDA, which helps companies create American jobs by supporting trade missions and projects where U.S. companies build up infrastructure in the developing world, and
• EXIM Bank, which assists in the financing exports of U.S. goods and service through loans, insurance, and loan guarantees.

The nature of this single trade agency has yet to be spelled out, so the impact of consolidation on individual agencies is not yet clear.  President Obama said in his announcement that he aims to create a “one-stop shop” by forming an agency dedicated “to helping our businesses sell their products to the 95 percent of global consumers who live beyond our shores.”  He proposed elevating SBA to cabinet level status, so that, presumably, the new agency would have three cabinet level representatives:  the head of the new agency, USTR, and SBA.

While it remains an open question whether or not Congress will grant President Obama fast track authority at all, initial responses on the Hill praised efforts to make the federal government more efficient.  Reactions among experts raised concerns and questions about the details of the proposal.  Many have expressed concern that the U.S. Trade Representative will lose its authority.  Still others discuss the impact the reforms may have on U.S. international development.  Others express concern for the impact on the small, flexible development assistance organizations like OPIC, USTDA, EXIM, and USTR should they lose their independence to a new agency.  Christopher Coughlin, former Vice President for External Relations for OPIC, outlined the value of autonomy for OPIC, EXIM, USTDA, and USTR.

We will be watching to see whether the trade agency consolidation appears in next week’s State of the Union.  The structure and future of U.S. trade and international economic relations could impact the International Affairs Budget with significant changes to several important economic development agencies.   Much of the debate has focused on USTR, but the development missions of OPIC, EXIM, and USTDA shouldn’t also be lost in the shuffle.