It makes little sense to have separate economic statistical agencies; other nations combine theirs into national statistical agencies, and the United States should do the same. At the same time, years of budget constraints have caused U.S. statistical agencies to lack the resources needed to effectively measure key elements of the traded economy. There are numerous examples, including the following, which should be rectified through increased or restored funding: The International Labor Comparisons Program at the Bureau of Labor Statistics (BLS), which produces timely, high-quality international comparisons of labor force, productivity, hourly compensation, and prices for many industrialized countries, was terminated in the Administration’s FY 2013 budget; The Bureau of Economic Analysis (BEA) no longer measures manufacturing foreign direct investment specifically and can’t distinguish between “greenfield” new plant investment in the United States and foreign purchases of existing U.S. establishments; BLS reporting of state level data on manufacturing property, plant, and equipment data ended in 2007; BLS lacks and needs to build an import price index so it can fix the productivity measurement problem with regard to imported manufacturing inputs; NSF needs to produce industrial R&D data in a timelier manner, as the most recent data is from 2008. It would also be helpful if the NSF data reported on three distinct components: scientific research, engineering research, and development; BEA should improve its existing annual surveys and five-year benchmark surveys of companies with facilities overseas to identify the type of products manufactured abroad and the number of employees at these facilities.

One step Congress could take to bolster U.S. traded sector competitiveness would be to create a 13-member United States Economic Competitiveness Commission, which would release a report every other year providing an independent assessment of the competitiveness of the U.S. economy (particularly its traded sectors, including but not limited to manufacturing) in the global marketplace. The report would offer targeted recommendations to improve U.S. competitiveness across key economic sectors. Senate and House Republican and Democrat leaders would each appoint three members and the Administration one member.

There is no entity in the federal government tasked with performing competitiveness analysis. The statistical agencies see their job as accumulating facts; not analyzing them. To remedy this, Congress should task the National Institute of Standards and Technology with the creation of a new traded sector analysis unit which prioritizes interpretation and analysis over collection and aggregation. This new entity should have two core functions. The first would be to regularly assess important aspects of overall U.S. traded sector competitiveness (e.g., trends in FDI, growth of traded sector jobs and output, changes in global market share of U.S. traded sectors, etc.). The second would be to focus on select traded sectors that are critical to the United States’ economic future (sectors where the United States has some competitive edge and where value added and wages are higher than average) and develop strategic road maps (by coordinating with DoD, DoE, NSF, and industry leaders) of how the federal government can promote the competitiveness of these sectors.

BLS’s International Labor Comparisons program adjusts foreign data to a common framework, allowing one to compare the traded sector health and competitiveness of the United States against that of other countries. The ILC data provides complete and comparable time series for extremely useful indicators including manufacturing output, hours, compensation, and productivity, as well as labor force, employment, price, and industry statistics. Funding for the ILC program was terminated by the 2013 sequestration, yet this data is critical to understanding U.S. economic competitiveness, and should be restored by Congress immediately.

The length of time and amount of money businesses must spend navigating the complex regulatory permitting process is a serious disincentive to invest in traded sector industries in the United States. The Department of Commerce should establish a one-stop shop to help companies navigate the complex U.S. regulatory framework and expedite the permitting process. It should also develop an online “Turbo Regulation” application that allows companies to complete the required “paperwork” in an easy to fill out Web form over the Internet.

Business regulatory compliance costs U.S. businesses tens of billions of dollars annually. To help address this, the Administration should increase industry’s participation in the federal rule-making process, which would likely help reduce the complexity of regulatory compliance, emphasize cost/benefit analysis, and restrict the executive branch’s impulse to “legislate by regulation.” Moreover, Congress should consider passing the “Regulations from the Executive in Need of Scrutiny” (REINS) Act, which would require both houses of Congress to affirmatively approve, and the President to sign, any “economically significant regulation,” defined as any administrative rule with a projected impact to the U.S. economy exceeding $100 million, before it becomes law.

In an era when global trade was minimal and the dominance of U.S. competitiveness was largely assured, the nation could afford to impose new regulatory requirements with little thought given to their impact on the competitiveness of traded sectors. But today, regulation can and does increase costs on industries in traded sectors that in turn make them less competitive globally. To the extent federal regulation makes distinctions between companies, it’s often on the basis of size, but it should rather be on whether a firm is in an industry facing global competition or not. To address this, regulatory agencies seeking to impose regulations that affect traded sectors in non-trivial ways should be required to have these regulations undergo a review by OMB’s OIRA for their first-order competitiveness impact. Moreover, given the limited amount of time and attention available for regulatory review, the highest priority should be placed on reviewing those regulations that directly impact traded sectors.