Brief History of MDCP Funding

(updated 2014.12.04)

Thirteen Consecutive Years of Funding

The International Trade Administration (ITA) of the U.S. Department of Commerce has made Market Development Cooperator Program (MDCP) awards each year since the program began in 1993, when Congress included $2.5 m in its Commerce Department appropriation for MDCP funding. MDCP is managed by ITA's Manufacturing and Services (MAS) program area. After 1993, MDCP funding was no longer a separate line item in the Commerce Department’s appropriation. Instead, it was considered to be part of ITA’s “base” allocation from the appropriation the Commerce Department received from Congress. Actual amounts that ITA/MAS applied to MDCP awards from 1993 to 2005 range from $1.6 m to $2.5 m with an average of over $2.3 m.

Increase in Earmarks in 2006 Put Squeeze on Non-Earmarked Funding

In its fiscal 2006 appropriation, Congress, using language originating in the Senate, instructed the Commerce Department to increase the level of funding to several organizations, most of them with relation to the textile industry. These “earmarks”, most of which were for programs that had received funding in previous years, totaled about $5 m more than they had in previous years. Congress did not increase ITA’s budget to accommodate the increase in earmarks. In order to fund the $5 m in additional earmark grants, ITA/MAS had to cut funding for several programs normally included in its base budget allocation. As a result, ITA decided it was not able to fund an MDCP competition for 2006. (For more information see a recent history of ITA earmarks and a recent history of ITA's MDCP awards.)

Cause of Cancellation of 2006 Competition Was Budgetary

It is important to note that Congress did not instruct ITA to withhold funding for a 2006 MDCP competition. MDCP is recognized by U.S. industry as one of the most successful programs for helping U.S. industry to become more competitive internationally. (See, for example, pages 7-8 of Congressional testimony by the National Association of Manufactuers from April 2008.) Since 1997, when ITA began gathering uniform export statistics for the program, MDCP has generated $2.4 b in exports. It is one of the most cost-effective federal programs now returning more than $100 in exports for every $1 invested in award funds and administrative costs. ITA made the decision not to fund the 2006 competition based on extreme budgetary constraints. Congress did not instruct ITA to cancel the 2006 competition. MDCP funding comes from ITA's base allocation and the ultimate funding decisions are made by ITA. Therefore, Congress would not have known that its 2006 appropriation would place ITA in a position where it would be obliged to curtail its 2006 MDCP competition.

Competiton Resumed in 2007

House Joint Resolution 20 (HJR 20) passed on February 14, 2007, resulted in funding for the Commerce Department through September 2007 at about the same level as for fiscal 2006. This continuing resolution contained none of the earmarks that had the effect of consuming ITA budget that could have otherwise funded a 2006 MDCP competition. On the other hand, HJR 20 did not cover $10 million in uncontrollable increases such as pay raises, increased space costs, and other inflationary type increases. As a result, ITA/MAS had to reduce the amount of MDCP funding available for a 2007 competition. Four awards were made to totaling $576,000. Again, the reduction in the amount available for awards was made by ITA based on limited availability of funds in ITA's "base" funding. Congress gave ITA no instructions with regard to MDCP funding one way or the other.

2008 Competition Results in Four New Awards

In late September 2008, ITA selected four (4) new organizations to receive MDCP awards totaling $431,000. ITA was able to make the awards due to some unexpected economies it was able to achieve earlier in the fiscal year.

2009 Competition

In October 2009, TA announced five MDCP awards totaling $1.5 million.

2010 Competition

ITA committed $1.7 million to fund five MDCP awards.

Legislation to Increase MDCP Passed in 2010 But Was Not Funded

On March 5, 2010 Senator Amy Klobuchar (D-MN) introduced the Export Promotion Act of 2010 that included $15 million in increased funding for MDCP. However, this bill was incorporated as an amendment into the Small Business Job Creation and Access to Capital Act of 2010. The MDCP provision was not funded by the Congress.

Other Proposed Legislation that Refers to MDCP

American Export Promotion Act of 2013

Competitions 2011-2014

ITA made several awards totaling about $2 million each year. See Projects for a list of awards. As with all other MDCP awards, these were made from ITA's base budget allocation.