Trade Adjustment Assistance (TAA) is a program of the United States Department of Labor, U.S. Department of Commerce, and the U.S. Department of Agriculture.
The DOL program, Trade Adjustment Assistance for Workers, provides a variety of reemployment services and benefits to workers who have lost their jobs or suffered a reduction of hours and wages as a result of increased imports or shifts in production outside the United States. The TAA program aims to help program participants obtain new jobs, ensuring they retain employment and earn wages comparable to their prior employment.
The DOC program,Trade Adjustment Assistance for Firms, provides financial assistance to manufacturers and service firms affected by import competition. Sponsored by the Department of Commerce’s Economic Development Administration (EDA), this cost-sharing federal assistance program helps pay for projects that improve firms’ competitiveness.
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Trade Adjustment Assistance (TAA) consists of four programs authorized under the Trade Expansion Act of 1962 and defined further under the Trade Act of 1974 (19 U.S.C. § 2341 et seq) (Trade Act). It was proposed by President John F. Kennedy as part of the total package to open up free trade. President Kennedy said: “When considerations of national policy make it desirable to avoid higher tariffs, those injured by that competition should not be required to bear the full brunt of the impact. Rather, the burden of economic adjustment should be borne in part by the Federal Government.”[1] TAA is conceived to act as a way to reduce the damaging impact of imports felt by certain sectors of the U.S. economy, even as consumers and other sectors benefit from imports. The current structure features four components of Trade Adjustment Assistance: for Workers, Firms, Farmers, and Communities. The program for workers is the largest, and administered by the U.S. Department of Labor. The program for Farmers as administered by the U.S. Department of Agriculture, and the Firms and Communities programs are administered by the U.S. Department of Commerce, Economic Development Administration.
Each Cabinet level Department was tasked with a different sector of the overall Trade Adjustment Assistance program. The Secretary of Labor was authorized to implement Trade Readjustment Assistance (TRA) and relocation allowances through cooperating state agencies. TRA are income support payments that were, at that time, paid in addition to an individual's regular unemployment compensation. The original program had no training or reemployment component. The program was rarely used until 1974, when it was expanded as part of the Trade Act of 1974. The Trade Act of 1974 established the training component of the program. In 1981, the program was sharply curtailed by the Congress at the request of the Reagan Administration.[2] In 2002, the program was again expanded and combined with the trade adjustment program provided under the North American Free Trade Agreement (NAFTA).[3]
The program is administered by the Department of Labor (DOL) in cooperation with the 50 states, the District of Columbia and Puerto Rico.
Workers must be directly impacted by imports or by a shift in production of their firm to any country with a free trade agreement with the United States, or by certain other shifts in production. Employees of upstream suppliers are eligible if the product supplied to the primary firm consists 20% of the production or sales of the secondary workers’ firm, or their employer’s loss of business with the primary firm contributed significantly to the secondary workers’ separation from work.
Employees of downstream producers are eligible if they perform additional, value-added production processes for articles produced by primary firms, and the primary certification was based on an increase in imports or a shift in production to Canada or Mexico.
Farmers and ranchers adversely impacted by trade will be eligible to participate in a new program operated by the Department of Agriculture and are potentially eligible to receive training under TAA. They are not eligible for the Trade Readjustment Allowance.
Under the current law, as modified in 2009, workers in most service jobs (call center operators, for example) are eligible for trade adjustment assistance. In 2004, a group of computer experts displaced by overseas labor tried to apply for trade adjustment assistance but were rejected because computer software was not considered an "article" by the DOL. After a series of scathing decisions by the United States Court of International Trade criticizing the DOL's approach, the DOL revised its policies in April 2006 to extend trade adjustment assistance to more workers producing digital products such as software code.[4]
Trade Adjustment Assistance for Firms provides import impacted companies with professional guidance, business recovery plan development, and cost-sharing for outside consulting services. Eligibility is established along similar lines, with companies showing that there has been a recent decrease in sales and employment, in part due to customers shifting purchases away from the applicant and to imported goods. The ARRA of 2009 expanded eligibility to service firms as well as the traditional manufacturing companies that had been the sole focus of the program. This expansion for service firms and workers is scheduled to expire on December 31, 2010, and the program would revert back to the pre-ARRA structure without a vote to extend the authorization.
The responsibility for administering the TAA for Firms program is delegated by the Secretary of Commerce to the Economic Development Administration (EDA). EDA, through a national network of 11 Trade Adjustment Assistance Centers (TAACs), provides technical assistance on a cost-shared basis to U.S. manufacturing, production, and service firms in all 50 states, the District of Columbia, and the Commonwealth of Puerto Rico.