Trade adjustment assistance
Encyclopedia
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.
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.
. 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. In 2002, the program was again expanded and combined with the trade adjustment program provided under the North American Free Trade Agreement
(NAFTA).
The program is administered by the Department of Labor (DOL) in cooperation with the 50 states, the District of Columbia and Puerto Rico
.
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.
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.
United States Department of Labor
The United States Department of Labor is a Cabinet department of the United States government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, re-employment services, and some economic statistics. Many U.S. states also have such departments. The...
, 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.
History
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.”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.
Trade Adjustment Assistance for Workers
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 1974Trade Act of 1974
The Trade Act of 1974 was passed to help industry in the United States become more competitive or phase workers into other industries or occupations.-Fast track authority:...
. 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. In 2002, the program was again expanded and combined with the trade adjustment program provided under the North American Free Trade Agreement
North American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...
(NAFTA).
The program is administered by the Department of Labor (DOL) in cooperation with the 50 states, the District of Columbia and Puerto Rico
Puerto Rico
Puerto Rico , officially the Commonwealth of Puerto Rico , is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin Islands.Puerto Rico comprises an...
.
Program eligibility
Workers must be directly impacted by importsInternational trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...
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
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
or Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
.
Farmers and ranchers adversely impacted by trade will be eligible to participate in a new program operated by the Department of Agriculture
United States Department of Agriculture
The United States Department of Agriculture is the United States federal executive department responsible for developing and executing U.S. federal government policy on farming, agriculture, and food...
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
Computer software
Computer software, or just software, is a collection of computer programs and related data that provide the instructions for telling a computer what to do and how to do it....
was not considered an "article" by the DOL. After a series of scathing decisions by the United States Court of International Trade
United States Court of International Trade
The United States Court of International Trade is an Article III court, with full powers in law and equity. The Customs Court Act of 1980 replaced the old United States Customs Court with the United States Court of International Trade. The Court has nine sitting Judges, as well as Senior Judges...
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.
TAA for Firms
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.