Trade-adjustment assistance

In the United States, trade-adjustment assistance (TAA) refers to government-sponsored training programs and supplemental cash UNEMPLOYMENT compensation provided to workers who lose their jobs due to increased foreign COMPETITION. Some TAA programs require participation in job-training and job-search programs. Trade-adjustment assistance grew out of programs intended to aid Americans who were dislocated when the European Community (now the EUROPEAN UNION) was established. The first assistance program was authorized in the Trade Expansion Act of 1962, although no assistance was actually provided until 1969. Congress has often been reluctant to fund TAA programs, but during the early 1980s, payments to workers dramatically increased, and the Reagan administration responded with efforts to repeal the program. Tighter eligibility standards and reduced budget allocations diminished the program’s scope. It was not until the Omnibus Trade and Competitiveness Act of 1988 that significant funding was committed to TAA. Under TAA, workers may petition the U.S. secretary of labor for assistance. The secretary must certify that workers have been or are threatened with job losses, that sales or PRODUCTION or both of the firm in question have decreased absolutely, and that increased IMPORTS of articles like or directly competitive with those made by the workers or the firm for which the workers provide essential goods or SERVICES “contributed importantly” to job separation or decline. The most visible trade adjustment assistance program is the NAFTA-TAA. Between 1994 and 1997, almost 100,000 American workers were certified for trade-adjustment assistance. This number was often used to show the adverse impact of the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA), but TAA certification does not necessarily mean workers have been displaced, only that there is the potential for workers to lose their jobs due to imports. In the first three years of NAFTA, slightly more than 12,000 workers received NAFTA-TAA. Many workers who have lost their jobs are encouraged by state officials to apply for TAA, thereby reducing the state COSTS for unemployment compensation.