Modernizing Trade Adjustment Assistance

by Nicole Venable

Senate Finance Committee Chairman Max Baucus spoke this morning (photo below) at the U.S. Chamber and noted that Congress has begun discussing legislation to modernize Trade Adjustment Assistance (TAA).  Chairman Baucus indicated that many Americans do not believe they are beneficiaries of trade and that it is his hope that a stronger TAA program will help them deal with some of the negative implications of more liberalized trade and alleviate some of their concerns about trade agreements. The truth is the American worker and the American consumer - often one and the same - are both beneficiaries of trade.

We hope that Members of Congress will follow Chairman Baucus' lead.  While it is important to deal with the negative implications of trade, it is paramount that the U.S. continues to open markets and expand trade opportunities for American goods, services, and agricultural exports through trade agreements like the pending trade deals with Colombia, Panama, and Korea. The Chamber has embraced the following set of principles relating to modernization of TAA:

• The benefits of trade far outweigh the costs, but those few who do lose their jobs due to trade deserve help:  While international trade brings tremendous benefits to American workers, farmers, and consumers, studies show that a limited number of job losses (less than 5%) can be attributed to import competition.  These workers deserve direct assistance in the short term and training to ensure their long-term employment.
• TAA should be made less bureaucratic and possibly expanded to services workers:  The Trade Adjustment Assistance (TAA) program should be improved to simplify training eligibility and provide more direct help to workers seeking new employment opportunities.  Workers dislocated due to shifting production should be eligible for TAA benefits without regard to the country to which jobs may be relocated.   The possibility of making TAA benefits available to services workers should also be explored.
• TAA training should match industry needs and complement the business community’s large investment in training.  Given skilled labor shortages in some sectors and states, the business community should be involved from the outset to ensure that TAA training programs focus on helping workers acquire skills that match the needs of industry.  According to the American Society for Training & Development, U.S. businesses already spend more than $100 billion a year on worker training.  Such programs need to be constantly reassessed, but this investment underscores the commitment of business.
• It makes no sense to enhance TAA but deny American workers the benefits of pending trade agreements.  Modernization and expansion of the TAA program must move in tandem with moves to provide new opportunities to American workers by opening foreign markets.  Nearly all imports from Colombia, Panama, and South Korea enter the U.S. market duty free, while these countries maintain formidable barriers against U.S. exports.  The pending trade agreements with these countries will level the playing field by eliminating their steep tariffs and other barriers against U.S. exports.  We call for a grand bargain to enhance and expand TAA and approve the pending trade agreements in parallel.