Trade Adjustment Assistance: Improvements Necessary, but Programs Cannot Solve Communities' Long-Term Problems

The Trade Adjustment Assistance (TAA) Program and the North American Free Trade Agreement Transitional Adjustment Assistance (NAFTA-TAA) Program are designed to help dislocated workers, communities, and firms adjust to the rapid economic changes that characterize the globalization of national economies. Although globalization has increased the importance of technology and service sector jobs, it has also resulted in the loss of many manufacturing jobs as companies that cannot compete with lower-priced imports go out of business or relocate abroad. The federal government recognizes that although the benefits of increased trade are widely dispersed across the economy, the costs of worker dislocation effects are more localized. This has heightened concerns about the efficacy of federal trade adjustment assistance efforts. This testimony discusses (1) the nature of trade impacts on communities and the use of benefits and services under TAA and the NAFTA-TAA programs, (2) the structural problems that impede effective delivery of those services and benefits, and (3) the longer-term challenges facing trade-impacted communities.