POLICY BRIEF 08-2

Strengthening Trade Adjustment Assistance

by Howard F. Rosen, Peterson Institute for International Economics

January 2008

Howard F. RosenMore than 40 years ago, Congress established the Trade Adjustment Assistance (TAA) program to provide assistance to workers and firms adversely affected by import competition. The program provides extended income maintenance and training to workers and technical assistance to firms. TAA was expanded in the 1970s and cut back during the 1980s. Provisions included in the Trade Act of 2002 breathed new life into the program. Eligibility criteria were extended to include secondary workers and workers who lose their jobs due to offshore shifts in production. A health insurance tax credit and wage insurance were added to the package of assistance for workers. TAA for Farmers and Fishermen was also created. Congress is currently considering further changes to the program, including covering service workers and expanding the health insurance tax credit and wage insurance. Many believe that expanding TAA is critical to winning congressional support for further trade liberalization.

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