Publication Date

1-9-2013

Abstract

[Excerpt] When Congress passed the Reciprocal Trade Agreements Act (RTAA) of 1934, it reflected an important transition in national trade policy away from “protectionism” toward greater “trade liberalization.” This shift continues to be the dominant, but hardly uncontested, trade policy of the United States. The substantial national gains from trade have long been recognized, yet trade liberalizing legislation often faces strong political opposition because related costs, although much smaller, affect a vocal and concentrated constituency. Congress first addressed this inherent tension with legislation that allowed higher tariffs and other trade barriers to be reimposed when domestic industries were threatened or hurt by imports. In 1962, however, Congress adopted an additional approach by providing trade adjustment assistance (TAA) directly to trade-affected firms and workers. It remains a much-debated, but enduring pillar of U.S. trade policy today.

This report discusses the role of TAA in U.S. trade policy, from its inception as a legislative option in the early 1950s, to its core role as a cornerstone of modern trade policy that many argue has served to promote the long-term U.S. trade liberalization agenda. It will also consider the extent to which TAA has been linked to both renewal of trade agreements authority1 and trade agreement implementing legislation. This includes action taken on TAA in the 112th Congress as part of a grand trade bargain that included passage of implementing bills for free trade agreements (FTAs) with Colombia, Panama, and South Korea. Understanding the origins of TAA, the historical economic and congressional debate, and legislative options considered by Congress over the past 50 years may help inform the recurring discussion on TAA reauthorization.

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Suggested Citation
Hornbeck, J. F. (2013). Trade adjustment assistance (TAA) and its role in U.S. trade policy. Washington, DC: Congressional Research Service.

A previous version of this report can be found here: http://digitalcommons.ilr.cornell.edu/key_workplace/867/

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