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Fair Trade Archive: GTW E-Newsletters, Action Alerts, and Updates

(Consolidated) Trade Adjustment Assistance (2003-present)

The consolidated Trade Adjustment Assistance (TAA) program, which merged the pre-existing TAA and NAFTA-TAA programs, was created by the "Trade Adjustment Assistance Reform Act of 2002" and came into effect at the end of 2002. To date, 967,368 workers have been certified under the revised TAA program (November 08, 2002 - June 30, 2009). Groups of workers that have lost jobs or substantial wages because of trade must first file applications for certification of eligibility with the Department of Labor (DoL) in order to receive benefits.

This program offers some new benefits, including an additional 26 weeks of income support for workers enrolled in training (to a maximum of 78 weeks after unemployment benefits are exhausted), a refundable 65 percent tax credit for healthcare costs for the duration of a worker's TAA eligibility (normally not more than two years), two years of limited "wage insurance" (50 percent of the difference between workers' old and new salaries to a maximum of $5000 per year) for workers over 50, and higher job search and relocation reimbursement.

The key difference in this new TAA program is that it extends eligibility to some additional groups of workers. Under the new program, workers who lose jobs as the result of their employer relocating their plant or factory to any country with which the U.S. has a free trade agreement (or which is a beneficiary country under the Andean Trade Preference Act, the African Growth and Opportunity Act, or the Caribbean Basin Recovery Act) are automatically eligible without having to prove that increased imports were a factor.

The consolidated TAA program also covers extremely limited groups of "secondary workers" ("upstream" and "downstream") hurt by the closing of a primary production facility due to trade. Production workers at "upstream" suppliers (companies that used to supply parts or goods to a plant or factory where workers have since been certified as eligible for TAA benefits) may be also certified if 1) the component parts that they supplied to the primary TAA-certified location accounted for at least 20 percent of their production or sales and 2) the loss of this business "contributed importantly" to subsequent layoffs. Upstream workers would include, for example, those involved in supplying an auto manufacturer with car doors, headlight casings or other parts or components.

Downstream production workers (employees at companies that used to perform additional, value-added production processes on an article made at a firm that has since been TAA-certified) are only eligible for benefits in cases where 1) the closure of the primary plant was due to imports from, or relocation to the two NAFTA countries and 2) the loss of business with the primary TAA-certified firm contributed importantly to layoffs at the downstream facility. Workers involved in adding cushioning and/ or upholstery to furniture frames to create a finished product would be an example of downstream workers.

The 2002 Act also includes a limited "wage insurance" demonstration program for laid-off workers over 50. This benefit (which pays 50 percent of the difference between old and new salaries for eligible individuals up to $5000 a year for two years) became fully available through an "Alternative TAA" program in 2003. The 2002 legislation also established a program for farmers and fishermen that provides technical assistance and cash support when imports "contribute significantly" to pushing the national average price for a product/commodity to less than 80 percent of the average for the previous five marketing years. More information on this program is available from the Department of Agriculture.

Yet this still provides unequal access to benefits for workers who are hurt by trade; a worker who loses a job as the result of a production shift to Mexico may be eligible for benefits while a worker whose employer moves their plant to China may not be. It also fails to cover the large numbers of permanent and contract high-tech and service workers that have been laid off as a result of increased imports, or because their jobs have been outsourced overseas. Even in manufacturing plants where line workers may be certified eligible for TAA, broad categories of non-production employees (such as those who run the computer systems, transport or box the finished goods, work in the cafeteria, mop the floors, etc.) have no access to these benefits.

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