Trade Assistance Linked to Trade Agreements

U.S. Trade Representative Ron Kirk told lawmakers that the pending trade deals with Colombia, Panama, and South Korea could all be passed “by August if not sooner” but with a slight catch. Kirk pegged the deadline on the condition that Congress renews the expired Trade Adjustment Assistance Program (TAA)—a program that helps American workers hurt by trade—which became a bargaining chit in the House when Republicans pulled a bill to renew it at the 11th hour. Democrats have been demanding the funding be reinstated before the president signs new trade deals.

Though the administration has long made it clear that it wants Congress to focus on passing a full trade agenda, not just these three trade pacts, the White House has come under increasing pressure from House Democrats to ensure that TAA, which expired earlier this year, is reauthorized before the agreements come up for a vote.

Specifically, TAA goes to workers displaced by imported goods or the migration overseas of industry and more recently, services such as call centers. Benefits help workers maintain wages, re-train, and search for new jobs. The announcement from the administration marks the first time that the Obama administration has directly tied domestic-worker benefits to the three trade deals.

While there was extensive talk of TAA at Congressional hearings last week and calls to review the pending Free Trade Agreements (FTAs), there was not the explicit tie between the two programs until National Economic Council Director Gene Sperling stated that the administration will not submit implementing legislation for the three agreements until there is a TAA deal, which Kirk reiterated to lawmakers, as well. The new requirement will almost certainly slow the effort to get the agreements completed this summer, since TAA provisions—and how to pay for them—could be controversial.

A group of 41 senators—led by Sherrod Brown (Ohio), Debbie Stabenow (Mich.), Jay Rockefeller (W.Va.), Robert Casey (D-Pa.), Jeff Bingaman (N.M.) and Maria Cantwell (Wash.) — sent a letter to President Obama expressing support for his decision not to submit the pending agreements with Colombia, Panama and South Korea to Congress until a deal is struck to extend a long-term extension of the TAA program.

The senators argue that since the new TAA began in May 2009, the program has assisted 185,000 workers with usage in some states increasing by more than 40 percent. The 2009 reforms aimed to improve accountability by requiring data on performance and worker outcomes, enabling Congress to identify where improvements were needed. Republicans have been reluctant to renew the program, especially at the 2009 economic stimulus levels.