Trade Adjustment Assistance Won’t Fix TPP

Dave Johnson

Some advocates of the upcoming Trans-Pacific Partnership (TPP) claim that including trade adjustment assistance (TAA) for displaced workers will make things OK for people who lose their jobs and the communities where they live. The record of “NAFTA-style” trade agreements says otherwise.

TAA is government help given to workers and companies whose livelihoods are displaced as a result of trade agreements. This help includes retraining and help finding new jobs, as well as some additional pay above unemployment compensation during the retraining period, for a limited time. What this has meant is that $40-an-hour manufacturing workers whose jobs are shipped out of the country are retrained under TAA to become low-wage workers in another industry, and these workers get job-finding assistance in competing with all the other workers displaced by trade deals who are looking for anything they can get.

Unfortunately, TAA only goes to employees (not contract workers and temps) who are directly displaced by the trade deals and only for a relatively short period of time. It is difficult to qualify for TAA. Meanwhile, workers in the retail stores and other businesses, the suppliers and others who lose their livelihoods in the ripple effect after the displaced workers stop spending do not receive TAA. And since the period for workers to receive TAA is limited, those workers will join all the other workers displaced by trade deals in collecting food stamps and other aid.

Also not qualifying for TAA are employees of other companies who are told by their boss to take a pay cut or the company will send their job out of the country, too. That’s an indirect effect of NAFTA-style trade agreements, while TAA only applies to employees who are directly laid off when the companies move the jobs and factories and industries to the low-wage, low-law, low-tax countries.

Benefits Of NAFTA-Style Trade Deals

Advocates of trade agreements say the overall benefits of the agreements outweigh the costs. They say TAA reduces the costs to workers making it an overall good deal.

The benefits of NAFTA-style trade agreements to our country include:

  • Billionaires who move jobs to low-wage countries can then pocket the difference between the wages they would pay here and the low wages paid there,
  • billionaires who move factories to countries that don’t regulate pollution can pocket the difference between the regulatory costs they would pay here and the low cost of being allowed to pollute the environment there, and
  • billionaires who move jobs and factories to countries that don’t collect taxes to pay for schools and infrastructure can then pocket the difference between the taxes they would pay for good schools and infrastructure here and the taxes they don’t pay there.

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