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1 1 (May 14, 2024)

handle is hein.crs/govepmw0001 and id is 1 raw text is: Congres&onal fesi infon in I I lative d y~ 3rch S since 191 Updated May 14, 2024 Trade Adjustment Assistance for Firms The Trade Adjustment Assistance for Firms (TAAF) program helps U.S. firms impacted by import competition to improve their global competitiveness. TAAF is administered by the U.S. Department of Commerce's Economic Development Administration (EDA). On July 1, 2022, TAAF termination provisions took effect, meaning EDA cannot accept new petitions for TAAF but may continue to assist firms that submitted a petition prior to the program's expiration. Historically, Congress has reauthorized and expanded Trade Adjustment Assistance (TAA) programs, including TAAF and a larger program for workers (see text box), in tandem with trade liberalization legislation, such as for free trade agreements (FTAs). Congress has also reauthorized TAA programs during periods of high U.S. unemployment. While most of the policy discussions have focused on the TAA for Workers program, the 118th Congress may consider whether or not to reauthorize TAAF, or whether to make policy changes to the TAAF program. Trade Adjustment Assistance (TAA) for Workers provides workforce services and other benefits for trade- affected workers. It is administered by the U.S. Department of Labor (DOL). Under sunset and termination provisions in the Trade Adjustment Assistance Reauthorization Act of 2015, the program began a phaseout on July 1, 2022. Workers who were receiving benefits prior to the termination may continue to do so, but new worker groups are ineligible for the program. TAA for Workers has continued to receive funding to support legacy participants. Background Congress first authorized TAA programs in the Trade Expansion Act of 1962 (P.L. 87-794), as amended. TAA programs were introduced to address domestic concerns about the localized negative impacts of trade liberalization without using trade protectionist measures such as tariffs, quotas, or duties. Congress reauthorized and expanded TAA programs in the Trade Act of 1974 (P.L. 93-618), which also created fast track trade negotiating authority-expedited legislative consideration of trade agreements, now referred to as Trade Promotion Authority (TPA). Under the Trade and Globalization Adjustment Assistance Act of 2009 (TGAAA, part of P.L. 111-5, the American Recovery and Reinvestment Act), Congress expanded TAAF through provisions such as (1) the inclusion of service-sector firms to reflect their increased role in the U.S. economy, and (2) extended timeframes for evaluating negative impacts of import competition on firm sales and/or production. Congress last reauthorized TAAF and other TAA programs in the Trade Adjustment Assistance Reauthorization Act of 2015 (TAARA, Title IV, P.L. 114-27), in conjunction with the latest TPA reauthorization. TPA expired in July 2021, and, to date, the Biden Administration has not sought reauthorization. TAARA included sunset provisions for TAAF, which ended TGAAA's expanded measures as of July 1, 2021. TAARA termination provisions took effect on July 1, 2022, meaning that firms can no longer submit new petitions for TAAF, but firms that filed a petition by June 30, 2022 can continue to receive assistance. TAAF Overyiew EDA provides TAAF funding to 11 regional Trade Adjustment Assistance Centers (TAACs), which provide technical assistance to firms in the 50 states, the District of Columbia, and the Commonwealth of Puerto Rico. EDA does not directly provide funds to firms. The following entities may apply to operate a TAAC: (1) universities or affiliated organizations; (2) states or local governments; or (3) nonprofit organizations. Phase 1: Certification. TAACs worked with firms at no cost to complete and submit their petitions to EDA to be certified as a trade-impacted firm. Most firms that applied for TAAF certification have been from the manufacturing sector. EDA had to certify that firms met three conditions: * Real or threatened negative employment impacts for a significant number or proportion of workers; * Decreases to sales and/or production during a specified timeframe; and * Import competition has contributed importantly to the negative impacts on employment and sales and/or production. Phase 2: Recovery Planning. Once EDA certifies a firm, the firm works with TAAC staff to develop a business recovery plan (adjustment proposal, or AP) for approval by EDA. Firms have two years from certification to submit an AP. TAAF covers 75% of phase 2 costs. Phase 3: AP Implementation. Once EDA approves a firm's AP, TAACs and firms jointly select and contract with consultants to assist with AP implementation. Firms have up to five years to implement projects, unless EDA approves an extension. TAAF covers 50%-75% of costs (up to $75,000) to implement APs, depending on the proposed project costs. Examples of AP projects include improvements to marketing/sales, production processes, financial systems, management, and information systems.

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