Passage of the three free trade agreements with Korea, Columbia, and Panama pending before Congress has stalled over an impasse on the Trade Adjustment Assistance program. The Obama Administration and congressional Democrats insist that Congress must renew the trade adjustment assistance program at the same time that it passes implementing legislation for the free trade agreements. The Trade Adjustment Assistance program expired earlier this year, congressional Republicans, on the other hand, want trade adjustment assistance to be considered separately from the free trade agreements. This procedural impasse has not yet been resolved.
Trade adjustment assistance has been an integral part of the U.S. trade agreements program since passage of the Trade Expansion Act of 1962. It was conceived to help workers displaced by imports or the relocation of plants overseas train for jobs in businesses that are more globally competitive. It also augments health and unemployment benefits for these displaced workers. During 2010, almost $1 billion in federal funds were allocated for benefits and services delivered to assist trade-impacted U.S. workers.
The program expired in February and is currently up for renewal. Congress has routinely renewed the program in the past with bipartisan support. As part of the 2009 stimulus legislation passed by the then Democratic-controlled Congress, trade adjustment assistance was expanded to apply to displaced service and agriculture workers in addition to displaced manufacturing workers. Many congressional Republicans argue that renewing the expanded program would be too costly when lawmakers are struggling to reduce the federal deficit.
The current impasse over trade adjustment assistance appears to be more procedural than substantive. Last month, the White House; Senator Max Baucus, the Democratic Chairman of the Senate Finance Committee; and Representative Dave Camp, the Republican Chairman of the House Ways and Means Committee, announced a bipartisan deal to renew trade adjustment assistance, but with fewer benefits. It is estimated that this negotiated, pared-down version of trade adjustment assistance will cost less than $1 billion over the course of the three-year extension.
After this deal was struck, the White House and Senator Baucus insisted that this compromise version of trade adjustment assistance be attached to one of the three non-amendable implementing bills for the free trade agreements. Representative Camp deferred on procedure to the Republican leadership in the House and Senate, which insisted that the negotiated version of trade adjustment assistance be decoupled from the pending free trade agreements and considered by Congress separately. Until this procedural impasse is sorted out, it is unclear how or when Congress will take up either the free trade agreements implementing bills or the renewal of trade adjustment assistance.