Trade Adjustment Assistance: Impact of Federal Assistance to Firms is Unclear

A letter report issued by the General Accounting Office with an abstract that begins "Concerns about the impact of foreign trade on U.S. manufacturing have focused attention on federal programs designed to help domestic firms that have been harmed by imports. One such program, the Department of Commerce's Trade Adjustment Assistance program, seeks to help U.S. firms adopt strategies to become more competitive. The program is run by the Economic Development Administration (EDA). GAO reviewed the nature and extent of Trade Adjustment Assistance as well as the outcomes of this assistance. GAO found that for fiscal years 1995 through 1999, EDA certified 157 firms annually as eligible for trade adjustment assistance and approved business recovery for about 127 firms each year. An average of $9.8 million dollars was spent by each of the 12 regional Trade Adjustment Assistance Centers operating under cooperative agreements with EDA. The impact of the program on firms is inconclusive because EDA does not formally monitor and track program outcomes of program recipients. Instead, EDA sets annual numerical goals for certifications and approved business recovery plans for each of the centers. As a result, EDA does not have the information necessary to systematically assess center performance in helping firms adjust to import competition.