Trade Adjustment Assistance Promotes Political Support For Free-Trade Agreements By

In general, manufacturing workers are the most affected by import competition compared to other sectors. Moreover, while the benefits of trade require a long time to produce their full effect, costs are quickly felt, especially in less competitive sectors. [8] However, in order to obtain trade benefits, the U.S. economy needs to reorient factors of production between sectors. Thus, free trade also entails worker-related costs that are distributed through import competition and offshore outsourcing. According to the Ministry of Labour (DOL), displaced workers are defined as “people aged 20 and over who have lost or left their jobs as a result of the closure or relocation of their factory or business, they were missing too little work, or their position or position was eliminated.” [6] The International Labour Organization (ILO) finds that workers bear high adjustment costs such as unemployment, lower wages during the transition, outdated skills, training costs and personal costs (e.g. B mental suffering). These commercial costs, although relatively lower than the benefits, are highly concentrated on the demographics of the region, industry and workers. For example, some occupations, such as teachers.

B, did not experience import competition, while import competition in the footwear industry increased by 40 percentage points. [7] Trade Adjustment Assistance consists of four programs approved under the Trade Expansion Act of 1962 and further defined by the Trade Act of 1974 (19 U.S.C. The original idea of a commercial compensation program dates back to 1939. [2] It was then proposed by President John F. Kennedy as part of the comprehensive free trade package. President Kennedy said: “While national political considerations make it desirable to avoid higher tariffs, those who are harmed by this competition should not be forced to bear the full consequences. On the contrary, the burden of economic adjustment should be borne in part by the federal government. [3] Trade adjustment assistance is an attempt to compensate those who are harmed by free trade.

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