Adjustment Assistance to Firms Under the Trade Act of 1974--Income Maintenance or Successful Adjustment?

A trade adjustment assistance program was established by Congress in 1974 to help firms adjust to the competition of international trade. Fewer than 125 firms, however, have been helped by the Trade Act program. Most of those helped have not become more competitive in their industry or taken remedial actions, but instead have used program assistance to pay off late bills or increase their operating money. As a part of the regular firm adjustment assistance program, the Department of Commerce is undertaking a special 3-year program for revitalizing the footwear industry in order to help this industry to become internationally competitive.

The Trade Act program, administered by the Department of Commerce, has not been effective for the following reasons: Commerce has not effectively publicized the program, and most firms are not aware of it; many firms find program benefits unattractive; the statutory certification criteria have kept some firms from being certified; and program literature does not explain all of the procedures in a convenient and easily understood manner.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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