Abstract

Since free trade benefits the economy as a whole, it ought to be feasible for the government to provide direct assistance to those hurt by imports. That was the idea behind the initiation of trade adjustment assistance (TAA) in 1962. But TAA proved to be a dismal failure. It did not help affected workers and did not stem protectionist pressures. As a review of the history shows, TAA failed not from conceptual errors but from implementation errors such as insufficient staff and funding. Also, TAA had no solid constituency. The current resurgence of protectionism makes it timely to revive TAA. Recent federal demonstrations provide evidence that training and counseling programs do assist workers in making vocational readjustments. Protectionists have the political advantage of being able to point to the victims of free trade. By implementing TAA, we would enable free traders to offer these victims more lasting help without endangering the world trading system.