	Background

The Trade Adjustment Assistance (TAA) program is the federal  government’s primary program specifically designed to provide assistance  to workers who lose their jobs as a result of international trade. Labor Certified Two- Thirds of Petitions Investigated and Generally Processed Petitions in a Timely Manner

Labor certified two-thirds of petitions that it investigated over the past   3 fiscal years, certifying nearly 4,700 petitions, covering an estimated  400,000 workers (see table 1). Labor met the  requirement to process petitions within 40 days for 77 percent of petitions  it investigated during fiscal years 2004 to 2006 (see fig. Labor officials said that they  are not always able to meet the 40-day time frame because they sometimes  do not receive necessary information in a timely manner from company  officials. In fiscal year 2006, the most common reason petitions were denied was  that workers were not involved in producing an article, a basic  requirement of the TAA program. For  example, among the industries for which we could obtain complete data,  we found that the number of additional workers eligible for TAA in those  industries could more than double if no additional criteria were used or  expand by less than 10 percent with relatively restrictive criteria. However, such an approach presents some design and implementation  challenges. For example, designing the specific criteria an industry must  meet to be certified could be challenging due to the possibility of making  workers who lose their jobs for reasons other than trade eligible for TAA. In addition, it may be challenging to ensure that all workers in certified  industries are notified of their potential eligibility for TAA, verify workers’  eligibility, and initiate the delivery of services to workers. For example, if over a 3-year period, an industry  were required to have a 15 percent increase in the import share of the  domestic market in 1 year, as well as increases in the import share during  the 2 other years, we estimated that there would have been a 9 percent  increase in the number of workers eligible for TAA in the 69 industries we  analyzed. Verifying worker eligibility. Such an approach could expand eligibility because some trade  remedies may cover areas in which there have been few or no certified  TAA petitions. It is difficult to estimate  the impact of this approach on eligibility because trade remedies are  applied to specific products, and data on unemployment by product do not  exist. For example, workers who did not lose their jobs due to  international trade could be made eligible for TAA in part because trade  remedy investigations are focused on injury to an industry as a whole and  not principally on employment impacts. Potential Challenges Exist with Using Trade Remedies to Identify Trade-Related Job Losses

An approach using trade remedies presents some of the same challenges  as an industry certification approach based on three petitions certified in  180 days. The verification process could be particularly challenging with  an approach based on trade remedies because of the narrow product  classifications of some trade remedy products. In firms that make multiple  products, for example, more than one type of stainless steel pipe, it may be  difficult to identify which specific workers worked on the products  subject to trade remedies. The Department of Labor did not  comment. Key contributors to this report are listed in appendix V.

Appendix I: Objectives, Scope, & Methodology

Our objectives were to determine: (1) trends in Labor’s certification of  Trade Adjustment Assistance (TAA) petitions, (2) the extent to which  industry certification based on three petitions certified within 180 days  would increase the number of workers eligible for TAA, and (3) the extent  to which certification of industries subject to trade remedies would  increase the number of eligible workers. Estimate of Extent to Which Industry Certification Based on Three Petitions Certified in 180 Days Would Increase Worker Eligibility

To estimate the extent to which industry certification based on three  petitions certified in 180 days would increase the number of workers  eligible for TAA, we first analyzed Labor’s data on petitions certified from  calendar years 2003 to 2005 to identify which industries would have had  three petitions certified in 180 days in that time frame.
Why GAO Did This Study

Trade Adjustment Assistance (TAA) is the nation's primary program providing job training and other assistance to manufacturing workers who lose their jobs due to international trade. For workers to receive TAA benefits, the Department of Labor (Labor) must certify that workers in a particular layoff have lost their jobs due to trade. Congress is considering allowing entire industries to be certified to facilitate access to assistance. GAO was asked to examine (1) trends in the current certification process, (2) the extent to which the proposed industry certification approach based on three petitions certified in 180 days would increase eligibility and identify potential challenges with this approach, and (3) the extent to which an approach based on trade remedies would increase eligibility and identify potential challenges. To address these questions, GAO analyzed data on TAA petitions, mass layoffs, trade, production, and trade remedies. GAO also interviewed Labor and ITC officials. GAO is not making recommendations at this time. Labor reviewed the report and did not provide comments. The ITC provided technical comments that have been incorporated as appropriate.

What GAO Found

During the past 3 fiscal years, Labor certified about two-thirds of TAA petitions investigated and generally processed petitions in a timely manner. Labor certified 4,700, or 66 percent, of the 7,100 petitions it investigated from fiscal years 2004 to 2006. Labor took on average 32 days to make a certification decision and processed 77 percent of petitions within the required 40-day time frame. According to Labor officials, they were not always able to meet the 40-day time frame because they sometimes did not receive information from company officials in a timely manner. In fiscal year 2006, 44 percent of the petitions that Labor denied were because workers were not involved in the production of an article. An industry certification approach based on three petitions certified in 180 days would likely increase the number of workers eligible for TAA but presents some design and implementation challenges. However, the extent of the increase in eligible workers depends on the additional criteria, if any, industries would have to meet to be certified. From 2003 to 2005, 222 industries had three petitions certified within 180 days. Based on our analysis of 69 of these industries for which we could obtain complete data, the number of eligible workers in these industries could more than double if no additional criteria were used, but would expand by less than 10 percent if industries had to meet more restrictive criteria, such as demonstrated increases in the import share of the domestic market over a 3-year period. Designing the criteria presents challenges due to the possibility of making workers who lose their jobs for reasons other than trade eligible for TAA. Implementation challenges include notifying all workers of their potential eligibility, verifying their eligibility, and linking them with services. Using trade remedies to certify industries could also expand eligibility for workers in some industries, but challenges exist. While basing industry certification on trade remedies could expand eligibility in areas where there have been no TAA petitions, some trade remedies are for products already covered by TAA petitions, such as iron and steel products. It is difficult to estimate the extent of the impact on worker eligibility because trade remedies are applied to specific products, and data on unemployment by product do not exist. This approach presents many of the same challenges as industry certification based on three petitions certified in 180 days. For example, workers who did not lose their jobs due to international trade could be made eligible for TAA because trade remedy investigations are not focused on employment. In addition, verifying workers' eligibility may be particularly challenging due to the narrow product classifications of some trade remedy products, such as carbazole violet pigment 23. In companies that make multiple products, it may be difficult to identify which specific workers made the product subject to trade remedies.