Congress this week reauthorized a program that offers aid to American workers who are displaced by foreign competition and, in doing so, made a concession to critics of a sweeping free trade agreement among 12 Pacific Rim nations.
But with the onus now on the Obama administration to bring home a good deal for America, it's worth asking whether the program, known as the Trade Adjustment Assistance (TAA), is worth the hundreds of millions of dollars the federal government spends on it.
There is no doubt that free trade agreements produce winners and losers. Since 1974, the federal government has tried to minimize the adverse effects of global trade by paying for job training and offering other benefits to workers whose jobs are sent overseas or whose employers cave under pressure from foreign rivals.
But while free trade has become a divisive issue, data show it plays a relatively small role in total job losses.
Between 1996 and 2004, the Bureau of Labor Statistics attributed less than 3 percent of mass layoffs to import competition and relocation overseas (Tweet This). The survey period began just two years after the implementation of the North American Free Trade Agreement, which removed barriers between the United States and its two biggest trade partners, Canada and Mexico.
That said, international trade does have an outsize negative impact on America's manufacturing sector. Nearly three-quarters of the applications from employers and workers seeking designation for trade displacement came from the manufacturing sector.