THE TRADE AND DEVELOPMENT AGENCY (CRS Report for Congress)
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| Release Date |
Nov. 9, 1998 |
| Report Number |
98-924 |
| Report Type |
Report |
| Authors |
Susan B. Epstein and Chikako Ohara, Foreign Affairs and National Defense Division |
| Source Agency |
Congressional Research Service |
Summary:
Congressional interest in linking foreign aid more directly with commercial interests has waxed
and
waned throughout the 1990s as increasing demands have been placed on the U.S. budget, constituent
support for more traditional foreign aid has dwindled, and U.S. industries have increasingly sought
federal assistance in garnering foreign sales. The Trade and Development Agency (TDA), operating
since 1982, is one of several government agencies involved in "aid for trade"--programs that combine
development assistance and export promotion. The agency provides grants directly to foreign
countries enabling them to hire U.S. companies to conduct feasibility studies for in-country capital
projects. Since several other countries provide this type of assistance, many believe the United
States should also, in order for U.S. businesses to remain competitive with foreign businesses in host
countries.
The Trade and Development Agency has been viewed quite favorably by many policymakers
as a relatively inexpensive tool to promote U.S. exports and employment while keeping the United
States relevant to the economic development of middle-income developing countries. However, the
program has also encountered criticism from Members who view it as a form of "corporate welfare,"
and by those who oppose foreign aid generally.
TDA's primary activities include funding feasibility studies overseas and definitional missions
(to assess the merits of funding a feasibility study project). Other activities include technical
assistance grants, orientation visits, technical symposia, training, grants to multilateral development
banks to hire U.S. consultants, as well as grants to state and local entities like the National
Association of State Development Agencies (NASDA).
Although funding increased nearly ten-fold from FY1982 to its peak in FY1994, when Congress
appropriated $65 million, TDA's budget remained modest when compared to most other agencies.
Even at the time of its peak funding, many TDA proponents believed the request was still inadequate
to fully utilize the agency and support its many potential projects. Others, concerned with budget
reduction, overlap and duplication among government agencies, believed that "aid for trade" agencies
and offices could be consolidated or better coordinated. Additionally, there were other matters
associated with TDA, such as whether there was large company bias in the agency's activities and
whether U.S. tax dollars should assist corporations with ample resources of their own for export
development. Despite the controversy, Congress appropriated $65 million for TDA in FY1994.
For comparison, on October 20, 1999 Congress passed the omnibus appropriations bill
( H.R. 4238 , P.L. 105-277 ) which included $44 million for TDA's FY1999 funding level,
6% above the previous year's appropriation. (The Administration's request for FY1999 had been $50
million.) The FY1999 appropriation is 32% below the peak FY1994 level at the same time that TDA
is expanding activities in new countries. Along with a reduction in funding since FY1994,
congressional debate over the appropriateness of providing federal funds to TDA and other agencies
involved with the aid for trade concept has also declined.
