A MIGHTY URGE has been building in Congress to do something (almost anything) to show its concern about huge trade deficits. Even senators and congressmen with unswerving commitments to the principle of free trade are feeling the need to demonstrate sensitivity to the domestic troubles caused by foreign competition. A likely vehicle for that concern is a proposal by Sen. William Roth and others to extend and expand the Trade Adjustment Assistance program.
The Roth proposal would impose a small "adjustment fee" on all imports to pay for extended unemployment benefits and retraining for workers who lose jobs to foreign competition. It has an advantage over other plans to help workers that are circulating in Congress: strong bipartisan backing, especially within the powerful Senate Finance Committee, and inclusion in the budget reconciliation measure that the Senate should take up in the next week or two.
The plan also has intuitive appeal. Open trade is surely good for this and other countries in the long run, but in the short run the costs of adjustment fall heavily on certain people and localities. Why not make the people who profit from importing goods into the United States help ease the resulting hardships? Sen. Roth and his cosponsors also point out that the needed levy on imports would be so small (probably only one-tenth of 1 percent of import value) that U.S. trading partners would probably accept the required change in trading rules. The administration, however, has stoutly opposed other import surcharges and, while it has not yet registered opposition to this one, may well be reluctant to embrace it. The administration, moreover, has consistently opposed the whole concept of earmarking programs for workers hurt by trade on the sensible grounds that such workers have no larger claim for public help than workers displaced by technological change, shifts in consumer taste, faulty management, high interest rates or domestic competition. It also turns out to be very hard to pinpoint eligible workers; a study of earlier trade adjustment programs found that workers given help because their jobs had been permanently lost to foreign competition were much more likely to be recalled to those same jobs than workers who weren't helped.
A better strategy might build upon the worker adjustment programs already being funded by the Department of Labor. While these programs are still quite new and generally lack money for extensive retraining or worker stipends, they have encouraged considerable innovation by states and involvement by private companies. Unfortunately, even as Congress considers voting money for a new displaced-worker program under the heading of "trade," it is also in the process of approving a massive slash in funding for the existing programs. That doesn't make sense.