A Brief Comparison of Globalisation Adjustment Funds in the EU and the US

09-07-2014

The European Globalisation Adjustment Fund (EGF) was created in 2007. It provides support to people losing their jobs as a result of major structural changes in world trade patterns arising from globalisation or relocation. The US has implemented a similar adjustment scheme known as ‘Trade Adjustment Assistance’ (TAA), which has been operational since 1961. Superficially similar, the EGF and the TAA are in fact very different. The EGF is not part of the EU budget, while the TAA is part of the US federal budget. This makes the TAA a real political bargaining tool in negotiations for international agreements. By contrast, while the scope of the EGF was recently extended to cover workers affected by the global economic recession, its use remains limited. There are several reasons supporting an overall rethink of the scope and functioning of the EGF and measures to improve its role in the context of the EU's Common Commercial Policy.

The European Globalisation Adjustment Fund (EGF) was created in 2007. It provides support to people losing their jobs as a result of major structural changes in world trade patterns arising from globalisation or relocation. The US has implemented a similar adjustment scheme known as ‘Trade Adjustment Assistance’ (TAA), which has been operational since 1961. Superficially similar, the EGF and the TAA are in fact very different. The EGF is not part of the EU budget, while the TAA is part of the US federal budget. This makes the TAA a real political bargaining tool in negotiations for international agreements. By contrast, while the scope of the EGF was recently extended to cover workers affected by the global economic recession, its use remains limited. There are several reasons supporting an overall rethink of the scope and functioning of the EGF and measures to improve its role in the context of the EU's Common Commercial Policy.