June 15, 2017
U.S. Trade and Development Agency (TDA)
Background
Examples of TDA Activities
In 2014, TDA awarded a grant of $871 thousand to a Colombian
The U.S. Trade and Development Agency (TDA), an
utility company for a feasibility study to determine the viability of
independent U.S. government export promotion and foreign
constructing geothermal plants in Colombia. Other recent
assistance agency, aims to support U.S. jobs by linking U.S.
examples include TDA’s support in 2016 for India’s “Smart
firms to export opportunities for development projects in
Cities” plan for safe, efficient, and integrated urban infrastructure
developing and middle-income countries through funding
through funding $3 million in technical assistance and $455
“pre-export” assistance. It is permanently authorized under
thousand for a reverse trade mission to showcase U.S goods and
the Foreign Assistance Act of 1961 (FAA), as amended (22
services to Indian decisionmakers.
U.S.C. §2421), and operates under the Secretary of State’s
policy guidance. In 1992, Congress established TDA as an
TDA collaborates on initiatives with other agencies, such as
independent agency (P.L. 102-549), but its predecessor
the State Department, U.S. Agency for International
dates to the 1980s. The TDA Director is appointed by the
Development (USAID), and Overseas Private Investment
President, by and with the Senate’s advice and consent.
Corporation (OPIC) on clean energy financing in Latin
TDA presents legislative, oversight, and appropriations
America and the Caribbean. Some projects that use TDA-
issues. President Trump’s FY2018 budget request to
funded project preparation services also may use financing
eliminate TDA may intensify congressional interest.
from the Export-Import Bank (Ex-Im Bank) for exporting.
TDA participates in the Trade Promotion Coordination
Funding. TDA is small relative to other export promotion
Committee (TPCC), an interagency body that coordinates
and foreign assistance agencies. Congress appropriated $75
U.S. export promotion efforts government-wide.
million for TDA in FY2017 ($15 million above FY2016).
TDA has an estimated 57 full-time equivalent staff in
Requirements. The FAA directs TDA to promote U.S.
FY2017. The President’s FY2018 budget requests $12.1
private sector participation in developing and middle-
million for an “orderly closeout” of TDA starting that year.
income countries and to give special emphasis to economic
sectors with notable U.S. export potential, e.g., energy,
Programs. TDA provides grants to foreign project sponsors
transportation, telecommunications, and the environment. It
(public or private entities that can make decisions and
also instructs TDA to, as much as possible, require firms
implement projects), who select U.S. firms (primarily
and other entities to share the costs of TDA-funded project
smaller firms) to perform TDA-funded project preparation
planning and to reimburse TDA for its expenditures if
activities. These and other TDA activities include:

project implementation is successful.
Feasibility studies that assess technical, financial, legal,
environmental, and other aspects of infrastructure
Activity. TDA targets its support in “priority markets” that
development projects that may lead to follow-on
it has determined offer solid prospects for success, U.S.
business, to assist projects in securing financing and
export growth opportunity, and strong development
achieving implementation.
benefits. It prioritizes projects where its support could sway
Pilot projects that provide analysis, evaluation, and
an opportunity in favor of a U.S. firm again a foreign
empirical data to demonstrate the effectiveness of U.S.
competitor or help a key project reach final stages.
goods, services, and technologies in the foreign buyer’s
setting, in order to secure project funding.
Figure 1. TDA FY2017 Priority Markets
Technical assistance to support legal and regulatory
reform, the establishment of industry standards, and
infrastructure-planning activities, to enhance the
business environment for U.S. exports.
Training programs for foreign decision-makers (e.g.,
on technology or regulatory requirements) to support the
sale of U.S. goods and services.
Reverse trade missions to bring foreign delegations to
the United States to meet with U.S. firms and observe
the design, manufacture and operation of U.S products
and services, in order to foster commercial ties.
Conferences and workshops to connect U.S. firms

with foreign project sponsors.
Source: TDA FY2017 congressional budget justification.
Notes: TDA funding is available in Power Africa countries (in
yellow), pending finalization of transfer funding.
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U.S. Trade and Development Agency (TDA)
In FY2016, TDA committed about $59 million in program
Issues for Congress
funding, up from $51 million in FY2015 and $49 million in
Rationale for TDA. Given President Trump’s budget
FY2014. TDA-funded activities span a range of program
request proposal to eliminate the agency, a key issue before
activities, economic sectors, and geographic regions.
Congress is the rationale for maintaining TDA. Supporters
Figure 2. TDA FY2016 Program Activity
of TDA, including many in the business community, hold
that its programs are key to U.S. export promotion efforts
and help U.S. firms compete with foreign firms that have
access to similar support through their national programs.
TDA’s role may be particularly critical for smaller firms
with insufficient resources to conduct their own project
preparation analyses. Critics argue that TDA and other
government-funded trade promotion programs distort
market conditions by encouraging commercially unviable
activities and, in turn, inefficient use of resources. Critics
also contend that TDA activities may provide unnecessary
assistance to corporations at the expense of taxpayers.
Supporters counter that beneficiaries share the costs of
TDA-funded activity and that some TDA costs are
reimbursed by beneficiaries.
Effectiveness and Efficiency. There is ongoing debate
about the effectiveness and efficiency of TDA. Such debate
may become more prominent in light of the Trump
Administration’s ongoing review of executive branch
agencies and programs, based on an executive order issued
by the President in March 2017 to develop a comprehensive
reorganization plan to improve the U.S. government’s
effectiveness, efficiency, and accountability. TDA
supporters tout the agency’s export multiplier as an
indication of its effectiveness and efficiency, and contend
that TDA would be more effective with a larger budget.
Critics question TDA’s impact on U.S. foreign policy and
export promotion goals, including whether exports
identified by TDA would have taken place without the
agency’s assistance.
Coordination and relation to other agencies. Current
debate over TDA’s role in the U.S. government’s export
promotion and foreign aid activities may intensify due to
the Trump Administration’s interest in government reform.
TDA supporters maintain that the agency’s dual focus on

export promotion and international development sets it
Source: CRS, based on TDA FY2016 annual report.
apart from other federal government agencies, as well as its
role in assisting businesses at early stages of international
Impact, monitoring and evaluation. According to TDA,
transactions. Critics calling for TDA’s termination assert
in FY2016, it supported $3 billion in new U.S. exports and
instead that TDA’s functions overlap with those of multiple
an estimated 18,000 U.S. jobs. As a gauge of its
U.S. export promotion and foreign aid agencies mentioned
effectiveness, TDA uses an “export multiplier” to measure
above. Other stakeholders call for enhanced coordination
the impact of its program activity on supporting U.S.
across these various agencies, such as through the TPCC.
exports. For FY2016, TDA calculated an export multiplier
Some others call for reorganization of government
of $85 in U.S. exports for each dollar of TDA
functions through consolidation or the creation of a new
programming.
development finance or assistance agency, such as focusing
TDA monitors and evaluates its activities to determine their
on the functions of TDA, USAID, and OPIC. Such options
effectiveness, inform funding decisions, and support
confront Congress with questions about the policy goals
oversight and accountability. The TDA Office of Program
and desired outcomes driving any potential change to
Monitoring and Evaluation tracks projects after TDA-
TDA’s organizational structure.
funded activities are completed to analyze the link between
TDA funding and project outcomes. TDA employs outside
Shayerah Ilias Akhtar, Specialist in International Trade
contractors for some project evaluation.
and Finance

IF10673
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U.S. Trade and Development Agency (TDA)


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