Updated September 10, 2019
U.S. Trade and Development Agency (TDA)
Background
buyer’s setting, for testing and scaling up in order to
secure project funding.
The U.S. Trade and Development Agency (TDA) is an
independent U.S. government export promotion and foreign
Technical assistance to support legal and regulatory
assistance agency. TDA aims to support U.S. jobs by
reform, the establishment of industry standards, and
linking U.S. firms to export opportunities for development
infrastructure-planning activities, to enhance the
projects in developing and middle-income countries
business environment for U.S. exports (such as for
through funding “pre-export” assistance. TDA is authorized
aviation-related projects in China and India, and a
permanently under the Foreign Assistance Act of 1961
cybersecurity project for the Brazilian energy sector).
(FAA), as amended (22 U.S.C. §2421), and operates under
Training programs for foreign decision-makers on
the Secretary of State’s policy guidance. In 1992, Congress
technology, regulatory requirements, or other areas to
established TDA as an independent agency (P.L. 102-549),
support U.S. exports (such as partnering with Japan’s
but its predecessor dates to the 1980s. The TDA Director is
Ministry of Economy, Trade, and Industry (METI) to
appointed by the President, by and with the Senate’s advice
train decision-makers in the Indo-Pacific on sustainable
and consent. President Trump’s continued request for
gas infrastructure procurement best practices).
funding to eliminate TDA, as well as other legislative and
policy developments, may intensify debate over the
Reverse trade missions (RTMs) to bring foreign
arguments for and against TDA, its role in supporting U.S.
delegations to the United States to meet with U.S. firms
exports, and its relationship to other federal agencies.
and observe the design, manufacture and operation of
U.S. goods and services, to foster commercial ties (such
Funding. TDA is small relative to other U.S. export
as a health care RTM for a Chinese delegation and a
promotion and foreign assistance agencies. President
Trump’s
ports development RTM for an Egyptian delegation).
FY2020 budget requests funding to implement an
“orderly closeout” of TDA; the Administration’s view is
Conferences and workshops to connect U.S. firms
that the private sector is better suited to serve TDA’s
with foreign project sponsors (such as hosting the
mission, and that other federal agencies can continue to
Association of Southeast Asian Nations (ASEAN)
support U.S. exports, U.S. businesses overseas, and
Connectivity Through Rail Forum (Jakarta, Indonesia)
international infrastructure development. Congress did not
to connect project sponsors with U.S. providers of
implement similar requests by the President in FY2018 and
technologies and services to advance ASEAN’s rail
FY2019 to eliminate TDA, instead funding TDA’s
infrastructure development goals).
continued operations (see Table 1).
TDA Initiatives
Table 1. TDA Funding ($ millions) and Employment
TDA partners with public and private groups, domestic and
overseas, to advance certain initiatives through its programs.
FY16
FY17
FY18
FY19
FY20a
Global Procurement Initiative: Training and other assistance
Funding
$60
$75
$79.5
$79.5
$12.1
for procurement officials on best practices and policies to
calculate the total costs for infrastructure projects.
FTEsb
55
57
48
62c
15c
U.S. Gas Infrastructure Exports Initiative: Feasibility studies,
Source: CRS, based on appropriations laws and budget documents.
RTMs, and other support to connect U.S. companies with
Notes: (a) Requested. (b) FTEs: Ful -time equivalents. (c) Estimated.
infrastructure export opportunities across the gas value chain in
emerging markets.
Programs. TDA provides grants to foreign project sponsors
(public or private entities that can make decisions and
Making Global Local: RTMs, conferences, and other support to
implement projects), who select U.S. firms (primarily
expand TDA outreach to U.S. businesses, especial y smaller firms.
smaller firms) to perform TDA-funded project preparation
TDA participates in the Trade Promotion Coordination
activities. TDA activities include (with examples of
Committee (TPCC), an interagency body that coordinates
FY2018 obligations):
U.S. government export promotion efforts. Some projects
Feasibility studies that assess technical, financial, legal, that use TDA-funded services may use financing from the
environmental, and other aspects of infrastructure
Export-Import Bank (Ex-Im Bank) for exporting. For
development projects that may lead to follow-on
example, in 2018, TDA provided a grant to Ghana’s
business, to assist projects in securing financing and
Ministry of Energy for a feasibility study to expand energy
achieving implementation (such as feasibility studies for
access through solar-based, independent “minigrid” energy
renewable energy projects in sub-Saharan Africa); also,
systems, with the aim to use Ex-Im Bank financing to
in some cases, pilot projects to demonstrate U.S.
implement the minigrids. TDA also collaborates with other
sellers’ goods, services, and technologies in the foreign
agencies, such as the U.S. Agency for International
Development (USAID), on Administration initiatives.
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U.S. Trade and Development Agency (TDA)
Requirements. The FAA directs TDA to promote U.S.
measure the impact of its program activity on supporting
private sector participation in developing and middle-
U.S. exports. For the most recent ten-year period, TDA
income countries and to give special emphasis to economic
reported a record-high export multiplier of $104 in U.S.
sectors with notable U.S. export potential, e.g., energy,
exports for each dollar of TDA programming.
transportation, telecommunications, and the environment.
TDA monitors and evaluates its activities to determine their
The FAA also instructs TDA to, as much as possible,
effectiveness, inform funding decisions, and support
require firms and other entities to share the costs of TDA-
oversight and accountability. The TDA Office of Program
funded project planning and to reimburse TDA for its
Monitoring and Evaluation tracks projects after TDA-
expenditures if project implementation is successful.
funded activities are completed to analyze the link between
Activity. TDA targets its support in projects that it has
funding and project outcomes. TDA employs outside
determined offer solid prospects for success, U.S. export
contractors for some project evaluation.
growth opportunity, and strong development benefits. TDA
Issues for Congress
prioritizes projects where its support could sway an
opportunity in favor of a U.S. firm against a foreign
Rationales for and Against TDA. Supporters of TDA,
competitor or help a key project reach final stages. In
including many in the business community, hold that TDA
FY2018, TDA obligated about $58 million for program
programs are key to U.S. export promotions and help U.S.
activities (see Figure 2), down from $70 million in FY2017
firms compete with foreign firms that have access to similar
and comparable to the $59 million it obligated in FY2016.
support through their national programs. TDA’s role may
Figure 1. TDA FY2018 Value of Obligations
be especially critical for smaller firms with insufficient
resources to conduct their own project preparation analyses.
Supporters also note that users share the costs of TDA-
funded activity and that some TDA costs are reimbursed.
Critics argue that TDA distorts 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 businesses
at the expense of taxpayers.
Effectiveness and Efficiency. The effectiveness and
efficiency of TDA may be a key issue in any debate over
potential reorganization of certain federal agencies, a
continued priority of the Trump Administration. TDA
supporters highlight the agency’s export multiplier as an
indication of its effectiveness and efficiency, and argue 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 estimated by
TDA would have taken place in TDA’s absence.
Relation to other agencies. Supporters maintain that
TDA’s dual focus on export promotion and international
development sets it apart from other federal government
agencies such as Ex-Im Bank and USAID, as well as its
role in assisting businesses at early stages of international
transactions. Critics assert that TDA functions overlap with
those of other U.S. export promotion and foreign aid
agencies. With the expected operationalization of the new
Development Finance Corporation (DFC) in 2019 under the
Better Utilization of Investments Leading to Development
Act of 2018 (BUILD Act, P.L. 115-254), Congress may
examine how TDA and DFC relate, given that DFC is also
to have some similar tools, such as authority to conduct
feasibility studies, tailored to development finance aims.
Other stakeholders may call for enhanced interagency
coordination, such as through the TPCC. Such issues raise
questions about the policy goals and desired outcomes for
any potential change to TDA’s organizational structure.
Source: TDA FY2018 annual report with TDA-based categories.
Shayerah Ilias Akhtar, Specialist in International Trade
Impact, monitoring and evaluation. According to TDA,
and Finance
in FY2018, it supported $4.9 billion in new U.S. exports
and 28,000 U.S. jobs. TDA uses an “export multiplier” to
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U.S. Trade and Development Agency (TDA)
Disclaimer
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