Updated January 21, 2021
U.S. Trade and Development Agency (TDA)
The U.S. Trade and Development Agency (TDA) is an
U.S. government export promotion efforts. Some projects
independent U.S. government export promotion and foreign
that use TDA-funded services use financing from the
assistance agency. TDA aims to support U.S. jobs by
Export-Import Bank (Ex-Im Bank) for exporting. For
linking U.S. firms to export opportunities for development
example, in 2018, TDA provided a grant to Ghana's
projects in low- and middle-income countries by funding
Ministry of Energy for a feasibility study to expand energy
“pre-export” assistance.
access through solar-based, independent “minigrid” energy
systems, with the aim of using Ex-Im Bank financing to
TDA-related issues for Congress may include the economic
implement the project. TDA also collaborates with other
justifications for its mandate, and its role in supporting U.S.
agencies, such as the U.S. Agency for International
exports, relationship to other U.S. agencies, and intersection
Development (USAID), on Administration initiatives.
with broader U.S. policy goals and priorities.
Background
TDA support may help U.S. firms win export bids over
foreign competition. For instance, in FY2020, when a
TDA is authorized permanently under the Foreign
telecommunications services provider in the Philippines
Assistance Act of 1961 (FAA), as amended (22 U.S.C.
was considering whether to integrate technology from U.S.-
§2421), and operates under the Secretary of State’s policy
based Cisco in its 5G rollout efforts for a network that had
guidance. In 1992, Congress established TDA as an
relied primarily on Chinese-government supported
independent agency (P.L. 102-549), but its predecessor
suppliers, TDA sought to level the playing field by offering
dates to the 1980s. The TDA Director is appointed by the
a training program to boost the project implementation
President, by and with the Senate’s advice and consent.
capacity of the company’s technical and managerial staff;
Programs
the company subsequently selected Cisco as a supplier.
TDA provides grants to foreign project sponsors (public or
Requirements
private entities that can make decisions and implement
The FAA directs TDA to promote U.S. private sector
projects), who select U.S. firms (primarily smaller firms) to
participation in developing and middle-income countries
perform TDA-funded project preparation activities. TDA
and to give special emphasis to economic sectors with
activities include:
notable U.S. export potential, such as energy,
Feasibility studies for infrastructure development
transportation, telecommunications, and the environment.
projects to assist in securing financing and achieving
The FAA also instructs TDA to, as much as possible,
implementation. Assessments may include technical,
require firms and other entities to share the costs of TDA-
financial, legal, environmental, and other aspects of
funded project planning and to reimburse TDA for its
infrastructure development. In some cases, pilot
expenditures if project implementation is successful.
projects may be funded to demonstrate U.S. sellers’
Funding
goods, services, and technologies in the foreign buyer’s
President Trump’s FY2021 budget requested funding to
setting, for testing and scaling up in order to secure
implement an “orderly closeout” of TDA; the Trump
project funding.
Administration contended that the private sector is better
Technical assistance to enhance the business
suited to carry out TDA’s mission, and that other federal
environment for U.S. exports, which may include
agencies can continue to support U.S. exports, U.S.
support for legal and regulatory reform, the
businesses overseas, and international infrastructure
establishment of industry standards, and infrastructure-
development. Congress did not implement the proposal,
planning activities in foreign markets.
instead funding TDA’s continued operations in FY2021.
Training programs for foreign decision makers on
Congress similarly did not implement previous requests to
technology, regulatory requirements, or other areas.
eliminate TDA in each of FY2018-FY2020 (see Table 1).
Reverse trade missions to foster commercial ties by
Table 1. TDA Funding ($ millions) and Employment
bringing foreign delegations to the United States to meet
with U.S. firms and to observe the design, manufacture,
FY17
FY18
FY19
FY20a
FY21
and operation of U.S. goods and services.
Funding
$75
$79.5
$79.5
$79.5
$79.5
Conferences and workshops that connect U.S. firms
FTEsb
57
48
62
65c
65c
with foreign project sponsors.
Source: CRS, based on appropriations laws and budget documents.
TDA participates in the Trade Promotion Coordination
Notes: (a) Requested. (b) FTEs: Ful -time equivalents. (c) Estimated.
Committee (TPCC), an interagency body that coordinates
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U.S. Trade and Development Agency (TDA)
Activity
oversight and accountability. The TDA Office of Program
TDA aims to target its support to projects that it has
Monitoring and Evaluation tracks projects after TDA-
determined offer solid prospects for success, U.S. export
funded activities are completed to analyze the link between
growth opportunity, and strong developmental benefits.
funding and project outcomes. TDA employs outside
TDA also prioritizes projects where its support may
contractors for some project evaluation.
strengthen prospects for U.S. firms facing foreign
competitors or may help a key project reach completion.
Issues for Congress
TDA services and program activity are provided in
Rationales For and Against TDA
response to private sector demand, but TDA also seeks to
Supporters of TDA, including many in the business
spur strategic growth in exports and prioritizes activity that
community, hold that TDA programs are key to U.S. export
generates a high rate of return on the use of its funds based
promotion efforts and help U.S. firms compete with foreign
on data-driven analysis. In FY2020, TDA obligated about
firms that have access to similar support through their
$68.9 million for program activities (see Figure 1), up from
national programs. TDA’s role may be especially critical
$57.7 million in FY2018 and $56.3 million in FY2019.
for smaller firms with limited resources to conduct their
Figure 1. TDA FY2020 Value of Obligations
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
use of taxpayer-funded assistance to businesses.
Effectiveness and Efficiency
The effectiveness and efficiency of TDA in meeting its dual
mandate may feature in any debate over potential
reorganization of certain federal agencies, which was a
recurring theme during the Trump Administration. TDA
supporters may highlight the agency’s export multiplier as
an indication of its cost-effectiveness and efficiency, and
argue that TDA would be more effective with a larger
budget. Critics may question TDA’s impact on U.S. foreign
policy and export promotion goals, and whether exports
estimated by TDA would have taken place in TDA’s
absence. Measuring the impact of a government program
can be complicated and sensitive to the assumptions made.
Relation to Other Agencies
Source: CRS, based on TDA FY2020 annual report data.
Supporters maintain that TDA’s dual focus on export
promotion and international development and its role in
TDA seeks to align its programmatic resources to advance
assisting businesses at early stages of international
U.S. foreign policy priorities. For instance, in support of the
transactions sets it apart from other federal government
Trump Administration’s Prosper Africa initiative and Indo-
agencies, such as Ex-Im Bank and USAID. Critics assert
Pacific Strategy, TDA is increasing its overseas presence;
that TDA functions overlap with those of other U.S. export
in FY2020, it opened up a new office in Nairobi, Kenya,
promotion and foreign aid agencies.
and has plans to open new offices in Manila, Philippines;
Kuala Lumpur, Malaysia; and Jakarta, Indonesia.
How TDA and the new U.S. International Development
Finance Corporation (DFC) relate may be of interest, given
Ongoing TDA focus areas include infrastructure resilience,
the DFC’s authority to conduct feasibility studies and
global procurement best practices, and supporting LNG
perform other technical assistance as part of the DFC’s
projects across the value chain.
mission to support private investment in developing
countries (Div. F. of P.L. 115-254).
Impact, Monitoring, and Evaluation
Other stakeholders may call for more interagency
TDA identified $1 billion in new U.S. exports supported by
coordination. The expansion of TDA’s overseas presence
its programs in FY2020. To measure the impact of its
also may prompt examination of how TDA coordinates
program activity, TDA calculates an “export multiplier”—
with overseas missions of other agencies.
the amount of exports TDA identifies as being generated by
each dollar of TDA programming. In FY2020, TDA
Shayerah I. Akhtar, Specialist in International Trade and
reported an export multiplier of, on average, $112 in U.S.
exports for each dollar of TDA programming.
Finance
TDA monitors and evaluates its activities to determine their
IF10673
effectiveness, inform funding decisions, and support
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U.S. Trade and Development Agency (TDA)
Disclaimer
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