U.S. Trade and Development Agency (TDA)

U.S. Trade and Development Agency (TDA)

Updated January 27, 2022
U.S. Trade and Development Agency (TDA)
The U.S. Trade and Development Agency (TDA), an
budget request for TDA is equal to the FY2021 enacted
independent U.S. government agency, operates under a dual
level. FY2022 appropriations have yet to be enacted.
mission to advance overseas economic development and
In contrast, President Trump’s budget requests for FY2018-
promote U.S. commercial interests. TDA aims to link U.S.
FY2021 sought an “orderly closeout” of TDA, based on the
businesses to export opportunities for priority infrastructure
premise that the private sector was better suited to carry out
projects in low- and middle-income countries by funding
TDA’s mission and that other federal agencies could
project preparation and partnership building activities.
continue to support U.S. exports, U.S. businesses overseas,
Background
and international infrastructure development. Congress did
not implement these requests to eliminate TDA, and instead
TDA is authorized permanently under the Foreign
funded TDA’s continued operations for each of those years.
Assistance Act of 1961 (FAA), as amended (22 U.S.C.
§2421, P.L. 87-195), and it operates under the Secretary of
Activities. TDA provides services in response to private
State’s policy guidance. In 1992, Congress established
sector demand, but the agency also seeks to spur export
TDA as an independent agency (P.L. 102-549), but its
growth in high-return activity, based on data-driven
predecessor dates to the 1980s. The TDA Director is
analysis. In FY2021, TDA obligated about $69.5 million
appointed by the President, by and with the Senate’s advice
for program activities (see Figure 1), up from $68.9 million
and consent. An acting director currently leads TDA.
in FY2020 and $56.3 million in FY2019.
Programs. TDA provides grants to foreign project sponsors
Figure 1. TDA FY2021 Value of Obligations
(public or private entities that can make decisions and
implement projects), who are to select U.S. firms to
perform TDA-funded activities. TDA programs include:
 Feasibility studies to assess technical, financial, legal,
environmental, and other aspects of projects to help
secure financing and achieve implementation.
 Pilot projects to test U.S. equipment and technology in
the foreign buyer’s market to promote U.S. solutions
and identify scalability and replicability opportunities.
 Technical assistance to enhance the business
environment for U.S. exports, which may include
support for legal and regulatory reform, the
establishment of industry standards, and infrastructure-
planning activities in foreign markets.
 Training for foreign decision-makers on technology,
regulatory issues, or other matters.
 Reverse trade missions to bring foreign delegations to
the United States to meet with U.S. firms and showcase
U.S. products and technologies.
 Conferences and workshops to connect U.S. firms with
foreign project sponsors.
Requirements. The FAA directs TDA “to promote United
States private sector participation in development projects
in developing and middle-income countries, with special

emphasis on economic sectors with significant United
Source: CRS, based on TDA FY2021 annual report data.
States export potential, such as energy, transportation,
Notes: Specific categories are TDA-based. ICT = Information &
telecommunications, and environment.” It also instructs
Communication Technology; MENA = Middle East & North Africa.
TDA to, as much as possible, require firms and other
entities to share the costs of TDA-funded project planning
Among its recent activities, TDA announced grant funding
and to reimburse TDA for its expenditures if project
for feasibility studies to expand internet access in
implementation is successful.
underserved communities (Nigeria and Southern Africa). At
the 2021 Indo-Pacific Business Forum, TDA announced
Funding. For FY2021, TDA was appropriated $79.5
new funding commitments, including for a feasibility study
million, of which no more than $19.0 million could be used
for solar power plants (the Philippines) and technical
for administrative expenses. The President’s FY2022
assistance to support smart city infrastructure (Vietnam),
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U.S. Trade and Development Agency (TDA)
and a call for proposals to support new aviation
priorities and “help level the playing field” for U.S.
infrastructure (Southeast Asia and the Pacific Islands).
companies around the world by: conducting project
preparation assistance for sustainable infrastructure; helping
TDA support may help U.S. firms win export bids over
position U.S. firms to win against competing foreign
foreign competition, including by offering training
infrastructure development efforts like China’s “One Belt,
assistance. For instance, a telecommunications services
One Road”; and promoting value-based procurement
provider in the Philippines was considering whether to
methods to enhance development outcomes and
integrate technology from U.S.-based Cisco in its 5G
international competition.
rollout efforts. The network relied primarily on Chinese-
government supported suppliers previously. TDA,
Monitoring and Impact. TDA monitors and evaluates its
according to its FY2020 annual report, sought to level the
activities to assess their impact, inform funding decisions,
playing field by offering a training program to boost the
and support oversight and accountability. In FY2021, TDA
project implementation capacity of the company’s technical
reported that, on average, each dollar of its programming
and managerial staff; the telecommunications services
supported $117 in U.S. exports (its “export multiplier”), up
provider subsequently selected Cisco as a supplier.
from $112 in FY2020. TDA also identified more than $2.3
billion in new U.S. exports supported by its programs in
Some projects that originate from TDA-funded activity may
FY2021, up from $1 billion in FY2020. Such estimations
be financed by other U.S. agencies (see text box). For
are complex to make and can be sensitive to assumptions.
instance, in 2018, TDA supported a study on a potential
geothermal power facility in Honduras. The follow-on
Issues for Congress
project received $135 million in financing from the
Debate over TDA. Congress may examine the rationales
Overseas Private Investment Corporation (OPIC), which
for and against TDA as it oversees TDA’s operations,
has been succeeded by the U.S. International Development
determines funding, or conducts other TDA-related
Finance Corporation (DFC). Also in 2018, TDA funded a
legislative activity. TDA’s supporters, including many in
feasibility study to expand solar-based energy access in
the business community, hold that its programs help U.S.
Ghana, with the aim of using financing by the Export-
firms compete with foreign firms that have access to similar
Import Bank (Ex-Im Bank) to implement the project.
support through their national programs and that its support
TDA in U.S. Trade Promotion Context
may be especially critical for smaller firms with limited
resources to conduct their own project preparation analyses.
TDA bears similarities with and distinctions from the Export-
Supporters also note that users share the costs of TDA-
Import Bank (Ex-Im Bank) and the U.S. International
funded activity and that some TDA costs are reimbursed.
Development Finance Corporation (DFC)—two agencies with
Critics question TDA’s impact on U.S.
which it is frequently grouped, based on its project support, and
export promotion
it may col aborate on projects and initiatives. A core objective of
and foreign policy goals, and argue that TDA distorts
both TDA and Ex-Im Bank is to support U.S. exports. TDA’s
market conditions by encouraging commercially unviable
additional development focus—along with its operation under the
activities and, in turn, inefficient use of resources. Critics
Secretary of State’s foreign policy guidance—resemble DFC,
also contend that TDA activities may provide unnecessary
which seeks to promote private investment in the economic
use of taxpayer-funded assistance to businesses.
development of less-developed countries. Unlike Ex-Im Bank and
Interagency Relationships. Some past trade reorganization
DFC, which can extend financing and insurance to eligible users,
proposals have included TDA. If Congress revisits TDA’s
TDA is limited to providing grant-based funding—an authority
organizational structure, it may examine whether TDA’s
that DFC also holds, but for a different aim. TDA and DFC can
conduct grant-based feasibility studies and other technical
dual export promotion and development focus and its role
assistance to support, respectively, U.S. exports and investments.
in helping firms at early stages of international transactions
distinguish it from other agencies (e.g., Ex-Im Bank,
Initiatives and Priorities. In addition to its general
USAID), or whether TDA’s functions overlap with such
programming, TDA has specific initiatives to open markets
agencies in a way that calls for streamlining. How TDA and
to U.S. industry and support international competition. A
DFC relate to each other, including the extent to which they
new initiative is the Global Partnership for Climate-Smart
leverage each other’s technical assistance activity and
Infrastructure, which aims to connect U.S. industry to major
expertise, also may be of congressional interest.
clean energy and transportation infrastructure projects in
Competitiveness and Standards-Setting for Overseas
emerging markets. Other initiatives include TDA’s Global
Infrastructure Projects. The Administration seeks for
Procurement Initiative (GPI), to educate public officials in
TDA to better position U.S. industry to secure contracts for
partner countries on public procurement methods to acquire
major overseas infrastructure projects, especially when they
quality, durable technologies for sustainable infrastructure;
compete with state-supported foreign firms, such as from
and Making Global Local, a group of domestic local-level
China. To the extent that Congress is aligned with this goal,
partnerships to connect U.S. firms with TDA programs.
it may consider whether TDA has the authorities and
TDA is involved in U.S. government multi-agency
capacity to do so. Congress also may examine how to shape
initiatives. For example, it aims to support the trade-focused
any role that TDA may play in advancing U.S. efforts to
Prosper Africa through its general programs and GPI. TDA
support infrastructure development overseas (such as
also supports other initiatives such as Power Africa and the
through the Build Back Better World Initiative), as well as
Western Hemisphere-focused América Crece.
to support standards-setting related to infrastructure (such
as through the Blue Dot Network, a public-private
Per the FY2022 international affairs congressional budget
certification initiative for infrastructure projects).
justification, goals for TDA are to support Administration
https://crsreports.congress.gov

U.S. Trade and Development Agency (TDA)

IF10673
Shayerah I. Akhtar, Specialist in International Trade and
Finance

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https://crsreports.congress.gov | IF10673 · VERSION 7 · UPDATED