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A Salve for Globalization's Pains

America continues to shed manufacturing jobs -- nearly 3 million have disappeared since President George W. Bush took office in 2001, and 3.5 million have expired since the peak of manufacturing employment in March, 1998. But a tiny, underfunded program buried deep in the U.S. Commerce Dept. at least aims to set things right. It's called Trade Adjustment Assistance for Firms.

Easily confused with its far larger Trade Adjustment Assistance (TAA) partner, which assists workers who have lost jobs due to international trade, the program helps small manufacturing businesses retain their income and jobs. By helping companies stand up to foreign competition -- which often includes copyright and trademark piracy -- the program has managed to save 48,039 jobs and $900 million in income over the past five years, according to TAA.

FORGET BARGAINS. Take the example of Teme Jewelry Designs, which manufactures gold and silver jewelry in New Mexico. After a Chinese company began copying Teme's designs and undercutting prices, the U.S. business laid off nearly all its workers and sought help from the Rocky Mountain Trade Adjustment Assistance Center, one of 11 regional nonprofit offices that contract with the Commerce Dept. to provide help under the TAA for Firms program.

The advice: Go upscale. Small manufacturers can seldom afford the high cost and lengthy delays that accompany foreign copyright and trademark cases, so they're better off leaving the low end to the pirates. "Pursuing a legal case is often hopeless, so we told them to go for the high end," says Edvard Hag, director of the Rocky Mountain TAA for Firms center.

Hag, who runs a seven-person Colorado office that advises companies in seven states, helped the jewelry outfit market its goods, produce a catalog, and make sure buyers understood Teme's offerings were made in America. One idea: Partner with Bentley, the prestigious British carmaker, to sell a related line of jewelry.

BUDGET LIMBO. Similarly, when Hamel Manufacturing found a foreign competitor was pirating its accessories for self-serve car washes, Hag's group recommended that the Waterloo, Neb., concern invest in differentiating its product as the "Original" Hamel Flex Wand that the company patented in 1983. (The wands attach to high-pressure hoses used at many self-serve car washes.)

"The irony is the same people who show up at Wal-Mart (WMT) and buy cheap imports are the same people who lose their jobs because their companies can't compete," laments Hag, who began advising small manufacturers 10 years ago as an MBA student at the University of Colorado.

With the success of the TAA for Firms program and the continuing loss of manufacturing jobs, you might assume that Congress would want to expand the program from its current spending level of $12.5 million a year -- a flyspeck on a $1.5 trillion federal budget. You'd be only half right.

While Congress last year envisioned bumping up spending on TAA for Firms to $16 million, the Bush Administration proposed in its fiscal 2006-2007 budget, released in February, to consolidate many federal unemployment programs, leaving the TAA for Firms without a specific appropriation. Thus far, the House has proposed to restore the current level of funding back to $12.5 million, and the Senate hasn't yet acted.


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