TCB: Fast Facts
Fiscal Year 2021 Overview
Trade capacity building (TCB) plays a critical part in the United States' strategy to enable developing countries to implement the market-opening reforms necessary for trade agreement compliance and foster economic growth from increased trade and investment. The United States is the largest single-country provider of trade-related assistance (also called TCB).
The U.S. government's trade capacity building (TCB) obligations totaled $851m in FY2021,
with investments in 511 activities
across 96 countries, geographic regions, or trade groups.
Top Three Largest Funders of TCB-Related Activities
- $479m Millennium Challenge Corporation (MCC)
- $139m U.S. Agency for International Development (USAID)
- $105m Department of Labor (DOL)
Top Three Largest Funders of TCB-Related Activities
- $500m Trade-related Infrastructure
- $120m Trade-related Labor
Increases in Funding by Agency
FY2020-FY2021
354%
MCC +668m
95%
Trade and Development Agency +13m
86%
DOL +48m
Decreases in Funding by Agency
FY2020-FY2021
92%
Department of Agriculture
68%
Department of Commerce (DOC)
48%
Department of State (DOS)
Total US Obligation Increase
FY2020-FY2021
137%
The increase in total USG obligations can be primarily attributed to the obligations made under MCC's Senegal Compact.
Regional Investment by Agency
Bilateral and Multilateral Assistance
Bilateral TCB assistance ($315m) between the United States and recipient states accounted for 84% of all TCB assistance, while 16% of TCB funding ($57m) was allocated to global, regional, and sub-regional programs.
With the exception of Trade-related Labor, funding in all TCB funding categories declined for FY2021, possibly as a result of disruptions in programming arising from the COVID-19 pandemic. Note that the trends in U.S. Trade Capacity Building by Category do not include MCC obligations given that MCC reports all obligations under a single compact during the compact's first year, thus skewing category trends. While agriculture has historically been the TCB category with the highest funding, Trade-related Labor surpassed Agriculture as the largest category of TCB activities. The precipitous drop in TCB funding to Agriculture is due to decreased activities under the Department of Agriculture's Foreign Agricultural Services in FY 2021.
Excluding MCC, Trade-Related Labor accounted for most TCB obligations of any category in Fiscal Year 2021. This increase in funding is due in part to the influx of funding of technical assistance from the Department of Labor (DOL) for the US-Mexico-Canada Agreement. Notably, FY2021 is the first year when Trade-related Labor has surpassed trade-related agriculture for TCB obligations. Trade-related Labor has been the second-most funded TCB until FY2021, when it surpassed Trade-related Agriculture as the highest funded category. The U.S. Agency for International Development (USAID) continues to be the largest contributor to total TCB obligations in Trade-related Labor each year. While other agencies' Trade-related Labor obligations dropped in FY2021, DOL obligations increased significantly in this category.
2014-2021 Obligation Trade-Related Labor (Million USD): Five Highest Obligating Agencies
Obligations, $US
Trade-Related Labor TCB Obligation Recipients in FY 2021
Top Two Income Groups in FY2021
Global Efforts FY2016-2021
Mexico
$48m
Trade-related Labor Funding
Upper Middle-Income
Income group
Colombia
$5.3m
Trade-related Labor Funding
Upper Middle-Income
Income group
Ethiopia
$5m
Trade-related Labor Funding
Lower Middle-Income
Income group
Focus of Trade-related Labor Efforts
Both Mexico and Colombia are upper middle-income countries, where Trade-related Labor TCB efforts focused on promoting labor law compliance and governance, support of labor standards, trade unions, workforce development, business education, and the social aspects of liberalization. In Ethiopia and other lower-middle-income countries, Trade-related Labor projects more commonly emphasize worker rights and reducing child and forced labor.
Country Context: Mexico
The country receiving the largest amount of TCB obligations, Mexico, also saw a large increase in Trade-related Labor funding, coinciding with the U.S. Mexico Canada Agreement (USMCA)'s new core chapter focusing specifically on labor. Additionally, the USMCA implementing legislation included $210 million to the U.S. Department of Labor's International Labor Affairs Bureau (ILAB) for USMCA-implementation activities, which includes funding for trade capacity building. ILAB obligated $180m in technical assistance for Trade-related Labor activities to help Mexico implement these provisions. These include TCB programs targeting gender equity, labor rights, labor law enforcement, and occupational safety and health conditions. Obligations to Trade-related Labor trade capacity building efforts have often focused on specific sectors most relevant to laborers in a country. For example, DOL's project Improving Working Conditions in the Mexican Automotive Supply Chain (CALLE) focuses on labor enforcement in the automobile sector, while another, Fields of Hope, has focused on coffee and sugarcane producers.
