ITC report finds little benefit to U.S. Economy from TPP
The U.S. International Trade Commission has released a report on the potential economic impacts of the Trans-Pacific Partnership (TPP.) And while the topline findings of the report suggest some minimal benefits, a thorough reading of the document reveals the trade deal's job-killing implications.
'Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors' suggests only very modest gains from the TPP. To wit, the report suggests that, after 15 years, the trade pact could boost U.S. annual real income by 0.23%, real GDP by 0.15%, and employment by 0.07%.
According to Kevin L. Kearns, president of the U.S. Business and Industry Council, "In spite of all the hype from the president, his senior officials, and so-called industry leaders, the upside of the TPP is extremely limited. It is also worth noting that the ITC has been completely wrong in its positive predictions about past trade deals, such as the Korea-US pact and the admission of China to the World Trade Organization. The minuscule gains the ITC is predicting for the TPP call into serious question why the United States Congress should even consider this massive undertaking, let alone follow the Obama administration's lead and try to ram it through in a lame duck session."
The report's fine print paints a darker picture than the putative gains, which are being hailed by the U.S. Trade Representative and the U.S. Chamber of Commerce and other multinational business dominated organizations. While minute increases in GDP and income, and the potential to "harmonize regulations" and "protect cross-border data flows" are touted as key selling points, one needs only to glance at page 24 of the report to see that good-paying jobs in "manufacturing, natural resources, and energy" (MNRE) are projected to fall by 0.2%. The report politely acknowledges this decline, saying, "The model does not capture the costs associated with employment transition or temporary unemployment." The real meaning here is that the U.S. economy could get slammed with substantial job losses.
Similarly, page 30 of the report explains that MNRE exports would rise by $15.2 billion, but imports would climb by a far greater $39.2 billion, yielding a trade shortfall of $24 billion. The report again politely minimizes this significant trade deficit by saying, "Output in MNRE sectors" would be "lower" by a mere "0.1 percent."
The U.S. Business and Industry Council (USBIC), which has represented the nation's small and mid-sized manufacturers since 1933, has long held a pessimistic view of the budding TPP. But as USBIC President Kevin L. Kearns notes, the assessments contained in the ITC report offer more troubling proof that the TPP simply makes no good economic sense.
Kearns added, "Manufacturing and mining are two of America's key value-added sectors. They are primary wealth-generators for the national economy. It is simply unthinkable to embark knowingly on a trade deal that promises to further erode the major, proven money-making sectors for the nation. Recognizing that manufacturing creates good-paying middle class jobs and has a significant multiplier effect creating other jobs throughout the economy, why would anyone in Congress want to sign his name to an agreement that promises to eliminate exactly this type of employment?"
Kearns said that even if manufacturing workers are downsized by the TPP, the report reveals that the TPP would hardly generate significant new employment opportunities for them. As the report reveals on page 35, employment in the lower paying services sector would increase by a mere 0.1%.
Said Kearns, "The president took six years to formulate this deal behind closed doors, and, now that the U.S. ITC analysis is in, we can see why he had something to hide. The only silver lining in this report is that it offers Members of Congress abundantly clear reasons to vote No on the agreement."
Click here to read more about USBIC's specific concerns regarding the content of the TPP.