USITC Finds TPP Benefits US Economy, But Maybe Not Jobs; Unclear On IP Rights

The United States International Trade Commission (ITC), an independent government agency, today released an 800-page analysis of the economic impact of the Trans-Pacific Partnership (TPP) Agreement completed last year.

The USITC report on the TPP is available here [large pdf].

The TPP was completed on 5 October 2015 by the US Trade Representative’s office, along with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. But it has not yet gone before the US Congress for approval as the Obama administration has been looking for votes.

Based on an initial reading, the USITC found an overall positive economic benefit over time, though some questions arose around manufacturing, natural resources and energy.

“Among broad sectors of the U.S. economy, agriculture and food would see the greatest percentage gain relative to the baseline projections; output would be $10.0 billion, or 0.5 percent, higher by year 15,” the report said. “The services sector would benefit, with a gain of $42.3 billion in output. Output in manufacturing, natural resources, and energy would be $10.8 billion (0.1 percent) lower with the TPP Agreement than it would be compared with baseline estimates without the agreement.”

“The overall impact of the TPP Agreement would be small as a percentage of the overall size of the U.S. economy; it would be stronger with respect to countries with which the United States does not already have a free trade agreement (FTA) in force: Brunei, Japan, Malaysia, New Zealand, and Vietnam,” it added.

On provisions such as intellectual property rights it was unable to get a clear read-out, but said there is “potential to positively affect the US economy.”

“The likely impacts of some of these provisions are difficult to quantify, but they have the potential to positively affect the U.S. economy by strengthening and harmonizing regulations, increasing certainty, and decreasing trade costs for firms that trade and invest in the TPP region.”

For jobs, services jobs would go up while manufacturing, natural resources and energy would go down. This led labor supporting US congressional Ways & Means Ranking Member Sander Levin, D-Michigan, to issue a statement calling it “deeply troubling” that US manufacturing would be expected to decline.

US Trade Representative Michael Froman noted in a statement today that “The ITC found that U.S. exports will increase by $57.2 billion annually by 2032 if TPP is passed and that overall U.S. annual real income will increase annually by $57.3 billion by 2032.”

“The ITC report provides another strong argument for why TPP should be passed this year,” Froman said. “It is part of a growing body of evidence that shows that TPP will benefit our economy at home and allow the U.S. to help set the rules of the road for trade in the Asia Pacific.” He added the threat that if not passed by Congress, it would allow China to “carve up” the region to its advantage.