The Trans-Pacific Partnership will have a positive impact on U.S. businesses, workers and families, the U.S. International Trade Commission said in a report issued May 18. The nearly 800-page congressionally mandated report assesses the impacts the TPP would have on the U.S. economy, specific industries, employees and consumers.
The ITC looked at the effects the TPP would have in 15 years on the economy, compared to a baseline economy without the TPP. Using a “computable general equilibrium model,” the ITC found the “TPP would have positive effects, albeit small as a percentage of the overall size of the U.S. economy. Key findings in the report include the following improvements by the year 2032 as a result of the TPP:
- U.S. annual real income would increase 0.23% to $57.3 billion
- Real GDP would increase 0.15% to $42.7 billion
- Employment would increase 0.07% or add 128,000 full-time equivalent jobs
- U.S. exports would rise 1% to $27.2 billion. Exports specifically with new free trade agreement countries under the TPP (Brunei, Japan, Malaysia, New Zealand and Vietnam) would grow 18.7% to $34.6 billion
- U.S. imports would rise 1.1% to $48.9 billion. Imports with new FTA countries would grow 10.4% to $23.4 billion.
Should the TPP be implemented, the ITC also said in the report that U.S. exports to TPP partner countries would grow faster than U.S. exports to the rest of the world — growing 5.6% higher than the baseline. Imports with TPP countries would also grow 3.5% faster than imports with from rest of the world.
The agriculture industry is expected to feel the largest impacts from the TPP as far as percentage growth, according to the report, with output and employment getting a boost of 0.5% growth by 2032. The U.S. manufacturing, natural resources and energy sector (MNRE) would experience the biggest growth in exports and imports from the TPP. Exports from the MNRE sector would increase by $15.2 billion and imports would increase by $39.2 billion by 2032, 15 years after the TPP is set to take effect.
“The report finds that TPP will increase exports of the world-class, Made-in-America products and services offered by American companies, and improve our nation's Gross Domestic Product,” U.S. Secretary of Commerce Penny Pritzker said in a statement. “The TPP will expand access to the more than 500 million consumers that reside in some of the world's fastest-growing markets and provide a level playing field for U.S. businesses and workers to contend with their global competitors.”
In a conference call open to the press May 19 regarding the ITC report, U.S. Trade Representative Michael Froman pointed out the benefits the TPP would have specifically on small and medium-sized businesses. Overall, it can reduce the costs for American small businesses, allowing them to export more goods to TPP participating countries. It can even mean the difference in whether a small or medium-sized business exports goods, hires workers and pays workers higher wages, Froman said, which is why it’s important for Congress to approve the trade agreement sooner rather than later.
“As this report and others before it demonstrate, it’s critically important that Congress get TPP done and get it done this year,” Froman said, adding one credible outside analysis suggests that the delay of passing the TPP by just one year would cost the American economy $94 billion.