Friday, May 20, 2016
thenation | The United States International Trade Commission has just released a long-awaited “report on what critics have decried as the NAFTA on steroids” proposal for a Pacific Rim trade deal. The report was expected to make a strong case for the agreement. Instead, it barely makes a case at all. So modest is the argument for the TPP that it was characterized by Politico as a “mildly positive” document with a “mixed” projection for how the TPP would influence the US trade deficit and the bad news that “the oil, coal, chemical, auto parts, forestry, leather and medical device industries could see slower growth than without the agreement.”
Lori Wallach, the director of Public Citizen’s Global Trade Watch, points out that “This report spotlights how damaging the TPP would be for most Americans’ jobs and wages given it concludes 16 out of 25 US economic sectors…”
Instead of strengthening the argument for the TPP, the congressionally mandated study of how the sweeping agreement might help or harm the US economy is heightening the level of concern.
Economist Dean Baker, the co-director of the Center for Economic and Policy Research and an internationally respected expert on trade and employment issues, notes that “The overall projected gains to national income by 2032 are $57.3 billion or 0.23 percent. Since this gain is realized over the next 16 years, it implies an increase to the annual growth rate of just over 0.01 percentage point. In other words, the USITC projects that as a result of the TPP, the country will be as wealthy on January 1, 2032 as it would otherwise be on February 15 of 2032.”
Baker also offers a cautionary reminder that the projected gains could be inflated. “It is worth noting that the USITC modeling exercises in the past have not been good predictors of the outcomes of trade deals,” explained the economist. “For example, their models failed to project the large increases in the deficit with Mexico following NAFTA, the increase in the deficit with China following PNTR, and the increase in the deficit with Korea following the US-Korea trade agreement.”
Critics of the agreement—which President Obama and Republicans in Congress are still trying to advance this year—are actually using the new report to make the case against the TPP.
“This ITC report is so damaging that any reasonable observer would have to wonder why the Administration or Congress would spend even one more day trying to turn this disastrous proposal into a reality,” says AFL-CIO President Richard Trumka: