WASHINGTON – The Trans-Pacific Partnership trade deal will raise U.S. incomes by a total of $131 billion annually after 2030, and a one-year delay in its implementation would cost $77 billion in lost income, according to a think tank study.
The Peterson Institute for International Economics said Monday that its analysis of the TPP deal reached in October between the United States and 11 other Pacific Rim countries found that it would boost U.S. exports by $357 billion annually, and by $1.025 trillion annually for all TPP countries together.
Annual incomes for the 12 TPP countries would be $465 billion higher after full implementation in 2030 and $492 billion higher for the whole world, Peterson said.
The study from the Washington-based, pro-trade economic policy group took a neutral stance on overall job effects, however, using a forecasting model that assumed no net change in employment directly resulting from the pact — only shifts in allocations of jobs.
It did show that there would be some 53,700 U.S. jobs that would “churn” annually during TPP’s 15-year implementation period, resulting in job losses in some sectors offset by gains in others.
It estimates that by 2030, some 796,000 jobs will have been added in U.S. export activities due to TPP, with some of these shifted from firms facing stiffer import competition.
“The present analysis does indicate that the benefits of the TPP to the U.S. economy will greatly outweigh adjustment costs, and that economy-wide price and employment consequences will be limited,” Peterson said in the report.
Republican leaders in the U.S. Congress have yet to schedule a vote on TPP, which is viewed as essential to the pact’s success. Some prominent lawmakers have cautioned against trying to approve it before the presidential election in November.
Many TPP opponents in Congress have raised concerns about the trade deal’s effects on existing U.S. manufacturing plants, particularly in industries that are vulnerable to low-cost imports, such as auto parts, steel and apparel.
While the Peterson study estimated that overall employment in manufacturing would continue to grow in the United States, TPP would reduce that growth rate by one-fifth, resulting in 121,000 fewer manufacturing jobs in 2030 than without the pact.
U.S. Trade Representative Michael Froman said in a statement that the Peterson study “shows that TPP will raise wages for American workers, grow our economy, and help farmers and businesses export more ‘Made in America’ products.”
The study assumes that implementation of TPP would start in 2017. If this were delayed by one year to 2018, it would reduce the present value of the increased U.S. income generated by the trade deal by around $77 billion, with a possible range of $59 billion to $115 billion.