Economists offer support in analyzing effects of TPP

JIJI

A group of renowned economists has started offering support for accurately analyzing the effects of the Trans-Pacific Partnership multilateral free trade pact.

The Global EPAs Research Consortium, including experts from the World Trade Organization, will provide Japan, the United States and 10 other TPP countries with its sophisticated analytical methods to help them increase the accuracy of policy evaluation, informed sources said.

The 12 countries, which reached a broad agreement on the TPP last October, are working to obtain a persuasive analysis of the pact’s effects, as they promote their respective domestic ratification procedures to put it into effect early.

The consortium, which has its secretariat at the National Graduate Institute for Policy Studies in Tokyo, is offering its estimates on the impacts from the abolition of tariffs and nontariff barriers under the TPP.

Using the group’s technique, the Japanese government has already estimated that the TPP will push up the country’s annual real gross domestic product by 2.59 percent from the fiscal 2014 level.

The consortium plans to make available its analytical methods and data obtained so far.

It also plans to support the analysis of effects from an envisaged economic partnership agreement between Japan and the European Union and the Regional Comprehensive Economic Partnership, or RCEP, for the Asia-Pacific region.

  • Steve Godenich

    Until currency manipulation protections are embedded in the TPP[1] or the international community agrees upon an equitable set of enforceable IMS rules, there is little point in lowering tariffs and quotas if they may be circumvented by counter-parties with impunity;That is not in the public interest or national interest if it continues to widen the current $0.5tn US trade deficit nor lift the standard of living or increase thecivil liberties in the TPP member countries. The EPA, Peterson Institute[2], Tufts University[3] reports are hardly unbiased. Further, the chair of the ITC commission, Meredith Broadbent[4], has close ties to Froman and the commission, itself, is composed of six politicians, not economists. This may be perceived as a feather in Obama’s hat, but there is no panache.

    [1] Currency Manipulation and its Distortion of Free Trade | Arthur Laffer |2014
    [2] Meredith Broadbent, Assistant U.S. Trade Representative for Industry, Market Access and Telecommunications | Office of the USTR (Archive)
    [3] Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement| Jeronim Capaldo | Tufts University | Jan 2016
    [4] Meredith Broadbent, Assistant U.S. Trade Representative for Industry, Market Access and Telecommunications | Office of the USTR (Archive)

  • A.J. Sutter

    The notion that there is expertise in this is an illusion. “Experts” from the WTO are clearly going to produce analyses in favor of free trade agreements; cost-benefit analyses are easy to tilt by creative assumptions about opportunity costs (I teach corporate executives how to do this, so that they can experience what a crock CBA is). So what are the assumptions involved in the government’s study? And who exactly will be the ones who benefit from any supposed increase in GDP? E.g., one could boost nominal GDP by weakening the yen, abandoning domestic agriculture, importing all food, and going full bore on the manufacture and international sale of weapons systems. Raising prices and going for “high-value-add” products like sophisticated bombers and missiles will mechanically raise GDP, but at what price to Japanese society?

    • KenjiAd

      I agree. I’m not an economist, but I do take a rather dim view of any economic projection studies.

      Because so many unknown variables are involved, the projection results would necessarily be very sensitive to the assumptions they make (perhaps including the fiscal policy of the next US government).

      And those assumptions are influenced by one’s political bias or, worse yet, the desire of those who commission the study. If WTO commissions a study, for example, I can’t imagine any study coming out saying free trade is bad. It’s not gonna happen.

      On top of that, I don’t understand why economists focus exclusively on GDP. Please correct me if I’m wrong, but I don’t think GDP takes into account the metrics that affect people’s happiness in general. Such as crime rate, anxiety of the general public, or even loss of some local traditional industries that mean a lot to the people.

    • KenjiAd

      I agree. I’m not an economist, but I do take a rather dim view of any economic projection studies.

      Because so many unknown variables are involved, the projection results would necessarily be very sensitive to the assumptions they make (perhaps including the fiscal policy of the next US government).

      And those assumptions are influenced by one’s political bias or, worse yet, the desire of those who commission the study. If WTO commissions a study, for example, I can’t imagine any study coming out saying free trade is bad. It’s not gonna happen.

      On top of that, I don’t understand why economists focus exclusively on GDP. Please correct me if I’m wrong, but I don’t think GDP takes into account the metrics that affect people’s happiness in general. Such as crime rate, anxiety of the general public, or even loss of some local traditional industries that mean a lot to the people.