The official government report projecting the economic impacts of the Trans-Pacific Partnership (TPP) was just released. Unexpectedly, it makes a strong case for why the TPP would be a disaster.
The report uses widely criticized methodology and unrealistic assumptions — and it STILL predicts that the TPP would worsen the already-enormous job-killing U.S. trade deficit and that 36 of 55 U.S. economic sectors would suffer losses!
Urge your member of Congress to reject the job-killing TPP.
The TPP report — from the U.S. International Trade Commission (USITC) — is the most negative such report that the agency, known for unrealistically rosy trade pact projections, has produced about any trade pact. It predicts:
• A $21.7 billion trade deficit increase that equates to the loss of 129,484 American jobs, according to the latest administration trade-to-jobs ratio, counting both exports and imports;
• Losses for 15 of 16 U.S. manufacturing sectors and even a decline in our existing service sector trade surplus;
• Only miniscule economic growth gains of 0.15 percent by 2032. In other words, the USITC predicts that we would suffer all of the TPP’s risks and the only prospective upside would be that the U.S. would be as wealthy on January 1, 2032, with the TPP as it would be on February 15, 2032, without the TPP.
And the scariest thing may be that these grim findings were produced using an absurdly optimistic economic modelling. Past USITC reports systematically have predicted that prospective trade deals would fix the trade deficit, create lots of new American jobs, significantly boost economic growth — basically puppies and unicorns for everyone!
But Americans have lived through the real consequences of corporate-rigged trade: offshored jobs, lower wages and outrageous income inequality.
The fact that even the overly optimistic methodology produced such grim projections suggests that, if ever implemented, the TPP could really be disastrous.
The U.S. government is required by law to release a report — within 105 days after a major trade agreement is signed — projecting the economic effects of that deal.
These official government reports — from the U.S. International Trade Commission (USITC) — have been shockingly off base about past trade deals.
Let’s check the scoreboard.
The North American Free Trade Agreement (NAFTA):
• USITC Projection — The report for NAFTA predicted that we would enjoy a growing trade surplus with Mexico and that NAFTA would increase U.S. employment by about 1 percent.
• Reality — The opposite occurred. A $2.6 billion goods trade surplus with Mexico morphed into a $106 billion deficit. And 845,000 Americans were certified as NAFTA job-loss casualties under one program that significantly undercounts such job losses.
The U.S.-Korea Free Trade Agreement (FTA):
• USITC Projection — The Korea FTA would result in our trade deficit with Korea being cut in half as U.S. exports to Korea would go up 3 percent while imports from Korea would rise more slowly at 1 percent.
• Reality — Nope. The U.S. trade deficit with Korea doubled in the pact’s first four years. U.S. exports actually shrank 9 percent with declines in 11 of the 15 sectors that export the most to Korea, and imports from Korea have jumped 19 percent. (This is especially ominous since the Korea FTA was the template for the TPP.)
China Permanent Normal Trade Relations (PNTR):
• USITC Projection — The U.S. trade deficit would worsen only slightly, from $113 billion to $120 billion.
• Reality — Wrong again! The U.S. trade deficit with China has exploded, rising to $340 billion in 2015. That is the largest trade deficit in history and bigger than the entire economies of many countries, including Denmark, Malaysia and New Zealand.
Unfortunately, the administration and the TPP’s corporate backers will ignore the USITC’s shoddy track record when the TPP report comes out.
They’ll use the (almost definitely inaccurate) report to try to persuade Congress to support the dangerous TPP.
That’s why we need to get ahead of the report and alert our members of Congress now.
Public Citizen’s Global Trade Watch
P.S. More info is available in our new analysis, but don’t forget to take action!