Report: Pacific trade pact would boost growth, jobs and incomes

Report: Pacific trade pact would boost growth, jobs and incomes
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A new government report shows that the U.S. economy would modestly expand and incomes and employment would rise under an expansive Pacific Rim trade agreement.

The U.S. International Trade Commission's report said that the agriculture and service sectors would gain the greatest benefits from the Trans-Pacific Partnership (TPP) agreement.

U.S. Trade Representative Michael FromanMichael B.G. FromanUS will investigate aluminum imports as national security hazard Overnight Finance: WH floats Mexican import tax | Exporters move to back GOP tax proposal | Dems rip Trump adviser's Goldman Sachs payout Froman heads to Council on Foreign Relations MORE said that the report represents another data point that will be used by congressional lawmakers to assess the 12-nation TPP agreement.

“The ITC report provides another strong argument for why TPP should be passed this year," Froman said on a call with reporters. 

"It is part of a growing body of evidence that shows that TPP will benefit our economy at home and allow the U.S. to help set the rules of the road for trade in the Asia Pacific," he said.

But lawmakers remained cautious on their support for TPP after the report's release. 

Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchNew kid on the tech block Senate GOP: Legislation to protect Mueller not needed Week ahead: Lawmakers scramble to avoid another shutdown MORE (R-Utah) said that the report “must be studied closely so that we have a clear understanding of what TPP will mean for the American economy.”

He said that agreement’s "success hinges on a strong and honest partnership between Congress and the administration."

"As Congress continues to undertake a rigorous review of the TPP, I’m hopeful that the Obama administration will work actively with members to resolve outstanding substantive and implementation concerns," Hatch said.

Froman said that he is working with the TPP's trading partners to accelerate the implementation process ahead of votes on the agreement so the countries are ready to go once the deal is passed by the various legislative bodies. 

He said that would provide stronger assurances to Congress that the 11 other nations will comply with the TPP provisions.

House Ways and Means Chairman Kevin BradyKevin Patrick BradyRepublicans open to targeted China tariffs despite steel flap GOP pushes for 'phase two' of tax cuts Lighthizer, Ross set to talk trade on Capitol Hill next week MORE (R-Texas) highlighted the positives of the report but said there is no time frame for Congress to consider the trade deal.

"We will also continue to work with the administration to resolve members’ outstanding concerns about this agreement," Brady said.

"Again, it’s the substance of TPP that will drive the timing and process in Congress, not the other way around," Brady said.

House Ways and Means Committee ranking member Sander Levin (D-Mich.) said that his “initial review of the ITC report only confirms my position that I cannot support TPP as negotiated.

He said the economic gains the ITC expects from TPP “are insignificant” and the figures are “based on an optimistic assumption that our trading partners will open their markets to our exports, rather than simply replacing their existing tariff barriers with new non-tariff barriers, even though we have repeatedly seen that happen in the past.”

By 2032, or year 15 of the TPP, economic growth would increase $42.7 billion, or 0.15 percent, employment would rise 128,000, or 0.07 percent, and incomes would rise by 0.23 percent under the agreement, according to the ITC report.

The nearly 800-page report details the effects of the TPP on consumers and individual sectors.

Myron Brilliant, the executive vice president and head of international affairs for the U.S. Chamber of Commerce, said the ITC report “at first glance provides substantive support for the Chamber’s view that the TPP is in our national economic interest.” 

“While the ITC understandably adopts a conservative approach to these reports, the historical record has shown that export growth under past trade agreements has exceeded projections by a considerable margin,” Brilliant said. 

With the trade agreement, U.S. exports to TPP partners will grow faster than exports to the rest of the world, the report found. 

By 2032, total exports to the TPP countries would be $57.2 billion or 5.6 percent higher than without the deal and imports from the TPP partners would be $47.5 billion or 3.5 percent higher.

Overall, exports to the world would be $27.2 billion higher or 1 percent and and imports would grow $48.9 billion higher of 1.1 percent. 

The gains would be slightly higher after 30 years, or 2047.

By then, economic growth would rise by $67 billion (0.18 percent); real income by $82.5 billion (0.28 percent); and employment by 0.09 percent, or nearly 174,000 full-time equivalents, compared to the baseline.

But detractors of the TPP said the report proves exactly what they have been saying all along that the TPP deal is bad for U.S. workers.

Rep. Louise Slaughter (D-N.Y.) said the trade report is “just the latest in its long line of rose-colored forecasts on the economic impact of free trade agreements.”

She said past trade projections have fallen short and “that the more modest projections in today’s report should be taken as a sign that this massive TPP agreement would be even more harmful to American workers and businesses.”

Lori Wallach, director of Public Citizen’s Global Trade Watch, said the report proves that the “TPP could really be disastrous.”

Ilana Solomon, director of the Sierra Club’s Responsible Trade Program, said the report “offers further evidence that the Trans-Pacific Partnership would be a disaster for working families, communities and our climate.” 

“ITC reports have a record of projecting economic benefits of trade agreements that have failed to materialize, so it is noteworthy that even the overly positive ITC acknowledges that the TPP would have real costs and estimates economic benefits that are slim,” Solomon said in a statement. 

United Steelworkers International President Leo Gerard said the report shows that the TPP isn’t worth passing.

“In the past, similar reports have proven to widely underestimate the negative impact of trade agreements on American workers and the economy,” Gerard said in a statement.

“This report as mandated by law indicates the TPP will produce, almost no benefits, but inflict real harm on so many workers.”