The US International Trade Commission (ITC) today released its report assessing the likely impact of the Trans-Pacific Partnership (TPP) Agreement that the President has entered into with Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The report, Trans-Pacific Partnership Agreement: Likely Impact on the US Economy and on Specific Industry Sectors, provides an assessment of the likely impact of the Agreement on the US economy as a whole and on specific industry sectors and the interests of US consumers.
In making its assessment, the Commission investigated the impact the agreement will have on the US gross domestic product; exports and imports; aggregate employment and employment opportunities; and the production, employment, and competitive position of industries likely to be significantly affected by the agreement. The main findings were determined through a dynamic computable general equilibrium model to determine the impact of TPP relative to a baseline projection that does not include TPP. The model estimated that TPP would have positive effects, albeit small as a percentage of the overall size of the US economy.
Details of the main findings include:
• By year 15 (2032), US annual real income would be $57.3 billion (0.23 percent) higher than the baseline projections, real GDP would be $42.7 billion (0.15 percent) higher, and employment would be 0.07 percent higher (128,000 full-time equivalents).
• US exports and imports would be $27.2 billion (1.0 percent) and $48.9 billion (1.1 percent) higher, respectively, relative to baseline projections. US exports to new FTA partners would grow by $34.6 billion (18.7 percent); US imports from those countries would grow by $23.4 billion (10.4 percent).
• Among broad sectors of the US economy, agriculture and food would see the greatest percentage gain relative to the baseline projections; output would be $10.0 billion, or 0.5 percent, higher by year 15.
• The services sector would benefit, with a gain of $42.3 billion in output.
• Output in manufacturing, natural resources, and energy would be $10.8 billion (0.1 percent) lower with the TPP Agreement than it would be compared with baseline estimates without the agreement.
Additionally, the report indicated that the TPP would generally establish trade-related disciplines that strengthen and harmonize regulations, increase certainty, and decrease trade costs for firms that trade and invest in the TPP region. Interested parties particularly emphasized the importance of TPP chapters addressing intellectual property rights, customs and trade facilitation, investment, technical barriers to trade, sanitary and phytosanitary standards, and state-owned enterprises.