By Stan Sorscher, WFTC Board President and former Boeing Engineer
When we negotiate a new trade deal, the US International Trade Commission prepares an official economic report. Their report on TPP came out last week.
The ITC methodology makes very optimistic assumptions. The ITC’s predictions of gains from CAFTA, Korea and other deals were contradicted by huge trade deficits with Korea, lost jobs, and disruption of the economies and social structures in Central America resulting in the flood of children out of Central America, into the US.
The ITC report on TPP predicts a microscopic overall increase in GDP due to TPP after 15 years. Agriculture may benefit slightly, manufacturing will be worse off, and our overall trade deficit will increase.
The Coalition for a Prosperous America summarizes the report in this graphic.
The “best case” gain from TPP is the tiny sliver, which is well within the measurement error for GDP.
But wait! Who gets that tiny gain? The gains from trade will be divided up the same way gains from productivity are divided up. That is, whoever has bargaining power will take the biggest share.
Workers do not see their interests in TPP. The rules in TPP will give market power to global companies, not to workers or communities.
In the global economy, workers in Vietnam, Malaysia, and Brunei will not see these gains. Workers in Indiana, Ohio, and Washington State will feel pressure to make concessions to keep their work from moving to Peru, Mexico, and Singapore.
The ITC report is an economic analysis. It does not measure our losses regarding environmental issues, public health, food security, internet freedom, or financial regulation. Those issues will be settled by the power relationships in TPP – in favor of global investors who wrote the language in TPP.
That little sliver can be seen one other way, That tiny slice of winners is the fraction of 1 percent of the country that benefits from our form of globalization, while the rest of us lose our political and economic power to protect the environment, and rebuild the middle class.
That’s the defining characteristic of a bad public policy. TPP is bad public policy.
Read the official Coalition for a Prosperous America statement on the ITC Report
Read the official Global Trade Watch statement on the ITC Report