A new university analysis of the Trans-Pacific Partnership trade deal finds that President Obama’s promises of sweeping economic benefits are not only wrong, but that the treaty will actually hurt America, cut jobs, and further whack GDP.
The analysis from the Global Development and Environment Institute at Tufts University near Boston found that some 448,000 jobs will be eliminated in the trade deal and that Gross Domestic Product, promised to nudge up, will go down.
It said that U.S. jobs would be “hardest hit” of all the 12 nations in the deal, a huge part of Obama’s legacy agenda.
The report is to be released at a press conference in Washington next week.
However, a copy on the university’s website details the potential disaster the trade deal with Asia could be for the United States, despite Obama’s promises.
Tufts said it did the analysis because the bold economic predictions made by supporters is based on outdated formulas. It instead used a new formula, one endorsed by the United Nations, to produce more “realistic” economic numbers.
The results are grim for the United States.
“Widely cited projections suggest modest GDP gains after ten years, varying from less than half a percentage point for the United States to 13 percent for Vietnam. However, these projections are based on unrealistic assumptions such as full employment and constant income distribution.
“This GDAE Working Paper employs a more realistic model that incorporates effects on employment excluded from prior TPP modeling. We find that any benefits to economic growth are more limited, and even negative in some countries such as the United States. More importantly, we find that TPP would lead to losses in employment and increases in inequality. This is particularly true for the United States, where GDP is projected to fall slightly (-0.54 percent), employment to decline by 448,000 jobs, and inequality to increase as labor’s share of income falls by 1.31 percent,” said the report.
The executive summary provided the following highlights:
— The TPP would generate net GDP losses in the USA and Japan. For the USA, GDP would be 0.54 percent lower than it would be without the TPP, ten years after the treaty enters into force. We also project that Japan’s GDP would decrease by 0.12 percent as a consequence.
— Economic gains would be negligible for other participating countries – less than one percent over ten years for developed countries, and less than three percent for developing countries. These projections are similar to the Peterson Institute’s finding that TPP gains would be small for many countries.
— The TPP would lead to employment losses in all countries, totaling 771,000 lost jobs. The USA would be the hardest hit, with a loss of 448,000 jobs. Participating developing economies would also suffer employment losses, as greater competitive pressures force them to limit labor incomes and increase production for export.
Paul Bedard, the Washington Examiner’s “Washington Secrets” columnist, can be contacted at [email protected].
