US Government Study Predicts TPP Trade Agreement Will Produce Practically No Extra Growth For Anyone

from the just-like-TAFTA/TTIP dept

As their name suggests, free trade agreements are designed to help trade flourish between the countries involved. The hope is that when trade increases, society as a whole benefits. One of the key metrics for assessing that outcome is to look at changes in Gross Domestic Product (GDP), which provides one index of economic activity in a country. It does not, of course, measure other things that may be important to people, such as public services or quality of life, but it’s widely used.

GDP growth is one of the main benefits that will flow from US-EU TAFTA/TTIP, according to its supporters. They point to a study from the CEPR group in London, which was conducted on behalf of the European Commission as part of the preparations for negotiating a trade agreement with the US. Here are the headline figures from the study, as reported on Commission’s TTIP Web pages:

Independent research shows that TTIP could boost:

the EU’s economy by €120 billion;

the US economy by €90 billion;

the rest of the world by €100 billion

CEPR’s detailed report (pdf) explains that those figures would be the uplift in 2027 if an “ambitious” agreement were reached, as compared to the economies in 2027 without TTIP. So the predicted extra 0.5% GDP growth for both the EU and US is actually cumulative growth after ten years, and represents around 0.05% extra GDP per year, in the best possible case — hardly impressive.

Another way of looking at TAFTA/TTIP is in terms of its effects on the trade flows between the EU and US. According to the CEPR study, in the most ambitious (that is, most optimistic) case, imports to the US from the EU would increase by about €187 billion in 2027, while exports from the US to the EU would increase by €159 billion in the same year. But again, looking more closely at CEPR’s figures shows that 47% of those increased imports would be cars, which would also represents 41% of the increased exports. In other words, nearly a half of the increased trade that TTIP might bring according to this forecast would consist of swapping cars across the Atlantic.

What about the economic impact of the Trans-Pacific Partnership (TPP)? Figures for this have been harder to come by, which makes a new publication from the US Department of Agriculture particularly valuable, since it gives official estimates of what benefits might flow from TPP. Here’s the basic result:

Agricultural output in the United States will increase in most sectors due to increased market access within the TPP region, especially in cereals (1 percent), dairy products (0.5 percent), and meat (0.4 percent). Among TPP members, the largest percentage gains in agricultural output will be in meats in Australia, dairy in New Zealand, and “other agriculture” in Singapore. Agricultural output quantities will decline in most sectors in Japan and Vietnam in 2025 relative to the baseline.

As you can see, this details increases in agricultural production in 2025. But what about the increases in overall economic activity — GDP?

The largest macroeconomic impact of the TPP, in percentage terms, takes place in Vietnam, where real GDP would be 0.10 percent higher in 2025 with the implementation of the TPP than it would be under the baseline. Small gains in real GDP will also accrue to Japan (0.02 percent), and to New Zealand, Malaysia, and Mexico (all 0.01 percent). The TPP is projected to have no measurable impacts on real GDP in any other TPP member countries.

So according to the US Department of Agriculture’s model, the country whose GDP receives the biggest boost from TPP would be Vietnam, which would see a gain of 0.1% in 2025. Most countries would see considerably less than that, with both the US and Australia experiencing “no measurable impacts on real GDP” as a result of TPP. Now, it’s important to note that this study concentrated on the agricultural products. As it points out:

The scope of the TPP negotiations goes well beyond cutting tariffs; they also cover other areas that could impact agricultural trade, including investment, trade in services, technical barriers to trade, sanitary and phytosanitary barriers, etc. This analysis does not account for the gains that might be achieved in these other areas of the negotiations.

In other words, there could be more significant gains for the US and other nations in these areas. But many countries are banking on TPP giving a considerable boost to their agricultural sectors, whereas the new US study predicts no extra growth as a result, anywhere. That’s important, because the governments of both Australia and New Zealand have indicated that it will be necessary to make concessions in other areas in order to obtain those hoped-for positive results for their key farming sectors. But if the prediction is that these concessions will only result in increased agricultural trade, but not increased GDP overall, the question has be asked: is it really worth accepting things like longer copyright terms and stronger pharma patents if the payback in terms of real growth is small or non-existent?

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Comments on “US Government Study Predicts TPP Trade Agreement Will Produce Practically No Extra Growth For Anyone”

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Anonymous Coward says:

like other ‘Trade Deals’ if this one goes through, the only change will be what was the only thing intended anyway, and that is to give more power to Hollwood and the other entertainment industries to be able to stamp out innovation, spy more on internet users, get more data on customers from ISPs, be able to have faster, easier methods of suing so-called pirates and get longer jail sentences for everyone on the planet, just for sharing a media file or format shifting it! in other words, ways to screw the people will be greater!!

Anonymous Coward says:

TPP is about setting up corporate international laws (tribunals) which trump the sovereign laws of all nations. It was never about free trade. It was always about free exploitation of sovereign nation’s resources (cheap labor mostly) and it’s people.

Intellectual Privilege laws used to prevent disruptive innovators and startups from entering the market and competing (Aereo), is simply icing on the cake.

Rekrul says:

Maybe I’m dumb, but I’ve never understood why countries have to pass bunches of restrictive new laws in order to be able to trade with each other.

I always thought that country A offered a product to country B and if they were interested, they bought it. Country B then offers a product to country A and if they like it, they buy it. What’s so complicated about that, that it needs hundreds of pages of new rules to make it work?

Anonymous Coward says:

Re: Re: Re:

…the reasonable and normal plan doesn’t enrich the multinational corporations to the greatest degree possible.

Am I allowed to find it funny that trade agreements are between nations, while the entities that take advantage of them are multinational corporations? Next thing you know, ISPs will want to charge both content consumers and content providers for the same data traffic.

Anonymous Coward says:

Re: Re:

The complication is stuff like Country B demands safety standards that the product from Country A does not meet, thus baring Country A from offering their product to the residents of Country B. Thus they need hundreds of pages to nullify Country B’s safety standards so that Country A can sell there without being liable for unsafe produces. Or Country A wants to sell something patented that’s unpatentable in Country B. So they need hundreds of pages to force Country B to accept the patents of Country A so that Country A can sell there without competition from generic copies of their product.

Anonymous Person says:

Re: Re:

If country A and country B do not have ethical and effective democracies how dangerous is the position for its citizens and global peace on a planet with limited resources?

I support Agroecology and the Alternative Trade Mandate.

RJ (profile) says:

Minor quibble w/trade flows analysis

Whether or not car imports/exports make up half of the projected total trade increase doesn’t really matter. When domestic car production increases to serve exports this provides income to workers, who then purchase cars, some of which will come from the EU. Unless the increased import volume results in significant displacement of US auto production jobs, on net it seems that this could have meaningful positive effects, at least for the auto sector.

David E.H. Smith says:

How Much does The Global Corp. Economy Benefit at the Expense of the harmless NON shareholders

Higher Taxes (But, No “NEW” Taxes) to Pay Secret TPP Tribunal Penalties; NON Shareholders Have to Pay SHAREHOLDERS, corporate America & ASSOCs., et al.

How Much are You Selling your Right to Sue the Global Corporate Economy for?



It will be good for, not only the NON shareholders of the enterprises that will be generated by the on-going global “cooperation” of corporate treaties, agreements, partnerships, et al, including the China – Canada Investment Treaty, The Trans Pacific Partnership, the EU – Canada CETA,
for the potential shareholders, as well,
who are quite interested to know if President Xi Jinping (China) will support Russia as a co-member of B.R.I.C.S. when President Putin uses his potential role as “The White Knight”.

And, while President Putin’s potential support as “The WHITE KNIGHT” in the development of the CETAgreement, et al, litigation below can dramatically off-set the hundreds of billions of dollars due to the present & future sanctions leveled by American led, et al, corporations & financial institutions via their governments’ signing their global corporate economic treaties/”arrangements”,
and the potential for making trillions of dollars for the Russian economy over the next 30 – 40 years & beyond,
are the citizens (SHAREHOLDERS & NON shareholders) of Germany & JAPAN just being prudent in wanting to wait for the outcome of:
1) the submission to The SUPREME COURT of CANADA & the highest court in Germany, et al, to make their findings regarding “The Submission”:
“The SHAREHOLDERS & Corporations of AMERICA, et al
the harmless Canadian NON shareholders, et al”?

2) “The MERKEL (Chanc. Germ.) Letter; To Sue, or, Be Sued”?
(see; )

Have the federal representatives of the nations that are the potential signatories of CETA, TPP, et al, willingly provided the NON shareholders of China, Canada, Europe, the Trans Pacific nations, et al, with the aforementioned information? Are the federal representatives, et al, depriving the NON shareholders of Canada, et al, of the due diligence information that enables the family of the NON shareholders of Canada, et al, to make informed decisions regarding their financial planning?

And, would a reasonable person conclude by a preponderance of the evidence, &/or, beyond a reasonable doubt, that these documents, et al, demonstrate that the SHAREHOLDERS of AMERICA, CANADA , the EU & Trans Pacific nations, et al, really do not care which NON shareholders pay them the punitive penalties, etc., by way of their secret (“Death-Star Chamber”) TRIBUNALS, as long as its not the SHAREHOLDERS who pay & not their corporations regardless of which country the corporations:
1) operating from,
2) maintain their headquarters,
3) use to do their cyber banking, accounting, “taxation”, etc.
4) et al?

And, re; the CHINA – Canada Investment Treaty, is it understandable why the “coveted” Hong Kong investor & his associates are “concerned” with the aforementioned findings of The SUPREME COURT of CANADA, et al, & the effects of the findings, et al, on the EU, AMERICA, the Trans Pacific nations, et al, treaties with CHINA, et al?

In regard to arms sales; how about the sale of arms (non nuclear) in general in regard to the “trade” treaties that are continuing to be secretly negotiated and how will the Tribunals, both; B.R.I.C.S. & non BRICS, adjudicate, decide & penalize the NON SHAREHOLDERS for the sale of legitimate, semi- legitimate & “illegal” sales of arms within the signatories nations & the those of others, &/or, unaligned? Of particular, interest is China, which does have an treaty with Canada, which puts China “at odds” with other arms manufacturing & nuclear powers that it (China) does not have any “arrangements” with.
Are these types of questions that your politicians & the corporate lobbyists calls “forget-me-nots” (“Buyer Beware”) that will be (maybe) worked out after the fast tracked signatures are obtained?

And, what do you think is the significance of the line in The Submission to The Supreme Court of Canada “…And, lest one forgets that the revelation of the present perilous international treaties/”arrangements” began with the regard for the rights of Native Canadians as per the Treaties/”arrangements” that corporate Canada & the Government of Canada have “foisted” upon Native Canadians…”? What are the various ways that this line will cost the SHAREHOLDERS, et al?

On the other hand, it may be worth repeating yet again,
“What the TREATY of VERSAILLES was to the 20th century PALES in COMPARISON to the TPP, CETA, C-CIT, NAFTA, et al, in the 21st”.

And, how will YOUR submission to YOUR highest court IMPROVE upon The Submission that is presently before The Supreme Court of Canada?

David E.H. Smith
– Researcher
– “Qui tam…”
Please consider sharing the enclosed information & questions with 10 members of your family, friends, associates in order that they can use the due diligence info to make more informed decision about their families’ financial planning, & then they can share it with 10 others…
For more Information & Questions re; The Relationship between Human (Nature) Rights & Economics by way of the C-CI Treaty, the CET Agreement,
TPP, et al, and The WAD Accord

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