WASHINGTON — Australian Prime Minister Malcolm Turnbull, in town for an Oval Office meeting with President Obama Tuesday, touted the benefits of the Trans-Pacific Partnership trade deal on Tuesday and countered arguments by some economists that the deal would only provide a slight economic boost for some of the larger nations.
Australia is part of the TPP trade deal with the U.S. and 10 other countries, including Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Chile, Brunei and New Zealand. It aims to tear down barriers to trade and would encompass 40 percent of the world’s gross domestic product if enacted.
Trade ministers reached a deal in October on TPP and leaders of the 12 nations are expected to sign it in early February, and then send it to their legislatures for approval.
Congress is expected to begin considering TPP and possibly vote on the trade deal this year, but a difficult legislative fight is expected.
“TPP is a very critical part of America’s continued presence in the Asia-Pacific,” Turnbull said in a speech at the U.S. Chamber of Commerce. “It is a very important element in the maintenance of the U.S. as the credible, strong, consistent, enduring guarantor of the rules based on international order.”
Turnbull noted the 12-nation deal will open markets, provide greater transparency for businesses and investors and a strong rule of law. “It is absolutely critical for the peace and stability the U.S. has underwritten in our region for so many years. All of those things need to be built on and the TPP is a key part of that,” Turnbull said.
But Turnbull took exception to some recent economic reports asserting that the TPP would not provide a big economic lift for some countries including the U.S. and Australia.
While Turnbull did not name economists or specific reports, a recent analysis and report by the World Bank concluded that TPP would raise the overall GDP in the partner countries by an average of 1.1 percent and lift trade by a combined 11 percent by 2030. The U.S. ranked the lowest among the 12 TPP countries in percentage GDP gains with estimated growth of under 1 percent by 2030, according to the report.
Australia’s GDP gain was estimated at around 1 percent, just slightly above that of the U.S., and behind the other 10 countries, according to the World Bank report.
“I know there will be economic analysis that will say TPP only adds a very small percentage to a given country’s GDP, our GDP or American GDP, Turnbull said. “Without being unduly critical of economists, they often miss the things that are hard to measure.”
“What is significant is that the stability, the prosperity, the growth of which I spoke in our region which is unprecedented in human history could not have occurred without the strong position, the strong presence of the United States,” Turnbull said. “The U.S….has underwritten that growth and every country in the region, China, India, [South] Korea, Japan, Australia and Indonesia, every country has benefitted from that. That needs to continue to be worked on and the TPP is a critically important part of that.”
China, India and South Korea are not a part of the TPP but negotiators have said that other countries will have a chance of joining TPP in the future, if approved by member countries.
Turnbull called skeptics of the impact of TPP’ an “extraordinary counsel of despair” and questioned why Americans would be “fearful of open markets.”
Many labor groups and unions and lawmakers opposed to TPP have long argued that trade agreements ship jobs overseas and hurt wages and employment in the U.S. and TPP, the largest the U.S. has ever negotiated, presents a fresh threat to economic growth, they have argued.
“The reality is TPP offers opportunities to the United States,” Turnbull argued. “There is very little at risk for such a strong and innovative economy as this and so much to gain in our region.”
“The more we can tie the economy of our region together, the more connected they become ;the more transparent they become and the stronger and more reliable the rule law is in each country,” he said. “The more of that interdependency, the greater the cost of anyone seeking to disrupt it.”
He vowed to make the case to U.S. lawmakers later on Tuesday and urge them to support TPP.
Obama said in comments before the Oval Office meeting that the U.S. and Australia are “both part of the driving force that created this rules-based system that is now being prepared to ratify among the various nations.”
“It is going to be good for our economy. It is going to be good for our workers and our businesses” he added. “And it reaffirms that in order for us to thrive in the 21st century, particularly economies that are respectful of rule of law and concerned about labor rights and environmental rights, it’s important for us to be making the rules in this region, and that’s exactly what TPP does.”