WASHINGTON — The impact of the 12-nation Trans-Pacific Partnership trade pact on the U.S. economy would be positive but “small” in relation to the size of the U.S. economy, according to a new U.S. International Trade Commission study released Wednesday evening.
The long-awaited report also outlined the effect of the trade deal on apparel, textile and footwear imports and exports, as well as on domestic production, and found that “U.S. demand for both imported and domestically produced apparel would increase over the 2032 baseline.”
In the overall economy, the report found that U.S. annual real income would increase 0.23 percent, or $57.3 billion, by 2032 compared to a baseline projection that does not include TPP. Real gross domestic product would be $42.7 billion, or 0.15 percent, higher than baseline projections and employment would be 0.07 percent, or about 128,000 full-time equivalents, higher than the baseline, the report said.
U.S. exports would increase 1 percent, or $27.2 billion, while imports would gain 1.1 percent, or $48.9 billion relative to baseline projections.
Exports to new free trade agreement partners would grow 18.7 percent, or $34.6 billion, while U.S. imports from those countries would grow 10.4 percent, or $23.4 billion, the report said.
Trade ministers signed TPP in early February. It includes the U.S., Australia, Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Chile, Brunei and New Zealand and aims to remove barriers to trade to encompass nearly 40 percent of the world’s GDP if enacted.
But the deal faces opposition from key Democrats in Congress, concerns from GOP leaders, all of the remaining presidential contenders, labor and environmental groups and growing numbers of the public. On the positive side, the deal has support from major business trade groups, including the U.S. Chamber of Commerce and National Association of Manufacturers.
“The ITC report provides another strong argument for why TPP should be passed this year. It is part of a growing body of evidence that shows that TPP will benefit our economy at home and allow the U.S. to help set the rules of the road for trade in the Asia-Pacific,” said U.S. Trade Rep. Michael Froman.
“What cannot be quantified in this study or any other is the cost to American leadership if we fail to pass TPP and allow China to carve up the Asia-Pacific through their own trade agreement,” Froman added. “If we allow China to beat us in defining the rules for trade it will undercut our workers and businesses and prevent us from taking badly needed steps to improve worker rights, bolster intellectual property protections and protect the environment through TPP.”
In the area of textiles and apparel, the report estimated that TPP would result in a 1.4 percent increase or $1.9 billion in U.S. imports of apparel over the 2032 baseline, which is the expected level of imports by that year without TPP. U.S. exports are projected to grow 0.3 percent, or $10 million, over the baseline.
“Imports of apparel would be expected to grow most significantly from Vietnam, the second-largest supplier to the U.S., while those from China, the largest U.S. apparel supplier, would be expected to decline,” the report said.
U.S. output and employment in the apparel sector is projected to increase 1 percent and 9 percent, respectively, over the 2032 projected baseline, the report found.
The model results for textiles estimated that TPP would result in a 1.3 percent increase, or $257 million, higher than the baseline estimate and imports that are 1.6 percent, or $869 million, higher than the 2032 baseline.
But the study found that output and employment in the textiles sector would be slightly lower, by 0.4 percent in both areas, compared with the 2032 baseline.