New CEPR report: Not much to be gained by a TPP deal
Two days after members of the House Ways and Means Committee sat down with Obama administration officials to discuss including a rule to punish currency manipulation in the Trans-Pacific Partnership (TPP) trade negotiations, comes a report from the Center for Economic and Policy Research (CEPR) that says America wouldn’t get much of an economic bump from a potential deal:
Recent estimates of the U.S. economic gains that would result from the proposed TPP are very small – only .13 percent of GDP by 2025.
The long-term losses, going forward over the same period (to 2025), from the failure to restore full employment t othe United States have been some 25 times greater than the potential gains of the TPP …
Egads! Here’s how the bloggers at Global Trade Watch put it:
Economists have estimated that Apple's iPhone 5 contributed a 0.25 - 0.5 percent increase to U.S. GDP.
That is, the TPP's total contribution to the U.S. economy is expected, by TPP proponents, to be about one half to one fourth of the contribution of the latest iPhone version.
Emphasis added. At the Alliance for American Manufacturing (AAM), we’ve got nothing against trade agreements -– as long as they don’t harm our domestic economy. But as AAM President Scott Paul wrote back in February: Nothing can erode the benefits of more open trade, or stop a manufacturing recovery faster, than predatory currency manipulation.
After all, what good does it do the average American if a TPP deal contributes what the CEPR researchers call a “rounding error” to GDP?
Here’s an idea: Before signing any deal, we use our leverage (as gatekeepers to the largest, freest market in the world) to see that currency manipulation is included as a punishable offense. This would certainly bum the Japanese government out, but American manufacturers and workers would be pretty psyched.
The buzz around the TPP negotiations isn’t the only place Washington is talking about currency manipulation. A bill in the House of Representatives – H.R. 1276 – is making its way around the Hill, picking up co-sponsors. It would add currency manipulation to the list of offenses around which American businesses could build trade cases. Has your rep signed on to it yet? Click here and get them on board!
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