After TPP, Trump to focus on jobs

Opinions split on effect pact would have had on growth

The Trans- Pacific Partnership was pitched as fuel for American exporters in their global competition.

President Trump, by signing an executive order Monday to abandon the TPP, demonstrated that his priority is to slow the tide of jobs leaving the United States and experiment with other protectionist measures before providing a leg- up to American companies seeking cheaper labor abroad.

The order on his first working day as president reverses decades of pro- trade policies pursued by his predecessors, who argued such deals boost U. S. exports, open markets for American companies and lead to more jobs.

Trump argues these trade deals are costing U. S. workers their jobs, and that the TPP is filled with too many concessions to other nations

The TPP is a trade pact among 12 Pacific Rim countries, excluding China, that was signed last year by President Obama after seven years of negotiation. But the Senate had not yet ratified it. The 30- chapter pact, which also needed to be ratified by other countries before Trump’s order Monday, aims to boost exports, remove tariffs, open access to more markets and usher in transparency in trade rules.

Other countries part of the TPP are Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam, Chile, Brunei, Singapore and New Zealand. The pact “levels the playing field by setting the highest enforceable standards and by removing barriers to selling our goods overseas,” Obama wrote last year in an editorial for The Washington Post.

A key selling pitch by Obama was that agreement would remove more than 18,000 tariffs that have hampered U. S. companies from selling their products in foreign countries. The TPP also includes rules about environmental standards, labor practices, the influence of state- owned enterprises, trade disputes, e- commerce policies, intellectual property protection and anti- corruption measures. ARGUMENT AGAINST TPP Labor unions that oppose the deal are primarily concerned that the TPP inhibits domestic investment, particularly in manufacturing, by offering benefits to U. S. companies that relocate operations and jobs abroad. They say it also loosens restrictions on foreign companies that export to the United States, hurting domestic competitors.

For example, the agreement with South Korea requires that only 35% of the parts of products coming into the U. S. duty- free originate in Korea, which means the majority of parts could come from China or other places, according to the Communications Workers of America.

The TPP could be used as a “backdoor” for Chinese products to come into the U. S. duty- free and hurt domestic competitors, it said.

About 448,000 U. S. jobs could be lost if the TPP were enacted, according to a study by Tufts University’s Global Development And Environment Institute.

Critics also say the TPP would be the latest in a string of failed trade policies that have contributed to wage stagnation in the U. S. Working- class Americans already lose about $ 1,800 annually because wages have been depressed by companies choosing to operate in countries with lower wages, according to the leftleaning Economic Policy Institute. “It’s a race to the bottom on wages,” said Robert E. Scott, senior economist for the Economic Policy Institute.

Obama has countered that the TPP offers benefits that would touch many sectors of the U. S. economy. “Building walls to isolate ourselves from the global economy would only isolate us from the incredible opportunities it provides,” he said.

Jeffrey Frankel, professor of capital formation and growth at Harvard Kennedy School, said in an editorial for The Boston Globe that the TPP reduces tariffs and quotas. “It is true that the United States will not be lowering many such import barriers under TPP because we don’t have many,” he said. “But other members around the Pacific Rim have lots. TPP will lower their trade barriers.” A NEUTRAL ASSESSMENT In a report last year, the U. S. International Trade Commission, a non- partisan federal agency, had a more optimistic outlook, saying the agreement would result in a net increase of 128,000 full- time jobs in 15 years.

But the agency estimated that the TTP would boost U. S. gross domestic product only by a modest 0.15%, or $ 42.7 billion, by 2032.

Output in manufacturing, natural resources, and energy would drop of 0.1%, with the TPP agreement in place, the agency predicted. In 15 years, output would grow 0.5% in the agriculture industry and 0.1% in the services sector, the ITC said.

The ITC concluded that the TPP would contribute to modest growth in American companies’ business abroad. U. S. exports and U. S. imports are projected to grow by 1% and 1.1%, respectively, in 15 years as a result of the TPP.

The ITC said some details of the agreement — such as rules for protecting data flows and establishing standards for customs, sanitary conditions and intellectual property rights — would be more difficult to quantify but be just as beneficial to U. S. exporters.

“TPP would generally establish trade- related disciplines that strengthen and harmonize regulations, increase certainty, and decrease trade costs for firms that trade and invest in the TPP region,” the ITC said.

The TPP would have removed more than 18,000 taxes that have hindered the sale of U. S. products in foreign countries.