Jan 29, 2016 - 10:00am

Study: TPP Means More Exports, Higher Wages and Better Jobs for America

Former Executive Director, Communications & Strategy


U.S. Exports Boeing

After months of debate over the implications of the new Trans-Pacific Partnership, the latest and most thorough analysis of the trade agreement yet leaves little doubt about what the agreement would mean for the U.S. economy: better jobs, higher wages and more exports of American-made goods.

“The TPP appears to have met its two most important negotiating objectives,” researchers from the nonpartisan Peterson Institute for International Economics wrote in their report, considered the most in-depth analysis of the economic implications of the agreement to date. They explained that, in addition to setting clear rules for trade between member nations, the trade agreement “will substantially benefit its members, and in particular raise real incomes in the United States by $131 billion in 2030 and a similar amount in subsequent years.”

In addition, the deal - which was finalized late last year and is expected to be signed by trade ministers from the 12 countries next week in New Zealand - would lift U.S. exports by $357 billion per year by 2030, by which time the deal would be nearly fully implemented. That represents a 9.1 percent increase over baseline projections.

And what about jobs? Most economists believe that, in principle, expanding free trade – particularly during a period of low unemployment – will gradually alter the mix of jobs available by creating more high-skill, high-wage jobs and fewer low-skill, low-wage jobs. The Peterson Institute’s projections align with this consensus view.

Most economic models assume “normal” or full employment, and in such circumstances the economic boost provided by a trade agreement would come in the form of higher wages as workers gradually shift to higher paying, export-related jobs.

“This independent analysis shows that TPP will raise wages for American workers, grow our economy, and help farmers and businesses export more ‘Made in America’ products,” U.S. Trade Representative Michael Froman told The Hill earlier this week. He added that the study “offers clear evidence that TPP is an answer to challenges on how middle class workers will compete at home and how our nation's economy will compete abroad.”

The study makes clear the potential cost of delay. If U.S. policymakers delay signing the agreement by even one year, the American economy will lose out on $77 billion worth of benefits, the report states. That’s the equivalent of draining $600 from every American household.

“Sitting on the sidelines and delaying TPP, even for a short time, will cost us dearly,” Froman said.

About the Author

About the Author

Former Executive Director, Communications & Strategy

J.D. Harrison is the former Executive Director for Strategic Communications at the U.S. Chamber of Commerce.