June 3, 2016

Will the TPP's Costs Exceed its Benefits

Like many Americans, I have long been concerned about the net impact that the Trans-Pacific Partnership (TPP) will have on our country. Against this background, I testified before the International Trade Commission in January (my testimony and its published summary are available here and here).

When the ITC’s final report was released this month, I immediately began to review it. The report is quite good and tries to present a balanced assessment. However, though the report does not explicitly say so, the TPP itself is fundamentally flawed and needs to be redesigned to fix the following problems:

1.     The TPP’s net benefits for the American people are exceedingly small and highly speculative.
2.     Tariffs are not the main reason for our trade deficits, lost jobs, and off-shored production.
3.     Misaligned currencies, the real culprit, are largely ignored.
4.     Overall trade deficits and job losses in key sectors will increase with the TPP.
5.     The TPP ignores China – America’s largest source of trade deficits and lost jobs.
6.     Large international corporations will be the primary beneficiaries of the TPP.
7.     Further economic and political polarization are likely if the current TPP is implemented.
8.     America needs trade policies based on 21st century realities, not 19th century theories.
9.     Though better rules for trade are desirable, what America really needs is a competitive dollar.

These points are discussed in more detail here on this blog site.

America Needs a Competitive Dollar - Now!

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