Congressional Airbnb, TPP’s Report Card, and Venture Capital Vetting

Here’s What You Need to Know

Last night, the U.S. International Trade Commission released its report on the Trans-Pacific Partnership trade deal and its effects on the U.S. economy. The report is 792 pages long. Even the “Executive Summary” is 22 pages long.

So here are the five things you need to know from ITC’s report that will have a significant impact on the policy and political debate on trade:

  • Good For America’s Economy, Better For Other Countries: The ITC’s macroeconomic model suggests the “overall impact of the TPP agreement would be small as a percentage of the overall size of the U.S. economy,” with an additional 0.18 percent in GDP growth in the long term. But “it would be stronger with respect to countries [with] which the United States does not already have a free trade agreement.” While the deal could “promote some new U.S. investment” with new trading partners, “it is unlikely that TPP would generate significant new investment flows into” America.
  • Agriculture Wins Big, Manufacturing And Energy Lose Small: ITC’s macroeconomic model shows TPP would increase output in the agriculture and food industry by 0.5 percent with measurable employment gains; but the manufacturing, natural resources, and energy industries would see a 0.1 percent decline with measurable job losses. Dairy, processed foods, and poultry are the biggest winners in the former. Titanium products and textiles would be the biggest losers in the latter.
  • Glass Half Full (Or Half Empty) For Auto And Service Industries: Within manufacturing, ITC says the passenger vehicle sector will see a 0.3 percent increase in output and employment, while the auto parts sector will see a 0.3 percent decrease. And the changes are small in America’s service sectors, with 0.1 percent increases in those figures.
  • Green And Blue Issues: ITC notes, “TPP goes further than any other major trade agreement to address environmental concerns” and “includes several labor provisions” involving workplace safety and minimum wages “not contained in any previous” agreements. But they also acknowledge “concerns about whether the U.S. government would effectively enforce” the environmental and labor provisions.
  • Reviews Are Mixed: Headlines show how much of a mixed bag ITC’s report is. The Hill’s headline: “Pacific trade pact would boost growth, jobs and income.” The Associated Press: “Pacific trade pact would deliver modest gains.” The United Steelworkers response: ITC “Report Validates That Trans Pacific Partnership Is Not Worth Passing.” U.S. Chamber of Commerce: “TPP is in our national economic interest.”

Ironically enough, both major parties’ likely nominees say they oppose this and other trade deals while the sitting Democratic president and Republican majorities in Congress are trying to find a way to ratify TPP. While ITC’s macroeconomic model shows TPP will be more economically beneficial to America than no TPP, specific conclusions of the report gives political ammunition to both sides. Keep an eye out for how the Trump and Clinton campaigns use this ITC report to talk to their constituencies and whether this report pushes the White House and Congress to attempt to pass TPP in a lame duck session.

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