TPP to take thousands of jobs
The Trans-Pacific Partnership Agreement (TPPA) is still up in the air, and has been a major topic during Prime Minister Malclm Turnbull’s trip to the US.
Mr Turnbull was eager to spruik the enormous trade deal in his talks with US President Barack Obama, claiming the TPP will help “maintain our high-wage, generous-social-welfare-net, first-world economies”.
But this is not a view shared by many.
Opponents of the TPP criticise it for letting private companies force governments on labor issues, environmental and safety rules in confidential tribunals.
A new paper by independent economists says far from creating growth, the TPP will actually remove them.
The estimates are staggering, and include forecasts that the US will lose 450,000 jobs if the deal is enacted, as well as 75,000 jobs in Japan, 58,000 Canadian jobs and 39,000 Australian jobs.
The paper - Trading Down:Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement – was compiled by Jerome Capaldo and Alex Izurieta, economists from Tufts University, and Jomo Kwame Sundaram – former United Nations Assistant Secretary-General for Economic Development.
The team took a critical and independent look at the economic modelling from the TPP's proponents, and found it to be based on utterly nonsensical and nonstandard assumptions about how economies perform.
When the researchers went back over the pro-TPP figures using “realistic” modelling assumptions (based on the United Nations Global Policy Model) they came across a stark finding; it appears that if developed nations sign the TPP, they can expect to haemorrhage jobs by the tens of thousands.
Meanwhile, poor countries will gain few, if any jobs, the experts say.
“TPP would generate net losses of GDP in the United States and Japan. For the United States, they project that GDP would be 0.54 per cent lower than it would be without TPP, 10 years after the treaty enters into force. Japan’s GDP is projected to decrease 0.12 per cent,” the analysis states.
“Economic gains would be negligible for other participating countries – less than one percent over ten years for developed countries and less than three percent for developing ones.
“These projections are similar to previous findings that TPP gains would be small for many countries.
“TPP would lead to employment losses in all countries, with a total of 771,000 lost jobs. The United States would be the hardest hit, with a loss of 448,000 jobs.
“Developing economies participating in the agreement would also suffer employment losses, as higher competitive pressures force them to curtail labor incomes and increase production for export.
“TPP would lead to higher inequality, as measured by changes in the labor share of national income. The authors foresee competitive pressures on labor income combining with employment losses to push labor shares lower, redistributing income from labor to capital in all countries. In the United States, this would exacerbate a multi-decade downward trend.
“TPP would lead to losses in GDP and employment in non-TPP countries. In large part, the loss in GDP (3.77 percent) and employment (879,000) among non-TPP developed countries would be driven by losses in Europe, while developing country losses in GDP (5.24 per cent) and employment (4.45 million) reflect projected losses in China and India.”