- Pacific-rim nations to get astonishingly small gains from the deal, while exposing themselves to high risks.
By Kevin P. Gallagher
24 April 2014
Despite President Barack Obama’s charm offensive in the region, Pacific nations are well-advised to remain wary of the U.S. government’s position on the Trans-Pacific Partnership agreement (TPP).
If U.S. trade negotiators got their way, the Pacific Rim would reap surprisingly few gains — but take on big risk. Until the United States starts to see Asia as a true trading partner, rather than a region to patronize, it is right to hold out on the TPP.
Despite all Obama’s charm, the rosiest projections — from an unsuspecting report at the Peterson Institute for International Economics, no less — say that the TPP will raise incomes among the parties to the treaty by a mere 0.3% of GDP in 2025.
Many economists see these projections as gross over-estimates. For one, they heroically assume that a doubling of exports automatically leads to more than a doubling of income. Yet, even if these estimates were taken at face value, they amount to just over one penny per day per person way out in 2025 for TPP nations.