The U.S. International Trade Commission (USITC) Commissioners and staff created their recent report: “Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors” and found that U.S. trade performance will worsen under the TPP overall and for the majority of sectors analyzed, including services. The Commission’s report should be viewed as the most optimistic result possible from the TPP if everything goes right.
However, TPP countries do game the system with modern mercantilist tactics by, for example, replacing tariff cuts with value added tax hikes, which Japan is engaging in now. Japan, Vietnam, Malaysia and Singapore also use comprehensive and strategic industrial policies that benefit national champion, state-influenced or state-owned companies so they can win the global competition for jobs and growth. While the report is nearly 800 pages, the following core facts in the report are important in this “most optimistic possible” scenario... [more...]