The U.S. International Trade Commission said on Wednesday that the sweeping pan-Pacific trade deal President Barack Obama wants Congress to approve before he leaves office would likely have only a small positive effect on U.S. growth.
The influential trade panel said in a new analysis that gross domestic product would be $42.7 billion higher in 2032 with the 12-country Trans-Pacific Partnership in place than without it, about a 0.15 percentage-point gain.
The increased output would translate to about 128,000 more jobs by 2032, the ITC said. Recent U.S. job gains have averaged 200,000 per month, according to Labor Department data.
U.S. real annual income would be $57.3 billion, or 0.23%, higher with TPP than without it in 2032. A TPP analysis by the Peterson Institute for International Economics in January estimated an income gain of $131 billion by 2030.
While many sectors would see mild positive benefits, including agriculture and services, output in the politically sensitive manufacturing sector would be $11.2 billion lower with TPP than without it in 2032, with employment down 0.2%. Vehicle production would gain, but auto parts, textiles and chemicals would see reductions, the ITC said.
Donald Trump, the presumptive Republican presidential nominee, has railed against the more than two-decade-old North American Free Trade Agreement as “destroying” U.S. manufacturing jobs and has vowed to kill TPP if elected. Hillary Clinton, the likely Democratic nominee, has said she wants to renegotiate the pact to include stronger curbs on currency manipulation.
U.S. Trade Representative Michael Froman said the ITC report would be “one data point among many” that members of Congress will consider in deciding how to vote on the trade deal.
“Every major study has said that TPP will benefit the American economy,” Froman told reporters on a conference call.
House of Representatives Ways and Means Committee Chairman Kevin Brady said he would not proceed with a vote until the Obama administration addresses members’ concerns, including plans for member countries to implement the deal’s obligations to ensure compliance.
Froman said he was working with partner countries on such plans.
The ITC report found that U.S. exports to TPP partner countries in 2032 would be $57.2 billion higher with the deal in force, while imports from these countries would be $47.5 billion higher.
But the report, which uses a forecasting model that assumes the U.S. trade deficit will grow at the same rate as GDP, estimates that the global U.S. trade deficit in 2032 would be $21.7 billion higher with TPP than without it.
TPP member countries are the United States, Japan, Canada, Mexico, Australia, Vietnam, Singapore, Malaysia, New Zealand, Brunei, Chile and Peru.