USITC report predicts increase in trade deficit, modest gains overall from TPP
WASHINGTON – On May 18, the U.S. International Trade Commission (USITC) released their economic assessment of the widely contested Trans-Pacific Partnership (TPP) trade agreement, predicting modest gains for the overall economy despite an increase in the United States’ already massive trade deficit. National Farmers Union (NFU) is skeptically weighing the report’s findings against the trade deal’s inadequacies.
“These reports are often overstatedly positive, which is why it’s striking that the USITC’s optimistic results only project very modest economic gains for TPP. The commission’s assessment of a gain of just .15 percent in U.S. GDP in the next 16 years, while increasing our massive trade deficit should raise serious alarms about the proposed benefits of this trade agreement,” said Roger Johnson, NFU president.
The TPP has been promoted by the Administration as a trade boon for agriculture that will break down trade barriers, but Johnson points out that with TPP, even agriculture does not stand to gain much with the rosiest of estimates. “Even agriculture, which is often touted as the most beneficially impacted sector of the economy, is only estimated to see a half percent gain over 15 years.”
The report highlights how damaging TPP will be for the nation’s trade deficit. The trade deficit currently represents a 3 percent drag on GDP, negatively impacting the overall economy.
“A trade deal that neglects to provide improvements to our $531 billion trade imbalance is not a deal we can get behind,” Johnson explained. “In this case, USITC not only predicts that TPP will not address the trade deficit, but will likely increase the deficit by $21.7 billion. The data support that our producers are historically better off trading with countries we don’t have trade agreements with compared to the ones that we do.”
Earlier this year, Johnson testified before the USITC, sharing similar concerns about TPP on behalf of nearly 200,000 family farmers and ranchers.
“TPP’s impact on agriculture and rural communities will perpetuate the same trends that have characterized the past 20 years of free trade agreements: greater consolidation; erosion of mid-sized farms; increased volatility in farm incomes; and depopulation of rural America,” he told administrators.
NFU will continue to urge Congress to thoughtfully consider opposing the TPP agreement in its current form.