The Economic Effects of the Trans-Pacific Partnership: New Estimates

33 Pages Posted: 15 Mar 2016

See all articles by Peter A. Petri

Peter A. Petri

Brandeis University - Brandeis International Business School; Brookings Institution; Brandeis University - Department of Economics

Michael G. Plummer

Johns Hopkins University

Date Written: January 1, 2016

Abstract

This Working Paper estimates the effects of the Trans-Pacific Partnership (TPP) using a comprehensive, quantitative trade model, updating results reported in Petri, Plummer, and Zhai (2012) with recent data and information from the agreement. The new estimates suggest that the TPP will increase annual real incomes in the United States by $131 billion, or 0.5 percent of GDP, and annual exports by $357 billion, or 9.1 percent of exports, over baseline projections by 2030, when the agreement is nearly fully implemented. Annual income gains by 2030 will be $492 billion for the world. While the United States will be the largest beneficiary of the TPP in absolute terms, the agreement will generate substantial gains for Japan, Malaysia, and Vietnam as well, and solid benefits for other members. The agreement will raise US wages but is not projected to change US employment levels; it will slightly increase "job churn" (movements of jobs between firms) and impose adjustment costs on some workers.

Keywords: Trans-Pacific Partnership, Free Trade Agreements

JEL Classification: F12, F13, F14, F15, F17

Suggested Citation

Petri, Peter A. and Plummer, Michael G., The Economic Effects of the Trans-Pacific Partnership: New Estimates (January 1, 2016). Peterson Institute for International Economics Working Paper No. 16-2; East-West Center Workshop on Mega-Regionalism - New Challenges for Trade and Innovation. Available at SSRN: https://ssrn.com/abstract=2723413 or http://dx.doi.org/10.2139/ssrn.2723413

Peter A. Petri (Contact Author)

Brandeis University - Brandeis International Business School ( email )

Mailstop 32
Waltham, MA 02454-9110
United States

HOME PAGE: http://ppetri.com/

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

Brandeis University - Department of Economics

Waltham, MA 02454-9110
United States

HOME PAGE: http://ppetri.com/

Michael G. Plummer

Johns Hopkins University ( email )

Via Belmeloro 11
40126 Bologna
Italy

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