The Economic Policy Institute released a policy memo today from economist Robert Scott outlining the dangers posed by the Trans-Pacific Partnership (TPP) and disputing the claim made by the Obama administration that “fast-tracking” the TPP would support U.S. job creation. While supporters of the TPP are quick to point out that the trade deal will increase U.S. exports, they fail to note that billions of dollars in increased imports from low-wage countries would increase the U.S. trade deficit, thereby hurting overall job creation and depressing wages.
“Our trade deficit with the TPP countries has been growing steadily, and this deal will cause it to grow further,” said Scott. “The fact that trade deficits hurt job creation is just common-sense economics. Exports support jobs, but imports destroy them.”
The U.S. trade deficit with the TPP countries was an estimated $260 billion in 2013. It grew 1.4 percent in 2013, while the overall U.S. trade deficit fell 6.9 percent.
The memo makes clear that, by making it easier for U.S. companies to outsource to low-wage countries such as Vietnam and Malaysia, the TPP would harm workers at home and have a similar effect as trade deals like NAFTA, KORUS, and China’s entry into the WTO.