In the article TPP’s Economic Impact Will Be Fewer Jobs, More Inequality, New Study Says, the author seeks to examine a study released at the beginning of this year regarding the TPP. Interestingly, the study actually predicts a shrinking of the US and Japanese economies ten years after the TPP would come into being and a very modest growth in the Canadian economy. Overall, the study claims that job losses will occur due to the TPP due to shifting production to goods for exportation as well increased competition.
The TTP would encompass 40% of the world’s economy so it’s not surprising that competition could get very fierce given new areas of trade for many of the countries involved. The study conducted by Tufts’ Global Development and Environment Institute predicts that Canada’s economy would grow 0.28% as opposed to not being part of the TPP. This 0.28% equivocates to only $5 billion dollars. Interestingly, the Tuft’s research contradicts some early research that states there would be bigger benefits to employment and economic growth. One contradictory study from the Fraser institute has the net benefits being at $9.9 billion for Canada, basically double what the Tuft’s research shows.
One finding the Tufts research that many have argued as a downside to the TPP is the loss of jobs and income inequality created by the TPP. The amount of income flowing to business owners and shareholders would increase, relatively, while the amount of income flowing to wage earners would shrink, the Tufts study predicts. A negative impact to income distribution scares many in Canada. The exact numbers used are a reduction of the labor’s share of the GDP of 0.86%. It’s important to note that Canada already more unequal than the US when it comes to the labor’s share of the GDP. It will be interesting to see how Canada interprets conflicting studies about how the TPP will affect it’s economy in the future.
The Tuft’s study appears to confirm the fears of everyday citizens in countries that are included in the TPP, do you believe this study is valid?
If Canada does not ratify the TPP, could the results be worse than ratifying it?
If the TPP is scrapped, do you believe a new trade agreement will have to be crafted in its place?