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Taking aim at TPP deal; Manufacturing groups issue new challenges

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WASHINGTON—Two manufacturing advocacy groups have issued new challenges to the proposed Trans-Pacific Partnership, reinforcing their position that the TPP will be a job-killer in the U.S. manufacturing sector.

Even the most optimistic forecast for the TPP estimates it will cost the U.S. some 50,000 jobs, according to the Alliance for American Manufacturing. Other estimates are in the range of 450,000, the AAM said.

“Economists are starting to break out their crystal balls to predict the impact of a proposed massive trade deal on the U.S. economy, and it is becoming clearer that significant factory job losses are to be expected,” Elizabeth Brotherton-Bunch, AAM digital media director, said in a Jan. 25 blog.

The U.S. Business and Industry Council noted the same gloomy economic projections for the TPP.

“The evidence is clear the TPP simply continues a failed model that will not enhance the U.S. economy or help to contain China,” USBIC President Kevin L. Kearns said in a Jan. 26 release.

Brotherton-Bunch's blog article quoted two recent studies from the Peterson Institute for International Economics and the Global Development and Economic Institute at Tufts University.

The Peterson Institute study is optimistic overall about the TPP, estimating it will increase annual real incomes in the U.S. by $131 billion and annual exports by $357 billion.

However, the Peterson Institute study also states some 53,700 jobs will be lost in “less productive, import-competing firms,” although a like number would be created in “exporting and other expanding firms.”

“This kind of movement between jobs and industries is what economists refer to as "churn,' and most kinds of productivity growth cannot occur without its taking place,” the Peterson Institute study said.

The GDAE, however, claimed to employ a more realistic model for the TPP incorporating effects on employment excluded from other studies.

“We find that any benefits to economic growth are more limited, and even negative to some countries such as the United States,” the GDAE study said.

The GDAE estimated that U.S. Gross Domestic Product would fall 0.54 percent under the TPP, U.S. employment would fall by 448,000 jobs and labor's share of income would fall 1.31 percent.

In his release, Kearns said the TPP contains many fatal shortcomings, including:

c A failure to address currency manipulation by China and other countries in the TPP;

c A failure to address value-added taxes in other TPP countries; and

c The dismantling of Buy America provisions in U.S. law.

“The executive and legislative branches need to understand that, instead of chasing success in foreign markets, American firms need to re-take market share here in their home market,” Kearns said. “We must pass and enforce trade laws that allow them to do so.”

The text of the TPP, a trade agreement between the U.S. and 11 other nations, became available in November 2015, a few months after Congress granted President Obama “fast-track” authority to transmit the agreement to Congress on a required up-or-down vote.

The TPP has attracted both passionate support and staunch opposition. The United Steelworkers union is one of the agreement's strongest opponents.