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

Author

Listed:
  • Peter A. Petri

    (Peterson Institute for International Economics)

  • Michael G. Plummer

    (Johns Hopkins University)

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.

Suggested Citation

  • Peter A. Petri & Michael G. Plummer, 2016. "The Economic Effects of the Trans-Pacific Partnership: New Estimates," Working Paper Series WP16-2, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp16-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Trans-Pacific Partnership; Free Trade Agreements;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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