THE 12-nation Pacific trade pact would create nearly a quarter of a million US jobs due to increased foreign investment in the US, a business group estimated on Monday, in the first look at the deal’s employment impact.
The Trans-Pacific Partnership (TPP), a potential legacy-defining achievement for President Barack Obama, is near completion, but has run into opposition from Democrats and others who worry the deal would cost US jobs.
The Organisation for International Investment (OFII), a trade group that represents the US operations of global companies, said TPP would create 68 000 direct jobs tied to an estimated $20 billion (R241.3bn) boost in foreign direct investment.
The trade deal, which reaches from Japan to Chile, would also create another 165 000 “indirect and induced” jobs from US suppliers and other firms that employ additional workers when foreign spending in the US increases, OFII said. The group said California is likely to see the biggest boost in employment from TPP, followed by Texas and New York.
Democrats worry that another free trade deal would siphon away US manufacturing jobs, as the North American Free Trade Agreement did in the 1990s.
Consumer group Public Citizen criticised OFII’s report and its findings, saying other studies did not show that trade pacts like TPP actually boosted foreign investment into the US.
“The report then translates its counterfactual hypothesis of increased foreign investment into a guesstimate of increased jobs, and then, incredibly, multiplies the spurious jobs number by three,” said Ben Beachy, research director of Public Citizen’s Global Trade Watch. Public Citizen has said trade agreements over the last 20 years have led to a net loss of nearly 5 million manufacturing jobs in the US and depressed wages. –
Reuters