NCPA - National Center for Policy Analysis

Trade Gains from the Trans-Pacific Partnership

December 4, 2014

The Trans-Pacific Partnership (TPP) is a trade agreement that would expand American trade with nations in the Asia-Pacific region, generating more trade than the NAFTA agreement (between the United States, Canada and Mexico) currently does. The TPP countries include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Alyson Cuervo, research associate at the National Center for Policy Analysis, contends the TPP, which covers trade in both goods and services, would create income benefits for all trading nations:

  • Each participating country would see an export increase of between 2.5 percent to 37.3 percent by 2025.
  • Income gains would total $295 billion annually by 2025.
  • Japan would see the greatest gains from the TPP, with $119 billion in income gains and $176 billion in exports by 2025.

Cuervo says the TPP would increase trade for small businesses, similar to the NAFTA agreement:

  • In 2010, more than 122,000 small businesses in the United States exported goods to Canada and Mexico.
  • Those businesses had $78 billion in exports in 2009, constituting 29 percent of small business exports worldwide.

Cuervo contends that small businesses will benefit similarly from the TPP's reduced tariffs and other trade terms that will enable them more easily to enter other markets.

Source: Alyson Cuervo, "The Trans-Pacific Partnership: Opportunities for International Trade and Internal Growth," National Center for Policy Analysis, December 4, 2014.

 

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