Tuesday, June 14, 2016

Trans Pacific Partnership A Winner for U.S.: Politicians, Left and Right, Are Wrong

When politics and economics collide, economics comes up roadkill. Take the case of the Trans Pacific Partnership (TPP). More than 99% of economists support this trade pact, yet 100% of individuals still in the race for the U.S. presidency are opposed to opening up Asian markets to U.S. manufacturers, businesses and farmers via TPP.

In October 2015 in Atlanta, the Obama Administration reached agreement with Japan, Vietnam and nine Pacific Rim nations to reduce trade barriers to produce the largest trade pact in the nation's history.

Due to reductions in trade restrictions, the USDA estimates that implementation of TPP will expand U.S. sales abroad by $130 billion annually. According to my calculations, if agriculture accounts for its historic share of U.S. exports, TPP would boost agricultural sales by $8.4 billion, and U.S. net farm income by approximately $1.0 billion in one year alone.

The deal, however, requires Congressional approval and both Democrats and Republicans have finally found something they agree on----rejection of TPP, economic jingoism, or what I will call "economic tomfoolery."

In 2015, the U.S. was the second largest exporting nation, behind only China. In that same year, the U.S. worker was the most productive on the face of the earth. Slinking into protectionism by rejecting fair and free trade agreements only subsidizes the less productive, and slows overall economic prosperity. Ernie Goss.

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