The U.S. International Trade Commission issued its report on the TPP last week. This is from the ITC press release:
The Commission used a dynamic computable general equilibrium model to determine the impact of TPP relative to a baseline projection that does not include TPP. The model estimated that TPP would have positive effects, albeit small as a percentage of the overall size of the U.S. economy. By year 15 (2032), U.S. annual real income would be $57.3 billion (0.23 percent) higher than the baseline projections, real GDP would be $42.7 billion (0.15 percent) higher, and employment would be 0.07 percent higher (128,000 full-time equivalents). U.S. exports and U.S. imports would be $27.2 billion (1.0 percent) and $48.9 billion (1.1 percent) higher, respectively, relative to baseline projections. U.S. exports to new FTA partners would grow by $34.6 billion (18.7 percent); U.S. imports from those countries would grow by $23.4 billion (10.4 percent).
My Cato colleague Dan Ikenson was not impressed:
... the model doesn’t take into account things like: supply shocks (such as another fracking-type boom) or demand shocks (such as mass adoption of hand-held devices); transitions from human labor to robots; changes in institutions; the policy reactions of other countries to the TPP; accessions to the agreement by other countries; the impact on the multilateral trading system, and so on. All of these factors matter at least as much as the terms of the TPP itself.
So the question is: Why even bother performing these studies? The real outcomes are determined primarily by information that is unknown and difficult to estimate with reasonable accuracy when the models are run. The results are politicized and misused by advocates and proponents of trade agreements alike.
I would just add that for the substantive obligations related to issues such as IP and labor, the report discusses the TPP text, and notes the differing views that were submitted to it, but doesn't try to quantify the benefits. As the report notes, the quantitative assessment is limited to the following:
The quantitative assessment in this report estimates the economic effects of TPP provisions related to tariffs and tariff-rate quotas; selected nontariff measures affecting trade in goods and cross-border trade in services; and restrictions affecting foreign investment, compared to a baseline estimate of economic growth in the absence of the TPP Agreement.
Not that I could quantify the impact of IP, labor and similar issues in the TPP myself, but shouldn't someone try to do this?