New study shows TPP-11 delivers zero agricultural trade benefits, shrinks manufacturing
September 6, 2018: Australian big business commissioned economic modelling of the impact of the proposed TPP-11 and released it yesterday, only to expose the failure of the deal to deliver tangible benefits even after 12 years. As Crikey put it, even the spruikers of the deal can’t find real benefits in it.
The reliable rural publication the Weekly Times noted the new modelling shows that Australian agriculture stands to make zero gains in exports under the TPP-11.
The report also acknowledges durable manufacturing will shrink in Australia by 2 per cent under the TPP-11 (p.26). Any increased exports would be completely offset by increased imports.
It showed Australia’s grains exports would not change at all under the TPP-11. All other agriculture could actually decline under the TPP-11.
The TPP-11 will add less than 0.5% to GDP in a decade’s time, or around one and a half days’ worth of income, to the Australian economy.
The report, by two US economists and commissioned by business groups such as the Minerals Council, the Business Council, the Australian Food and Grocery Council, the Australian Industry Group, the Australian Chamber of Commerce and Industry (ACCI), the National Farmers Federation and the Winemakers Federation of Australia, is a humiliation for the business sector. The report does not evaluate the cost of the TPP 11, including foreign investor rights to bypass national courts and sue governments over domestic legislation and increased numbers of temporary migrant workers vulnerable to exploitation.
On wages, the report is brief, but indicates that wages would, after a decade, only grow by the miniscule amount of 0.46 per cent, per year or about $10 per year in 2030.
Perhaps to hide the lack of real economic benefits in the data, the report waxes lyrical about abstract benefits from greater regional economic integration which could occur in the future if the TPP-11 expanded in future, but still admitis manufacturing will shrink: “Deeper integration through regional agreements will generate additional trade and output gains in Australia’s sectors of comparative advantage, including agriculture, mining, early stage processing activities related to these sectors and services. It also reduces slightly Australia’s output of durable manufactured products.”