Transcript Trans-pacific Partnership - International Trade Relations

Trans-pacific Partnership
A brief look at possible impacts on Intellectual
Property rights, labor, and exports
Potential
TPP countries make up 40% of world GDP
GDP current 2011 U.S. dollars (billions)
80,000
70,000
69,800
60,000
50,000
40,000
GDP current 2011 U.S. dollars (billions)
30,000
26,378.50
20,000
14,991
10,000
0
5,867
159.7 239.6
16.3
1,379
1,736
123.6 176.9 287.9 1,153
248.5
Source: World Bank
Growth, Jobs, Exports

“as imports are substituted for domestically produced goods,
production that supports domestic jobs falls, displacing
existing jobs and preventing new job creation.”
Source: Heading South: US-Mexico trade and job displacement after NAFTA

NAFTA resulted in approximately 682,900 American jobs displaced
as of 2010
Source: NAFTA’s Economic Impact

After NAFTA, the U.S. saw GDP growth rates of 3.3 percent
annually, compared with 3.6 percent for Canada and 2.7
percent for Mexico
Source: NAFTA’s Economic Impact
KORUS impacts on U.S. exports
U.S. beef exports have declined by 8 percent
 U.S. pork exports have fallen by 20 percent
 U.S. poultry producers have faced a 41 percent collapse of
exports to Korea
 16 percent increase in the U.S. auto trade deficit with Korea


net loss of more than 9,000 U.S. jobs in just the first
several months of the new FTA

the FTA did not include measures to counter devaluations
that could effectively undo the FTA’s tariff cuts
Source: U.S. International Trade Commission
KORUS impacts on U.S. exports
Product
U.S. Exports (Million $)
% Increase
2010
2011
2012
2011-2012
Oranges
114
152
217
43
Almonds
64
84
130
54
Walnuts
66
84
103
22
Cherries
29
39
74
88
Frozen Potatoes
47
54
74
36
Fresh Cheese
11
30
62
109
Orange Juice, Frozen
11
11
30
173
Wine
10
10
15
52
U.S. Trade Deficit with FTA partners
Source: U.S. International Trade Commission
IP issues

Senator Bernard Sanders and a number of other Representatives
are worried that IP proposals set forth by the U.S. could in effect
“dramatically increase the cost of medicine”
Source: Letter from 10 Representatives asking for a meeting to discuss IP policies that could undermine public health and access to
medicines

“intellectual property protection in the medical field keeps prices
high and limits access to treatment, and furthermore does not
stimulate innovation for many of the diseases affecting people in
developing countries, where patients have limited purchasing
power.” Source: Doctors Without Borders Campaign for Access to Essential Medicines
China

“The big challenge and test for the TPP is whether
China can join. As it stands it is looking very unlikely
with the hurdle set too high.” Source: The Trans-Pacific Partnership: The Great Divider?

U.S. access to new markets
◦ Reduce dependence on China in certain industries
◦ Put pressure on China to better enforce IP issues
◦ Must be careful not to make the same mistake as KORUS in
regards to devaluation of currency
Conclusion

It is clear that past FTAs have resulted in an increased U.S. trade deficit and
job loss.

This must be compared with the increased exports, earnings, and
opportunities for American players in related industries.

American jobs are lost because goods made outside the U.S. replace goods
made inside the U.S., but also because

American firms are able to find the labor, resources, and markets they need
outside of their home country.

Additionally, these FTAs provide Americans with access to foreign goods
that they clearly have a strong appetite for.

Major implications on U.S.-China trade relations, including IPR, currency
devaluation, and industry dependence