Not that it looks to be going anywhere – until possibly a lame-duck session of Congress – but it’s always good to be reminded how foolish the Pacific Rim trade deal negotiated by President Obama looks when you recall what measly export markets the other 11 members look like.
Of course, the president’s fundamental export-expanding case for the Trans-Pacific Partnership (TPP) has been fraudulent literally from the start. As I’ve demonstrated, the United States itself represents nearly 62 percent of the so-called new TPP free trade zone. Add Mexico and Canada – with which the United States has already reached a North American Free Trade Agreement (NAFTA) – and you get another ten percent of the supposed new market opportunities. Moreover, America has already signed other free trade deals with four other signatories: Australia, Chile, Peru, and Singapore.
I’ve also shown that when the projected growth performances of the TPP members are examined, the notion that America’s own growth will be fueled by the deal becomes positively comical. And more evidence for this proposition has just come from the International Monetary Fund and its latest World Economic Outlook (WEO).
The Fund is anything but a flawless forecaster. But who is? And it’s something of the official aggregate voice of all its members – a list which includes the United States and virtually every other country on earth. Below you’ll see the 2016 growth forecasts for the TPP countries the WECO made in its previous report (from last spring) and in the newest version:
Old IMF 2016 forecast New IMF 2016 forecast
US 3.1 percent 2.4 percent
Japan 1.2 percent 0.5 percent
Canada 2.0 percent 1.5 percent
Australia 3.2 percent 2.5 percent
Singapore 3.0 percent 1.8 percent
New Zealand 2.7 percent 2.0 percent
Malaysia 4.9 percent 4.4 percent
Brunei 2.8 percent -2.0 percent
Vietnam 5.8 percent 6.3 percent
Mexico 3.3 percent 2.4 percent
Peru 5.0 percent 3.7 percent
Chile 3.3 percent 1.5 percent
What this table shows is that, as of last year, the Fund expected that six of the 11 other TPP members would grow faster than the United States. This year, those out-performers number only four. Moreover, as has consistently been the case, the two biggest out-performers in percentage terms are Vietnam and Malaysia – whose own growth is heavily dependent on racking up trade surpluses, not on importing.
Even more damning, although the IMF has downgraded its growth forecasts for the United States as well as ten of the other TPP countries (Vietnam is the exception), these downgrades are more pronounced for seven of these economies than for America. Here are the figures:
IMF 2016 Growth Revisions for TPP Countries in Percentage Terms
US -22.58 percent
Japan -58.33 percent
Canada -25.00 percent
Australia -21.88 percent
Singapore -40.00 percent
New Zealand -25.93 percent
Malaysia -10.20 percent
Brunei from 2.8 percent growth to 2.0 percent contraction
Vietnam +8.62 percent
Mexico -27.27 percent
Peru -26.00 percent
Chile -54.55 percent
Freeing up trade with big economies makes a lot of sense in principle. So does freeing up trade with fast-growing economies, with economies growing faster than the United States, and with economies displaying various combinations of these characteristics. Yet few of the TPP economies fit any of these descriptions, let alone two or all of them. When President Obama and his allies can convincingly explain why more U.S. growth will result from linking America’s economic fortunes even more tightly to so many laggards, they’ll deserve support for the TPP. But not one moment before.