AS PRESIDENT Obama reminded the nation during his State of the Union speech Tuesday, congressional approval of the Trans-Pacific Partnership (TPP) looms as a major piece of unfinished business for his final year in office. The 12-nation trade agreement would knit the United States and 11 Pacific Rim nations more closely together in a rule-based economic zone, with likely benefits for all. Yet presidential candidates across the ideological spectrum have distanced themselves from the pact, including Democrat Hillary Clinton, who helped promote it when she was Mr. Obama’s secretary of state. And that’s to say nothing of those who are crudely trashing the TPP, such as Donald Trump.
The upshot is that a pro-TPP member of the Senate Republican leadership, John Thune (S.D.), called the deal’s chances of passage this year “less than 50-50” after Mr. Obama’s speech. (When Mr. Obama touted the pact briefly in his address, most of the applause seemed to come from his own Cabinet members.) Congress and the candidates need to see the latest nonpartisan assessment of the pact’s effects, which has been issued by the World Bank. Like many previous analyses, it’s fundamentally positive.
In a world desperate for new sources of economic growth, the World Bank finds that the TPP would help by stimulating global trade, which had been increasing rapidly until the Great Recession but has been growing less rapidly since then. By 2030, the World Bank calculates, the economic output of TPP member nations could be 1.1 percent larger than without the TPP. The biggest winner would be Vietnam, which would add 10 percentage points to its gross domestic product, along with a 14 percent increment to the unskilled worker’s average wage. In other words, it would lift hundreds of thousands of people, if not millions, out of poverty.
Meanwhile, the TPP would add 0.6 percent to the size of the U.S. economy, not because the deal is somehow tilted to Vietnam but because the U.S. economy is already huge and open to trade, unlike Vietnam’s. Indeed, the TPP would increase U.S. unskilled wages by 0.4 percent, according to the World Bank, contrary to much fear-mongering about the impact of free trade on low-skilled, low-wage workers. Skilled workers’ wages would also benefit, to the tune of 0.6 percent.
To be sure, these projected economic gains for the United States are incremental, not transformational. They do not support some of the political hype the White House has emitted in favor of the agreement. But what they really don’t support is the even more hyperbolic disaster scenarios being peddled by TPP opponents.
Instead, the World Bank’s deliberate analysis reveals that the TPP is likely to be just what its most sober advocates have always maintained: a modest but measurable net plus for U.S. workers and businesses, with the additional benefit of strengthening the U.S. geopolitical position in Asia, whose strategic importance was just underscored by North Korea’s provocative nuclear testing.
Campaign-season demagoguery notwithstanding, Congress should take its earliest opportunity this year to move the legislation toward final passage.