issue: Economy

Local Economic Revival and The Unpredictability of Technological Innovation

Posted on by The Progressive Policy Institute

One of the important themes of this year’s presidential campaign is the need for economic growth to move beyond the tech hubs and coastal urban areas that have prospered in recent years.  To some degree, this is already happening. Our latest analysis shows that the top 10 App Economy states include Illinois (4) and Michigan (9),  where jobs developing, creating, and maintaining mobile apps are partially replacing lost employment in manufacturing.

Similarly, the hydraulic fracturing (fracking) revolution created a new wave of job growth in areas such as Pennsylvania, North Dakota and Texas–not just oil and gas drilling workers, but transportation and construction jobs as well.  The exact number is a contentious subject, but even skeptics agree that the added employment has been significant in some areas. One even-handed report noted that

Pennsylvania’s shale boom was enough to ease — but not erase — the state’s pain during the recession. BLS reports the state shed a net total of 74,133 jobs between 2007 and 2012, while the oil and gas industry added roughly 21,000 jobs.

Taking into account spillover jobs, it’s clear that Pennsylvania’s downturn would have been a lot worse without fracking. Once again, innovation creates new industries and new jobs.

Still, apps and fracking by themselves are hardly enough to revive some of the hardest-hit areas of the country, especially those which have suffered from the loss of manufacturing jobs. Local officials ask, quite naturally, where the next innovation job boom will come from. And here the glass is both half-empty and half-full. There are plenty of candidates for the “next big thing,”  ranging from the Internet of Things to additive manufacturing to artificial organ factories to autonomous cars to space commerce to Elon Musk’s hyperloop. Each of these has the potential to revolutionize an industry, and to create many thousands or even millions of jobs in the process–not just for the highly-educated, but a whole range of workers.

Yet the problem–and the beauty–is that technological innovation is fundamentally unpredictable, even at close range. Consider this: The two most important innovations of the past decade, economically,  have been the smartphone and fracking. The smartphone transformed the way that we communicate and hydraulic fracturing has driven down the price of energy, not to mention shifting the geopolitical balance of power.

Yet a decade ago, in 2006, the major business press wrote precisely two (2) stories about fracking–one in the New York Times, and one in the Wall Street Journal. BusinessWeek, Fortune, Forbes, The Economist, and the Financial Times had not a mention, even though fracking as a technique had been around for years. Even though production was already ramping up, few people saw the profound economic impact of being able to tap into shale oil and gas reserves.

And while in 2006 journalists and analysts were writing about the possibility of an Apple phone, it was more with an air of bemused skepticism. Nobody forecast that the the iPhone,  followed by Android-based phones, would quickly make all other phones obsolete. More importantly, nobody foresaw the introduction of an App Store that created millions of app-related jobs around the world.

What does this history tell us? First,  the next big job-creating innovation isn’t likely to announce itself in bold letters before it arrives. Just because the next big thing isn’t obvious today doesn’t mean it won’t be obvious a year from now.

Second, when the next big job-creating innovation occurs, there will be a chance to spread the wealth by boosting growth in areas that are lagging today. The geographic pattern of tech jobs need not be replicated for  additive manufacturing or space commerce. Innovation doesn’t just create jobs, it creates opportunities for local economic revival as well.

 

 

 

 

 

 

 

Spreading the Wealth: Globalization, Innovation, and Local Policy

Posted on by The Progressive Policy Institute

Donald Trump’s attack on trade, if carried out as President, would be an economic disaster. Connections with the global economy enable the free flow of goods, services, ideas, data and people across national borders.. Countries that make use of those connections have prospered, while countries that have engaged in protectionism have stagnated. We believe that trade agreements such as TTIP and TPP are essential to global growth.

Nevertheless, we must acknowledge that the process of globalization has produced much more turbulence than expected. When the United States concluded the trade deals of the 1990s, most economists expected that advanced countries would continue to climb the technological and productivity ladder, creating space on the lower rungs for countries such as China and India. Meanwhile American workers were supposed to reap the benefits of innovation and productivity gains in the United States.

This assumption turned out to be only half true. The US excelled in the digital sphere, creating new companies, new industries, and millions of new jobs.

However, innovation has faltered in physical industries such as manufacturing. Take a look at the table below, which shows multifactor productivity growth in manufacturing since 1994, when GATT was approved.

Multifactor productivity growth (1994-2014)
average annual percentage change
Computer and electronic products 7.9%
Printing 1.2%
Petroleum 1.0%
Textiles 0.7%
Miscellaneous (including toys and medical equipment) 0.6%
Transportation equipment 0.5%
Plastic and rubber 0.4%
Wood products 0.1%
Primary metals 0.1%
Nonmetallic minerals -0.1%
Machinery -0.2%
Furniture -0.3%
Fabricated Metal Products -0.3%
Food, beverage, and tobacco -0.4%
Paper products -0.6%
Electrical equipment -0.6%
Chemical products -0.7%
Apparel and leather -2.2%

 

Since 1994,  multifactor productivity has actually fallen in 9 out of 18 manufacturing industries, and has barely risen in another 4 manufacturing industries. The only industry with significant productivity growth over the past 20 years is computer and electronic products.

So no wonder manufacturing has lost so many jobs! Without productivity growth, US manufacturing workers got stuck on the lower rung and had to fight for space with much lower paid workers overseas.

Indeed, the narrative that job loss in manufacturing is due to higher levels of productivity is fundamentally wrong and unsupported by the data. Rather, the lack of productivity growth has exposed U.S. manufacturing workers to foreign competition.

Continue reading “Spreading the Wealth: Globalization, Innovation, and Local Policy” →

Brexit and Innovation

Posted on by The Progressive Policy Institute

The exit of the UK from the EU is and will be a tremendous shock to the global economic and business community. Certainly no one knows what is going to happen in areas such as finance, immigration, and even trade.

Nevertheless,  Brexit does nothing to change the fundamental economic problems facing the developed world: Slow growth, and an inability to create new industries that can employ the millions of workers whose careers have been  disrupted in areas such as manufacturing and transportation. These problems are fueling populist revolts around the world that are all the more powerful because they are based on a kernel of reality.

The productivity numbers in Europe are, frankly, terrifying. Based on OECD data, from 2007 to 2015 labor productivity growth averaged 0.3% annually in France, 0.15% annually in the UK, and a stunningly low 0.02% in Germany. Let’s not forget Italy, where productivity actually shrank over this period.The US was doing a bit better at 0.9%, but only in comparison.

With growth so slow, no wonder the voters want something different, even if they are not sure what it is.

There is no end of good innovative ideas in London, Paris, and Berlin. The App Economy is booming in Europe, as our research has shown.  But a combination of factors–ranging from culture to finance to government regulation–makes it more difficult to convert scientific research and small start-ups into productive and job-creating businesses.  Indeed, the US is having much the same problems.

Innovation creates jobs and growth. The problem is that the developed world have not had enough innovation, not that there’s been too much. Our challenge is to fix that.

 

 

 

 

The Hill: How ‘Brexit’ would inflame populism abroad – and here in the US

Posted on by The Progressive Policy Institute

The ‘Brexit’ tide at last seems to have hit the sturdy seawall of British common sense. Heading into today’s national referendum, polls show rising support for staying in the European Union.

True, the contest remains a dead heat and could go either way. But the momentum apparently shifted after last week’s shocking murder of Labour Member of Parliament Jo Cox by a man spouting ultra-nationalist slogans. It’s also possible that the impending vote has concentrated U.K. voters’ minds on the sheer implausibility of going it alone in today’s interconnected world.

There’s little doubt where global markets stand on the question. Stocks surged everywhere early this week and the British pound rose as word of the new polls spread. That reaction can only reinforce the “Remain” camp’s argument that detaching from Europe would, on balance, weaken Britain’s economy.

Continue reading at The Hill.

The Hill: Trade is popular in swing states, among Democrats

Posted on by The Progressive Policy Institute

The Hill’s Vicki Needham cited a PPI poll and quoted both PPI President Will Marshall and Senior Fellow for Trade and Global Opportunity Ed Gerwin in an article on how voter’s opinions on trade will impact the election.

Voters in four battleground states — Colorado, Florida, Nevada, and Ohio — expressed positive views about the U.S. expanding trade, even while Hillary Clinton and Donald Trump call for major changes to the nation’s global commercial outreach.

A new Progressive Policy Institute (PPI) poll on Wednesday shows that by a 55 to 32 percent margin swing-state voters say that new high-standard trade deals can help the U.S. economy and support good paying jobs.”

Read the entirety of the article at The Hill.

Does ‘Deadbeat Donald’ Have Any Money?

Posted on by The Progressive Policy Institute

On Saturday, Donald Trump issued an “emergency” appeal seeking $100,000 for his campaign “to help get our ads on the air.”

This was odd for three reasons. First, according to his own commercials, the main premise of Trump’s campaign was that he would pay for it himself. Second, Trump’s campaign disclosure forms allege that his total net worth is ten billion dollars. To be clear, this is 100,000 times larger than his $100,000 urgent appeal. If Trump told the truth about his wealth, $100,000 for him would be the same as about 2 or 3 dollars for an average American. Third, his near-bankrupt campaign has paid out millions of dollars to Trump businesses and family members.

These facts add to mounting evidence that Trump has lied about his wealth. As Forbes recently wrote, “The Occam’s razor explanation is that he’s not worth $10 billion.” Forbes should know, given the magazine’s long track record of assessing the relative wealth of various billionaires. Just last year, Forbes concluded that Trump’s $10 billion claim was “a whopper” of a lie. Indeed, experts suggest that the reason Trump refuses to release his tax returns because they will reveal the extent of his lies.

So how has Trump gotten away with lying about his business record?

In part, he’s used lawsuits to deter people from poking around in his affairs. For instance, in 2009, Timothy O’Brien published a book reporting that Trump was a millionaire, not a billionaire, who had amassed less money than prior presidential nominees such as Ross Perot (roughly $3.9 billion) or Mitt Romney (roughly $330 million if you include the separate trust for his children). Trump sued O’Brien for defamation, as part of a broader legal campaign to ward off critics.

Unfortunately for Trump, he lost his lawsuit against O’Brien both at trial and on appeal, and in the process was forced to give depositions and even privately share his tax returns with O’Brien.

So, when the lies are pulled away, what information do we have about Trump as a businessman and a candidate?

First, Trump inherited his money.

Over four decades ago, in 1974, Trump’s father gave him control of a company that was worth $200 million, and then provided additional loans and assistance over time. A finance professor at the University of Texas, who analyzed Trump’s holdings since 1976, concluded that: “Trump has underperformed the real estate market by approximately $13.2 billion, or 57%.” That bears repeating. Compared with average business performance in the real estate sector, Trump squandered billions of dollars over the course of his career.

Second, Trump is more grifter than a business leader.

As The Atlantic reported in 2011: “In financial circles, it’s pretty well known that Trump is a deadbeat.” While Trump has paid himself and family members out of campaign funds, he has repeatedly stiffed smaller vendors, destroying some mom-and-pop businesses that had previously survived for generations. He’s also destroyed wealth by urging people to invest in failing businesses, such as Trump Mortgages; Trump Tower Tampa; Trump Ocean Resort Baja Mexico; Trump Taj Mahal; Trump Magazine; Trump World Magazine; Trump Steaks; the Trump Shuttle; and Trump University. In several of these projects, Trump was sued. He settled out-of-court with investors in some cases. With Trump University, tuition-paying students allege that Trump used fraud to dupe them into becoming customers. Each time a Trump company declares bankruptcy, his partners and investors are left holding the bag.

Third, Trump had strong ties to the Mafia when he was a real estate developer.

Pulitzer Prize-winning journalist David Cay Johnston, who has written a book about organized crime and gambling, has spent many years investigating the ties between Trump and the Mafia. In a lengthy story for Politico, Johnston “encountered multiple threads linking Trump to organized crime.” These threads included openly seeking mob support to compete against real estate developers who refused to do so. This seems astonishing for a mainstream presidential candidate, but recall that unlike Trump’s political rivals, Trump has aggressively used libel laws to prevent prior journalistic investigations of his money. Johnston’s Politico story is well worth a close read.

Fourth, Trump’s only “legitimate” money came from promoting gambling, sex, and violence.

When you take away the inheritance, the mob ties, the contract breaches, bankruptcy court, litigation threats, eminent domain, and fraud, what’s left is Trump’s role as a huckster. In 1992, Trump blamed Mike Tyson’s rape victim for her rape, when Tyson’s release would have boosted Trump’s boxing-related revenues. In 1994, Trump spoke with Lifestyles of the Rich and Famous and speculated as to whether his then-infant daughter would develop attractive breasts. From the late 1990s onward, Trump built his name as a “reality star” by repeatedly demeaning women first on Howard Stern’s radio show, then later on his television show The Apprentice. As the Washington Post summed it up, “Trump has made flippant misogyny as much a part of his trademark as his ostentatious lifestyle.” Apparently, this brand appealed to the roughly 5 percent of eligible American voters who voted for Trump in the GOP primaries, but sleaze marketing is not much of a blueprint from which to strengthen America.

Finally, Trump’s proposals would be a disaster for the American economy.

So what are the policy ideas of this so-called “businessman” whose only clean money comes from reality television? For starters, Trump has made it clear that he intends to extend the philosophy of “Deadbeat Donald” to the full faith and credit of the United States Treasury. During a recent interview with CNBC, Trump literally suggested that the United States should threaten bankruptcy to stiff owners of Treasury bonds. As analysts from the left, right, and center pointed out, this idea would trigger an immediate global economic crisis. This is because the world economy relies upon Treasury bonds as risk-free securities, to the benefit of global financial markets and the enormous benefit of the United States.

This is not the only economically catastrophic idea that Trump has proposed. Actual business leader Mitt Romney, the Republican Party’s presidential nominee four years ago, explained that: “If Donald Trump’s plans were ever implemented, the country would sink into a prolonged recession” by triggering a trade war with other nations. Trump’s budget math does not remotely add up. His famous wall with Mexico would cost tens of billions of dollars to build and maintain, and no, Mexico will not pay for it.

Americans have roughly five months to learn about the “Deadbeat Donald” aspect of Trump’s track record and policy ideas. If we do not learn that lesson by November 4, unfortunately we will learn it the hard way shortly thereafter.

Cross-posted from Huffington Post. A version of this post originally appeared on Medium.

RealClearPolicy: Trump’s Wrong on Trade Policy & Maybe Trade Politics, Too

Posted on by The Progressive Policy Institute

The Washington Post’s Catherine Rampell recently detailed the economic carnage that would result from Donald Trump’s reckless approach to trade — including likely recessions, millions of lost jobs, and higher prices for American consumers.

As we’ve detailed, protectionism is bad economics. But, apparently, it’s been good politics for Trump as well as Bernie Sanders, both of whom used trade-bashing populism to energize angry voters during primary elections, where extreme partisans often play an outsized role. And Trump promises to double down on opposition to trade as he pivots toward November.

As America moves from interminable primaries to the general election, however, Trump — and Hillary Clinton — will face a different political calculus on trade. A new Progressive Policy Institute poll shows that Democratic voters in key battleground states have a broadly positive view on trade — and a more positive one than do Republicans. Crucially, so do the swing voters, who will ultimately determine whether these states go red or blue in November.

Swing voters and voters in battleground states played a decisive role in reelecting Barack Obama in 2012 — and in sending a large Republican majority to Congress in 2014. As detailed in our new poll, conducted by veteran Democratic pollster Peter Brodnitz, these voters also have decidedly different attitudes about trade and America’s role in the global economy.

Continue reading at RealClearPolicy.

MIT Technology Review: Dear Silicon Valley: Forget Flying Cars, Give Us Economic Growth

Posted on by The Progressive Policy Institute

Dr. Michael Mandel, PPI’s chief economic strategist, is quoted in David Rotman’s piece about the advances in technology and economic slowdown. 

Michael Mandel, an economist at the Progressive Policy Institute in Washington, D.C., says the productivity slowdown is occurring in what he calls the physical industries, including manufacturing and health care. Such industries, which he estimates make up 80 percent of the national economy, account for only 35 percent of investments in information technology and their productivity reflects that, growing at only 0.9 percent annually. Meanwhile, productivity is growing by 2.8 percent a year in what Mandel calls digital industries, which include finance and business services.

If that is what is going on, it leaves plenty of room for optimism. “As we learn to apply the new technologies,” says Mandel, “we could see growth in productivity speed up again.”

Read the rest of the article at the MIT Technology Review.

San Diego Union-Tribune: Public Nuisance Lawsuits Out of Control

Posted on by The Progressive Policy Institute

This past year, public nuisance lawsuits have spiraled out of control in California. Cities like San Diego, Berkeley and Los Angeles have been convinced to sue U.S. companies for enormous sums. Trial lawyers, looking to win big, scour the state and the nation for potential plaintiffs and then recruit municipalities to partner with them to file suits against businesses.

Pandora was let out of the box in 2002 when Santa Clara County and Orange County, using private plaintiff’s lawyers to bring the charge, sued lead paint manufacturers under a public nuisance theory – even though the paint manufacturers didn’t know about problems with lead paint at the time they sold it. After that, the Orange County District Attorney’s Office used public nuisance theory to sue drug manufacturers for the costs of unemployment, emergency room visits and other social services. The idea was that people took prescription painkillers, then got addicted, then the prescription ran out, then they switched to heroin, then they lost their jobs and ended up in the emergency room without insurance, so the drugmakers should pay for the county’s unemployment and ER costs. The judge dismissed the case because the FDA regulates prescription drugs, because some patients really do need painkillers and because it’s not appropriate for local prosecutors partnering with private plaintiff’s lawyers to do the oversight and regulation that appropriately belongs to the federal government.

Along with other cities, San Diego has entered the fray. By partnering with a plaintiff’s firm, the city doesn’t have to pay for the expense of investigating and prosecuting the case – those costs are fronted by the trial lawyer firm. But this partnership is ethically suspect.

Continue reading at the San Diego Union-Tribune.

 

The Hill: Geopolitics moves to center stage of Obama trade deal push

Posted on by The Progressive Policy Institute

PPI Senior Fellow and trade expert Ed Gerwin was quoted by The Hill’s Vicki Needham in this article about the Trans-Pacific Partnership.

Ed Gerwin, a trade expert with the Progressive Policy Institute, said that the significance of the strategic issues only became clear to him after he traveled to Japan last fall and spoke with their defense ministers where there are rising concerns about China actions in the South China Sea.

“I think in terms of the TPP there’s a huge geopolitical basis for passing it,” he said.

“TPP influences what kind of China we have commercially,” he said.”

Read the article in its entirety at The Hill.

PRESS RELEASE: Consumers Want One Set of Rules Protecting Their Information

Posted on by The Progressive Policy Institute

FOR IMMEDIATE RELEASE
May 27, 2016

CONSUMERS WANT ONE SET OF RULES PROTECTING THEIR ONLINE INFORMATION, PUBLIC OPINION STRATEGIES AND HART SURVEY FINDS

National Poll Finds 94 Percent of Internet Users Agree All Companies Collecting Data Online Should Follow Same Rules

WASHINGTON—When consumers go online, they want their privacy protected, and they feel that no matter which company has their data – be it Amazon, Apple, AT&T, Comcast, Facebook, Google, Microsoft, T-Mobile or Twitter – that company should be held to the same set of rules, according to a new national survey by Public Opinion Strategies and Peter Hart.

The survey, conducted on behalf of the Progressive Policy Institute, demonstrates that online consumers do not have different concerns based on which specific entities collect online data. By overwhelming margins, 94% to 5%, Internet users agree that “All companies collecting data online should follow the same consumer privacy rules so that consumers can be assured that their personal data is protected regardless of the company that collects or uses it,” including 82% of Internet users who say they “strongly” agree with that statement.

“Ultimately, consumers want to know there is one set of rules that equally applies to every company that is able to obtain and share their data, whether it be search engines, social networks, or ISPs, and they want that data protected based on the sensitivity of what is being collected” said Peter Hart.

Consumers believe that all internet companies have access to a lot of data about their online behavior, and they want consistent privacy rules to apply to all of these companies regarding the treatment of this data. Of those surveyed, 83% agreed that online privacy should be protected based on the sensitivity of their online data, rather than on who is collecting and using the data.

The national poll of 800 Internet users was completed by a live telephone survey. The results clearly support that consumers want clear, uniform rules that protect their privacy based on the sensitivity of the data, not based on the type of company that uses the data.

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PPI Poll: Recent National Survey of Internet Users

Posted on by The Progressive Policy Institute

On behalf of the Progressive Policy Institute, Public Opinion Strategies & Peter D. Hart completed a live telephone survey of 800 Internet users nationally, May 23‐25, 2016. Fully 40% of the telephone interviews were conducted via cell phone, and the margin of error for the survey is +3.46%. The purpose of this memo is to review the key findings from the survey.

Download “Internet-User-National-Survey-May-23-25-Key-Findings-Memo”

 

The Hill: Universal Pensions: A Progressive Alternative to Retirement

Posted on by The Progressive Policy Institute

In the midst of the chaos of this election cycle, some important themes are emerging. In particular, voters are highly worried about retirement security. Indeed, 91 percent of voters in four swing states agree that most Americans are not prepared for retirement. That’s according to a poll by the Progressive Policy Institute (PPI), in partnership with veteran Democratic pollster Peter Brodntiz.

That’s why it’s time for a Universal Pension system that would help all U.S. workers save for retirement by eliminating the need to navigate the maze of tax-favored retirement plans, and making their job-based pensions portable. Specifically, the UP would reduce today’s welter of tax-favored retirement accounts into one universal IRA account (with a choice between a traditional or Roth-style IRA).

The accounts would be managed by private firms, under the supervision of the individual rather than the employer, giving workers more control over their investment choices. Furthermore, when workers switch jobs, they can rollover their existing 401(k) or other company pension plans into their Universal Pension reducing paperwork burdens and financial fees for both employers and employees.

And by helping all workers start saving for retirement from their very first day of work, the Universal Pension would harness the power of compound interest for everyone. It would help to close a yawning wealth gap at a time when wealth inequality is roughly 10 times wider than income inequality.

Continue reading at The Hill.

RealClearPolicy: Nuclear Innovation Can Support Growth and a Healthy Climate

Posted on by The Progressive Policy Institute

Amid mounting public concern about climate change, many progressives are giving nuclear energy another look. It’s already America’s biggest source of zero-carbon energy, far surpassing wind and solar. And “next generation” reactor technologies hold great promise for generating nuclear power in safer, cleaner, and cheaper ways.

What’s more, America will need more nuclear energy to meet the ambitious greenhouse gas reduction targets President Obama set at last year’s Paris climate summit. According to the White House: “As America leads the global transition to a low-carbon economy, the continued development of new and advanced nuclear technologies along with support for currently operating nuclear power plants is an important component of our clean energy strategy.”

Nuclear energy today accounts for nearly 11 percent of the world’s electricity. Without it, the world produce an additional 2.5 billion metric tons of carbon dioxide per year. Here in the United States, nuclear energy generates 19 percent of our electricity — 63 percent of all zero-carbon electricity in America. The United States as well as developing countries such as China and India will need more nuclear power to meet growing energy demand without loading more carbon into the earth’s atmosphere. But we’re heading in the opposite direction — decreasing more nuclear capacity than we are adding.

U.S. nuclear companies intend to add five more reactors to the nation’s fleet by 2020. In the meantime, however, they have announced plans to shut down three existing plants — and more may be in the offing. Why so many closures? One of the main reasons is the glut of cheap natural gas stemming from America’s shale boom. Natural gas typically sets the price of electricity on the grid in much of the United States. Today, with natural gas trading on the spot market at around two dollars per BTU, nuclear-generated power is being priced out of electricity markets.

Continue reading at RealClearPolicy.

Press Release: PPI Statement on USITC Report Concerning the Trans-Pacific Partnership

Posted on by The Progressive Policy Institute

FOR IMMEDIATE RELEASE
May 19, 2016

Contact: Cody Tucker, ctucker@ppionline.org, 202-775-0106;
Steven Chlapecka, schlapecka@ppionline.org, 202-525-3931

WASHINGTON—Ed Gerwin, senior fellow for trade and global opportunity at the Progressive Policy Institute (PPI), today released the following statement after the United States International Trade Commission (USITC) released a new report concerning the likely impact of the Trans-Pacific Partnership (TPP) agreement on the U.S. economy:

“The Progressive Policy Institute welcomes the release of the U.S. International Trade Commission’s report on the economic effects of the Trans-Pacific Partnership on the American economy. We are pleased that the Commission’s detailed economic analysis concludes that a U.S. economy with TPP would, overall, see higher growth, employment, and exports as compared to a U.S. economy without TPP, and we look forward to reviewing the report in detail.

“It’s important to recognize—as the Commission itself notes—that the USITC’s cautious economic model does not capture the full economic impact of many of the TPP’s high standard reforms. These include the benefits of stronger protections for U.S. intellectual property, the elimination of trade impediments for many U.S. service providers, and reductions in standards-related barriers to American exports.

“In particular, the Commission’s economic analysis does not fully reflect the potentially substantial economic benefits of two key TPP reforms: (1) the many TPP provisions that establish a modern framework for e-commerce and digital trade, and (2) those that make trade easier, faster, cheaper, and more certain for American small business. As the Commission notes, many observers believe—as we do—that the TPP’s provisions on digital trade are ‘the most transformative measures in the agreement.’

“PPI’s analysis has shown that expanding e-commerce and digital trade has particular potential to ‘democratize’ trade, by making trade easier for small and non-traditional traders. And—when taken together with the TPP’s many advancements for small exporters—the TPP’s digital trade provisions can support stronger growth, better jobs, and new pathways for sharing trade’s benefits more inclusively.

“Finally, the TPP would have benefits beyond those that can be measured in economic terms, including strengthening America’s geopolitical ties around the Pacific Rim and supporting important values—like the rule of law, transparency, and the protection of workers and the environment—that we seek to more fully share with our friends and allies.”

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