Countries trade because trade delivers mutual benefits. New market-opening trade agreements like the Trans Pacific Partnership (TPP) can enhance the shared benefits of trade by eliminating barriers to expanded international commerce and deepening economic cooperation between partners. It’s not surprising, therefore, that a detailed economic simulation of freer commerce under the TPP finds that each of the 12 TPP countries would see aggregate income gains and increased ex- ports under a comprehensive TPP. A strong TPP agreement, in short, could be a win—times 12.
But governments and their leaders don’t simply operate in the aggregate. Despite trade’s undeniable overall benefits, not everyone benefits from trade—and beneficial agreements that increase trade and open markets can require sometimes- difficult economic adjustments.
For the United States, for example, the TPP could support more good-paying jobs for U.S. workers who produce and sell American goods and services to growing Pacific Rim economies that should see even stronger growth under TPP. At the same time, however, growing trade can lead to lost jobs and lower wages for some American workers, and will require a renewed U.S. focus on comprehensive solutions, including assistance and better training for lower-skilled workers.
Other countries will need to adjust as well. Japan, for instance, will require reforms to its farm sector, while Canada will need to upgrade its intellectual property rules to comply with global standards.
