Several studies in recent years have attempted to project the long-term impact of the potential TPP on member and
nonmember states. The absence of a concrete agreement makes it extremely difficult to accurately calculate such impacts.
Without access to clearly defined tariff reduction timetables and NTB removal guidelines, there are necessarily many
assumptions involved in any attempt to model TPP’s future effects on total welfare. Because of these uncertainties, the
results of these existing studies should be interpreted with caution.
The primary model to be published in recent years is a 2011 study by Peter Petri, Michael Plummer, and Fan Zhai for the
Peterson Institute for International Economics (PIIE).22 The authors continue to update the model with some regularity
(most recently in April 2013) and publish raw output on their website.23 Most recent data show modest net gains for the
United States in all TPP scenarios. In a TPP agreement including South Korea and Japan, they project the United States to
see welfare gains of about $36 billion above a baseline projection (or 0.19% of baseline GDP).
These gains will not be spread uniformly throughout the economy, according to the model. They project the U.S.
manufacturing sector to experience a $44 billion drop in total welfare from baseline, and the agriculture and mining
sectors to see a combined near-zero increase. However, the services sector is projected to see welfare gains of more than
$79 billion, offsetting the negative impact on manufacturing.
A 2012 study by the National Bureau of Economic Research (NBER) projects a welfare increase of near-zero with
complete elimination of import tariffs. Assuming the additional elimination of all NTB costs in goods and services, the
paper projects a U.S. welfare gain of 0.22% of GDP.24
A 2014 paper co-authored by a Purdue University economist makes findings that are similar to those of the Peterson
model. The study projects U.S. annual welfare gains by 2025 of $33 billion above a baseline, only slightly lower than the
Peterson outlook.25
Other studies include a 2013 paper by the Center for Economic Policy Research (CEPR), which focuses on median wage
impact rather than total welfare. Author David Rosnick suggests that at best, TPP will have a near-zero impact on U.S.
median wages by 2025 and may be directly responsible for a 0.6% drop in U.S. median wage.26 The methodology used in
this study is based on extrapolating the change in U.S. trade balances following the implementation of other trade
agreements, such as NAFTA, and using it to predict the impact of TPP, and differs considerably from the computable
general equilibrium (CGE) models used in the other studies cited
Note: This section was prepared by Gabriel Nelson.
U.