Fact-checking the campaigns for and against the TPPA

Fact-checking the campaigns for and against the TPPA
TPPA is projected to yield higher overall GDP growth for the countries with the expansion of markets and removal or reduction of trade barriers.
Dozens of labor, environmental and consumer groups are urging Congress to oppose the Trans-Pacific Partnership, the 12-nation trade deal that President Barack Obama hopes will be a signature achievement of his administration. Meanwhile, business groups and major trade associations are lining up to support it.

Here, we highlight some of the biggest talking points from both sides - and whether they match up with projections from economists and evidence from previous trade agreements.

For economic projections, we relied primarily on recent analyses by The World Bank, The Peterson Institute of International Economics and Tufts University.

Here we go:

1. Argument: TPP will lead to job losses and lower wages in the United States.

Facts: Two major studies found that wages will rise slightly overall, but acknowledged the possibility of job losses and wage cuts for some U.S. workers.

The World Bank and Peterson Institute both concluded that TPP will raise U.S. wages slightly by 2030 - about 0.6 percent for skilled workers and 0.4 percent for unskilled workers. The Tufts University study disagrees, finding that TPP would decrease median U.S. wages "making the vast majority of workers worse off."


The Peterson Institute found that TPP will not change employment levels overall, but could force 53,700 U.S. workers annually to find new jobs. However, displaced workers could face significant periods of unemployment and wage cuts, the study said.
The Tufts study is more pessimistic, estimating that TPP will lead to 771,000 lost jobs across all countries, with the majority - 450,000 - lost in the U.S. by 2025.


2. Argument: TPP will benefit the economy and U.S. manufacturers, and help create jobs.

Facts: TPP will increase annual U.S. exports by $357 billion, or 9.1 percent of exports, by 2030, according to the Peterson Institute. It will increase annual real incomes in the U.S. by $131 billion, or 0.5 percent of GDP.

By 2030, about 796,000 export jobs (those directly supported by exports) will be added, drawing workers from other firms.

However, TPP would slow growth in manufacturing employment by one-fifth and lead to 121,000 fewer jobs in manufacturing by 2030. That means increases in employment in the service and primary goods sectors, the study said.


3. Argument: TPP will lead to more companies challenging environmental regulations in the arbitration process.

Facts: TPP includes what is called the Investor-State Dispute Settlement (ISDS) provision, a flashpoint of controversy for liberals, including Massachusetts Sen. Elizabeth Warren (D).

The language allows corporations to sue foreign governments over environmental or public health regulations if they feel those regulations are hurting their profits. The cases go before private arbitration panels rather than the courts. The system's proponents say ISDS is a way to protect foreign investors from unfair treatment by foreign governments; its critics say it favors companies and makes it difficult to enforce regulations.

READ: Key facts about the TPP trade deal

There has been an explosion of such cases since the 1994 North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico. That year, two such arbitrations were initiated, and the number has grown - reaching a record 70 in 2015, according to the U.N. Conference on Trade and Development.

And the rulings weren't necessarily favorable to governments: More than $400 million has been paid out to corporations in ISDS cases under NAFTA-style deals, according to Public Citizen, which opposes TPP.


4. Argument: TPP will lead to an increase in harmful environmental pollutants, as manufacturing operations move to countries with lax standards.

Facts: A 2000 study by the Commission for Environmental Cooperation (CEC) - an intergovernmental organization formed by the United States, Canada and Mexico to address NAFTA environmental issues - found that air pollution generated by NAFTA truck transportation, the dominant mode for delivering NAFTA-associated goods, created "environmental stress" and "environmental pressures as measured by its impact on air quality," particularly at the U.S.-Canada border.

However, TPP includes more comprehensive and enforceable environmental rules than previous trade agreements, the Peterson Institute said.


5. TPP will cause the price of prescription drugs to go up.

Facts: TPP provides intellectual property protection for drugs for up to eight years. That means cheaper, generic versions would not be available until after that - seniors and doctors say the deal will lead to higher prices, particularly in poorer TPP countries. This is a topic many researchers have studied, with results varying by country.

Extending protection for drugs could cost Australian taxpayers hundreds of millions of dollars each year, according to a 2014 report to Australia's Department of Foreign Affairs and Trade.

After Canada and Japan extended the protection period, overall spending on drugs as a percentage of GDP went up slightly but not dramatically, according to 2015 research by the Geneva Network.

At U.S. International Trade Commission hearings in January, the Peruvian ambassador to the U.S. testified that since a trade agreement with the U.S. in 2009, the price of medicines in Peru has actually risen more slowly than the rate of inflation from 2009 to 2014.

That has not been the case in other trade deals. Since the U.S.-Jordan pact in 2001, there was a 20 percent increase in drug prices between 2002 and 2006, according to a 2009 report in the Journal of Generic Medicines.