The Trans-Pacific Partnership would have a positive impact on U.S. retailers and consumers, according to a new report from the National Retail Association.
A sweeping free trade agreement linking 12 nations on four continents but awaiting ratification would have a positive impact on U.S. retailers and consumers, according to a new study by the National Retail Federation, North America’s largest association of retailers.
The report analyzes impacts of the pending Trans-Pacific Partnership, which would provide phased-in duty-free benefits on goods and services among the United States, Canada, Mexico, Japan, Singapore, Malaysia, Vietnam, Chile, New Zealand, Peru, Australia, and Brunei.
Pre-election rhetoric has focused on the negative aspects of the trade deal, with both presumptive presidential candidates saying they are against the TPP as currently constructed.
The NRF’s report, “Trans-Pacific Partnership Agreement Holds Potential for Retailers and American Families,” notes that prices of imported retail merchandise are driven up considerably by tariffs, which the NRF calls “hidden taxes” on consumers that can range as high as 67.5 percent on footwear or 32 percent on apparel, for example. Tariffs on goods from TPP countries totaled nearly $6 billion in 2015, and nearly all would eventually be eliminated after the measure is enacted, which would benefit consumers through lower prices.
The report also found that international trade is a major supporter of U.S. employment, accounting for 6.9 million U.S. jobs in the retail industry.
“The TPP will have a significant positive impact on American families, workers and the retailers who seek to provide them with a wide range of goods at affordable prices,” according to the report, which was prepared for NRF by The Trade Partnership. “It will lower costs across global supply chains in the TPP region, and those lower costs will be reflected in U.S. price tags…. Families will benefit from greater spending power both from lower prices and higher wages.”
In addition to the economic value of eliminating tariffs, the report noted labor and environmental protections in the agreement that would be valuable to U.S.retailers. TPP opposition groups in the United States have highlighted what they consider to be negative impacts the deal would have on jobs in the manufacturing, and environmental and labor conditions issues posed by TPP members that don’t have laws similar to those in the United States.
“TPP will make it much easier for retailers to ensure that factories in TPP countries adhere to labor and environment conditions in their codes of conduct,” the report said, citing prohibitions against child and forced labor and protections for endangered species.
The NRF and other pro-trade groups have long argued the importance of the TPP and other trade deals in minimizing barriers to lower consumer prices and job creation related to imports and exports. Congress appears to be in a wait-and-see mode until the presidential election in November, but trade advocates remain hopeful the deal as currently constructed will eventually pass. Congress last year gave the president renewed power to negotiate trade deals such as TPP. Granting that power and then blocking the ratification of the TPP is seen by many as hypocritical.
“This report shows the importance of international trade to the U.S. economy and how TPP creates economic growth and opportunity in the United States,” NRF President and CEO Matthew Shay said. “Congress should move quickly to approve this agreement so American workers, consumers and businesses can begin to realize those advantages as soon as possible.”
The TPP is also the subject of an American Shipper webinar at 2 pm ET Thursday.
U.S. retailers lay out case for TPP
