Selling TPP as the Farm Economy Drops off a Cliff

http://www.commondreams.org/views/2016/03/21/selling-tpp-farm-economy-drops-cliff

The farm economy is beyond struggling. Farm income was 50 percent lower in 2015 than in 2013 and is expected to drop further in 2016, reports the USDA. Prices for commodity crops, livestock and poultry are tumbling. Farmland prices are declining. Farm debt is rising. Approximately 45 percent of crop farms are in poor financial condition. Under these dire conditions, a new proposed trade agreement, the Trans Pacific Partnership (TPP), is being pitched as a savior for the farm economy. But given the experience of past trade deals, this will be a tough sell.

Supporters of the 12-nation TPP have had a hard time explaining its benefits from the beginning—mostly because even the rosiest scenarios conclude that the economic gains are tiny. None of the economic projections completed thus far are willing to claim the TPP will increase jobs. The often-cited Peterson Institute projection for the TPP found very small economic gains for the U.S. (only .5 percent after 15 years), and some 500,000 job losses in the first 10 years. A World Bank analysis found that TPP countries would, on average, see only a 1.1 percent gain in their economy annually by 2030. The U.S. would have the smallest gain, at just .4 percent by 2030—with Vietnam (10 percent), Malaysia (8 percent) and Japan (2.7 percent) as the biggest winners.

And most troubling, a TPP analysis by Tufts University, using updated methodology, found that the deal would actually result in both a net loss of jobs and increased income inequality. The Tufts analysis criticizes the older Peterson and World Bank methodology for assuming full employment (any jobs lost will be picked up elsewhere), as well as not accounting for declining wages, as seen in previous trade agreements.

In the case of agriculture, it’s been a time-honored tradition to grossly overstate the benefits of proposed free trade deals for farmers and the TPP is no different. Last month, the Farm Bureau released a new study claiming that the TPP would boost net farm income by $4.4 billion. The Farm Bureau sent 500 members to Capitol Hill to tout the study and lobby on behalf of the TPP—USDA Secretary Tom Vilsack has since cited those projections. But the study has some serious problems, including that it hasn’t publicly posted where the numbers come from. The Coalition for a Prosperous America raised 10 reliability concerns about the Farm Bureau study, including that it lists no author and doesn’t publicly and fully disclose its methods and data. It’s hard to tell whether or how it accounts for increased imports under the TPP—an essential component of assessing any trade deal.