by Amrietha Nellan
The World Bank recently released its analysis on the economic impact of the Trans-Pacific Partnership (TPP) on partner countries and the global economy, confirming the deal will drive trade and increase GDP. The study finds that trade between TPP partners and annual GDP growth will increase by 11% and 0.4-10%, respectively. These gains are to be expected given the extensive tariff cuts across all segments of traded goods and services and major reductions on non-tariff barriers artificially increasing costs and depressing trade. The study also confirms the TPP’s impact of raising conditions for workers in partner countries as the first regional trade deal to incorporate enforceable labor standards.
The study highlights there is a “growing literature [that] suggests trade agreements foster domestic reforms in developing countries” lifting standards in participating countries. The TPP is no exception, particularly in its impact on labor. The World Bank finds that the TPP could increase real wages in all partner countries with the greatest increase to workers in the least developed economies in the pact. Skilled and unskilled real wages in Brunei and Malaysia could increase between 5-7%, skilled wages in Peru could increase by 8%, and unskilled wages in Vietnam could increase by over 14%. These numbers represent meaningful, measurable change for the betterment of workers in TPP countries. And as we try to craft better, more progressive trade deals for the future, the TPP is clearly the new model, where higher standards support and promote strong economic gain to industry and workers alike.