Findings and recommendations
[url=]Economic
Policy
Institute[/url]
Models that have been used to evaluate the effects of the TPP and past free trade agreements, that have assumed full employment, should not be used to evaluate the potential demand shifting effects of currency manipulation on the members of the TPP.
Computable general equilibrium (CGE) models characterized by such instantaneous price flexibility are not well suited to the analysis of external shocks, such as currency manipulation by other trading partners. Such policies can shift aggregate demand from one trading partner to another by changing the levels of imports, exports, and the trade balance. Currency manipulation could affect demand both directly, within the TPP, if, for example Japan, Malaysia, or Singapore were to engage in large, persistent purchases of dollar-denominated assets, and indirectly, if China or another major trading partner were to increase its currency manipulation, which could affect levels of trade and demand for all TPP partners.
Even if the TPP were a true free trade agreement it would likely be hard on non-college educated American workers who make up more than two-thirds of the U.S. labor force.
http://www.epi.org/publication/trans-pacific-partnership-agreement-currency-manipulation-trade-wages-and-job-loss/ |
