Federal panel: Pacific trade pact would deliver modest gains

WASHINGTON (AP) - A contentious trade deal between the United States and 11 Pacific Rim nations would give the U.S. economy a modest boost, an independent federal agency reported Wednesday.

The U.S. International Trade Commission said the Trans-Pacific Partnership would increase economic growth and create jobs. But the gains would be vanishingly small: After 15 years - 2032 if the agreement takes effect next year - the deal would add just 128,000 jobs, an increase of less than a tenth of one percent. Exports would increase, but imports would increase more, the report said.

U.S. Trade Rep. Michael Froman said the report shows that "TPP will benefit our economy at home and allow the U.S. to help set the rules of the road for trade in the Asia Pacific."

The ITC analysis is required by law and is supposed to signal the start of congressional debate on the TPP. But lawmakers likely won't act in a contentious election year.

Presumptive Republican presidential nominee Donald Trump and Democratic front-runner Hillary Clinton both oppose the pact, and voters have been increasingly skeptical about the benefits of international trade.

"It seems more than likely that Congress will punt to the next administration," said Eric Shimp, a former U.S. trade official and now policy adviser at the law firm Alston & Bird LLP. "Trade itself has become toxic in Congress."

The deal, requiring congressional approval, would tear down trade barriers and encourage investment between the countries that signed it. Critics worry it would cost jobs by exposing American workers to low-wage competition from countries such as Vietnam. They also say it would allow multinational corporations to challenge local laws by saying they violate the trade deal.

Public Citizen's Global Trade Watch, which opposes the TPP, released a pre-emptive report earlier this month, arguing that previous commission reports on pending trade agreements have proven "dramatically inaccurate" - and overly optimistic.

The advocacy group says the ITC missed by a wide margin the trade deficits that followed the 2000 deal that brought China into the World Trade Organization and a 2011 free-trade agreement with South Korea. The ITC also underestimated the large trade deficits with Mexico that came after the 1993 North American Free Trade Agreement.

The countries that agreed to the pact last October are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. China is not part of the pact. In fact, the U.S. sees the agreement as a way to counter Chinese influence in Asia. Still, China could join later.