While the prospects for a renewed Trade Promotion Authority are up in the air, the White House and the United States Trade Representative are continuing negotiating rounds for the completion of the Trans-Pacific Partnership (TPP) agreement. Last week, Vice President Biden voiced support for the administration on the completion of a robust TPP agreement that would bring economic and strategic value to the United States. As countries and their negotiators are in Singapore this week, Singapore's Prime Minister Lee Hsien Loong says the agreement is 'very close' to completion.
The TPP is an important agreement for the U.S. economy and the 11 partner countries. New trade agreements open new markets for U.S. businesses both small and large as well as provide consumers with access to new products. Free trade is a boon to economic productivity, which creates more jobs at higher wages. The U.S. stands to benefit from the TPP due to the value of our products and goods, specifically intellectual property (IP) intensive industries.
IP-intensive industries, those that invest more on R&D per employee than the national average, outperform non-IP-intensive industries across economic measures. IP protection is an essential component for innovation, which is the main driver of economic growth across countries. IP protections are instrumental in facilitating the transfer of technology, attracting foreign direct investment, and localized innovation.
- Based on the trade impacts of ten existing U.S. FTAs with 16 countries, the formation of TPP is expected to boost U.S. manufacturing exports by $26 billion, create 38,811 jobs, generate $2.2 billion in wages, and add $11 billion to the U.S. GDP.
- Altogether, the formation of the TPP is expected to produce $47.5 billion in manufacturing sector sales, create 107,051 direct jobs, generate $4.8 billion in wages, and add $15.4 billion in gross domestic product for all 12 member countries. Two-thirds of these economic benefits come from IP-intensive industries.
We've visualized our findings through an infographic to show the powerful figures of our report:
Our report underscores the important role of IP and IP protection. Since more than three-quarters of U.S. exports to foreign affiliates are in IP-intensive industries — which rely on patents, trademarks, and trade secrets, IP protections based on current U.S. law need to be adopted to secure the long-term economic growth. The stronger the protection of IP rights under the TPP agreement, the greater the value of trade, leading to greater economic growth, more jobs, and higher incomes across 12 countries.