Forecasting the Impact of the TPP on Growth

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Several conclusions can be drawn from our analysis. Once implemented, the TPP is expected to be generally beneficial for most, but not all, member countries. Those countries which are not parties to the TPP are expected to be worse off because of trade diversion. At a national level, the income effects of trade reform are very modest, less than one percent of GDP in most cases. Against the background of the ongoing expansion of most economies, the gains from trade reform are small. At a sectoral level, substantial adjustment would be required in some sectors in some countries, such as livestock products, textiles and motor vehicles, but in most cases the adjustment merely requires slower growth, rather than a contraction of the sector. Negotiators have attempted to ease the problem of structural adjustment by phasing in the tariff reductions over a period of up to ten years, or by imposing tariff rate quotas, where large tariffs are imposed once a quota is exceeded.

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