The Trans-Pacific Partnership (TPP-11) will deliver $15.6 billion in net annual benefits to Australia’s economy by 2030 and an increase in exports of $29.9 billion, new analysis shows.
New modelling undertaken by economists from Brandeis International Business School and Johns Hopkins University also predicts investment into Australia will increase $7.8 billion under the TPP-11.
And additional overseas investment by Australian businesses will increase by $26 billion.
Trade Minister Simon Birmingham says TPP-11 will provide greater market access and export potential to Australian businesses and exporters in industries including farming, mining and manufacturing.
The TPP-11 legislation is expected to be debated in the House of Representatives in the next sitting week.
Exporters must be able to access new market opportunities
Mr Birmingham urged the Australian parliament to ratify the TPP-11 as soon as possible to “lock in the forecast benefits and avoid being at any competitive disadvantage.”
The pact includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
It is one of the most comprehensive trade deals ever concluded and will eliminate more than 98 per cent of tariffs in a trade zone with a combined GDP worth $13.7 trillion.
The US pulled out from the Trans-Pacific Partnership last year, but US President Donald Trump has not closed the door completely. He indicated the decision would be reviewed if the US can secure a more favourable deal.
“To secure and grow our national prosperity Australian producers and exporters must be able to access the new market access opportunities that the TPP-11 will provide,” Mr Birmingham said.
“More export opportunities for Australian businesses contributes to a stronger economy and creates more Australian jobs.”
Higher incomes for Australian households
Business Council chief executive Jennifer Westacott said the new modelling shows why the parliament must “double down and fast track legislation implementing the TPP-11.”
“The benefits to Australia are substantial,” she said.
“Higher national income means higher incomes for Australian households.
“It would be irresponsible to stall an agreement which can improve living standards, particularly at a time of weak wages growth.”
Also, the modelling highlights the potential for even bigger benefits if other countries join.
“If the Agreement was expanded to 16 countries, the modelling shows Australia’s national income would increase by $22.1 billion and exports by $48.1 billion by 2030,” Ms Westacott said.
Improving living standards
“Not passing the legislation now could also have serious implications at a time of rising international trade tensions.
“Signalling any reversal would not only harm Australia but could further weaken support for a liberal world trading order.
“Australia has been a global leader championing trade liberalisation, which has both benefited Australians and lifted millions out of poverty overseas.
“This is something the parliament can do now to lock in improved living standards for our country.”
US economists Peter Petri and Michael Plummer prepared the modelling on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership on behalf of 11 business groups including the Business Council.
The report updates 2016 modelling on the TPP (which included the US).
Read the full modelling report here – Australia will gain from continued Asia Pacific trade integration.