New Study Shows Repeated Failed Outcomes Despite Rosy US Government Projections for "Trade" Deals

Big problems found with the USITC's Methodology and past results failed to predict outcomes.

The United States International Trade Commission (USITC) is required to release a report
projecting the economic effects of the Trans-Pacific Partnership (TPP) no later than May 18,
2016.

The USITC study on a trade pact, which is required as part of the Fast Track process,
typically generates considerable attention from policymakers and the press. However, with
respect to past such studies, the USITC projections have been dramatically inaccurate.
Indeed, past USITC trade agreement studies have systematically projected positive outcomes that
have been contradicted by the actual results of trade agreements.


This analysis reviews the USITC projections for the three most economically significant U.S.
trade agreements relative to the pacts’ actual outcomes. The USITC projected an improved trade
balance, gains for specific sectors, increased U.S. economic growth and additional benefits in its
reports on the 1993 North American Free Trade Agreement (NAFTA) and the 2007 U.S.-Korea
Free Trade Agreement (FTA).3

For China’s 1999 World Trade Organization (WTO) accession
agreement with the United States and related China Permanent Normal Trade Relations (PNTR)
vote, the USITC report projected a small increase in the U.S. trade deficit with China.
However, the USITC reports on NAFTA, China’s WTO accession/China PNTR and the Korea
FTA not only overstated the prospective benefits. Each of these USITC studies also simply got
the bottom line wrong: The U.S. trade deficit with the trade partners increased dramatically and
as detailed in the text of this study, industries projected to “win” saw major losses.