White House study: China
trade deal worsens damage from TPP failure
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[November 04, 2016]
By David Lawder
WASHINGTON
(Reuters) - The Obama administration issued a fresh warning on Thursday
about the dangers of Congress failing to pass its Asian trade deal,
saying that millions of U.S. jobs could be at risk if a rival China-led
trade pact is enacted.
As they gear up for one last push to persuade Congress to pass the
Trans-Pacific Partnership (TPP)in the two months following Tuesday's
elections, senior administration officials said 35 U.S. industrial
sectors would lose substantial ground to Chinese competitors in the
Japanese market alone.
In a new study, the White House Council of Economic Advisers estimated
that China's Regional Comprehensive Economic Partnership (RECAP) trade
deal would likely lower Japanese tariffs on Chinese goods by five to 10
percentage points. If TPP is shelved, U.S. companies would be stuck with
Japanese tariffs averaging twice as high as their Chinese competitors.
Obama administration officials have long argued that China would seize
economic leadership in Asia and write lower-standard trading rules for
the region if TPP fails. The White House study seeks to quantify the
argument by examining the effect of likely RCEP tariff cuts by Japan.
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China is negotiating RCEP with 16 Asian countries, seven of which are
also signatories to the TPP agreement: Japan, Australia, New Zealand,
Vietnam, Malaysia, Singapore and Brunei.
"If TPP is not passed and RCEP is enacted, which is what all these
countries say they are planning to do, then U.S. businesses would face a
direct loss of competitive position," said Jason Furman, the chair of
the Council of Economic Advisers.
This would displace U.S. goods and be worse than simply maintaining the
trade status quo, Furman said. The study identifies 35 industrial
sectors employing 4.7 million people with $5.3 billion in sales to Japan
that would face such a disadvantage.
A broad manufacturing sector stretching from sporting goods to office
supplies could see $720 million in annual sales to Japan at risk, the
study said.
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![](../images/110416pics/busine19.jpg)
U.S. President Barack Obama (R) stands with Chinese President Xi
Jinping during an arrival ceremony at the White House in Washington
September 25, 2015. REUTERS/Kevin Lamarque/File Photo
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The administration faces an uphill battle to get a vote for TPP in
Congress' post-election "lame duck" session, due to strong anti-trade
rhetoric in the presidential campaign and House Speaker Paul Ryan's
recent comments that the trade deal lacks the votes for passage.
But U.S. Trade Representative Michael Froman said he is continuing to
press the TPP case with individual members and working with Senate
Finance Committee Chairman Orrin Hatch to ease his concerns about patent
protections for biologic drugs.
Froman said these efforts have been met with "a lot of receptivity".
(Reporting by David Lawder; Editing by Jonathan Oatis)
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