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TPP: Effects on the US economy may be limited – Wells Fargo

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 8, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Córdoba) - On Monday, the Trans-Pacific Partnership (TPP) agreement was signed. Now it has to be approved by every country and in the US by the Congress. According to Jay Bryson and Erik Nelson, global economist and economic analyst respectively, at Wells Fargo Bank, consider that it could have limited effects on the US.

    Key Quotes:

    “The direct economic effects on the U.S. economy from eventual ratification of the TPP may be limited. The United States already has FTAs in place with 6 of the other 11 TPP signatories, so it is questionable how much further American trade with these countries will be enhanced by the TPP. With the notable exception of Japan, these five other non-FTA economies are rather small and none would be considered a major trading partner of the United States. Did the United States really go to all the trouble of negotiating the TPP just to get a FTA with Japan?”

    “In our view, American motives should be viewed through a wider lens. The 12 TPP economies together account for one-third of global GDP and one-quarter of global trade. Unfettered access to these markets is attractive to economies that currently are not members.”

    “The TPP could be the catalyst that encourages TTIP negotiators to complete a free trade agreement between the United States and the European Union.”

    “The TPP, which will likely exclude China for the foreseeable future, may be America’s answer to the rising economic and financial power of China.”
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