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American firms, especially those in California, stand to gain if the Trans-Pacific Partnership is enacted, a Stanford economist says.
But as with any trade agreement, some sectors of the economy may initially face tougher competition from imported goods, according to Michael Boskin, the Tully Friedman Professor of Economics and senior fellow at the Hoover Institution.
A proposed trade agreement among 12 Pacific Rim countries (including the United States) and reportedly one of the largest ever, the Trans-Pacific Partnership now awaits its fate by Washington, D.C. lawmakers. Boskin, also a senior fellow at the Stanford Institute for Economic Policy Research, was recently interviewed by the Stanford News Service on this issue:
What benefits would the Trans-Pacific Partnership bring to the U.S. economy, businesses and workers?
Expanded trade leads to higher growth in income, greater efficiency and lower costs and increased variety for consumers. In addition to eliminating many tariffs, the TPP will, if ratified and implemented by the parties with minimal slippage, reduce non-tariff barriers such as excessive red tape and protection of state-owned enterprises; harmonize policies and procedures; and include dispute settlement mechanisms. On balance, that should enable American firms and their workers to expand exports to these markets. California firms and workers, in particular, stand to benefit disproportionally, given the central role the state plays in trade with Asia, from goods and services we export to the flow of goods through our ports.