Summary:The Obama Administration currently is negotiating two comprehensive and high standard mega-regional free trade agreements (FTAs): the Trans-Pacific Partnership (TPP) among the United States and eleven other countries and the U.S.-European Transatlantic Trade and Investment Partnership (T-TIP). During discussions of these and other free trade agreements, academics and others have focused attention on quantifying the impact of trade agreements on jobs in the U.S. economy. Â Economists and others often use sophisticated economic models to estimate the economic impact of trade agreements on the economy, particularly the impact on jobs and wages. The International Trade Commission (ITC), for instance, provides estimates of the impact of FTAs on the U.S. economy. Limitations of data and important theoretical and practical issues make it difficult to derive precise estimates of the impact of a particular trade agreement on the U.S. economy. Such models use a number of assumptions that are necessary to derive the results, but such assumptions reduce the reliability of the estimates. In addition, the economy as a whole is subject to a broad range of events, often unforeseen, that cannot be modeled ahead of time in generating trade estimates, but may affect economic performance, including job creation and job losses, in ways that may outweigh the impact of free trade agreements.
