Global trade is an essential part of any U.S. retailer’s business. Trade benefits more than the retail business; it also benefits the workers employed and the consumers who shop in those stores. The recently concluded Trans-Pacific Partnership agreement is critical for retailers’ future growth — not only ensuring they can continue sourcing products globally to deliver everyday savings to U.S. consumers, but also paving the way for retailers to bring U.S.-made goods to foreign consumers. If Congress does not act now to enact the TPP, U.S. retailers, consumers and the economy in general may lose out.
NRF’s new study, “Trans-Pacific Partnership Agreement Holds Potential for Retailers and American Families,” explains how several chapters within the agreement can offer Americans the greatest potential direct benefits. Here are some of the biggest:
The TPP agreement includes the United States and 11 countries in the Asia-Pacific region.
The agreement establishes strong rules affecting trade with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
These countries currently account for 39 percent of U.S. goods and services exports and 35 percent of U.S. goods and services imports.
Source: NRF TPP Matters Report
Lowering costs and increasing wages for American families
The removal of hidden import taxes — better known as tariffs, which have historically been a cost of doing business with international suppliers — will lead to lower consumer prices or broader product selection. Roughly 6,000 U.S. tariffs on imports into the country will be cut after the agreement is fully implemented. As our study shows, this has the potential to boost annual spending power for the United States by $131 billion, or over $1,000 per household per year.
Cutting these hidden fees will have a significant potential benefit for all consumers, specifically low-income households. Families within this demographic spend nearly 40 percent of their average income on consumer items like apparel, footwear, home appliances and toys, compared with just 10 percent for upper-income households. Removing these hidden taxes means greatly reducing the unequal impact tariffs have on these families.
Families can also expect higher wages: One economic assessment concluded it would increase wages across the entire U.S. workforce. Americans will benefit from greater spending power, both from lower prices and from higher wages, which will strengthen the U.S. economy in the process.
Enhancing safety protections and protocols
Passing the TPP means stronger food, labor and environmental protections for partner nations. The TPP will help to ensure that other countries better align their food and product safety systems, laws and regulations with those of the United States. Requirements for workforce treatment in foreign factories will also be streamlined, including banning the use of child and forced labor. Also included are provisions pertaining to the protection and conservation of elephants, rhinos, whales, dolphins, sharks and sea turtles, among other animals.
- Download full report: Trans-Pacific Partnership Agreement Holds Potential for Retailers and American Families (PDF)
- Download infographic summaries for all 50 states (PDF)
- Related research: Trade Matters to American Retailers and Families
- Related press release: U.S. International Trade Commission report confirms benefits of trade deal
Empowering growth of global e-commerce
Online retail sales in the Asia-Pacific region have been growing at rates in excess of 35 percent annually, and projections in the United States aren’t far behind. Under the TPP, any consumers buying from retailers in partner countries will be not be assessed charges on electronic transactions. This free trade agreement for the first time covers digital goods — software, music, video, e-books and games — as well as physical items like apparel, footwear, food products and home furnishings. It’s a critical step toward breaking down physical boundaries standing in the way of digital commerce.
The TPP is a trade agreement for the 21st century, and once implemented, the impact on American families, workers, retailers and the economy will be significant. But Americans won’t be able to reap these benefits until Congress approves legislation enacting it. Retailers and consumers should contact their members of Congress today and urge immediate passage of the TPP.