Abstract
In summary, the fundamental role of multinational trade agreements such as the TPP and the TTIP is to eliminate tariff and non-tariff barriers across substantially all trade categories, which includes goods, services and investments in productive assets. The ultimate objective is to integrate national markets into regional ones and thereby realize greater efficiencies by facilitating specialization on the supply side and the realization of economies of scale through access to larger markets. Individual domestic economies will realize greater market opportunities and easier access to critical inputs, thereby promoting innovation, productivity, and overall competitiveness.However, such globalization of supply chains and related markets poses a threat to domestic industries protected through previously erected trade barriers. Inefficient industries will have to be restructured and domestic workers will have to be reskilled, in order for targeted comparative advantages to be realized. Thus, the removal of tariffs and quotas will initially cause shifts in location of various high-tech products and services, as effective relative prices adjust. Such “transition costs” must be managed by each economy and the international organizations overseeing implementation of trade agreements.
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