The Trans-Pacific Partnership meant to create the world’s largest free trade area will cost Canada 58,000 jobs and increase income inequality, says a new U.S. study. Perhaps more surprisingly, the study found that the two largest economies in the TPP — the U.S. and Japan — would actually shrink as a result of the trade deal, and that the deal would result in fewer jobs overall in all the participating countries. Ten years after the TPP were to come into force, Canada’s economy would be 0.28 per cent larger than it would have been without it, the study from Tufts University, near Boston, found. That amounts to an additional $5 billion in economic activity, on an economy worth some $1.8 trillion today. That boost is only slightly more than the $4.3-billion subsidy the Harper government proposed for the dairy industry, to absorb the shock of an open dairy market. The U.S. economy would be about 0.54 per cent smaller with the TPP, or about US$100 billion smaller. The country would see a net loss of 448,000 jobs due to the agreement.

The authors — researchers at Tufts' Global Development and Environment Institute — say that’s because creating the massive free trade area that would encompass 40 per cent of the world economy would force companies to be more competitive and efficient, pushing them to cut jobs. They also say that participating countries’ economies would shift to focus more on producing goods for export rather than for domestic consumption, and export-oriented industries create fewer jobs, overall. In all, the study estimates that the 12 countries involved in the proposed free trade deal would lose a net total of 771,000 jobs in the 10 years after the deal comes into force.