TPP trade deal will expand Australia's economy by less than 1%, World Bank reveals

The federal government maintains the Trans-Pacific Partnership agreement will deliver “enormous benefits”, despite World Bank analysis showing Australia’s economy will grow by less than 1% as a result of the deal.

Australia’s increased growth is projected to be worse than 11 of the other 12 countries that signed the deal last year, according to the report on the global implications of the deal. Only the US fares worse.

By 2030, Australia’s gross domestic product could increase by just 0.7% as a result of the historic trade agreement. By contrast, Vietnam’s GDP could rise by 10%, and Malaysia’s by 8%, the World Bank finds.

The analysis concedes that the impact for developed nations like Australia and the US will be “modest” because “existing barriers to their trade ... are already low for the most traded commodities”.

“If ratified by all, the agreement could raise GDP in member countries by an average of 1.1% by 2030. It could also increase member countries’ trade by 11% by 2030, and represent a boost to regional trade growth,” the analysis said.

The trade minister, Andrew Robb, has defended the agreement, which has been described as one of the largest and most diverse trade deals in history.

“The historic Trans-Pacific Partnership agreement will deliver enormous benefits to Australia by enhancing our competitiveness, and promoting job creation, growth and higher living standards,” a spokeswoman for Robb told Guardian Australia.

“As well as slashing tariff barriers, it will drive Australia’s integration in the fast-growing Asia Pacific, and improve access to regional value chains by establishing one set of trading rules across 12 countries.

“The World Bank report demonstrates that all 12 TPP member countries – representing around 40% of global GDP – will experience economic growth and increased exports under the agreement.”

The Greens spokesman for trade, Peter Whish-Wilson, said the World Bank report was “evidence that the highly politicised TPP agreement will not deliver anything like the government’s overhyped spin”.

“Its economic impact will be negligible,” he said. “This latest World Bank analysis simply backs up all the evidence that has previously been presented regarding the lack of benefits to Australia.

“Andrew Robb has his head in the sand and no amount of credible evidence presented is going to shift him from his spin.” Whish-Wilson argued the cost of controversial clauses which allowed multinational corporations to sue governments if they thought domestic laws harmed their investments had not been taken into account by the government.

The government is “in total denial about the future costs to Australia of Trojan horse investor-state dispute settlement provisions,” Whish-Wilson said.

Labor has vowed to examine the agreement.

“The trans-Pacific partnership is a major agreement involving some of Australia’s most important trading partners. Labor supports trade negotiations that promote growth and create jobs,” Labor’s acting spokesman on trade, Jim Chalmers, told Guardian Australia.

“The World Bank also notes that the agreement could be an important counterweight to the post-GFC global trade slowdown. Analysis by the World Bank and others will be considered by Labor as we consider the agreement.”

The 6,000-page deal was put online in October, but had previously been criticised for its secrecy. The wide-ranging deal includes changes to tariffs, drug patents and intellectual property.

The 12 countries to sign the deal are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam.

Global economic giant China was excluded from the deal, as was South Korea.