Negotiators begin talks, but reviving TPP will be an uphill battle.
TRADE
Negotiators and s enior trade officials from 11 Pacifi c Rim nations gathered in Toronto Tuesday to the possibility of salvaging the Trans-Pacific Partnership.
The goal of the preliminary talks, which conclude Wednesday, is to determine if t heir countries’ t rade ministers should pursue a revival of the deal at a meeting in Vietnam later this month.
The TPP was t hrown for a loop after U. S. President Donald Trump signed a memorandum formally withdrawing the U. S. from the multilateral trade agreement. It was one of the first things Trump did after he was sworn into office.
The U. S. pullout makes it impossible to ratify the agreement as currently written.
The deal was to enter force once it had been ratified by six nations representing more than 85 per cent of the proposed trading block’s total gross domestic product. The U. S. alone would have represented 60 per cent of the proposed block’s GDP.
The Toronto talks explore whether it’s possible to carve the U. S. out of the existing deal and build a new agreement around the remaining 11 nations, including Canada. Some call the deal that could emerge “TPP minus One.” Others call it “TPP 2.0.”
“It’s certainly a positive development for TPP to potentially move ahead without the U.S.,” said Greg Kanargelidis, leader of the international trade group at law firm Blake, Cassels & Graydon LLP. “I know Japan is anxious to have this agreement in place. It makes sense that Canada would be an active participant.”
A March 2017 meeting of Asia-Pacific Ministers generated a decision to revive talks among the remaining TPP signatories. Canada agreed to play host. The talks in Toronto this week set the stage for further discussions at the ministerial level at an Asia- Pacific Economic Cooperation meeting in Vietnam later this month.
François- Philippe Champagne, Canada’s Minister of International Trade, is not attending the Toronto meeting because it is at the officials’ level. “Canada is a strong supporter of progressive free trade and the Asia Pacific remains an important region and a priority market for our government,” a statement from the ministry said.
Keeping the TPP alive is not simply a matter of asking the 11 remaining nations to ratify the deal. All trade agreements are the product of a balance of concessions between the participating countries. Much of the current TPP text would reflect bargains that were struck to accommodate the U.S.
Mark Warner, a Toronto- based international trade lawyer, said reopening these talks could unwind the concessions that made the deal possible, such as Canada’s decision to open up its dairy industry.
“I guess it’s great for Canada to sit down with these folks,” Warner said. “But at the end of the day, the TPP is kind of like a sweater. If you pull on one of those threads, whether it’s dairy or rules of origin, the whole thing comes unravelled rather quickly.”
Joy Nott, chief executive of the Canadian Association of Importers and Exporters, said she believes a “TPP 2.0” is viable. During the U.S. presidential election, there were fears the TPP would not survive the exit of either the U. S. or Japan. Nott said having the remaining stakeholders at the table in Toronto this week shows that it might be possible to work something out. “Do I think anything would come of this? Yes, I do. I honestly do.”
The TPP talks come at a crucial time for Canada on the trade front.
Canada is gearing up to engage in three-part talks with the U. S. and Mexico about renewing the North American Free Trade Agreement. After an initial meeting with Canadian Prime Minister Justin Trudeau in February, Trump said he merely wanted to “tweak” the NAFTA deal. More recently, Trump has harshly criticized Canadian trade policies. Last week, his administration imposed duties on Canadian softwood lumber shipments.