Australia Brunei Canada Chile Japan 11 THE TPP Malaysia Mexico New Zealand Peru Singapore Vietnam
SEAFOOD, MINING AND FORESTRY WINNERS IN TRADE DEAL IN ‘SIGN THAT CANADA DOES HAVE OPTIONS’
OT TAWA • Seafood, mining, non- dairy agriculture, forestry and manufacturing industries are set to get a boost as Canada joins 10 other countries to form the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Labelled by U. S. President Donald Trump as a ' job killer’, the TPP was resurrected by the remaining Pacific Rim countries who persevered for months to weed out the deal’s thorny issues, mostly behind closed doors. Trump abandoned the deal precisely one year ago.
While the loss of the U. S. from the trade pact marks a major diminishing of the scope of TPP, the deal is still sizable enough to send a message to those at the table in North American Free Trade Agreement talks in Montreal this week, said Daniel Schwanen, the vice- president of research at the C.D. Howe Institute.
“It’s still a very significant part of the world economy — it’s not the 40 per cent it would have been with the U. S. in there — but to me it’s a major coup almost in terms of the timing amid NAFTA negotiations,” Schwanen said.
“We’ll never not depend on the U.S. market, but they depend on us as well.”
Business associations praised the deal as potentially rolling back tariffs between Canada and its Pacific Rim trading partners, while trade experts said it could potentially reduce administrative costs for exporters.
The Canadian dairy industry was disappointed with the deal, especially in the shadows of NAFTA.
“It’ s a pretty sombre day for the 220,000 Canadians t hat depend on dairy for their livelihood ... The domestic dairy sector has already been carved out once with ( last year’s deal between Canada and Europe), now with TPP, as we’re in the negotiations with NAFTA,” said Jacques Lefebvre, CEO of the Dairy Farmers of Canada. The Canadian Vehicle Manufacturers’ Association also labelled the TPP deal as “a harmful one- way street for automakers who invest billions in Canada.”
But other industries believe access to economic powerhouse Japan and some of the world’s most promising economies such as Malaysia, Peru, Singapore, New Zealand, Australia, Brunei and Vietnam would open up new markets for Canadian businesses. Fellow NAFTA member Mexico is also part of the group.
“We can’t afford to be outside of this trading bloc,” said Pierre Gratton, the president and CEO of the Mining Association of Canada. “It would put as at a huge disadvantage. Our industry is pretty unequivocally open trade, and open markets.”
Tariffs on exported minerals and metals currently range anywhere from up to 7.99 per cent in Japan, 10 per cent in New Zealand and 50 per cent in Malaysia. Gratton expects those rates could eventually be pared back under TPP.
The TPP could also significantly reduce import tariffs for wood products companies, according to Joel Neuheimer, a vice- president at the Forest Products Association of Canada.
Still, forest products manufacturers remain heavily dependent on the U.S ., which buys 70 per cent of its exports. China is the next largest export market for the Canadian forestry sector at 14 per cent, while TPP members account for a combined 10 per cent of exports, according to FPAC.
Import tariffs for some wood products in Vietnam currently run as high as 31 per cent, and 27 per cent for paper products; in Malaysia, tariffs on plywood are currently 40 per cent. Neuheimer expects those tariffs to be drastically reduced or outright eliminated under TPP.
The U.S. Commerce Department recently announced preliminary countervailing duties on Canadian imports of uncoated groundwood paper, which is used in the manufacture of newsprint, calendar paper and other products.
“Obviously this isn’t the magic bullet in terms of our trade disputes with the U.S ., but it is encouraging news,” Neuheimer said.
Paul Lansbergen, t he president of the Fisheries Council of Canada, said seafood tariffs could be reduced under TPP, but noted that sanitary regulations and other trade rules could also be harmonized, simplifying the flow of goods.
Companies currently have to abide by highly complex and incongruent rules around the temperature at which fresh foods are shipped, the cleanliness standards of shipping containers and other regulations.
“We expect that TPP would create some more standardized rules around those non- tariff barriers — and that will help open up markets,” Lansbergen said.