NewTPP will cut billions in imports from U.S., feds say
OTTAWA• American imports into Canada could fall by $ 3.3 billion under the recently rebooted Trans-Pacific Partnership, the federal government has concluded, sparking fears the new pact could hurt the ongoing NAFTA renegotiation.
The text of the 11- country Pacific Rim trade deal — a pa ct U.S. President Donald Trump pulled the United States out of last year — was released late Tuesday, but a Global Affairs Canada analysis of the deal also delves into the impact on the North American Free Trade Agreement talks, which are to resume in five days in Mexico City.
The Trump administration has blasted trade deficits with Canada as an underlying reason for wanting to renegotiate or tear up NAFTA. The Canadian government rejects that position, saying the statistics don’t back the U.S. deficit assertions.
But the most recent analysis of the new TPP — known by the acronym CPTPP — predicts lower U.S. imports into Canada.
“Under the CPTPP, Canadian exports to the United States are not expected to change significantly as the United States is not party to the CPTPP. However, there would be a decline in imports by Canada from the United States, resulting from erosion of U.S.’s NAFTA preferences in the Canadian market,” the analysis says.
“Total Canadian imports from the United States are projected to fall by $ 3.3 billion, led by a decline in automotive products imports.”
Flavio Volpe, president of Canada’s Automotive Parts Manufacturers Association, says that will hurt Canada at the upcoming NAFTA round, where automotive remains a major obstacle between Canada and the U.S.
“The report states that U.S. imports into Canada would drop $ 3.3 billion, mainly in automotive. If true, that is a gap smart U.S. negotiators could then be seeking to close in NAFTA 2.0,” said Volpe.
Canadian auto workers and manufacturers have been critical of the new TPP, including the government’s assertion that it has gained more access to the protected Japanese market.
International Trade Minister Franço is-Philippe Champagne has said a side letter with Japan guarantees greater access and enshrines a dispute resolution mechanism. But that side letter and others with Malaysia and Australia have yet to be made public.
The government analysis also concluded the agreement would generate longterm economic gains for Canada totalling $ 4.2 billion, up from the $ 3.4 billion expected under the old TPP. The increase is due to improved access to member nations in the absence of U.S. competition.
The analysis said t he gains would cover a broad range, including pork and beef, wood products, machinery and equipment, and transportation equipment.
Canadian food producers are enthusiastic about the new TPP and the government’s predictions of increased pork and beef exports to Japan. The analysis predicted pork exports to rise by $ 639 million, or 36.2 per cent, and beef to increase by $ 378 million or 94.5 per cent.
The 11 nations in t he CP TPP are Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.