Harper’s legacy for trade lawyers

Canadians may have decisively shown him the door, but Prime Minister Stephen Harper still leaves behind the Trans-Pacific Partnership.

Of course, Canada hasn’t ratified the deal, and the government that negotiated Canada’s participation in the trading bloc is history.

Incoming prime minister Justin Trudeau has promised “a full and open public debate in Parliament” on the deal. But he’s also said his Liberal Party “strongly supports free trade.” It’s hard to conceive of a scenario in which his fresh new Parliamentary majority wouldn’t embrace the chance to link Canada with the 11 other nations in the massive new trading bloc.

So the TPP is going to be a part of Canada’s near-term business future, and that has me wondering what this means for trade lawyers.

Free trade or trade liberalization always sounds like it sweeps away the rules and restrictions that make it difcult or impossible for companies to sell their products or services across international borders. Yet removing all those legal impediments does not have the side efect of wiping out the need for trade lawyers. In fact, the opposite is arguably true. Trade deals are thick, complicated documents that can introduce fresh rounds of red tape.

“Just because it facilitates trade doesn’t mean you don’t need the trade lawyer anymore,” says John Boscariol, head of the international trade and investment law practice group at national Canadian business law firm McCarthy Tétrault LLP. “In fact, these deals are somewhat complex. Their interaction with other trade agreements is a complex issue so you will need more trade law advice as a result of these, not less.”

The world of trade law is a drastically diferent place from the mid-1990s when the practice basically boiled down to two things: the implementation of the North American free-trade agreement (NAFTA) and the operation of the World Trade Organization (WTO).

According to Boscariol, Canada has been signing a “spaghetti bowl of trade agreements” and joining trading blocs for the simple reason that lots of other countries seem to be doing it. “If we don’t, we will lose preferential market access that other countries are getting by way of these deals. So we’ve got to be at the party,” Boscariol says.

Since 2006, Canada has signed trade agreements with 39 countries. Prior to that year, Canada had trade agreements with only five countries.

The biggest surge has come over the past two years. Of course there’s the TPP, which was announced on Oct. 5. Then there’s the massive trade deal Canada announced with the European Union in August 2014, the Comprehensive Economic and Trade Agreement (CETA).

This surge in trade agreements has implications for the practice of trade law. Once upon a time, a Canadian trade lawyer’s advice could be limited to how a client needed to adapt to the rules created by NAFTA or the WTO. Now trade lawyers need to look at not only how a client needs to use the relevant trade agreements that govern the jurisdictions where that client does business, but also how all those various trade deals Canada has signed interact with one another.

“That being said, companies that take the time to understand this stuf and their markets will be able to take advantage of some real trade liberalization in these agreements. It just takes a little bit of efort,” Boscariol says.

As far as the TPP itself is concerned, the negotiation and arrival of the agreement generated some near-term work for trade lawyers — “but less work than people might think,” says Milos Barutciski, a leading Canadian trade law practitioner with Bennett Jones LLP in Toronto.

As bits and pieces of the agreement’s text dribble out into the public domain, trade lawyers have been able to provide some advice to clients on what the agreement accomplishes. This work will move into a diferent phase as the full text of the agreement emerges and various countries introduce local legislation to implement the deal.

There’s bound to be some political ducking and weaving as various governments go about ratifying and implementing the TPP. Governments have a crafty way of cooking up local environment, labour, packaging and marketing rules that might be outwardly pitched as health and safety measures but are really just non-tarif-based ways to protect local industries.

But Barutciski’s take on this work is that it’s just a prelude to the real business that is to come. And that business has to do with clients taking advantage of the TPP to expand their business into countries covered by the agreement.

“It’s good for business, for sure,” Barutciski says. “But not in the way that a lot of people think that it’s a complicated text and you have to spend lots and lots of time interpreting the complicated text.

“The real fun part comes with what the treaty’s supposed to do, which is open doors for Canadian companies outbound and foreign companies inbound.”

In years to come, historians can debate whether Harper’s legacy includes TPP.

Meanwhile, trade lawyers will rejoice at the bounty of work the deal heralds.