No special treatment for Americans if they rejoin Trans Pacific trade deal
OTTAWA — The United States will receive no preferential treatment if it decides it wants to rejoin the sweeping Trans-Pacific Partnership that Canada and its 10 countries signed Thursday, said a senior Canadian trade official.
The signing of the new 11-country TPP marked the culmination of a massive salvage operation that kicked into gear after U.S. President Donald Trump pulled the United States out of the deal after he was sworn into the Oval Office last January.
“The United States will not receive any fast-track access to this agreement if they choose to return one day,” a senior Canadian trade official told a teleconference from Santiago, Chile.
Despite the president’s repeated attacks on a trade deal that he said was unfair to Americans, senior Trump administration officials have said recently they’re looking at ways to possibly rejoin the pact. That may not be so easy. The new TPP, known as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, or CPTPP, contains 22 provisions that were suspended from the original 12-country agreement, which included the U.S.
Under the terms of letting new members into the CPTPP, all 11 members would have to agree to lift those suspended provisions.
“Whether they’re a carrot or a stick depends on the eyes of the beholder,” the official said during a technical briefing for the media.
“If the United States were to indicate to us seriously that they were prepared to enter into discussions with us to enter into the CPTPP, those suspended provisions would not be automatically lifted simply by them expressing their interest in joining.
“That gives us all some leverage around the table in terms of negotiating the potential terms of the United States coming back.”
International Trade Minister Francois-Philippe Champagne was in Chile to sign the CPTPP on Canada’s behalf.
He travels to Paraguay today to announce the start of free trade talks with the four-country Mercosur group of South American countries, which also includes Brazil, Argentina and Uruguay.
Champagne’s spokesman Joseph Pickerill said those negotiations could begin in earnest in the next 10 days.
The progress on both deals is a sign that Canada’s efforts to diversify its international trade portfolio have paid off in the face of growing uncertainty with its top trading partner, the United States, said Pickerill.
This week’s inroads into the Pacific Rim and South America come as Trump threatens to levy stiff tariffs on steel and aluminum, and with persistent uncertainty continuing to plague the renegotiation of the North American Free Trade Agreement.
Canada was able to win exemptions on digital content in the renegotiated TPP, but the government has faced heavy criticism from Canadian auto workers and manufacturers for signing side deals with Japan, Australia and Malaysia on automobiles.
Champagne defended those side deals, saying they reduce trade barriers that will provide benefits to Canadian automakers. It will also provide a dispute settlement mechanism with Japan, he said.
The new TPP will give Canada access to a market of 1.7 billion people, comprising 13 per cent of the world’s gross domestic product.
Mercosur is much smaller — just 260 million consumers — but would deliver Canada a deal with Brazil, the biggest country in the Mercosur bloc, which also includes Argentina and Uruguay.
Pickerill said the Mercosur countries “are keen on Canada’s approach to trade, and are prepared to do a more comprehensive deal than was ever on the table in the past.”
But striking a deal with Mercosur won’t be easy, said Carlo Dade, an expert on Latin American affairs with the Alberta-based Canada West Foundation.
That’s because Brazil and Argentina have been reluctant to talk free trade with Canada in the past, and though they’ve opened the window, uncertainty remains, he said.
Potential irritants with Brazil include its likely demands for greater access for its beef into Canada, and the ongoing aerospace dispute between Canada’s Bombardier and Brazil’s Embraer, he added.
“This is going to be a tough negotiation. Brazil is a large market, so is Argentina,” said Dade. “With Argentina, it’s a small window. It’s a soap opera that changes every week. And this week we’ve got a government that wants to talk to us.”
Argentine President Mauricio Macri has imposed unpopular austerity measures in an attempt to stimulate a stalled economy and attract foreign investment.
He won power in 2015, unseating Cristina Fernandez, who — along with her ex-vice president — is embroiled in a corruption scandal after eight years in power.