Compromise on autos drives TPP deal closer
Canadian unions and Ontario fear job losses after reports of agreement on car production
OTTAWA— Negotiators from Canada and other countries trying to hammer out a Pacific Rim trade deal in Atlanta appear to be inching closer toward an agreement after a compromise on auto trade, a key sticking point for Canada in the high-stakes talks.
The agreement on autos, which could cause an upheaval in auto manufacturing in Ontario, fuelled expectations that a pact to create the 12-member Trans-Pacific Partnership (TPP) was within reach after years of gruelling horse-trading.
Talks were expected to continue Saturday, with a press conference scheduled in the afternoon.
Details remained scarce at the closed-door negotiations. However, the Japan Times reported Canada, Mexico, Japan and the U.S. had overcome differences on so-called rules of origin governing whether vehicles can be exported within the trade zone without duties.
“We are making good progress in trying to conclude those negotiations,” International Trade Minister Ed Fast, who is taking part in the talks, told reporters Friday.
“There’s still some work left to be done. But we’re optimistic that issue can be solved and we’ll have an outcome that will support our Canadian auto sector and ensure its long-term viability in Canada.”
Under TPP rules, member countries would be allowed duty-free export of cars within the TPP even if the cars have a lower percentage of domestic parts than under the North American Free-Trade Agreement.
Some auto parts producers have said the TPP will provide valuable access to Asian markets. But Unifor, which represents autoworkers, says the deal would allow Japan to source parts for cars being exported to North America from low-wage coun- tries, such as China, to the disadvantage of Canadian vehicle-makers. Up to 26,000 jobs could disappear in Canada as a result, the union estimates.
All indications are that a TPP deal, if reached, would stir controversy on a range of issues. Those include drug costs, farming and measures allowing corporations to sue governments if they have interfered with a business’s ability to operate profitably.
Measures in the TPP would entrench patent protection rights for pharmaceutical companies by effectively slowing the creation of cheaper generic copies and possibly barring governments from buying pharmaceuticals in bulk to reduce costs. Some would-be TPP members were still haggling Friday over a separate drug issue — monopoly protections for developers of new biologic drugs.
The U.S., Australia and New Zealand have been pushing for greater access within the TPP to protected agricultural markets. As a result, Ontario and other provincial governments are concerned the TPP will open the dairy sector here to more imports and undermine the system of supply management.
Cabinet ministers from Liberal governments in Ontario, Quebec, Nova Scotia and New Brunswick were in Atlanta earlier this week to press federal negotiators against opening the dairy sector to foreign competition.
The federal government has promised to maintain the supply-management system but isn’t ruling out more imports. That was underscored this week when the outgoing agriculture minister, Gerry Ritz, hinted at possible compensation for farmers whose livelihoods are impacted by changes in Canada’s agricultural protections.
The timing of the TPP talks has made the negotiations an issue in the Oct. 19 election campaign. If an agreement in principle is reached, Conservative Leader Stephen Harper will play it up as part of his economic strategy.