Partnership is the new ‘gold standard’
TPP agreement has some critics but most experts feel it’s a good deal
OT TAWA It will take years before the benefits of the Trans-Pacific Partnership, and its possible drawbacks, find their way into the Canadian economy.
One thing for sure is that much of what we gained from the North American Free Trade Agreement, which came into effect in 1995, will be superseded by the new 12-nation TPP — whenever member nations finally sign off on the pact.
That could still be a least a couple of years down the road, according to the Canadian government.
But if other international trade deals are any indication, don’t hold your breath — timing isn’t always everything when it comes to multinational agreements. Nor are the details of these international negotiations usually readily accessible at the time they are inked.
After all, the Comprehensive Economic and Trade Agreement, unveiled in September 2014 by Canada and the European Union, remains a work in progress, awaiting member ratification. And we’re still waiting for the influence of Canada’s free-trade pact with South Korea — this country’s first major foray into the Asia-Pacific market — to be felt, even though it officially took effect in January.
But the TPP represents a huge rewrite of international trade engagement for Canada. Business and industry groups — such as the Canadian Chamber of Commerce and Canadian Manufacturers & Exporters — were quick to endorse the deal announced at the start of last week, despite few details on how their members would actually benefit from the TPP.
The full agreement is still under wraps, although Trade Minister Ed Fast promised last week to release a provisional copy of the deal in the next few days.
But some of the more contentious issues — lower thresholds for Canadian content rules in the auto industry and government concessions on financial assistance to the dairy and poultry sectors — had been telegraphed during previous TPP sessions.
Even so, the broad strokes delivered in Atlanta last week did little to calm concerns of many at the centre of the trade debate.
Jerry Dias, president of Unifor, the Canadian labour union, said “the TPP poses a significant threat to Canada’s auto industry.”
Federal negotiators “had their chance to champion the auto industry and failed,” he said.
Few others have openly balked at joining the new fold, which is nothing short of being the world’s biggest deal on exports — which includes the increased exchange of intellectual property and services of all kinds.
“Unifor aside, criticism has been muted,” acknowledged a government official close to the final talks this week in Atlanta.
“I think people recognize how important this deal is for Canada and that, at the end of the day, TPP strengthens our trading relation- ship with NAFTA partners and beyond,” the official said.
“It’s a new preferential trade zone and anybody who’s a Canadian exporter can take advantage of it. But it’s up to industry to decide what agreement they want to take advantage of. If there was a void, NAFTA (provisions) would still apply 100 per cent.”
The TPP “is a major deal for Canada. And not something that we should turn our back on by any means. I think we should embrace it,” said Lawrence Herman, an expert in international trade law.
Next to agreements under the World Trade Organization, “I would suggest this is the biggest deal on the planet.”
“The TTP will supersede all bilateral agreements we have, where there’s a conflict. We’ll retain our rights under the NAFTA where any NAFTA agreements are superior to the TPP provisions. And they haven’t set those out in any detail,” Herman said.
“But I think that most of the provisions in the TPP will be superior.”
For one, access to the U.S. procurement process will exceed the levels agreed to in NAFTA. “Canadian companies will obviously get additional preferential bidding opportunities for U.S. procurements,” Herman said.
Forget WTO, Herman added, TPP will become the “gold standard” of global trade.
Danielle Goldfarb, director of global commerce at the Conference Board of Canada, agreed this agreement is “a bit more ambitious in terms of its liberalization.”
But NAFTA “essentially remains in place unless these other aspects of the deal are more ambitious,” she said. “So, if Canada and the U.S. have no tariff between them in a particular sector (now), then Canada and the U.S. will not have tariffs between them in that particular sector under the TPP as well.”
Still, she adds, the TPP “gets into all kinds of areas, like investment and services, data flows and ecommerce, and all kinds of labour mobility (issues) and so on — many areas that go beyond what already exists in NAFTA.”
David Watt, chief economist at HSBC Bank Canada, said the TPP represents “the next generation of trade deals that cover more than just trade.”
“NAFTA was a trade deal. It basically dealt largely with merchandise and trade. Now we’re seeing these trade deals evolve into issues of services, skills recognition, migration trends and things like intellectual property — which might not have been serious concerns in the past,” he said.