Trade deal looms over vote
But NDP say they won’t be bound by Trans-Pacific Partnership
The federal government appeared poised late Sunday to sign on to a sweeping Trans-Pacific Partnership trade deal that’s been years in the making for Stephen Harper’s Conservatives.
But locking down the last details of the mammoth economic agreement was proving elusive, and when the controversial deal is finally done, it could carry significant political implications in the home stretch of the election campaign.
Trade ministers meeting in Atlanta expected to wrap up negotiations Sunday. However, talks dragged into the night as all sides tried to iron out last-minute concerns. A late sprint toward agreement turned into yet another marathon negotiating session, as a few lingering issues, including Canadian dairy, repeatedly delayed an announcement of a deal.
Insiders told The Canadian Press negotiators had been haggling about how much foreign butter, condensed milk and other dairy products should be allowed into Canada. The Conservatives have been trumpeting the proposed agreement of 12 Pacific Rim nations as a boon to the Canadian economy and another example of why they are the only party that should be trusted to run the country as voters head to the ballot box in two weeks.
Tom Mulcair’s NDP is promising a New Democrat government wouldn’t be bound by the contents of the “secret agreement,” and is campaigning heavily against expected parts of the deal in hopes of shoring up support in Quebec and Ontario.
Liberal Leader Justin Trudeau has criticized Harper and the Conservatives for being too secretive about the negotiations and failing to tell Canadians what’s at stake with an agreement. He hasn’t gone as far as Mulcair in expressing concerns with what’s potentially in the deal or if the next government would be tied to its terms.
The agreement is meant to reduce or remove tariffs and other barriers on sectors across the economy and potentially increase Canadian exports in a wide variety of products and services, including beef, pork, canola, wines and spirits, and seafood, among many others.
However, several parts of the deal are contentious. They could increase imports into Canada, including on automobiles and auto parts, and dairy products, which could benefit consumers but potentially hurt these two sectors of the domestic economy.
While the agreement will have a huge economic impact on Canada in the coming years, there could be political fallout in the coming days.
Ontario, home of Canada’s auto sector and second-largest number of dairy farms (about 4,000), also holds 121 of the country’s 338 seats; Quebec, with its 78 federal seats, is home to the largest number of dairy farms in Canada (about 5,900).
The federal government has promised not to break up Canada’s supply management system, which hands dairy and poultry farmers production quotas and protects them behind a tariff wall from foreign competition. There are approximately 12,000 dairy farms in Canada.
The supply management system is crucial to Canada’s agricultural sector and helps keep many family farms operating, but it forces consumers to pay higher prices for milk, butter and other dairy products.
The system supports 215,000 jobs and contributes about $19 billion to Canada’s GDP and $3.6 billion in taxes. However, the Conference Board of Canada says dairy production quotas cost the economy $28 billion per year.
Dozens of upset dairy farmers parked their tractors and walked their cows in front of Parliament Hill last week to protest the trade deal, known as the TPP for short, and what they fear is the government’s willingness to open up the supply-managed dairy sector that could lead to a flood of foreign milk imports into Canada.
Some TPP countries, notably New Zealand and the United States, have been pushing for greater access to Canada’s dairy market. Harper has promised he would not sacrifice Canada’s supply management sector.
The Conservative leader, however, has cautioned in the past couple of weeks that Canada’s automotive industry might not be happy with parts of the TPP.
Canadian auto parts manufacturers and Unifor, the country’s largest private-sector union, have raised concerns the agreement could allow Japanese auto companies to export cars to North America with significantly less North American content than is currently required.
Japan has been pushing to allow for the duty-free movement of vehicles and auto parts containing as little as 30 per cent content produced in TPP countries. Canadian auto parts makers, meanwhile, are worried they will lose business to low-cost Asian producers that aren’t part of the trade deal, such as China and Thailand.
NAFTA rules up to now have stipulated that cars must have 62.5 per cent North American content for finished vehicles and 60 per cent for auto parts to be sold tariff-free in Canada, the U.S. and Mexico. The proposed TPP deal was expected to see potentially 45 per cent domestic content rules for cars and 35 per cent for parts.
Unifor national president Jerry Dias has said a completed TPP will devastate Ontario’s auto parts manufacturers.
The manufacturing of vehicles and auto parts contributes roughly $20 billion to the country’s GDP and directly employs 120,000 people, not including spinoff jobs, according to a 2014 report from the Automotive Policy Research Centre at McMaster University.
Sensing some Conservative vulnerability on the issue, and hoping to regain lost ground in the polls, Mulcair has seized on the TPP issue and insisted an NDP government would not be locked in to its terms.
“The NDP, when we form government on Oct. 19, will not be bound by this secret agreement that Mr. Harper has been negotiating,” Mulcair said Sunday at a campaign stop in Brantford, Ont., part of a TPP-focused whistle-stop tour of Conservative ridings in southwestern Ontario through province’s agricultural and industrial heartland.
The 12-country TPP — which includes Canada, the United States, Japan, Mexico, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam — represents a market of nearly 800 million consumers and almost 40 per cent of the global economy, with a combined GDP of about $28.5 trillion.
The TPP agreement is expected to surpass the North American Free Trade Agreement (NAFTA) in economic importance to Canada and includes two of the world’s three largest economies (the U.S. and Japan).
The agreement must be ratified by parliaments in each country, which could prove a serious challenge and take several years to complete.
“It has become clear that your government’s continued negotiation in the TPP during this campaign is not in the best interests of Canadians,” Mulcair said in a letter sent Friday to International Trade Minister Ed Fast.
“You have no mandate to make concessions that could put thousands of well-paid Canadian jobs and the communities that depend on them in peril. While other governments have been upfront with their citizens and legislators about what is on the table during TPP talks, your Conservative government has kept Canadians in the dark.”