Pacific pact could affect U.S. imports to Canada

OTTAWA — American imports into Canada could fall by $3.3 billion under the rebooted TransPacific Partnership, the federal government has concluded, sparking fears it could hurt the NAFTA renegotiation.

The text of the 11-country Pacific Rim trade deal — a pact U.S. President Donald Trump pulled the U.S. out of last year — was released Tuesday, but a Global Affairs Canada analysis delves into the impact on the North American Free Trade Agreement talks, which are to resume in five days.

The Trump administration has blasted trade deficits with Canada as an underlying reason for wanting to renegotiate or tear up NAFTA. The Canadian government rejects that position, saying the statistics don’t back the U.S. deficit assertions. But the most recent analysis of the new TPP — known by the acronym CPTPP — predicts lower U.S. imports into Canada.

“Under the CPTPP, Canadian exports to the United States are not expected to change significantly as the United States is not party to the CPTPP. However, there would be a decline in imports by Canada from the United States, resulting from erosion of U.S.’s NAFTA preferences in the Canadian market,” the analysis says. “Total Canadian imports from the United States are projected to fall by $3.3 billion, led by a decline in automotive products imports.”

Flavio Volpe, the president of Canada’s Automotive Parts Manufacturers Association, says that will hurt Canada at the upcoming NAFTA round.

“The report states that U.S. imports into Canada would drop $3.3 billion, mainly in automotive. If true, that is a gap smart U.S. negotiators could then be seeking to close in NAFTA 2.0,” said Volpe.