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“In the less than two weeks left in the election campaign it is impossible to work out how much help Canadian industries affected by TPP will need, and receive,” Robert Bothwell says (image by Chapendra via Flickr)

The Trans-Pacific Partnership explained

Canada and 11 other countries signed the Trans-Pacific Partnership this week but it’s unclear how much Canadians knew or understood about the deal.

The agreement lowers tariffs for those inside the trading bloc – covering about 40 per cent of the world’s gross domestic product. Each country still needs to vote on the deal, the details of which have yet to emerge.

Canadian dairy farmers and auto workers have been vocal in fighting against it.

U of T News writer Noreen Ahmed-Ullah asked international relations Professor Robert Bothwell and PhD candidate Tina Park to weigh in on what we know so far about the agreement.


How did Canada fare with the Trans-Pacific Partnership?

Robert Bothwell: On trade policy, the government admittedly has a tough situation. Canada relies on exports and has an obvious interest in opening as many markets as possible. In return, of course, Canada must open its own.

Although arguments for trade pacts are usually put in glowing, positive terms, the best arguments are in fact negative – what would be the consequences if Canada were left out? That was the case in the eighties, with US free trade, in the nineties, with NAFTA, and today, with the just-concluded TPP.

In the first two cases, and I believe also in the third, there were (and will be) some companies, and some industries, that will fare poorly. So, of course, will the Canadians employed in those industries. But with the Americans driving the negotiations on TPP it is hard to see how Canada could do anything but follow along.

Will Canada, on balance, do better out of the TPP? There are loud affirmative sounds from the government, but really these should be taken as statements of faith. In the less than two weeks left in the election campaign it is impossible to work out how much help Canadian industries affected by TPP will need, and receive. For example, will the government buy out Canada's dairy farmers, or pension them when or if their farms go out of business? The Harper government has a deserved reputation for flying by the seat of its pants when it comes to costing its promises; and it is even less reliable when it comes to implementing them.

Tina Park: The Trans-Pacific Partnership is an enormous achievement, covering 40 percent of the global economy ($28 trillion), with a combined population of 800 million people. Coupled with the Canada-Korea Free Trade Agreement, and the Comprehensive Economic Trade Agreement with the EU, Canada will gain preferential access covering 90 percent of our exports. The 12 countries of TPP are expected to grow even larger and account for 50 percent of global GDP by 2050. TPP is arguably the largest free trade deal in the world, with so much room for competition and growth.

A lot has been said in the media on what Canada might lose, particularly dairy and auto parts. We should remember that the final text for the TPP won’t be public for some weeks, and no one in the public knows much about the full implications of TPP yet. We have two years for all signatories to approve the deal, which will give plenty of time for debate, discussion, and parliamentary approval. The 2.5 percent allowance for dairy imports is very moderate and Ottawa will be spending $4.3-billion over 15 years to compensate dairy, chicken and egg farmers.

Provinces will also have a role in ratification, especially on pharmaceutical, environmental and labour issues. Increased market access will increase our competitiveness and productivity, which in turn will lead to higher GDP and higher incomes to Canadians.

In the globalized world we live in today, TPP has much to offer for advancing Canadian national interests and it will be up to Canadian businesses to be innovative and actively seize the opportunity.

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