Canada's long-drawn-out federal election campaign has become entangled with the 12-sided Trans-Pacific Partnership negotiations, which failed to reach an agreement in Hawaii at the end of July. At this rate, with an unpredictable three-sided election in this country, it would be best for Canada if the trade talks did not resume until November, when we will know who the governing party is and when it has had a chance to catch its breath.
Only a few ridings would be directly affected by Canadian supply management in the dairy industry, but in a potentially close-run race, any one constituency could skew the Canadian negotiating position, possibly even disturbing the TPP negotiations as a whole.
The talks have already been upended by a side deal that affects Canada. The 12 countries involved have 40 per cent of global GDP, but the United States and Japan are two of the three largest economies in the world. So it is not surprising that the U.S. is particularly eager to accommodate Japan to make TPP work, as part of American "grand strategy" – even at the expense of its partners in the North American free-trade agreement, Canada and Mexico.
The Japanese want as much access as they can get to lower-cost, imported automobile parts from outside the TPP area, so the U.S and Japan have agreed with each other to let into their respective countries as much as 50 per cent of car content. Mexico and Canada, both with big auto industries, want no more than 30 per cent access for other countries.
In principle, it would be best to have as much access as possible to supply chains for car parts and other goods, for the sake of the end-users. But, to put it mildly, consumer sovereignty does not always prevail in trade negotiations.
The TPP began with sweeping ambitions for trade liberalization. It is not astonishing that the eventual treaty will probably be as convoluted as other trade agreements – and will still be beneficial, overall.
Little, however, is likely to be achieved until after Oct. 19. That's probably not such a bad thing.