Once again, Stephen Harper’s political fortunes are being held hostage by American domestic politics. First it was the Keystone XL pipeline. Now it’s the Trans Pacific Partnership (TPP).
The Prime Minister may soon have to choose whether or not to champion a TPP agreement that could end protection for dairy and poultry farmers – a very risky move politically – even though the United States might never ratify the treaty.
The Trans Pacific Partnership trade agreement, which would create the biggest free-trade zone in the world and which would make Canada a major player in the Pacific economy, should have been completed by the end of 2013. But that deadline came and went, and a round of talks in Singapore in February failed to seal the deal.
The biggest problem appears to be – quelle surprise! – agriculture subsidies, with the Americans demanding that the Japanese and Canadians open their market to agriculture imports. The Japanese are resisting and the Canadians aren’t going to surrender supply management, which protects the dairy and poultry industries, unless the Japanese lower their barriers as well.
If the Americans and Japan compromise – increasing quotas for Japanese agricultural imports, say, while still permitting some protection – then Canada will compromise too. Negotiators in other countries continue to hope and expect that all sides will come together, and that a TPP agreement can be signed later this year.
But the biggest problem surrounds the question of whether Congress will grant the Obama administration Trade Promotion Authority – or fast track, as it’s commonly called.
With fast track, the Obama administration will be able to submit a TPP agreement to Congress for a straight up-or-down vote. But many Democratic-friendly interest groups, such as unions and environmentalists, are opposed to the TPP and Republicans don’t want to give the President fast track authority just because they hate him so much.
This means the other 11 members of the TPP – Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Malaysia, Singapore, Vietnam and Japan – must decide whether to sign a TPP deal, even though there is no guarantee the U.S. signature will ever be ratified by Congress.
For Mr. Harper, that could mean surrendering protections on dairy and poultry, which will enrage many farmers in Ontario and Quebec, without knowing whether it is worth weathering the political storm.
Nonetheless, many leaders appear willing to reach a TPP deal even without an American fast-track approval. The reasoning, according to sources, is that if negotiators reach a good agreement, then agriculture, business and other powerful interests will work on Congressional leaders. Once the mid-term elections are out of the way, reason will prevail and Congress will ratify the TPP.
It’s a big risk for other governments to take, and especially for the Harper government. The Conservatives intend to campaign in the 2015 election on their economic record, citing trade agreements with the European Union and Korea as proof that the government is working hard to grow the economy.
A Trans Pacific Partnership agreement would be a huge boost to that agenda. But going into an election with the dairy and poultry farmers up in arms, and without knowing whether TPP will ever be implemented – that would be very courageous, Prime Minister.
As with pipelines, so with trade. Mr. Harper must wait to see whether the Americans will approve or veto his economic agenda. It must be frustrating, though he should be getting used to it by now.
John Ibbitson is a CIGI senior fellow, an award-winning writer and leading political journalist in Canada. Currently on a one-year leave from The Globe and Mail, John is researching, writing and speaking on Canadian foreign policy at CIGI while he works on a new book.