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Japan's Prime Minister Shinzo Abe gestures as he gives a keynote address at Japan Summit 2014 hosted by the Economist magazine in Tokyo April 17, 2014. (YUYA SHINO/REUTERS)
Japan's Prime Minister Shinzo Abe gestures as he gives a keynote address at Japan Summit 2014 hosted by the Economist magazine in Tokyo April 17, 2014. (YUYA SHINO/REUTERS)

Why the next election could be fought on trade Add to ...

If Barack Obama and Shinzo Abe can hammer out a deal on agriculture subsidies this week, then next year’s Canadian election could be the first in a generation in which trade is a key issue, with Stephen Harper favouring the Trans Pacific Partnership (TPP) and Thomas Mulcair and (possibly) Justin Trudeau opposing it.

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That’s an awful lot to cram into one sentence. So let’s unpack it.

You’ve almost certainly heard about the Trans Pacific Partnership talks, which involve Canada and 11 other Pacific nations, including the United States and Japan. Negotiations have been dragging on for years, but all sides are keeping at it because of the enormous potential: the countries involved account for a third of the world’s trade.

Things are at a make-or-break stage, and this week could prove decisive. All parties have generally agreed to broad tariff reductions, limits on the abilities of governments to favour local suppliers and increased protections for intellectual property. The devil in the details is Japan, which refuses to lower tariffs on agricultural products and automobiles. The Americans are insisting on greater access.

Various media, including the Japan Times, reported over the weekend that the two sides are approaching a deal on rice and wheat, in which the United States would grant Japan some continued protection in exchange for a gradual increase in import quotas. Talks on the remaining issues resumed Monday, and on Thursday President Obama will meet with Prime Minister Abe in Japan. Both sides would like to announce something – if not a complete agreement, then at least a substantial breakthrough.

For its part, Canada is seeking to preserve the supply management system that protects the dairy and poultry industry within the TPP. But if Japan agrees to lift agricultural tariffs, Canada will have no choice but to do so as well. There will no doubt be ample time provided to phase out dairy and poultry quotas, along with financial compensation, but the Conservative government, if it must choose between protecting supply management and signing the TPP, is almost certain to sign the TPP, for reasons of politics as well as policy.

Stephen Harper wants to campaign in the next election on his economic record. Landmark trade deals are integral to that record. The government has already negotiated an agreement with the European Union and last month announced a free trade agreement with Korea. Adding a Trans Pacific Partnership accord would bring the total of countries that have signed new free trade agreements with Canada in the last year to 40.

There is irony in this. It has long been the dream of progressive thinkers to wean Canada from its excessive dependence on trade with the United States. With the TPP, the Conservatives might actually pull it off.

But governments of all stripes in Canada have traditionally shied away from angering dairy and poultry farmers. Supply management is bound up in Canada’s historic attachment to agriculture. Many Baby Boomers had parents or grandparents who worked the land. People saw value in preserving the family farm. And dairy and poultry farmers vote. Angering them could cost a party seats in eastern Ontario and in rural Quebec.

But the ties to the land are dissolving. Millennials feel less attachment to their family’s agricultural legacy than did their parents or grandparents. The millions of immigrants who have come to this land in the past two decades are mostly from Asian and Pacific nations. The old settler-culture myths mean nothing to them. Enmeshing Canada within the Pacific region that most of them hail from means much more.

For the Conservatives, the political stakes of abandoning supply management are relatively low. Many of the affected farms are in rural Quebec, where there are no Conservative MPs. Signing on to the TPP might cost the Conservatives a couple of seats in Eastern Ontario, but Cheryl Gallant, for example, is safe in Renfrew-Nipissing-Pembroke no matter what happens to the dairy farmers in her riding. The political costs for the Tories should be marginal.

And the potential political gains could be enormous among suburban, middle-class voters, especially immigrant voters, who will support expanding trade opportunities. Suburban Ontario voters decide federal elections, which is why the opposition parties should be supporting the TPP as well. But they might not, because for them the political calculation is different.

The New Democrats could never endorse the TPP. Those Quebec dairy and poultry farmers are in ridings held by the NDP. There is no way the party would ever support dismantling supply management.

Justin Trudeau knows that to win the next election he must minimize the Conservative advantage on the economy. That’s why the Liberal Leader supports the recent trade agreement with the European Union.

But the TPP is different. The Liberals are determined to expand their base in Quebec. That means winning seats in rural Quebec. That means protecting supply management.

Would Mr. Trudeau be prepared to sacrifice those potential Quebec gains for the sake of attracting suburban Ontario voters by supporting the TPP? Logic suggests yes. But the Liberal Party’s DNA is rooted in its Quebec base. This will be no easy decision for Mr. Trudeau.

An election in which both the Liberals and the NDP opposed a Pacific trade agreement while fighting over Quebec seats that Conservatives could never hope to win anyway – even as Mr. Harper promotes the new trade deal in suburban Ontario as further proof that only he can be trusted to manage the economy – is not the worst scenario for a governing party seeking a fourth mandate and trailing in the polls.

The TPP won’t decide the election. But it could be a useful Conservative wedge. And in any election, a useful wedge is worth its weight in gold.

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.

Along with other CIGI experts, Mr. Ibbitson will be contributing at www.cigionline.org/blogs, where this post was originally published.

Follow on Twitter: @JohnIbbitson

 

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