Federal trade minister Ed Fast has said almost nothing publicly for months about the most important trade deal going – the Trans-Pacific Partnership.
A few words in a recent speech revealed a lot about Canada’s negotiating posture.
“Our government continues to promote and defend Canada’s interests within the Trans-Pacific Partnership,” Mr. Fast said. “This is why we are at the table.”
Yes, Canada wants a foot in the door of this potential $28-trillion, 11-country free trade zone.
But it’s a decidedly defensive position. Ottawa is negotiating at a distinct disadvantage as it vigorously defends the steep wall of tariffs that protects Canada’s dairy and poultry industries from most foreign competition. It’s like a defenceman trying to play without a stick in his own zone.
Three countries in particular – the United States, Australia and New Zealand – want Canada to make significant concessions on dairy and poultry as the price for joining the TPP.
The trade agreement got a major lift last week when the U.S. Senate voted 65 to 33 to move ahead with a bill to grant President Barack Obama free rein to negotiate the TPP and other trade agreements. Canada and many other TPP members see passage of so-called Trade Promotion Authority – often called fast-track – as a vital precondition before they will put their best offers on the table.
The fast-track bill must also clear the House of Representatives.
If the TPP negotiations eventually stall, the significance of Canada’s defensive posture will be a moot point. Canada won’t have lost anything and it won’t have gained anything.
But if Mr. Obama secures fast-track authority in the coming weeks, the way could soon be cleared for a TPP deal later this year.
That would set up a big decision-day for Canada.
It’s not at all clear what concessions Ottawa would be prepared to make on dairy and poultry to join the TPP. Would Canada walk away from the deal just to save the supply management regime, while sacrificing the advantages of membership that would go to other sectors of the economy?
We don’t know, and the government isn’t saying.
Mr. Fast declined a request for an interview.
Turning its back on the TPP would be a watershed moment for Canada. The government has touted its pro-free trade agenda at every opportunity – proof, it says, that it’s doing everything possible to boost trade and create jobs. For decades now, Canada has been ready to do free trade deals with any willing partners.
When Canada joined the TPP in 2012, Prime Minister Stephen Harper said the agreement would diversify exports and create “jobs, growth and long-term prosperity for Canadian families.”
Just as importantly, the TPP is considered the new gold standard for global trade rules. More than just an effort to cut tariffs on goods, the deal would also regulate e-commerce, Internet communications, intellectual property, investments as well as labour and environmental standards.
The ultimate hope is that the TPP becomes such a potent rules-based trading club that China will feel compelled to join.
It’s hard to imagine Canada on the outside looking in.
As a trading nation, Canada has every reason to want to get this deal done. Roughly 30 per cent of the economy comes from trade. But it’s an area that has stagnated since the 2008-2009 financial crisis. Export Development Canada is forecasting no growth at all in merchandise trade this year.
And a study released last week by the Bank of Canada highlights a disturbing trend in global trade since the financial crisis. For decades the ratio of trade to global GDP has been steadily rising, a measure the bank calls the world’s “propensity to trade.” But the ratio has levelled off since 2008 due to rising protectionism, weak business investment and fewer incentives to grow trade as developing countries become less reliant on the developed world, according to the study.
Given all that, the lack of public comment on the TPP by either Prime Minister Stephen Harper or his trade minister is glaring.
TPP negotiators are in Guam this week, setting the stage for a possible meeting of trade ministers in late May.
If Mr. Obama has trade promotion authority in his pocket by then, the TPP negotiations could quickly come to a conclusion, with or without Canada.
Surely, Canadians deserve to know where their government stands.Report Typo/Error