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Politics Harper says auto industry won’t like everything in Pacific trade deal

Conservative Leader Stephen Harper speaks during The Globe and Mail leaders' debate in Calgary on Thursday, Sept. 17, 2015.

Sean Kilpatrick/The Canadian Press

Stephen Harper is telegraphing that Canada's auto-parts sector will find something to dislike in a massive Pacific Rim trade deal in the making – one that his government is negotiating during the middle of the federal election campaign.

For full Globe coverage of the debate, click here.

It was a remarkable acknowledgment from the Conservative Party chief during the second party leaders' debate in Calgary Thursday night, an event hosted by The Globe and Mail.

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An U.S.-led effort to land a Trans-Pacific Partnership deal within weeks is under way, raising the prospect this wide-ranging agreement among 12 countries could dominate the final stretch of the Canadian election campaign.

Chief negotiators for all participants, including Canada, will begin meeting in Atlanta on Sept. 26, and trade ministers will join them next week, possibly Sept. 30, The Globe and Mail reported this week, citing a Canadian government official.

The Atlanta round of talks means chances have suddenly increased tremendously that Canadian voters will be confronted with a sweeping trade deal before they have chosen a new government.

The costs of entry to the Trans-Pacific Partnership could include exposing the Canadian auto-parts sector, which employs 80,000 people, to far more foreign competition and eroding the preferential position the industry enjoys under the North American free-trade agreement (NAFTA).

It could also cause headaches for dairy farmers by opening their sheltered industry to significantly more outside imports.

On Thursday, Mr. Harper acknowledged a deal is near and defended his determination to remain at the Trans-Pacific Partnership table.

He rejected the idea of walking away, saying this would mean all Canadian businesses would be left out of the accord and the preferential trading network it would create between countries comprising 40 per cent of annual economic output.

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"We're entering the final stages of a trade discussion in the Asia Pacific that I think frankly is going to conclude successfully, that is going to be the basis of the global trade network in the Asia Pacific for the generation to come," the Conservative Leader said Thursday night at the debate.

"What I say to the auto sector in particular, I'm not suggesting they will necessarily like everything that is in that, but what I am saying is we simply cannot afford as a country to have our auto sector shut out of global supply chains. That would be a disaster.

"We're going to make sure we get the best deal for that and all of our sectors, but we are committed as a government to making sure we do not fall behind in our access to a global trading economy which is so integrated. If we do that, that would be disastrous for this country."

NDP Leader Thomas Mulcair raised alarm following the debate at Mr. Harper's comments about the auto sector and the TPP deal.

He questioned whether the Conservative government has the authority to cut any trade deal during the campaign.

"Now he wants to jeopardize 80,000 new jobs in the auto-parts manufacturing sector. We are very concerned with his attitude."

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Mr. Harper wants a deal he can brandish as evidence he is working to create jobs and spur growth.

Mr. Mulcair has said a New Democrat government would seek better protection for the Canadian auto sector in a deal.

Liberal Leader Justin Trudeau has criticized the Conservatives as too secretive about what is being negotiated.

"Canadians need to have confidence that their government is being honest with them, being open and transparent about the kinds of issues that we're going to have to make possible concessions about."

But it was the head of Unifor, which bills itself as Canada's largest private-sector union, that had the most scathing critique of Harper.

"It just blew us out of the water. You've got Ed Fast, the trade minister, saying that he's not signing a trade deal that's going to negatively impact the auto industry, and you have Harper saying just the opposite," said Unifor President Jerry Dias.

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"Harper is the world's most incompetent negotiator."

"He just told Japan and the United States, 'Do whatever it is you wish, because I need a deal under any circumstances because of this federal election.' He threw in the towel," said Dias.

Washington and Tokyo, the two most influential players in the 12-country negotiations, are behind this effort to conclude a deal. The United States is trying to establish a North American-style trading and investment regime for commerce in Asia that becomes the dominant standard and acts as a counterweight to Chinese influence in the region.

An agreement in principle, if reached in Atlanta, would need to be fleshed out and ratified by all countries, including whichever party forms the government in Canada after the Oct. 19 federal election.

The drive for a deal comes in the middle of an election campaign, when Ottawa is being run in caretaker mode until a new government is elected. But the Privy Council Office, the bureaucratic support arm of the Prime Minister's Office, released guidelines in August that justify Trade Minister Ed Fast's presence at the talks, saying that to skip negotiations "could negatively impact Canada's interests."

A deal would eclipse NAFTA in importance and would expand copyright and patent protections for drugs, place constraints on how state-owned companies and sovereign wealth funds conduct themselves and open up traditionally protectionist Japan to more foreign commerce.

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A late July effort in Hawaii to complete a deal hit a wall after Canada and Mexico balked at domestic-content rules for vehicle imports set by Washington and Tokyo that would allow cars to have far more foreign parts before tariffs must be paid.

Files from The Canadian Press were used in this report

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