On Tuesday, as Stephen Harper arrives in China, a delegation from Japan begins talks in Washington that could affect Canada’s trading future far more than anything that gets signed in Beijing.
The Japanese badly want to join the Trans Pacific Partnership, an ambitious set of trade negotiations between the United States and eight other Pacific nations that have gone far farther, and faster, than most observers expected. Australian Trade Minister Craig Emerson said last week that he expects to see “something substantial – not a finalized agreement, but substantial – by around July.”
That doesn’t leave much time for the Japanese to get in, or for Canada, either. This country is also eager to join the TPP.
But membership has its costs, and some may not be aware how high those costs could be.
All nine member countries within the TPP talks — the United States, Australia, New Zealand, Chile, Peru, Malaysia, Vietnam, Singapore and Brunei — must agree before any country can join the talks at this late stage. The Japanese are in Washington to secure the Obama administration’s support, but the Americans are demanding a very high price.
They want Tokyo to scrap regulations that keep American cars out of the Japanese market. They want the Japanese to eliminate their prohibitive tariffs on rice and other agricultural imports. Assistant U.S. Trade Representative Wendy Cutler has declared that her country will tolerate no exceptions if Japan wants America’s support for entry into the TPP. The Japanese, desperate to revive their flagging manufacturing sector, appear willing to agree.
If that’s what the Americans want from the Japanese, it’s easy to project what they will want from Canada: an end to the supply-management system that protects dairy and poultry products; an end to restrictions on foreign investment in banks, telecommunications firms, cultural industries and airlines. The talks also aim to harmonize intellectual-property laws.
One senior official, speaking on background, suggested that Canada’s signature on a TPP treaty would amount to a whole new free trade agreement between Canada and the U.S., stripping away all of the protections the Mulroney government secured in the original talks, with all the other members of the TPP having access as well.
And if that weren’t enough, Nkenge Harmon of the Office of the United States Trade Representative, pointed out in an e-mail exchange that the administration would “want to ensure we have Congressional support … before finalizing a decision about Canada's entry.”
What are the chances that the Harper government would agree, even in principle, to scrap supply management, eliminate restrictions on foreign investment – when the Prime Minister himself said recently that he doesn’t want to see foreign ownership of such sensitive companies as Research in Motion – and surrender sovereignty over copyright law, all for the sake simply joining the TPP talks? One is tempted to reply: zero.
Yet officials remain optimistic. International Trade Minister Ed Fast is jetting off to Malaysia, Brunei and Singapore this month, followed by Vietnam in March, to secure the consent of those TPP members. As for the U.S., the Canadians are confident that it would be geopolitically unthinkable for the U.S. to support Japan’s admission to the TPP while opposing Canada’s.
And on the question of concessions, officials say the government is prepared to put everything on the table, but only after Canada actually gets admitted to the TPP table.
Whatever happens, if the TPP turns out to be as ambitious as everyone involved says it is, joining it would end decades of protection in sectors of the economy that no Canadian government has ever dared tamper with. It will be a brave prime minister who signs his name to such a deal.