Derek H. Burney was Canada's ambassador to the United States from 1989 to 1993 and directly involved in negotiating the Canada-U.S. free-trade agreement. He is co-author of Brave New Canada: Meeting the Challenge of a Changing World.
After weeks of wrangling, the U.S. Senate voted this week to approve fast-track authority, enabling President Barack Obama's administration to bring a concluded Trans-Pacific Partnership (TPP) agreement to a clean up-or-down vote in Congress. Without this authority, any agreement could be subjected to amendments by Congress.
Mr. Obama had to rely on heavy support from Republicans in the House and Senate in order to override stiff opposition from most of his own party, including Senate Minority Leader Harry Reid and House Minority Leader Nancy Pelosi. Depending on the final round of negotiations and last-minute tradeoffs in Congress over related issues – assistance packages for workers, currency manipulation concerns, measures to enhance the Commerce Department's power to counter alleged trade violators – the final vote could come as early as this fall, or lag into 2016. In Washington, "it is never over till it is over – and even then…," as former secretary of state George Shultz once observed.
This timing is a critical concern for Canada, as concessions on supply management programs for dairy and poultry producers are almost certain to feature in the final negotiating round. This will be a sensitive election issue in some directly affected rural ridings in Quebec and eastern Ontario. While these programs are staunchly supported by the farmers who benefit, supply management is widely seen as detrimental to the interests of consumers and food processors in Canada. Nonetheless, it has persistently garnered all-party support in Parliament, benefiting from one of the most successful lobbying efforts ever.
The Conservatives will undoubtedly contend the benefits of a trade liberalization agreement covering 40 per cent of the global economy outweigh the costs of adjustment for a country highly dependent on open trade. Canada's motives from the outset have been primarily defensive – to preserve and, where possible, improve the preferential access we have under the North American free-trade agreement while opening new access for our exporters in key Asian markets. The economic arguments in favour are inevitably more salutary than the political arguments.
Other countries, such as Japan, also have sensitive sectors they wish to protect. The United States itself is no stranger to supply management practices and hefty subsidization of some of its own agricultural products, so the final round of negotiation will involve the most difficult tradeoffs.
Canadians may wonder about the efficacy of concluding another major trade deal with the United States when the current administration fails to live up to its obligations under existing agreements – undermining energy export flows, unilaterally discriminating against meat imports and implementing blatant Buy America protectionism. But on balance, Canada would be better off as party to a regional trade pact than it would be on the outside looking in. At least it would give us additional leverage to deploy against the United States in the company of other signatories to TPP.
The New Democrats have never had a problem objecting to trade liberalization deals and will undoubtedly oppose TPP, if only to preserve a few rural seats in Quebec. The Liberals may straddle the issue until the fine print is revealed, but they may confine concerns to TPP's details rather than its principles. They did oppose NAFTA, at least until they were elected. For the Conservatives, the timing of an ultimate agreement may be awkward. But success on TPP would make trade expansion a significant plank in their campaign platform, along with the Comprehensive Economic and Trade Agreement with Europe and the Canada-Korea free-trade agreement.
The main procedural obstacle in Washington has been overcome, although some hooks may still surface in Congress. As the Wall Street Journal reported, Mr. Obama's victory on fast-track authority "kicks off a gruelling, months-long process to complete a Pacific trade pact that still faces domestic opposition and must win final congressional approval."
The debate has been acrimonious in Washington, but TPP has played out with little public attention or concern thus far in Canada. Now, as we enter the home stretch, it's crunch time for the negotiators and their political masters. It's time for a careful calculation of whether what we stand to gain will override the cost.