USA May Cut Canada out of Pac-Rim Deal Reports Say

[Warhippy]

http://www.cbc.ca/news/business/u-s-may-cut-canada-out-of-pacific-rim-trade-deal-sources-1.3147300

The United States, frustrated over the lack of progress with Canada over new rules for agriculture trade, is weighing "contingencies" that could include completing a Pacific Rim trade pact that excludes Canada, according to two sources familiar with the issue.

One official familiar with the 12-nation Trans-Pacific Partnership trade negotiation said Canada is not coming forward with plans to lower its barriers to agricultural trade.

Meanwhile, several U.S. senators who met with U.S. Trade Representative Michael Froman on Thursday urged him to "move forward on TPP without Canada unless a serious offer on dairy, poultry, and agriculture market access" was made, a U.S. Senate aide said.

According to the aide, Froman responded that he preferred to move forward with Canada, but added that the United States is "preparing for all contingencies."

Max Moncaster, a spokesman for Canadian Trade Minister Ed Fast, told Reuters: "We continue to work with all TPP partners to conclude an ambitious agreement that will create jobs and prosperity for Canadians."

But Moncaster added that Ottawa will "continue to promote and defend Canadian trade interests across all sectors of our economy, including supply management."

The United States is set to host a meeting of TPP trade ministers in Hawaii July 28-31.

The Obama administration is hoping to wrap up in coming weeks the negotiations that would establish a massive trade pact encompassing 40 percent of the world's economy, ranging from Japan to Chile.

The negotiations got a boost last month when the U.S. Congress approved "fast-track" authority for President Barack Obama, which allows him to negotiate trade pacts knowing that Congress can approve or reject such deals, but not amend them.

Japan and other leading countries in the 12-nation negotiation said they were awaiting action by Congress before moving toward the final stage of the talks.

Now, Canada's agriculture industry is the focus of negotiators' attention, in addition to many other details that still have to be settled.

Canada's dairy and poultry industries are worth tens of billions of dollars.

Canadian farmers are afraid that TPP would endanger the supply management system, which keeps dairy and poultry prices artificially high by restricting supply. Cheaper supply could come from the United States but also potentially from New Zealand and other countries

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For those of you not following, the TPP and or TFIP is a massive, possibly world economy defining free trade agreement encompassing every major country in the Pacific Ring.

The sticking points for canada have been control over Agriculture, Dairy and Poultry and BC Lumber and softwoods.

This could be a VERY beneficial thing for Canada should the US use NAFTA to pursue this without Canada and I will explain why here

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http://www.cbc.ca/news/politics/trans-pacific-partnership-talks-canada-japan-at-odds-over-b-c-timber-1.3139750

One of Canada's most protected industries — British Columbia timber — has been targeted by Japan in the massive Trans-Pacific Partnership trade talks, The Canadian Press has learned.

Japan is pushing Canada to eliminate or modify the controls it imposes on B.C. log exports — a practice that is heavily restricted by the federal and provincial governments, and which drives up their cost to foreign buyers.

Trans-Pacific Partnership? Never heard of it, Canadians tell pollster

What is the Trans-Pacific Partnership?

Market access for farm products a final hurdle in TPP talks

Details of the forestry impasse with Japan are contained in documents from Canada's Foreign Affairs department that are marked "secret" and that have been obtained by The Canadian Press.

The revelation comes as Canada continues to face pressure from another TPP country — the United States — which has taken aim at the coveted supply management system that protects the country's dairy and poultry farmers.

Prime Minister Stephen Harper has said that Canada would protect its supply management system while pushing ahead with the TPP because he sees that as vital to the country's future economic health.

With the October election looming, the trade impasses have implications for Harper. He has invested much political capital in various free trade talks — none bigger than the TPP — as he positions himself as the most reliable steward of the Canadian economy.

But Canada has another fight on its hands with Japan over B.C. forestry, as it tries to break down trade barriers in that sector in Asia.

"Canada is pursuing full tariff elimination for the forestry sector — as you know, tariffs in Malaysia are as high as 40 per cent, as high as 31 per cent in Vietnam and as high as 10 per cent in Japan," says the April briefing note, prepared for a meeting of senior federal trade officials in Ottawa and their provincial counterparts in B.C.

Log exports restricted

The memo says talks with Malaysia and Vietnam are progressing well. Not so with Japan, Canada's largest Asian trading partner.

"Discussions with Japan are ongoing but have been difficult. Japan has very clearly linked the elimination of forestry tariffs to B.C. eliminating or significantly modifying log export controls," the memo says.

"Our efforts to delink the two continue but are becoming increasingly difficult."

It is possible that removing all restrictions on log exports as part of a trade agreement could leverage concessions of a similar size that would benefit British Columbia and Canada.

- Frase Institute report

B.C. exports a small percentage of its logs to foreign markets, including Japan, but must satisfy some strict provincial and federal requirements.

According to one study last year by the Fraser Institute, the result of that protection scheme is that in 2011, logs sold for $74 per cubic metre on the Vancouver Log Market, while the average price for exports hovered around $108.

"Although free trade in logs in not the preferred policy from a B.C. perspective, it certainly is from a global perspective," says the institute's June 2014 report on B.C. log policy.

"Canada is currently in talks to join the Trans-Pacific Partnership, which includes Japan," the report adds.

"It is possible that removing all restrictions on log exports as part of a trade agreement could leverage concessions of a similar size that would benefit British Columbia and Canada."

The report proved prescient, given what is contained in the government's own April memo, which makes clear there's serious negotiating taking place between Japan and Canada on forestry issues.

"There have been some suggestions from your officials that Canada settle for no tariff reductions from Japan on forestry products in order to protect our log export control regime," the memo says.

"This is not an acceptable outcome for Canada; it would put our competitors at a permanent advantage in the Japanese market for one of our primary exports."

Talks sensitive ahead of election

A government spokesman declined comment on what has happened at the negotiating table since April.

With the U.S. Congress recently granting President Barack Obama fast-track authority to negotiate the TPP, there is widespread speculation that the deal could be finalized as early as August.

However, the deal will have serious domestic political implications for Harper as he seeks his fourth term as prime minister.

Supply management in sacrosanct in Ontario and Quebec, and so is the forestry sector is in B.C.

The 12 countries in the TPP, including Canada, are Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, and they represent 792 million people with a combined GDP of $28.1 trillion.

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Now, ther eason this si so worrisome is that Harper is currently seeking re-election on the backs of "fiscal responsibility and dependability"

Yet the numbers have shown he has been by far the worst fiscal manager as PM in Canada since Mulroney.

One of the fears many have is that to save face before the election he will bend over backwards and give away the vital control over Dairy and Poultry; which would possibly bankrupt dairy and poultry farmers back east and here in BC as the US uses massive industrial farms with huge subsidies which could destroy the supply and control here in Canada

But also the softwood and lumber issue here in Bc which would see the money collected via tariffs cut to almost nothing, meaning our lumber would leave, RAW without any added value for a tenth of what it is today.

Harper has shown himself to be a terrible negotiator as shown by the Chinese agreement and the ridiculous protectionist favoritism handed to China which allows for any company state or individual to sue any individual company or municipality/government agency in BC should their investment be interfered with (one of the noted issues behind BC's unwillingness to enact foreign ownership laws over housing)

Knowing he stands a very obvious chance of having his party decimated during the upcoming election as evidenced by recent polls and the loss of almost all of his highest profile MPs the fear is Harper will bend over and allow this country to be shafted just to save face for a few percentage points in the polls.

I for one am hoping that the US pushes ahead without Canada in this deal.

[Webster6]

This is as good as news gets.

[theminister]

I hope so.

Scrap NAFTA too while we are at it.

When we ship raw logs out we only get primary industry and forego secondary, tertiary, and quarternary

[brownky]

Please please please please please please please please please please.

Please cut us out. It would make me a fan. We do not want to be a part of this.

And I agree, kill NAFTA too. Manufacturing is where the real money is, not resources. Use the resources to manufacture finished products. Good money jobs all the way along.

[Ghostsof1915]

My concern over the lumber industry is it used to be owned by Canadian firms. Now it seems it's all US firms.

I'm fine with backing out of NAFTA. Japan and China have some of the toughest import regulations, and it doesn't hurt them any.

The other point is places like Sweden employs double the amount of people in the lumber industry, but they provide only half the amount of lumber. Seems to be we should be learning from nations that get the most out of their resources, instead of giving away our water, etc. at wholesale prices.

[BeefcakeBo]

Tariffs on Canadian export are already too low. As a very resource rich country we should be dominating the manufacturing markets by not giving away our resources. As much as we need to export, there is no way that lowering all these is a good thing. We should be setting a standard and raising them back up. If Japan wants softwood, then they can have the crapty stuff from Washington. Or they can pay a premium for BC lumber(not logs). We shouldn't even be exporting anything that hasn't been processed through a mill in B.C. first.

[KoreanHockeyFan]

Either have a proper FTA and concede your heavily protected industries, or don't have one at all.

If everyone's pushing Canada to lower their supply management system, then the U.S. needs to do the same with their ridiculously subsidized agriculture industry, especially sugar. Japan would need to do the same with their rice products.

I have no problem with this agreement if countries are willing to make an actual free trade agreement. Not some phony one where each country is looking to gain a strategic export advantage over each other. That's not what you call an FTA, that's what you call the IMF's structural adjustment program, which was a disaster.

My real worry here is for the smaller players like Chile, Peru, Vietnam, etc. Everyone is being pressured to give up something while the big guys like Japan and the U.S. are not. The TPP is a nice idea, but if trade barriers aren't coming down for EVERYONE then it's not a TPP.

But in the end though, why are developing countries in even this agreement in the first place? They should worry about developing their own industries behind closed doors first before even thinking about joining multilateral trade agreements. The TPP is going to subject them to massive amounts of foreign competition that they will never be able to handle in the current stage their in.

[RUPERTKBD]

As someone who grew up in lumber country, I feel everyone's pain at shipping raw logs overseas. It's been a bone of contention for many years.

The problem is, no-one is stepping up the the plate to do value added in any meaningful way. Maybe this is a failing of government, or maybe it's an industry that's content with the status quo, I don't know.

However, for all the complaining I've listened to throughout the years, I've yet to see any government (and I've lived through several Conservative, NDP and So-Cred/Liberal governments) make it any kind of priority.

This deal is a good example. What do Trudeau and Mulcair have to say about it? I have no doubt that both will paint anything Harper does in a negative light, but will either step up and tell us what they plan to do if elected?

It's easy to be critical. It's another thing to take a solid position. I'd be inclined to vote for someone who shows that kind of backbone.

[Realtor Rod]

My concern over the lumber industry is it used to be owned by Canadian firms. Now it seems it's all US firms.

I'm fine with backing out of NAFTA. Japan and China have some of the toughest import regulations, and it doesn't hurt them any.

The other point is places like Sweden employs double the amount of people in the lumber industry, but they provide only half the amount of lumber. Seems to be we should be learning from nations that get the most out of their resources, instead of giving away our water, etc. at wholesale prices.

There are quite a few Asian owners of lumber mills as well.

[Mustapha]

I wish I was an American, that way I could vote to elect Bernie Sanders.

The US needs to kill this deal and NAFTA, and only he has the cojones to do it.

Harper has already done serious damage, and Canada cannot deal with another Conservative government.

The question is: Can left-wing voters decide WHO to elect, or will they split their vote and allow Harper another majority?

While I hope for the former, I expect the latter.