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Trans-Pacific partners invite Canada to the table

Canada to join trade talks with Asia-Pacific nations

CBC News

Posted: Jun 19, 2012 1:07 PM ET

Last Updated: Jun 19, 2012 1:37 PM ET play-media-lrg.gifhi-harper-mexico-cp-0283118.jpgCanada's new trade talks3:56

Canada has been invited to join trade talks with the world's Asia-Pacific countries, Prime Minister Stephen Harper says.

Months after Canada started pursuing entry into the talks, and years after it eschewed them in favour of focusing on Canada-EU talks, the countries negotiating the Trans-Pacific Partnership have invited Canada to join them at the table.

"This is a further example of our determination to diversify our exports and to create jobs, growth and long-term prosperity for Canadian families," Harper said from Mexico on Tuesday.

Canada becomes the 11th country to get involved. Mexico was invited in Monday, joining Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.

With Canada and Mexico entering the talks, the countries involved represent 658 million people and a gross domestic product of $20.5 trillion, according to a release from the Prime Minister's Office.

Many believe the deal will have more economic strength than the North American Free Trade Agreement.

Harper said that Canada hasn't agreed to any specific measures in terms of an eventual Trans-Pacific Partnership agreement. But as a latecomer, Canada has had to accept without question all that has already been agreed to by the TPP partners.

"There is an accession process, so we don't disrupt the negotiations," Harper said. "We're obviously not going to try to undo what's been done, but these negotiations in our judgment are at fairly preliminary phases right now."

"As in any negotiation, nothing is agreed to until everything is agreed to by all parties," said Harper, who stayed vague about the terms of Canada's entry into the TPP talks.

Market access for dairy products has been a contentious issue in the TPP negotiations so far, particularly for the United States and New Zealand. Some speculated that Canada's trade restrictions on dairy and poultry products were holding it back from joining the talks earlier.

Canada has a supply management system that controls domestic milk and egg prices while setting prohibitively high tariffs on imports. Despite pressure from business and consumer groups to ease up on the controls, the Harper government (as well as all three opposition parties) have steadfastly defended the system.

"As the prime minister said, everything that we would sign for the future would have to be for the benefit of Canada," Industry Minister Christian Paradis told reporters before question period in the House of Commons on Tuesday.

"We always said that we stand by supply management," added the Quebec minister.

"We did not give away anything to get to the table," Gerald Keddy, the parliamentary secretary to the trade minister, said during question period.

1st meeting likely not until fall

Another anticipated announcement about Canada's first steps toward closer trade ties with China was postponed due to diplomatic roadblocks.

The federal government is also pursuing trade deals with India and has launched negotiations with Japan.

Canada's admission into the free-trade deal must be approved by all the other countries.

The government first announced an interest in joining the TPP talks last November. It will take several months to ratify Canada's participation, with the next chance to join the talks early this fall, although the negotiations will go ahead first without Canada in July.

"One of the things that happens on an administrative level is the U.S. government gives 90 days notice to Congress, before it starts negotiating with anybody," Laura Dawson, a specialist in international trade agreements, told CBC's Carol Off.

"So even though there's no longer blockages from the other members, our actual participation in the negotiations will be at least 90 days, if not more."

By the time Canada joins the United States, Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei at the table — with Mexico also coming in late — 12 rounds of negotiations will have already taken place since 2010, The Canadian Press reported.

The government has not released a cost-benefit study to speculate how much could be gained and at what possible price, as it did during past negotiations with Europe and India.

Earlier this year, Canada launched negotiations toward a free trade agreement with Japan, which will generate billions of dollars in commercial flows between the two countries. Canada also announced formal exploratory talks toward a potential free trade agreement with Thailand, Canada’s largest bilateral trade partner in Southeast Asia.

Harper made the announcement at a meeting with U.S. President Barack Obama as the G20 summit in Mexico came to a close.


What is the Trans-Pacific Partnership?

CBC News

Posted: Jun 20, 2012 2:14 PM ET

Last Updated: Jun 21, 2012 9:49 AM ET

hi-852-tpp-protest-8col.jpgFarmers from tsunami-hit Miyagi Prefecture shout a slogan against a Trans-Pacific Partnership in 2011. Japan, like Canada, is debating whether to join the free trade zone that could be a game-changer for its member economies. (Shizuo Kambayashi/The Associated Press)

The Trans-Pacific Partnership (TPP) may soon be an acronym as recognizable as NAFTA — but this free trade venture could have much more economic strength and impact than its North American predecessor.

As Canada sets its sights on joining the club, many are asking what exactly our country would be getting, and giving up, to secure a potentially game-changing multilateral agreement.

What is the Trans-Pacific Partnership?

The Trans-Pacific Partnership is a free trade deal aimed at further expanding the flow of goods, services and capital across borders.

Its four founding members — New Zealand, Chile, Singapore and Brunei – may not be the usual suspects when it comes to high-powered global economic deals, but the trade-hungry countries turned heads when they signed off on the TPP's precursor, the Trans-Pacific Strategic Economic Partnership Agreement in 2005.

They pledged, among other things, to "enlarge the framework of relations among the Parties through liberalizing trade and investment and encouraging further and deeper cooperation to create a strategic partnership within the Asia-Pacific region."

The nine partners currently have a combined GDP of more than $17 trillion.The quartet faced relatively few obstacles in their quest to set up the transnational deal, and the efforts soon caught the attention of five other nations: the United States, Australia, Peru, Vietnam and Malaysia, who joined in 2008.

Canada and Mexico are now being considered for membership, subject to the approval of the nine countries already involved — including their long-time trading partner, the U.S.

Although negotiations involving Canada haven't begun in earnest, the federal government has already signaled its eagerness to get on with the process.

"This is a further example of our determination to diversify our exports and to create jobs, growth and long-term prosperity for Canadian families," said Prime Minister Stephen Harper from the G20 Summit in Mexico on June 19.

Where did it come from?

The TPP has its roots in the notoriously incremental dealings of the Asia-Pacific Economic Co-operation forum (APEC), a 21-member collective that seeks to promote free trade within and beyond the Asia-Pacific region.

Canada was among APEC's founding members, capitalizing on its Pacific Ocean coastline and its interest in freer trade. In 1989, it joined the forum, which included Japan, Indonesia, Australia, Brunei, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and the U.S.

Throughout the 1990s, nine other members — including Chile and Vietnam — also joined APEC. It is from this forum that TPP’s founding members would eventually springboard to expedite many of APEC's goals.

Early on, one of the TPP's stated objectives was to "support the wider liberalization process in APEC consistent with its goals of free and open trade and investment" by establishing a free trade area.

hi-852-tpp-member-map.jpgThe Trans-Pacific Partnership already includes nine pacific countries — including Vietnam, Australia, New Zealand at the U.S. — with a combined GDP of over $17 trillion. If Canada and Mexico successfully join, that number would rise to over $20 trillion. (CBC)

What’s in it for Canada?

The federal government has been vocal about its plans to diversify trade. It is pursuing trade deals with India and has a foothold in China and Japan. So far, however, Canada does not have a bona fide free trade deal in increasingly attractive Asia.

Admission to the TPP would mean access to a bundle of growing economies.

In fact, the TPP could become the world's largest free-trade zone – one that is well formed, but also flexible enough to accommodate a growing membership.Add to this the possibility that Japan could join the TPP, despite mounting protests in that country, and the economic and political traction of the group increases.

With Canada and Mexico entering the talks, the countries involved represent 658 million people and a gross domestic product of $20.5 trillion, according to a release from the Prime Minister's Office.

The TPP already includes some of Canada's major trading partners, notably the U.S., and could soon include Mexico — which increases the pressure to protect Canada's economic position in North America.

Ottawa argues that TPP membership would be a boon to the integrated supply chain on the continent, and that a missed opportunity to join would have dire consequences.

CBC News national affairs editor Chris Hall notes that, if Canada is shut out of the group, national products could become relatively more expensive, and therefore less appealing. Canada would also have to deal with the group's tariffs.

On the flip side, a best-case scenario for ordinary Canadians would include new jobs and lower prices on everything from cheese to manufactured goods if TPP membership bolsters both import and export trade.

Indeed, the possibilities presented by membership are enormous, but so too are the potential risks.

What are the risks?

The major concerns surround what Canada will have to give up to join the TPP, and whether or not the costs will outweigh the benefits. The government has not released a cost-benefit study as it did during past negotiations with Europe and India.

Many are uncomfortable with the bargaining chips already on the table, especially control over Canada's marketing boards and the national supply of eggs, chickens and milk.

It's an important point for some members — especially the U.S. and New Zealand — and some have speculated that Canada's supply management system, which controls domestic poultry and dairy prices, trade restrictions and high tariffs on imports, will have to ease up before the country can enter the TPP.

"Let's be clear, we've signed free trade agreements with nine countries around the world and we've been able to look after supply side management in every single one of those," he said.Gerald Keddy, the parliamentary secretary to the trade minister, insisted that Canada's marketing boards will be protected.

From the outside looking in, however, the details of a potential deal remain imprecise. It isn’t even clear what the cost of admission was for other members.

"What did they give up, if they gave up anything?" asked Liberal trade critic Wayne Easter, who is not convinced of the merits of the TPP. "We need a net benefit for the country."

Another concern is that, as a late comer, Canada will have to accept several agreements made by the current TPP partners before it is allowed to come to the table — which will happen no sooner that the fall.

By then 12 rounds of negotiations will have taken place without Canadian input, according to the Canadian Press.

This reality hasn't fazed the prime minister, who says the negotiations are still at "fairly preliminary phases" and that Canada won't try to undo what has been done.

"There is an accession process, so we don't disrupt the negotiations," he said.

Harper was vague about the specific terms of Canada's entry into the TPP talks.

"As in any negotiation, nothing is agreed to until everything is agreed to by all parties."

What are critics saying?

The TPP has no shortage of critics around the world.

At home, many are questioning the assertion that Canada will steer clear of major and unprecedented compromises, arguing that the federal government has already worked hard to be considered a candidate.

'It's really a trade agreement for the one per cent and their corporate interests.'
—Maude Barlow, the Council of Canadians

“It’s very, very clear that Canada had to make some significant concessions … in order to get into these negotiations,” said Dan Davies, the NDP trade critic.

"We've been given a seat at the table, but we've had our ability to negotiate significantly impaired," he added.

Citizens' organizations and public advocacy groups who oppose the deal are gearing up for a fight that could be as intense and bitter as the one that lead up to NAFTA's implementation in 1994.

"It's really a trade agreement for the one per cent and their corporate interests," said Maude Barlow, the National Chairperson of the Council of Canadians, which opposed and continues to criticize NAFTA.

"This is not going to be a good deal for Canadians."


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