Is Canada dragging its feet on TPP?

Canada’s heading into the NAFTA renegotiation next week, but a deal that hasn’t been discussed a lot lately is the Trans-Pacific Partnership — and why is that?

The U.S. pulled out of TPP and left eleven remaining countries. Canada has participated in all of the meetings post-U.S. pulling out. The Canadian govenrment has provided a lot of talk in regards to wanting TPP to continue, but some are starting to wonder — is it lip service? Is Canada really as focused on TPP happening as they should be?

We hear a lot of times in sports: is there commitment? And maybe that’s the right word to use. Is Canada as committed to getting TPP done in a very timely manner as it should be?

There are many saying Canada is not, and it’s frustrating to people. This goes back to political stories in February where people were asking this question, and we sort of just forgot about it; or we’ve been taking the Liberal government at its word.

Now, I don’t know if the criticism is fair, but I definitely want to ask people about it. This has started swirling in our minds, and I’ve seen Twitter responses for some of our stories on trade from Conservative trade critic Gerry Ritz, former Ag Minister, saying “Canada’s stalling on TPP”, and I might think “yeah, whatever Gerry,” and that it’s a partisan response — but the more research I do, the more I’m finding that there’s actually a lot of people in Gerry Ritz’ camp.

One of these groups is the Canadian Agri-Food Trade Alliance or CAFTA, which represents almost all of the agricultural trade Canada does in exporting to countries around the world.

I asked Martin Rice, acting executive director for CAFTA, if they think the Canadian government is actually stalling on TPP? And if so, why?

“We’re confident that Canada is involved in the negotiations amongst the TPP-11, to explore what can be done with the existing agreement, but we’re really quite mystified by how little has been indicated by Canada so far in terms of its support for the TPP being retained. There are several countries which have already ratified TPP into effect. There’s no question, based on analysis done by the Canada West Foundation and others that have thought about this, that it definitely is in Canada’s interest to take advantage of an agreement that’s already been completed, that many other TPP countries are saying should be implemented. Which, in the absence of, we would be in serious trouble in many of our agri-food industries if it did not take place, because there’s nothing else there in terms of access to Japan, that would assure us of being able to compete against our counterparts. We’ve seen the EU and Japan reach agreement on a deal. We’re sure that the U.S. will be quick with Japan to do a bilateral, and we’ve been very pleased with how Japan has been leading the effort to pass the existing TPP. So in our view, there’s no reason for Canada to not be exhibiting its support for putting into place that deal and working with the other ten TPP-11 members to have it implemented at the earliest opportunity.”

And we saw the impact of not having TPP last week, when Japan raised the tariff from 38.5% to 50% on frozen beef going into the country because they passed an import threshold. Meanwhile, Australian beef continues to flow into Japan at a lower tariff thanks to a trade agreement between the two countries.

So what’s the hold up? Obviously there’s a lot of focus currently on the NAFTA renegotiations, but that doesn’t mean that TPP should just be left on the sidelines while that happens.

Rice agrees that NAFTA has created a simultaneous multi-front issue.

“I think NAFTA has been a huge preoccupation for Canada, but at the same time the benefits of TPP for Canada are still very much there and perhaps even greater than they were with the U.S. in the deal… there’s no obvious reason why they wouldn’t be pushing ahead. We’re thinking that we have to just make it even more evident than it is to us, that it’s in Canada’s economic interest to move ahead with the TPP and not rely on some secondary set of negotiations that would take much, much longer than would be the case to implement the existing TPP deal.”

So the possibility of China entering the TPP 2.0 — is that causing some of the hangup? Some trade experts are wondering if the Canadian government is attempting to lobby to have China included in a TPP 2.0. I asked Martin Rice about whether CAFTA believes TPP is held up by whether China will be included.

“I don’t think so, because there’s been a lot of interest certainly in Canada in the potential for a Canada-China agreement, and the Canadian government has been pretty vocal in its interest in having that happen, or at least to exploring all available interest in seeing negotiations take place. But we think that the existing TPP is something that many other countries will want to join, whether it’s Korea, Thailand or Indonesia, so we think that the existing deal doesn’t need to be looked at as something that needs to be renegotiated at all – just some changes to accommodate the U.S. not being there at the beginning. Otherwise it doesn’t need to be held back by any concerns about what’s China’s place in it, or any other potential member of TPP.”

So CAFTA’s acting executive director Martin Rice says that he believes Canada isn’t moving as fast as it should be. This is really going to be interesting as to how it plays out, because it’s not good management if Canada moves more of its people and resources to NAFTA but doesn’t have the staff on the ground to tackle TPP at the same time. We have to be able to do these two things at the same time.

We also asked the trade minister’s office whether there’s been a strategic decision to hit pause on the TPP file. Here’s part of their predictable response:

Canada is actively participating in ongoing discussions among the remaining TPP countries to look at options for a possible Agreement, including views on whether the net benefit to Canadians has changed since discussions began… Our commitment includes hosting the first set of talks among senior officials in Toronto earlier this year. The last meeting of senior officials took place in Hakone, Japan on July 12 to 14, 2017, and Canada was present. The remaining 11 TPP signatories are working on options for a possible TPP Agreement. These options will be presented at the APEC meetings in Vietnam in November.

So we’ll see how it plays out, but I’m definitely detecting a real sense of frustration from people in agriculture that Canada is not moving ahead with TPP as they think we should be.

Canada must be able to push ahead on multiple trade fronts at the same time as countries around the world work to solidify their trade futures. This is especially true if you believe that the NAFTA 2.0 negotiations will not be quick.

With the importance of Asia long term, Canadian agriculture cannot afford to drag its feet on TPP so let’s all hope that Gerry Ritz is wrong on this one.

You can hear the discussion with Martin Rice on RealAg Radio – Wednesday, August 9, 2017

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