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Canada, Mexico Would See Most Gains from TPP-Minus-One Deal, While U.S. Would Lose Exports

Posted May 08, 2017


News group Politico reports today that a study to be published next month by the Canada West Foundation, a free-trade oriented think tank in Calgary, finds that a new trans-pacific trade agreement omitting the U.S. would turn America’s previously estimated $12.7 billion export gain to TPP countries into a projected $3 billion loss.

Additional results of the study undertaken by Dan Ciuriak, a former deputy chief economist for Canada’s Department of Foreign Affairs and International Trade, will show that:

  • A TPP deal without the U.S. could still generate 2.43% in additional intra-regional exports. The number is two-fifths of the full TPP’s impact. TPP 11 countries stand to gain an additional $16.6 billion at 2017 prices vs. $40.7 billion for the TPP 12.
  • A deal among 11 countries could raise real GDP by about 0.074% and generate economic welfare benefits of about $16.1 billion by 2035. The gains are smaller in absolute terms but about the same in percentage terms compared to the gains under the TPP 12.

  • Exports of automotive products and business services would benefit the most from a TPP 11 deal.

  • Countries in the Western Hemisphere would see the biggest benefits, since Mexico, Canada, Peru and Chile would preserve access to the U.S. under pre-existing deals and would not have to compete with the U.S. in the TPP’s Asian markets. For Canada this would mean a boost for exports of beef, fruits and vegetables, pork and canola oil.

  • Vietnam would have the most to lose in potential gains with the loss of the U.S. market for its textile and apparel exports. However, it would still gain in exports to other TPP markets. After automotive products, textiles and apparel would still have the second-largest gains in intra-TPP exports with a growth of more than $3 billion.

Negotiators from the remaining members of the TPP gathered in Toronto last week for two days of meetings to establish recommendations ahead of an Asian trade ministers’ meeting being held in Vietnam later this month.

Joseph Pickerill, chief spokesman for Canadian Trade Minister Francois-Philippe Champagne, said officials were considering what kind of free trade arrangement or framework for the region would receive the most support at the upcoming Asia-Pacific Economic Cooperation summit.