Canada can best protect existing trade relationships and enjoy a net gain in trade by ratifying the Trans-Pacific Partnership agreement, argues a report published today by the Canada West Foundation.
Our country would gain greater access to nine new markets around the Pacific and be in a better position to protect its relationship with its most important trade partner – the United States – by joining the partnership, write authors Carlo Dade, director of the Centre for Trade & Investment Policy, and policy analyst Shafak Sajid.
The report, called The TPP: The West Wants In, notes that the 12-nation trade agreement is the largest, most complex and potentially most impactful agreement Canada has ever been a part of. In effect, the deal updates and replaces the North American Free Trade Agreement.
According to the authors the beneficial aspects of the TPP are that it would: reduce tariffs for sectors that are important to the West; reduce non-tariff barriers; open trade in services, which is crucial to diversification; keep Canada within an updated and more competitive NAFTA; allow Canada to leapfrog its backlog of bilateral agreements in Asia; build on the success of regional trade agreements; and, create the best opportunity to negotiate deals favourable for Canada.
The report acknowledges that concerns over the agreement’s impact on the dairy and automotive sectors mean ratification is far from certain. Accordingly, it offers up a “Plan B” – several alternative actions Canada can take to advance its interests around the Pacific – if the agreement is not ratified. If this happens, the authors suggest that Canada has the potential to salvage some of the agreement’s benefits by taking the following actions:
1) Reprogram resources at the Ministry of International Trade to pick up on gains made with Asian countries during TPP negotiations. This would include devoting more resources to negotiating a trade agreement with China.
2) Look to an alliance on this side of the Pacific by forging a smaller version of the TPP. This pact would incorporate TPP elements into a new regional agreement with the Latin American countries with whom Canada already has trade agreements.
3) Develop partnership facilitation services for Canadian small- and medium-sized enterprise (SME) exporters that would have been part of a TPP implementation strategy.
4) Use the time created by the failure of the TPP to prepare for the likely opening of the U.S. market as that country negotiates other more advanced trade agreements.
Click here to download the complete report.