As Canada prepares to engage as a full participant in the Trans-Pacific Trade (TPP) negotiations for the first time, a comprehensive report by Canadian trade specialist Peter Clark suggests that the advance hype about the TPP being a high quality comprehensive deal is “hogwash”. Clark, President of Grey, Clark, Shih and Associates, says “There is already evidence of many deficiencies, exclusions and reservations. There will be more to come from all sides. Like any other trade negotiation the TPP is and will be a negotiation about exclusions”.
Canadian exporters have been hoping that the TPP talks will allow Canada to strengthen its trade foothold in Asia. In a study released today entitled The Trans-Pacific Partnership: NAFTA 2.0 or Doha Revisited?, Clark suggests that “while the TPP is important to Canada from a defensive standpoint, its real value lies in its potential if membership were to be expanded to include Japan.
Though the TPP has been hyped by leading players as deep and comprehensive, Clark cautions that the current framework is likely to generate “little more than “a gift” to Washington”.
Clark maintains the U.S. has dominated the dynamic of TPP negotiations and appears to be trying to realize trade gains it wasn’t able to get through the 1994 North American Free Trade Agreement between the U.S., Canada and Mexico.
“Washington seems to be looking at TPP as though it’s NAFTA 2.0,” Clark says. “Participation in the TPP raises more questions for Canada than it answers. Right now, the benefits to Canada appear illusory, as Canada already has deals with 90% of the TPP economy. A deal with Japan, on the other hand, could bring real gains for Canada.”
Clark’s research paper offers Canadian legislators and decision-makers an overview of how the TPP may affect Canadian interests and what roadblocks will need to be addressed by politicians before the deal is done.
The report examines in detail import, export and other sensitivities of all 11 nations at the negotiating table, as well as Japan. Key findings include:
- The U.S. proposals have major deficiencies in that they exclude many important obligations for state governments. Clark said “The U.S. is putting much less than a full loaf on the table”.
- The TPP is a defensive deal for Canada;
- Every time the U.S. negotiates another Free Trade Agreement, Canada’spreferences in our most important export market are eroded. The losses are concentrated in manufacturing jobs.
- The TPP does not include provisions to discipline U.S. subsidies in agricultureand manufacturing. These contribute to job losses in Canada; and
- Food companies could find it easier under the TPP to serve Canada from their U.S. plants, which will hurt their Canadian counterparts.
Clark concludes that the TPP remains important to Canada for defensive reasons, but suggests that a balance of benefits has been lacking to date. “This is a negotiation about exceptions – some major gaps exist and more will come. There are signs that some U.S. stakeholders are lobbying for flexibility – and there are preliminary indications this could come. If not, the U.S. can forget about this platform for freer trade in Asia. The negotiations will likely suffer the same fate as the Doha Round.”
Round 15 of the TPP talks is taking place in Auckland, New Zealand from Dec. 3-12. Peter Clark will be on hand to report on the negotiations.