Not 24 hours into the job, Canada’s new trade minister Chrystia Freeland was handed the full 6,000-page text of the Trans-Pacific Partnership (TPP). She has asked Canadians to become familiar with the deal and send in their comments.
The auto parts sector has already started to raise concerns about TPP provisions in this full text. Others will no doubt look at the impact on their sectors. It will be important to analyze these 6,000 pages in the coming months, and to consider the sector-specific impacts. But, while doing so, Canadians need to keep the big picture front and centre—this is a hugely important deal and Canada needs to be part of it.
The TPP is a ground-breaking deal that breaks the mould. It is the most ambitious trade negotiation under way anywhere today. The TPP will mean moving beyond the rules established under the North American Free Trade Agreement (NAFTA) to set the new rules for the next era of global trade.
The negotiations aim to create a high-standard and comprehensive agreement, opening up trade in nearly all goods and services and establishing rules that go beyond those set out under the World Trade Organization or NAFTA. There are 12 partner countries, including the U.S., Japan, Australia, New Zealand, and Canada, as well as several fast-growth Latin American and Asian markets.
With the U.S. set to remain Canada’s main trading partner for the foreseeable future, Canada has to be part of this agreement—or any such deal of which the U.S. is involved. Not being part of it means other countries could get better access than Canada to the U.S. market. Being in the deal at least ensures that we get the same access as other TPP countries.
Moreover, the TPP addresses areas that are going to be critically important for global—and Canada’s—prosperity in the future, including more knowledge-based activities. For example, the TPP opens up services markets and makes it easier to invest and move people across borders. This matters for Canada, because our economy is 70 percent services. And services, although less visible than Canada’s manufacturing or energy sectors, are amongst our fastest-growing exports. These are high-value services, such as engineering and computer services, that support high-wage jobs in Canada. As new Conference Board research will show, demand for these high-value services is strong and growing in the U.S. (Canada’s main market for services), but also in other parts of the world, including in other TPP countries.
TPP will also open up opportunities for Canada’s companies to build their markets in fast-growing emerging economies. If Canada’s free trade deal with Europe gets implemented alongside TPP (another one of the challenges on Minister Freeland’s desk), Canada would find itself at a hub, with freer access to all these markets.
This is a complex deal to analyze, both in terms of the range of leading-edge issues it addresses and the number of partners. It will be critical for the Canadian public, business leaders, government leaders, and researchers to now analyze what Canada has negotiated, all the while keeping in mind the critical stake Canada has in being part of the TPP.
This piece was first published at conferenceboard.ca.