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What's Behind Canada's Entry to the Trans-Pacific Partnership Talks?

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Thursday June 28, 2012
Last week, U.S. President Barack Obama formally extended an invitation to Canada to join the Trans Pacific Partnership negotiations, a proposed trade deal that includes the U.S., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam (Mexico was also added last week). Supporters have lauded the TPP as potentially the world's most important trade pact and the Canadian government spent months crossing the globe to lobby for an invitation.

Yet dig beneath the heady promises and my weekly technology law column (homepage version, Toronto Star version) notes that the benefits for Canada are hard to identify. The price of admission was very steep - Canada appears to have agreed to conditions that grant it second-tier status - and the economic benefits from improved access to TPP economies are likely to be relatively minor since we already have free trade agreements with four of the ten participants.

Given those conditions, why aggressively pursue entry into the negotiations?

The reason stems less from gaining barrier-free access to a handful of relatively small economies and far more about using the TPP as a backdoor mechanism to promote regulatory changes in Canada.

Given Canada's late entry into the TPP process, the U.S. was able to extract two onerous conditions that Prime Minister Stephen Harper downplayed as the "accession process." First, Canada will not be able to reopen any chapters where agreement has already been reached among the current nine TPP partners. This means Canada has already agreed to be bound by TPP terms without having had any input. Since the TPP remains secret, the government can't even tell us what has been agreed upon. [Scott Sinclair reports that the commitment is even broader, covering any chapter where provisions have been agreed upon]

Second, Canada has second-tier status in the negotiations as the U.S. has stipulated that Canada will not have "veto authority" over any chapter. This means that should the other nine countries agree on terms, Canada would be required to accept them.  

This condition could be used to stop Canada from joining forces with another country on a tough issue during the late stages of the negotiation. For example, Canada and New Zealand both have copyright terms that last for the life of the author plus an additional 50 years. The U.S. has proposed that the TPP mandate a term of life plus 70 years. While Canada and New Zealand might be able to jointly block the extension, the U.S. could pressure New Zealand to cave on the issue and effectively force Canada to accept the change.

These tough entry conditions might be worth it if Canada stood to benefit significantly from new market access. However, Canada already has free trade agreements with the U.S., Mexico, Chile, and Peru. That leaves just six countries, which currently represent less than one percent of Canadian exports, as the net gain. In fact, there has been recent speculation that Chile is prepared to drop out of the negotiations precisely because it already has a free trade agreement with the U.S. and sees little upside in making major concessions in order to gain better access to the remaining TPP markets.

With Canada already surrendering negotiation leverage and few important markets at stake, our participation is less about other TPP countries and much more about us. Business groups such as the U.S. Chamber of Commerce applauded Canada's entry into the TPP, expressing the hope that it would force further changes to Canadian intellectual property laws less than 24 hours after Bill C-11 passed in the House of Commons.   

For the Canadian government, the TPP offers cover for major reforms to supply management, the combination of tariffs, quotas and price supports that increase costs for dairy, eggs, chicken, turkey and broiler hatching eggs. The system has been politically untouchable for decades, but using a backdoor approach of mandating change through trade agreement might provide the mechanism to garner the necessary popular support.

While backers maintain that the TPP will open up new markets to Canadian companies, the reality is that the agreement's biggest impact is likely to come from major domestic legislative reforms that would otherwise face considerable opposition and serious political risk.
Comments (10)add comment

Ki said:

...
Sounds like the PM put us into a great negotiating position. The one where we bow to the will of the US again I'm sure.
June 28, 2012

pat donovan said:

illegal, immoral, fattening
Like NAFTA, this will open the aupply management to stateside producers (of GM products).

ONE feed-lot operation per province will wipe out milk, egg, cheeze, etc. Que will be SO pleased it's pig farms might survive.

The contaminants in these products will be killing people here soon. (crohns, etc, pus from anti-buds in milk,according to one theory)

The whole canadian population just got designated an experimental animal.

packrat

June 28, 2012

Uncle Sammy said:

...
What's wrong with a little "policy shopping"? To messy to handle at home? Who needs sovereignty? Or democracy, for that matter?
June 28, 2012

Jeremy Van Veelen said:

...
I think it's time to let the government know that the Trans Pacific Partnership will not be tolerated as another "closed door" deal. All these closed door deals with the USA flies in the face of the principals of democracy. The late entry was likely a deliberate US hatched scheme to force corporate American dream policies on Canadians.
June 28, 2012

Crockett said:

At least with Harper's Omnibus bill we knew what we were being force fed, here its unclear if even he knows!
What is ugly is the concessions he is willing to make on supply management when the USA is keeping their intact ... thank you very much. He also doesn't seem to care about IP issues, treating it like a disposable trading card.

At the end of the majority mandate Canada will look quite different, remade in the conservative image.
June 28, 2012

Ray Saintonge said:

Australia
Given yesterday's comments from the Australian parliamentary committee about ACTA, can we expect them to be more enthusiastic aboout TPP?

What can we expect from a second-tier government but second-tier status.
June 28, 2012

fred said:

...
Harper is a sellout loser who never should have been allowed to be prime minister. That and that sellout, arrogant Conservative party.

While Harper can never be PM again, if that Moore guy has any aspirations of being PM, vote him out. He's the biggest cheerleader of bringing American-type ACTA policies to Canada.
June 28, 2012

Brian said:

Where's the "news"?
Harper sells out Canadians. This is certainly not news. This is just another day in the Harper government.

So how about some news then?
June 29, 2012

Teri said:

This is The Dream of the 1%! Your Rights are about to be Trashed by Multi-national Corporations !
With all due respect Michael, I think you soft-petaled this article. What is happening is an Outrage. It's a vulture capitalist wet dream.. the Dream of the 1%. People should be protesting and petitioning against these talks!! People need to wake up and realize what is happening.

There's a reason Why these talks and the details are being kept a Secret. There are 600 Corporate Representatives from around the world that are bargaining, negotiating a means to circumvent the laws of the land including environmental, and consumer protections that each Canadian citizen or business must abide by. This agreement will put these multinational corporations Above the law and set a Double standards. Here's an article from the U.S. I think you'll find of interest. I'm an American citizen and if there is one thing I've learned, you must always be vigilant because the fight for democracy never stops.

All the Best;
Teri.
July 01, 2012

Teri said:

This is The Dream of the 1%! Your Rights are about to be Trashed by Multi-national Corporations !
Sorry.. I forgot the link:
http://www.thenation.com/article/168627/nafta-steroids
July 01, 2012

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