Canada’s business community has mobilized in recent weeks to call on the government to adopt a more aggressive, engaged approach with respect to the biggest trade negotiations on the planet – the Trans Pacific Partnership Agreement. The TPP involves 12 countries including the United States, Australia, Mexico, Malaysia, Singapore, New Zealand, Vietnam, Brunei, Japan, Peru, and Chile.
My weekly technology law column (Toronto Star version, homepage version) notes that negotiators insist that progress is being made, but some in the business community are concerned that Canada may be left out of the deal unless it makes significant concessions on market access (including the dismantling of supply management in several agricultural sectors), restrictive intellectual property protections, and investor-state dispute settlement rules that allow companies to sue governments and potentially trump national courts.
The U.S. has been pressuring other countries to rapidly conclude a deal, though without “trade promotion authority”, which effectively locks it into a final agreement by removing the ability for Congress to modify the deal after others have signed on, the remaining countries are wary of revealing their best offer. Negotiations last week in Guam made only limited progress and a final meeting of government ministers has yet to be scheduled.
Delays will likely mean that Canadian business groups will continue to urge negotiators to move full steam ahead, but there are good reasons for caution.
Much of the business case focuses on concerns that failing to join the TPP will leave Canada out of a major trading block. Yet the reality is that Canada already has free trade agreements with nearly half of the TPP countries, including the U.S., Mexico, Chile, Peru, and South Korea. Moreover, Canada has engaged in free trade agreement negotiations with Japan and Singapore.
Free trade agreements with the likes of Brunei and Malaysia might provide some modest benefits to Canadian businesses, but Canadian trade interests are already well-covered within the much of the TPP community. Indeed, the costs of the TPP are a steep price to pay given the incremental gains that come from free trade access to a handful of additional countries.
The TPP cheerleading from business groups is somewhat puzzling given that the full text of the deal remains shrouded in secrecy. In other words, business groups are advocating for a deal they haven’t actually read or seen.
The concern is not just that the public has not had the chance to read the fine print of a deal that will affect every aspect of the Canadian economy. Rather, it is that the lack of transparency associated with the TPP virtually guarantees that it will be presented to Canadians on a “take it or leave it” basis with no informed public discussion or advance debate about the substantive terms.
Where elements of the agreement have become public through a series of high profile leaks, there has been ample reason for concern. The investor-state dispute settlement provisions could lead to a proliferation of lawsuits against the Canadian government by companies.
For example, pharmaceutical giant Eli Lilly is suing Canada for hundreds of millions in damages due Canadian patent law. The cost to the health care system of an expanded investor lawsuit system could be enormous as claims from other pharmaceutical companies could soon follow.
Similarly, leaked versions of TPP intellectual property text point to the extension of the term of copyright, which would mean that no new Canadian works enter the public domain for decades. Moreover, e-commerce rules may block countries from enacting domestic privacy protections that mandate that personal information be stored locally.
In short, the TPP hype doesn’t meet the reality. The new market access to a few countries comes at a significant cost, suggesting that Canadians should be skeptical about big claims on the still-secret deal.
My lowly opinion….free trade has been one of the worst inventions to everyday Canadians ever to come down the pipe. While big business (and I mean BIG businesses) have profited, we as Canadians have lost decent jobs forever and have lost control of our country. Expanding “free trade” with even more countries is just releasing more control with some slight benefit to some more BIG businesses. And us Canadians will end up paying for it in the end with cheap (not inexpensive) goods and loss of jobs. Would you rather make $30/hr and pay $20 for a t-shirt (made in Canada) or make $15/hr and pay $8 for a t-shirt (made elsewhere) that falls apart after a month’s wear? Well, you actually don’t have that choice anyway because of “free trade”. Of course government has been too dumb to realize that more people making $30/hr makes for a healthier country but hey, people making $15/hr and buying t-shirts three times a year makes for a better bottom line for business. Like I needed more proof that government is not not “for the people” and is the puppet of big business. And now we “need” free trade with more countries. Yeah.
I wholeheartedly agree with your ‘lowly’ opinion.
I fully agree. At least one of the parties should have as part of their election platform a promise to have an all party committee review the existing trade deals to see if other countries are actually living up to the commitments and to see which ones have been beneficial and which ones haven’t. If they haven’t we should give notice that we are withdrawing.
Trade agreements should be done on a country by country basis. The US has no business telling Canada what rules to use when trading with Mexico. Someone is driving the agenda and I believe the only purpose to these type of trade agreements is to strong-arm the smaller countries.
Any time the Americans talk about ‘Free Trade’ it translates simply as ‘YOU trade..WE get it for Free.’
It’s not that Canadians should be sceptical of trade deals, Canadians should completely reject them.
There is a lot of wisdom in this column too: http://www.samefacts.com/2015/05/everything-else/free-trade-pareto-improvements-and-redistribution/
Key thought: ‘Reducing barriers to trade creates potential Pareto improvements: making them actual Pareto improvements requires redistribution. But of course it’s precisely the people loudest in their support of “free trade” who are most vehement in their opposition to income redistribution’
I am not sure if you are aware of this particular site but it does cover global trade agreements and gives good analysis as well. See bilaterals.org or bilateral.org
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All very good points…what really concerns me is the secrecy. If its such a good deal then why the secrecy? Maybe, because it is a giant screw job yet again for all Canadians.
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we as Canadians have to stop this secret deal for our children and grandchildren, as it only benefits BIG CORPORATIONS sue our government for our hard earned tax dollars instead of putting that money toward health care or roads…Thank you Herr Harper we know your kids wont suffer