If the Trouble with the TPP is that it is unlikely to generate significant economic growth or create many new jobs (some studies predict job losses), where are the benefits? The agricultural sector is often pointed to as a likely winner with the expectation that more open markets will result in Canadian farmers selling more beef, pork, canola, and other products. Those predictions may prove true, but based on what the Standing Committee on International Trade has heard, there are many other agricultural sectors that stand to lose as a result of the deal.
The dairy industry is the most obvious sector that projects losses in the billions of dollars. Indeed, the Conservative government promised billions of taxpayer dollars as compensation for those losses. When the dairy industry appeared before the committee, it made it clear that it expects the Liberal government to honour the same payout, arguing that the compensation – which amounts to $150,000 per dairy farmer – is part of the agreement (even if not actually part of the TPP text).
In fact, the compensation extends to other supply managed sectors such as the chicken industry, which is also projecting losses due to the TPP (and CETA). In all, these various sectors expect $2.4 billion from an income guarantee program, $1.5 billion from quota-value guarantee program, $450 million for a processor modernization program, and $15 million for a market development initiative.
In other sectors, the impact of the TPP is modest at best. For example, the Canadian Vintners’ Association appeared before the committee to discuss the impact on the Canadian wine industry. With low tariffs already in place in several TPP countries, the impact will be modest unless Vietnam suddenly starts drinking a lot of Canadian wine. According to the CVA, the more important issue, which is not solved by the TPP, are domestic restrictions that limit sales of wine between provinces:
we’re working with one hand behind our back, actually two hands behind our back because we don’t have free trade within our own country. We can only ship wine – British Columbia, Manitoba and Nova Scotia are the only three provinces that have opened up their borders since the unanimous bill passed in the House of Commons and approved in the Senate in 2012. If we had those types of things in place, we can grow our domestic market and therefore take advantage of these agreements. With reduction in tariffs, New Zealand and Australia will continue to grow their market share here, and if we can’t compete, we won’t benefit domestically and we won’t benefit from the TPP.
In fact, the CVA noted that the U.S. opened up the wine market between states, which resulted in many smaller wineries increasing their domestic “exports”, thereby preparing them for a global market. Since that has not happened in Canada, even the CVA acknowledges that most Canadian wine producers are not ready to take advantage of the TPP.
(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty, Day 30: Losing Our Way on Geographical Indications, Day 31: Canadian Trademark Law Overhaul, Day 32: Illusory Safeguards Against Encryption Backdoors, Day 33: Setting the Rules for a Future Pharmacare Program, Day 34: PMO Was Advised Canada at a Negotiating Disadvantage, Day 35: Gambling With Provincial Regulation, Day 36: Why the TPP Could Restrict Uber Regulation, Day 37: Breaking Digital Locks for Personal Purposes, Day 38: Limits on Canadian Digital Lock Safeguards, Day 39: Quiet Expansion of Criminal Copyright Provisions, Day 40: Mobile Roaming Promises Unfulfilled, Day 41: ISDS Rules Do Not Meet the Canada’s New “Gold” Standard, Day 42: The Risks of Investor-State Dispute Settlement, Day 43: Eli Lilly Is What Happens When ISDS Rules Go Wrong, Day 44: Canada’s Terrible ISDS Track Record, Day 45: Limited Economic Gains for Canada, Day 46: Limited Employment Gains or Even Job Losses for Canada)