The TPP has emerged as a major political issue in the United States with presidential candidates such as Donald Trump, Hillary Clinton, and Bernie Sanders all expressing opposition or concern with the deal. Moreover, House Speaker Paul Ryan has said there are not sufficient votes to support passing the agreement. The U.S. opposition makes it a near-certainty that it will not pass the TPP in 2016 and that the debate will certainly extend into 2017 and the election of a new president. Meanwhile, Chrystia Freeland, Canada’s Minister of International Trade, has said it is not her job to sell the TPP and made it very clear that the government will not commit to ratifying the TPP until it has conducted a full public consultation.
In response to these developments, business lobby groups such as the Canadian Chamber of Commerce have called on the government to move quickly to ratify the deal without regard for what happens in the U.S. Yet the TPP’s implementation provisions are structured to provide little incentive for countries to move quickly without assurances that the U.S. plans to ratify. Article 30.5 establishes the rules for the TPP entering into force:
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The Trouble with the TPP series has focused on dozens of problematic provisions within the trade agreement and identified several implementation possibilities that might limit some of the harm. For example, the post on copyright term extension discussed how Canada could require copyright registration and notification of the extended term in order to qualify for further protection. Copyright registration would not eliminate all the harm to the public domain, but it would mean that only those that desire the extension would take the positive steps to get it, thereby reducing the costs of the TPP’s unnecessary copyright term extension.
Should Canada move toward ratification of the TPP, there is a concern that attempts to mitigate the harm of some provisions will face opposition from the U.S. While implementation flexibility is the goal of every negotiator, the U.S. reserves the right to “certify” whether other TPP countries have, in its view, properly implemented the agreement.
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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).
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Yesterday’s Trouble with the TPP post canvassed the economic studies released to date on the agreement, finding that the evidence suggests that the economic gains for Canada are modest at best. In addition to efforts to assess the economic growth impact of the TPP, some studies have also tried to estimate its effect on employment.
The Tufts University study referenced yesterday has a specific analysis on job growth. It anticipates that Canada will lose jobs as a result of the TPP, projecting a loss of 58,000 jobs in Canada. That ranks the third highest in the TPP, but the highest of all countries on a per capita basis.
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The Trouble with the TPP series has spent the past two months examining dozens of provisions in the agreement and their implications for Canadians and Canadian law. Yet beyond the new restrictions, missed opportunities, and business uncertainty, lies real doubt about the actual gains from the TPP. While certain groups were prepared to support the TPP sight unseen, the evidence continues to mount that there are very limited Canadian benefits from the deal. The next few days will consider the economic and employment implications of the TPP.
At a recent Standing Committee on International Trade hearing on the TPP, Brian Kingston, a Vice-President with the Business Council of Canada (formerly the Canadian Council of Chief Executives) was asked if there were any negatives about the deal. Incredibly, Kingston responded that he could not think of any, a position that was rebutted in the next hearing as agricultural groups talked about billions in losses. Further, Kingston was also asked about studies on the TPP. He indicated that the main study he had seen was from the Peterson Institute.
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