Social Policy in Ontario

Canada mustn’t walk away from ratifying TPP trade deal

Posted on February 5, 2016 in Debates

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TheGlobeandMail.com – Business/ROB/Commentary
Feb. 05, 2016.   Perrin Beatty

Perrin Beatty is president and CEO of the Canadian Chamber of Commerce.

That grunting you hear across Ottawa is the sound of new ministers picking up the burdens of government and finding them a little heavier than they thought.

In time, they’ll adjust to the weight and even add more as they take on new challenges, but in the early days of a government, it’s a bit of a shock to find how hard it is to go from campaigning to governing.

A good example is the Trans-Pacific Partnership, a trade agreement Canada and 11 other countries negotiated last October in the middle of the election campaign. This week, the country representatives are meeting in New Zealand to sign the agreement.

In Ottawa, the new government is uncomfortable. They have inherited a sweeping trade deal negotiated under the leadership of the people they defeated just three months ago. They have begun extensive consultations, but in the meantime, they have agreed to sign along with the other countries.

The TPP is one of the key economic decisions facing the new government. Although support for the deal is broad in Canada, the usual anti-trade voices are audible. Opposition is modest, but it’s enough to cause the government to pause.

Worse, the poisonously partisan political system in the United States may not be able to ratify the TPP in President Barack Obama’s final year. So it’s easy to imagine the tacticians around Mr. Trudeau asking, “Why take criticism if the deal won’t be final anyway for months, or years?”

Hence the delay before asking Parliament to ratify it.

But, here comes that pesky burden of governing again. Canada has so much to gain in the TPP that the government must do everything it can to help the agreement along, even if the negotiations began on someone else’s watch.

The economic case is easily made. Reductions of tariffs to allow our products into the growing economies of Southeast Asia would, by themselves, be reason enough to ratify the TPP. The tremendous opportunities with Japan, our foremost ally in the Pacific, would be another. Beef and pork producers, for example, expect to double their sales in Japan as a result of the TPP. Chemical, industrial products and aerospace companies will all benefit from lower tariffs and improved regulatory regimes. Countries that currently have scant respect for intellectual property will commit to new legislation, which will benefit our huge service sector.

In 2013, Canada petitioned its trade partners to be allowed to join the TPP negotiations. The idea of watching 11 Pacific countries, including the United States, Mexico, Japan and Australia, making special deals for each other while Canada stood on the sidelines was unacceptable, as it should be now.

As Canada pursued its ambitious trade negotiation with Europe back in 2012, commentators such as former Bank of Canada governor Mark Carney warned that Canada was missing out on Asian economies, which are growing far faster than Europe’s. Canada was not focused on this critical part of the world.

Thanks to the TPP, we now have this opportunity to reverse the situation. If the TPP is ratified, we will be among the most privileged trading nations in the world.

The geopolitical case is even stronger. World trade was stalled with the demise of the WTO’s trade negotiations (known as the Doha Round). TPP is by far the most ambitious attempt to restart it. This matters to us. No country in the world is more dependent on the progress of multilateral trade than Canada. Are we better off fighting trade disputes with huge countries alone or with an army of partners? The question answers itself.

Waiting as the Americans dither and dispute would be a mistake. Canada should show the world – America included – that it supports trade as its central international preoccupation. We should demonstrate to the other TPP countries that we negotiated in good faith and with a vision for our future with Pacific nations.

Although the government’s promised consultations will certainly allow Ottawa to understand and possibly help any sectors under pressure from TPP, the key question isn’t, “Why should we ratify this agreement?” but rather, “Where will we be if we walk away?”

There are sectors in Canada that will be challenged by the agreement, to be sure. As the new government shoulders the burdens of office, the safe political stance might be to delay. But the best course for Canada is to finish what we started and ratify the TPP.

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Tags: economy, globalization, ideology, participation, privatization, rights, standard of living

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