Opinion

Shell Game: Why Canada's in Trans Pacific Partnership Talks

It's more about changing farm sector regs here than opening up markets.

By Michael Geist, 26 Jun 2012, TheTyee.ca

Broken eggs

Breaking up existing egg and dairy tariffs, quotas and price supports is real goal of Harper government.

Related

Last week, U.S. President Barack Obama formally extended an invitation to Canada to join the Trans-Pacific Partnership (TPP) 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 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 (see Scott Sinclair's piece on TPP also today on The Tyee.) 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.

All this for one per cent of exports?

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.

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 per cent 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.

Backdoor approach to farm policies

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.  [Tyee]

7  Comments:

Login or register to post comments

  • Fiat lux

    47 weeks ago

    More Clinton photos, what the

    More Clinton photos, what the hell is going on?

    What new markets for which "Canadian" companies and what do we have to sell except resources, which are "products" only in the warped minds of so called "economists" and "conservative" politicians ?

    When will our politicians, regardless of party, come to grips with the fact that the sale of resources is not an income, but abysmal stupidity, forced on the public with the imagined, artificial value of non existing, imaginary money, controlled by a mafia like sector?

    Ed Deak.

  • Hakuin

    47 weeks ago

    Ed, are we living in a closed system?

    http://en.wikipedia.org/wiki/Moriori_people

  • Vox.Pop

    47 weeks ago

    Vancouver Sun = Corporate shill

    I sent the following letter to The Vancouver Sun after a pro-TPP piece by Don Cayo, the Sun's resident corporate economist - of course, it wasn't published, that's why Cayo is on the payroll.
    >>
    The paid lobbyists of Big Business (and their allies like Don Cayo) are coordinating their latest campaign "to stick it to the little guy". The 'think-tanks' are producing reports aimed at getting rid of Canada's supply management programs that have served us very well over many years. We still have very many small family farms producing vital food stuffs at reasonable prices. This is vital: if we were to let these farms disappear we would be at the mercy of foreign suppliers - a very dangerous situation when future international crises breakout. We are told that our milk prices are higher than the Americans but it is never mentioned that their giant agribusinesses receive massive federal subsidies while bribing the FDA to allow US milk to be polluted with hormones and antibiotics.

    The Trans-Pacific Pact is just another example of our federal government selling out all Canadians for just a few of their primary benefactors - multinational corporations. Tariffs are an excellent vehicle to protect key industries, as the American 'defense' industries have demonstrated for years - we don't see the USA buying French or Russian fighter planes to save 10% on such deals; if it were only about "the numbers" then economists would be calling all the shots. Let's recognize that these corporate shills always have a hidden agenda.
    <<

  • pwlg

    47 weeks ago

    Obama Trade Document Leaked

    Both authors writing about the so called Trans Pacific Partnership have posed similar questions.

    Just why is Harper so eager to join in on this 'partnership' when the nations who we don't have any trade deals with account for a very very small portion of our exports and imports?

    Whose interests is Harper looking out for? What corporate interests are behind Harper pushing him into yet another blunder? Are our ruthless mining companies behind this push? Do they wish to circumvent national regulations and laws to do what they do best, exploit wealth of other nations and create environmental messes.

    Huffington Post article about an aspect of the already negotiated portions of the TPP which would affect government sovereignty can be found here:

    http://www.huffingtonpost.com/2012/06/13/obama-trade-document-leak_n_1592593.html

    Here is a portion of the article relevant to how a Canadian mining company headquartered in Vancouver, Pacific Rim, is taking advantage of similar provisions in CAFTA - Central American Free Trade Agreement:

    "In early June, a tribunal at the World Bank agreed to hear a case involving similar foreign investment standards, in which El Salvador banned cyanide-based gold mining on the basis of objections from the Catholic Church and environmental activists. If the World Bank rules against El Salvador, it could overturn the nation's domestic laws at the behest of a foreign corporation."

    If the WTO rules in favour of Pacific Rim El Salvador has two options, none of which is favourable to the country or its citizens. One, allow Pacific Rim to develop, mine and mill its ore using cyanide and poison the land and water and expose residents to toxins and disease or pay Pacific Rim for its 'loses' which would further impoverish El Salvador.

  • pwlg

    47 weeks ago

    and...under the Trans-Pacific Partnership deal

    Will foreign interests in the tar sands have the final say on how it is developed, shipped and sold under current and future 'free' trade deals?

    As Enbridge likes to tell us in their current ad noise campaign:

    "It's a path to our future."

    Just who do they mean by "our"?

  • pwlg

    47 weeks ago

    recent attacks on Wheat Board

    It seems the Harper unilateral decision and attempt to destroy the Canadian Wheat Board-CWB is part and parcel of his careless free market ideology at the expense of national interests. This seems to fit with the author's theory that the TPP for Harper is about removing food policies that ensure Canada's food security.

    His free market cronies, Viterra, Cargill and others seem to be having difficulty filling their grain storage and shipping facilities though and are agreeing to handle CWB grain that many farmers are still supporting despite Harper.

    And while Harper and his mullet brained cronies were adamant about preventing Australian based BHP Biliton from purchasing Saskatchewan's Potash Corp. nothing is preventing Swiss based Glencore from purchasing Saskatchewan's grain giant Viterra.

    Know who is the leader in takeovers of Canadian companies these days? Bank of America, the bank that received the biggest amount of bailout funds from US taxpayers and just received another $500 million back door bailout from US taxpayers. Too big to fail but big enough to determine Canada's economic future.

    Yup, "it's a path to our future".

  • AnnieP

    45 weeks ago

    Agreement

    (T)rade is the least of it. Only two of TPP’s 26 chapters actually have to do with trade. The rest is about new enforceable corporate rights and privileges and constraints on government regulation. This includes new extensions of price-raising drug patent monopolies, corporate rights to attack government drug formulary pricing plans, safeguards to facilitate job offshoring and new corporate controls over natural resources.

    Also included are severe limits on government regulation of financial services, zoning and land use, product and food safety, energy and other essential services, tobacco, and more. The copyright chapter poses many of the threats to Internet freedom of the Stop Online Piracy Act (SOPA), which was stalled in Congress under intense public pressure.

    The proposed pact is so invasive of domestic policy space that it would even limit how governments can spend tax dollars. Buy America and other Buy Local procurement preferences used to reinvest our tax dollars in the American economy would be banned and sweat-free, human rights or environmental conditions on government contracts would be subject to challenge in closed-door foreign tribunals.