Oh, the irony! With their withdrawal from the TPP, and after doing all the hard work, the Americans are handing us their market share under TPP 11
By Carlo Dade
Director of the Trade and Investment Centre
Canada West Foundation
CALGARY, Alta./Troy Media/ – That Western Canada has not been well served by the country’s trade agenda under the previous and current governments is not just a criticism of Ottawa; it’s a damming critique of how little westerners seem to care or how ineffective they’ve been in shaping national trade priorities.
What we in the West have done to date has gotten us three times as many trade agreements in Central America as we have in Asia. If you’re happy with Honduras, stop reading. If not, it gets worse.
The largest and most important opportunity for western exporters, a resurrected Trans-Pacific Partnership agreement without the U.S., a TPP 11, is at hand. But it’s not generating attention, much less pressure on Ottawa to act.
A recent report by the Canada West Foundation, The Art of the Trade Deal: Quantifying a TPP without the United States, shows that all remaining countries benefit from a TPP 11, but Canada and Mexico would gain the most. Canadian agricultural and commodity exporters generally do better in a TPP 11 than in a TPP with the United States.
In markets like Japan, a TPP 11 gives Canadian exporters advantages that American firms will not have and would finally put Canada on equal footing with competitors like Australia.
But the real gift is that the better terms that Canada has under a TPP 11 are thanks to the Americans. With the Americans at the table, countries made concessions in the original TPP that they never would give Canada in bilateral negotiations. The irony of the U.S. withdrawal is that after having done the hard work, the Americans are walking away and handing us their market share.
In trade, as in life, it doesn’t get any better than this.
And we in the West should know. This is opposite of what happened to us in Korea when Canada dawdled in negotiating only to see the U.S. and Australia rush past to sign trade pacts. We essentially handed the Aussies and American our market share. Canadian exports to Korea, most notably pork, plummeted and have not recovered even after Canada rushed to conclude its own agreement.
Yet here we are again.
But this time the opportunity is larger. We can go from having one trade agreement in Asia to having the equivalent of seven. We can go from running behind the Americans in Asia to running ahead, and do so for the decade or longer that it will take the U.S. to negotiate bilateral agreements from scratch.
Success in the North American Free Trade Agreement (NAFTA) negotiations is critical, but it’s also about preserving what we have, not adding or growing. It also leaves us stuck worrying about President Donald Trump’s every tweet.
The European Union trade agreement is important because it further opens Europe, a rich, stable market. But it’s a market that produces most of what we produce and, thanks to Brexit, it’s shrinking rather than growing.
The West needs better access to booming, growing Asia. A TPP 11 delivers that almost instantly.
The agreement is done and other countries are forging ahead to ratify it as is without the U.S. Yet Canada is again dawdling. Rather than leading, the government – worried about unions and non-governmental organizations in Ontario and Quebec, and hearing nothing from the West – is hiding in silence behind consultations.
To save this opportunity, a TPP 11 must become the most discussed topic in Western Canada. Every western MP at every summer barbecue must explain what they will do to assure that Canada ratifies the agreement. Every provincial legislative member and premier must say what they will do to push Ottawa.
If Western Canada is ever going to have the trade access it needs, then westerners across the board must go beyond what they’ve done in the past to ensure we don’t lose this opportunity.
It’s time to stop trying and start winning. That begins with getting a TPP 11.
Carlo Dade is the director of the Trade and Investment Centre at the Canada West Foundation.
© 2017 Distributed by Troy Media