Prime Minister Justin Trudeau is hoping to drum up support for the Canada-Europe Trade Agreement during the G20 summit in Hamburg, Germany this week. But there’s another trade deal on the other side of the world that might not be as dead as earlier reports suggested.
While Donald Trump’s move to pull the U.S. out of the Trans Pacific Partnership seemed to kill the agreement, a recent report from the Canada West Foundation indicates that, as was the case with Mark Twain many years ago, its death has been greatly exaggerated.
The report, “The Art of the Trade Deal: Quantifying the Benefits of a TPP Without the United States,” suggests that not only could the deal be resurrected by the remaining 11 Asia-Pacific partners, but such a revised agreement could be to Canada’s advantage.
“Canada stands to benefit in TPP11 compared to TPP12 more than any other country in the group, save Mexico,” says the report, which was authored by Carlo Dade and Dan Ciuriak, along with Ali Dadkhah and Jingliang Xiao.
The report adds, “A TPP11 would actually be better than the original agreement for Canadian agriculture and agri-food, because this sector would no longer compete with the U.S. in TPP11 markets.”
The authors point out that the beef sector in particular would benefit from not having to share access to the Japanese market with the Americans. There would be similar benefits for Canadian fruit and vegetable exports, processed food products, and pork and poultry.
Canada’s automotive sector would enjoy the largest intra-TPP export gains of all the goods sectors, the report adds, and other areas that would see benefits under the TPP include machinery and equipment (C$2.3 billion) and leather products (C$2.1 billion).
Trump called the original TPP “a disaster” for the U.S., preferring instead to promote an “America first” approach to trade. But such an isolationist view seems unwise in the modern global marketplace where nations a world away are both your potential customers and competitors.
Canadian officials are recognizing the importance of trade relationships with other regions of the world, and so are other countries. That’s why such trade alliances are popping up like dandelions.
The TPP was supported by President Obama, and while the U.S. withdrawal from the deal was an alarming blow initially, the Canada West Foundation report indicates that since then, the remaining 11 TPP signatories have forged ahead with ratifying the agreement. The deal will require some restructuring with the U.S. no longer part of the picture, but the report says the remaining nations will be better off with a TPP11 than with no TPP at all.
The report forecasts that a TPP11 would generate an increase in exports of 2.43 per cent among the trading partners, and would grow exports of TPP11 members to the rest of the world by 0.23 per cent.
The report’s authors acknowledge that the TPP11 gains would be modest, but note they are gains nonetheless.
The TPP might not be quite as envisioned while the U.S. was part of the equation, but the TPP with 11 participants is still nothing to sneeze at. From the Canada West Foundation’s analysis, it appears the deal would be a positive one for the majority of Canada’s industrial players, and for the Canadian economy.
Let’s hope it comes to fruition.