Analysis

Canada's dance with Pacific Rim trade partners came down to timing: Chris Hall

Canada is now ready to sign on to a Pacific Rim trade deal with 10 other nations after three days of intense negotiations in Tokyo resolved the Trudeau government's concerns over protections for intellectual property, culture and the auto sector.

Accused of sabotaging the agreement in November, Canada now says it obtained sought-after concessions

Prime Minister Justin Trudeau announced the revised trade deal at the World Economic Forum in Davos, Switzerland Tuesday at the World Economic Forum. (Paul Chiasson/Canadian Press)

Well, it took a while. But Canada is now ready to sign on to the Pacific Rim trade deal it turned away from in November after three days of intense negotiations in Tokyo with the 10 other nations that resolved the Trudeau government's concerns over protections for Canadian culture and access to new markets for its autos.

At least that's the Canadian angle.

"Our government stood up for Canadian interests and this agreement meets our objectives of creating and sustaining growth, prosperity and well-paying middle class jobs today and for many generations to come," Prime Minister Justin Trudeau said in opening his speech to business leaders attending the World Economic Forum in Davos, Switzerland.

Some Australian media commentators provided a markedly different view on Tuesday of what prompted the breakthrough. They portrayed Australia and Japan as the key players in persuading a reluctant Canada to return to the fold, all served up with a sharp reminder that Trudeau, alone, had almost scuttled, sabotaged and even screwed the other leaders last November by refusing to attend a planned signing ceremony on the sidelines of the APEC summit in Danang, Vietnam.

Whatever the view, whatever hard feelings Trudeau's actions back then might have fostered, the so-called Comprehensive and Progressive Trans-Pacific Partnership will now be signed in March by trade ministers. Formal ratification in all 11 countries would follow.

Once ratified, the CPTPP will create another giant free-trade zone of 500 million consumers, while generating billions of dollars in new economic activity.

On that, at least, there is no dispute among the partners.

Standing up for Canada

"It hasn't been easy but we're finally at the finish line," said Australia's trade minister, Steve Ciobo, who, like Trudeau, is in Davos. "And Aussie business will be the big winners."

It's become the axiom of trade talks ever since Donald Trump became U.S. president to insist that a trade deal must be seen in terms of winning. So what wins did Canada really get out of the negotiations in Tokyo? 

According to International Trade Minister François-Philippe Champagne, this country got a better deal than the one the other nations wanted to sign back in November.

"When we were in Danang we stood up for Canada. We said for this agreement to work for Canada we need to address specific issues," he said. "You saw that we were forceful in our position and since then we have worked to get agreements with our partners, notably on the cultural sector ... to protect, defend and promote out culture across Canada."

The revised TPP deal includes improved access for the auto sector. (Chris Young/The Canadian Press)

"We also stood up for the auto sector, making sure we have a side letter for Japan to provide the greatest market access ever for the auto industry."

Canadian officials, speaking on background, said Canada obtained binding letters on culture with each of the other 10 nations that recognized Canada's right to protect its cultural sector.

The side letter with Japan is intended to resolve non-tariff trade barriers on automobiles, and requires Japan to give Canada the same terms as any auto makers in Europe and Japan. It also includes a formal dispute resolution process.

Canadian officials say both the letters and the dispute-resolutions mechanism are gains from the original deal.

A hit to the brand

These changes came despite the dark warnings two months ago that the deal was dead because of Trudeau's actions, that the remaining countries would move on without Canada, that the country and Trudeau's personal brand had been tarnished on the world stage.

Instead, Canada used its status as the lone holdout and its clout as the second largest economy in the group after Japan to push for and get more. 

Donald Trump pulled the U.S. out of the TPP exactly a year before the remaining countries announced the agreement. (Evan Vucci/Associated Press)

Tuesday's news out of Tokyo couldn't come at a better time for Trudeau, who weathered criticism not only for failing to sign the Pacific Rim deal in November, but who returned from China a month later without an expected announcement that the countries would begin formal trade talks.

For starters, it allowed Trudeau to stand before some of the most influential business leaders in the world to extol his government's commitment to more progressive trade, to reiterate his assertion that his government, as it did with the Europeans, closed a trade deal that includes chapters on the environment, labour and women's rights.

The news also came as NAFTA negotiators settled in for a sixth round of bruising talks in Montreal, where Donald Trump's negotiators continue to demand major concessions from Canada and Mexico — including guarantees of specific U.S. content in North American cars and a mandatory five-year expiry date — and after the president pumped up his threat to walk away from the deal if he doesn't get what he wants.

Today, Trump's two partners signalled their intention to sign a new deal with Asia. It may not have a direct impact on the talks in Montreal, but negotiators now know Canada  is on the cusp of free trade deals with large new markets in  both Europe and the Pacific Rim. It's a clear signal that this country is serious about lessening its dependance on its giant neighbour to the south.

And if coincidence is your thing, the announcement of this agreement in principle comes a year to the very day after Trump pulled the U.S. out of the TPP — leading many observers to conclude the deal would collapse without the world's largest economy.

It didn't. 

About the Author

Chris Hall

National Affairs Editor

Chris Hall is the CBC's National Affairs Editor and host of The House on CBC Radio, based in the Parliamentary Bureau in Ottawa. He began his reporting career with the Ottawa Citizen, before moving to CBC Radio in 1992, where he worked as a national radio reporter in Toronto, Halifax and St. John's. He returned to Ottawa and the Hill in 1998.

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