ANALYSIS: Pacific trade deal would impact Canadian consumers
The Harper government's sudden desire to be part of a potentially sweeping new free-trade deal with Asia-Pacific countries and the U.S. could have far-reaching consequences for ordinary Canadians, possibly affecting everything from milk prices and cellphone rates to foreign takeovers and internet regulation.
Reaction to Prime Minister Stephen Harper’s unexpected announcement at a weekend summit meeting in Hawaii has mainly focused on whether the proposed free-trade deal would mean Canada’s having to tear down long-standing protectionist walls around dairy and poultry producers.
But trade experts say Canada's participation in the so-called Trans-Pacific Partnership (TPP) deal would almost certainly have an impact far beyond the farmyard.
So far, it is a comprehensive negotiation covering over 11,000 tariff categories and other trade issues among nine countries — the U.S., Australia, New Zealand, Malasia, Singapore, Vietnam, Brunei, Chile and Peru.
More than 20 negotiating groups have already met in nine formal rounds of bargaining to develop the specific commitments the countries will make to open their markets to each other's goods, services and government procurement.
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Japan recently asked to join the negotiations along with Canada, and even China is making favourable comments about the proposed pact.
Where exactly the Trans-Pacific negotiations will lead — and how long it might take to get there —remain unclear.
But experts say one thing is certain: For the first time in almost two decades, Canada’s entering the fray will ultimately put this country once again across the free-trade bargaining table from our biggest commercial partner.
John Weekes, Canada's former chief negotiator for the North American Free Trade Agreement (NAFTA) almost 20 years ago, says the U.S. will likely use a new Asia-Pacific deal to try to resolve a whole range of bilateral trade issues with Canada.
For instance, he says, NAFTA never dealt with Canadian foreign ownership rules that have kept American companies out of this country's lucrative telecommunications market — a fact, many argue, that has also been to the detriment of consumers here.
Documents from the U.S. Trade Office describe the proposed Trans-Pacific agreement as promoting "competitive access for telecommunications providers in TPP markets."
And Weekes says the U.S. might well want to use those negotiations to open up the Canadian telecom market to foreign ownership.
Since the Harper government has already shown it wants more competition, especially in the cellular phone market, it could also find the Trans-Pacific negotiations a convenient excuse to oblige.
The U.S. government documents go on to describe the proposed Trans-Pacific deal as a "single undertaking that covers all key trade-related areas."
While the documents are long on generalities and short on specific trade measures being contemplated, there is no doubt Canada is entering into negotiations that could cut a swath across all sectors of the economy and society.
For instance, negotiators are already considering proposals "addressing the high cost of international mobile roaming," those often punishing charges slapped on travellers using their cellphones and mobile data devices on the road.
Another issue the Americans might like to put on the table with Canada is opening the banking sector to more foreign financial services.
According to the U.S. Trade Office: "The TPP text related to investment in financial institutions and cross-border trade in financial services will improve transparency, non-discrimination, fair treatment of new financial services, and investment protections."
The proposed deal even includes "provisions addressing customs duties in the digital environment."
Of course, Canada could also find the Asia-Pacific trade talks useful in addressing a growing roster of trade irritants being spawned in an increasingly protectionist Washington of late.
The U.S. administration, for instance, may have a hard time defending its "Buy America" policy for all federal infrastructure projects while it is negotiating a Trans-Pacific deal that guarantees "government procurement is conducted in a fair, transparent and non-discriminatory manner."
Of course, in theory, there is nothing to say that Canada has to remain in the Trans-Pacific negotiations, or sign a new free trade deal with anyone.
But as the Harper government has apparently recognized, this is one time that not being a player would be risky if not reckless.
With the U.S. in virtual stagnation and Europe on the brink of economic disaster, Canada can ill-afford to ignore any opportunity to exploit the exploding markets in Asia and the rest of the Pacific rim.
Former NAFTA negotiator Weekes puts it clearly: "If other countries are starting to get tariff-free access and other improved trade with these major growth areas of the Pacific, we certainly want to be there too."
One way or another, Canada’s sudden move towards free trade with Asia and the Pacific rim involves a lot more than the price of milk, eggs and chickens.