Trans-Pacific Partnership trade deal could be closed this week

The Conservative government hopes to reach an agreement before the weekend that would establish the world's largest free-trade zone, allowing a final sprint toward election day with the 12-country pact in hand.

Battles remain over auto, dairy sector concessions

Ed Fast, minister for tnternational Trade and minister for the Asia-Pacific gateway, heads to Atlanta, Ga., this week to try and close the historic trade deal. (Daniel Munoz/Reuters)

The Conservative government hopes to reach an agreement before the weekend that would establish the world's largest free-trade zone, allowing a final sprint toward election day with the 12-country pact in hand.

If all goes according to plan, the government will reveal details later this week of the Trans-Pacific Partnership at briefings in different cities including Atlanta, Ga., Ottawa, and Montreal, which is hosting Friday's French-language election debate.

Should the negotiations in Atlanta conclude successfully, Conservative Leader Stephen Harper will take the debate stage heralding a new free-trade deal covering 40 per cent of the global economy.

The government expresses optimism the deal might be sealed during a two-day round of talks for which Canada's trade minister departs Tuesday.

Ed Fast leaves the campaign trail in his British Columbia riding to join the three-dozen-member Canadian delegation already in Atlanta. Ministerial-level talks begin the next morning.

"We are certainly going down there with (hope there) could be a deal," said Max Moncaster, a spokesman for Fast. "But a lot of difficult issues remain, and we're committed to resolving those with our TPP partners."

That note of caution underscores the sense of disappointment still fresh in negotiators' minds following the last round. Harper had also planned to make a triumphant announcement on the eve of his election call, but those plans were scuttled during the late-July round in Maui.

The Canadian delegation felt blindsided by an unforeseen irritant on auto manufacturing. Sources in two countries say the American and Japanese sides worked out a drastic change that would affect vehicle manufacturing on this continent.

The other North American parties were only informed later. One source said the Americans first told the Mexicans they'd agreed to practically slice in half the regional-content requirement for tariff-free vehicles from the NAFTA levels. The Mexicans broke the news to the Canadians.

"Our officials were, like, 'No, that's not going to work,"' said a Canadian source, speaking on anonymity because they weren't authorized to discuss the talks publicly.

Wrangling over dairy

Officials identified positive signs since that July disappointment — they cited minor progress on auto manufacturing and dairy at subsequent talks in Washington and San Francisco.

Other countries have asked for greater access to Canada's tightly managed dairy sector, with sources saying those initial demands were multiple times higher than the increased import quotas in the Canada-Europe trade deal.

One source said other countries have inched away from their initial request.

But a New Zealand official said agriculture remains far too protected. Mike Petersen, that country's envoy for agriculture, said several countries including Canada haven't gone far enough.

Quebec dairy farmers brought two cows to Montreal before last week's French-language leaders' debate to protest the proposed Trans-Pacific Partnership. (Sarah Leavitt/CBC/Radio-Canada)

"We have yet to see the major players offer the step up to what is required to meet the goals of TPP," Petersen said. "This issue is clearly shaping up as being pivotal to the success or otherwise of these talks in Atlanta."

The federal government faces pressure at home, too.

The dairy industry has a strong presence in dozens of Central Canadian ridings. Ontario and Quebec's agriculture ministers are heading to Atlanta to shadow their federal counterpart, accompanied by representatives from the dairy sector.

Quebec Agriculture Minister Pierre Paradis said there's concern his federal counterpart could be pressured to give up too much.

"We want the minister, who left the federal campaign to go down there, to feel that this is a big deal," said Paradis, referring to federal-provincial meetings.

Epic battle over auto sector brewing

The battle over automobile production could be epic.

A union representing auto workers predicts production would shift to non-TPP countries like China with new regional-continent rules, and would exacerbate the long-term decline of Canadian auto manufacturing.

Unifor plans to fight the government in a dozen swing ridings in southern Ontario with a strong presence of auto workers. Unifor has previously run ads against the Harper Tories.

It wants the government defeated, and wants the opposition parties to back away from any bad deal. The union president noted that the deal's full text probably wouldn't even be released before Canadians vote.

"This government thinks they're going to close the deal, they're going to have a photo-op to say, 'Look, we just signed a deal,' without any intention of sharing the details with Canadians," said union leader Jerry Dias.

"They're not going to get away with it. They're going to have to tell the dairy farmers what's in the deal. They're going to have to tell the auto-parts companies what's in the deal."

Some Canadian auto companies favour the deal. Ontario-based Martinrea International Inc. pays taxes in Canada, has 2,500 employees in Canada, but also has 14,000 workers worldwide.

The auto-parts company says a TPP would help it grow — including in Canada. But if Canada misses out on TPP, it says, the car companies it supplies will simply shift operations to countries within the zone.

"How can we walk away from one of the largest free-trade agreements in the world — where we have an opportunity to participate and then don't?" said company chairman Rob Wildeboer.

The debate could continue for months, as parliaments in different countries decide whether to ratify the deal.