Trans-Pacific Partnership: 6 questions answered
TPP talks in Atlanta may conclude soon, with just over 2 weeks before Canadians vote
Trade ministers and senior negotiators from 12 Pacific Rim countries are holed up in intense talks in Atlanta, trying to reach an agreement in principle for the Trans-Pacific Partnership.
The ministers originally were scheduled to meet until the end of Thursday, but International Trade Minister Ed Fast told reporters he hasn't booked a return plane ticket yet.
Their last meeting two months ago in Hawaii almost nailed it down: 98 per cent of the deal has been agreed to, sources suggest. Will everyone stay in the room this time for as long as it takes to tie things off?
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While we wait, here's what we know and what we don't know:
What is the TPP?
If it succeeds, this deal will form a trading block representing roughly 40 per cent of the world's gross domestic product.
The free trade push started small in 2005, with a sub-group of the larger Asia-Pacific Economic Co-operation forum — New Zealand, Chile, Singapore and Brunei. It grew to include the United States, Australia, Peru, Vietnam and Malaysia by 2008. When Japan expressed interest in joining, Mexico and Canada felt they needed to be in too. Canada officially joined in 2012.
The TPP is a plurilateral agreement — a World Trade Organization term for a sub-group of countries voluntarily agreeing to specific rules. (Under a multilateral agreement, all countries must sign on to everything.) Elements of the negotiations are not always reciprocal — Country A might offer something that benefits Country B, in return for something Country A wants from Countries D and E, who in turn might exact a concession from Country B.
Everyone's trying to meet what each perceives as the definition of a winning compromise — perhaps not in every area, but overall — and that's why the talks are so complicated.
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The TPP aims to bargain as many tariffs as possible down to zero. But it will also rewrite rules for trade in services and investment between partner countries, and tries to level the playing field by setting consistent rules for patent and copyright law, environmental protection and labour standards and mobility.
Why does Canada want in?
Canada's bilateral trade talks with Japan have stalled. However, it's a critical export market for a range of Canadian goods, from farm commodities to natural resources like lumber. If, for example, American or Australian competitors got a tariff advantage over Canada through TPP, it could be game over for Canadian exports there.
Canada and Mexico have enjoyed an advantaged relationship with the United States thanks to the North American Free Trade Agreement (NAFTA). However, with the U.S. looking for new trade partners in South America and Asia, the two other "amigos" risked losing if they were on the outside looking in.
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The list of potential markets interested in joining TPP down the road is too big to ignore: Taiwan, the Philippines, Laos, Colombia, Thailand, Indonesia, Cambodia, Bangladesh and India. China too, perhaps, someday.
When will TPP happen?
Much of the timeline is uncertain, starting with whether an agreement in principle will be reached this week.
But suppose it does: next, the finer points will need to be hammered out by technical and legal experts and translated into the various languages of the countries involved. We might learn roughly how much import access Canada had to give up on dairy products to get a deal, if any, but not exactly which countries will ship what kinds of products to fill this new quota allocation.
If the Canada-European Union deal is anything to go by, this process could take not just weeks but months. Then each country would need to ratify the agreement before it comes into force, a process that varies in each place.
In Canada, Stephen Harper's Conservatives have committed to putting all new trade deals to a vote in Parliament, although constitutionally, that's actually not required before ratification.
Politically, at least the framework for a deal needs to happen this fall for both the U.S. and Japan, where 2016 is an election year.
What about Canada's election?
When the campaign started in August, the federal government fell into "caretaker" mode: no significant new programs or spending will happen until after the Oct. 19 election.
However, knowing the TPP talks were ongoing, Harper's Conservatives sought and received a clarification that "where a major decision is unavoidable," such as due to an "international obligation," the trade minister could carry on representing Canada's interests.
The guidelines specify that consultation with opposition parties "may be appropriate, particularly where a major decision could be controversial or difficult for a new government to reverse." However, both the Liberals and the New Democrats say they are not being consulted about what's happening at the table this week.
The real question might be not how the election impacts the ability to get a deal, but rather how getting a deal might impact the election: Will Conservatives be credited with success? Or will concessions cost them seats?
What if Conservatives don't win?
Neither the Liberals nor the New Democrats have said they'd support this deal no matter what — both say they want to see the deal before passing judgment.
However, considering past positions on free trade deals, as well as current messaging around this one, it's not hard to imagine the Liberals supporting the kind of deal that's shaping up. Or most Liberals, anyway: agriculture critic Mark Eyking suggested in an interview last weekend that if dairy concessions were made, Liberals wouldn't approve.
New Democrats have worked hard to shake off the anti-trade label that Conservatives have tried to stick to their party. However, their agriculture critic, Malcolm Allen, said Wednesday the party does have red lines that, if crossed, would rule out their support. He declined to specify exactly what those might be.
Harper is fond of repeating that TPP will proceed with or without Canada. If a new government decided it was better out than in, other countries should be expected to carry on.
Who wins and who loses?
Any sector that gets the tariffs on its major exports down to zero is in line for a win under TPP. In Canada, that's a long list, ranging from heavily manufactured goods to raw resources. Canada's strong banking industry is among the services that could find a new competitive edge.
Any sector that has a sensitive domestic market currently protected by tariffs stands to lose, although the fine print of exemptions must be studied before the exact impact can be calculated. For something like automotive manufacturing, the precise details will really matter.
Harper has promised that Canada will only sign if the final deal is an overall win — balancing the interests of different regions and economic sectors. When, or perhaps if, an agreement is reached, all parties will scrutinize it to decide whether that was achieved.