The Canadian government has been a late convert to the benefits of the Trans-Pacific Partnership. But will it be willing to make the changes necessary to fit in?
Canadian Prime Minister Stephen Harper’s proclamation at the APEC Leaders meeting in Honolulu last November of Canada’s formal expression of interest in joining the Trans-Pacific Partnership (TPP) trade talks marked a stunning reversal of Canadian policy. Up to that point, Canada had feigned disdain for the TPP, and publicly stated that it wouldn’t agree to join a negotiation where it would have to agree to a priori conditions.
Canada had been asleep at the switch when the TPP, which had begun life modestly as a grouping of just four small economies (New Zealand, Chile and Singapore, joined at the last moment by Brunei), expanded its membership at the APEC summit in Peru in 2008. The TPP had limited traction until the administration of George W. Bush, looking for an initiative to take on the trade front in the face of a hostile Congress, latched on to the TPP as a possible vehicle to promote trade liberalization, potentially leading to a future Free Trade Area of the Asia Pacific (FTAAP). Once the United States was on board, Peru, Australia and Vietnam all enthusiastically signed on through unilateral declarations. Malaysia expressed cautious interest and was eventually admitted. Canada, still mired in a minority government that hadn’t yet bought into the realization that Canada’s future lies as much, or more, in Asia rather than across the Atlantic or exclusively in North America, did nothing.
Over the past couple of years, though, the TPP has started to gain momentum. With the reaffirmation of U.S. commitment by the Obama administration, negotiations started in earnest in 2009, leading to a declaration in Honolulu in November 2011 at the APEC Summit that the TPP leaders had achieved the broad outlines of an “ambitious 21st Century agreement.” They expressed the hope that the agreement will be completed by the end of this year.
As the TPP started to move toward reality, and as Canadian trade relations with Asia continued to mark time (Canada has signed a number of free trade agreements in recent years, but none with an Asian economy), Canadian officials started to realize that they were on the outside looking in. They quietly started to sound out the United States on the possibility of Canada joining the negotiations, but it’s fair to say that Canadian participation wasn’t a U.S. priority.
First, there was the issue that adding participants would complicate a negotiation that was already challenging, given the varied economic interests of the participants, ranging from fully developed economies like Australia and New Zealand to emerging, state-directed economies like Vietnam. Second, there were some very real concerns regarding Canada’s willingness to make a positive contribution to achieving the kind of ambitious outcome the U.S. was seeking. Canadian intellectual property rights (IPR) laws were notoriously lax, and several attempts to update them had gone nowhere. Canada has also always been keen on carving out a wide exception for a broadly-defined range of “cultural industries.”
This is something not designed to appeal to important interests in the U.S. and, perhaps of more importance to New Zealand than the United States, Canada clung to an outdated supply-management system for dairy, eggs and poultry, the effect of which was to more or less seal off the Canadian market for these products (with the exception of specialty items that couldn’t be produced in Canada). In short, Canada wasn’t really welcome at the table, although no one wanted to say so publicly, and Canada didn’t want to run the risk of a rebuff by asking publicly.
Photo Credit: Office of the Canadian Prime Minister