Canada Chases the TPP Holy Grail (Page 2 of 2)

Fast forward to Honolulu. Japan had let it be known prior to the APEC summit that it would be interested in joining the TPP talks. This would be a quantitative game changer, not only because of the importance of the Japanese economy, but also because of the opportunity to get Japan to adopt trade disciplines that it had traditionally rejected. Japan’s not so subtle profession of interest offered an opportunity for Canada (and Mexico). It would be difficult for the U.S. to embrace Japan yet rebuff Canada, a NAFTA partner and its largest trading partner. Moreover, Obama had to give Harper some bad news in Honolulu. He said he would be deferring a decision on the Keystone XL pipeline, which was supposed to bring Alberta bitumen to the markets in the U.S. southeast. Perhaps to sugar coat this bitter pill, the Obama cleared the way for Canada’s expression of TPP interest by “welcoming” Canadian (and Mexican) interest in participation – while reiterating the high standards expected of TPP participants.

Since then, Canadian officials have gone into overdrive. Trade Minister Ed Fast has just visited Malaysia, Singapore and Brunei to drum up support for Canadian participation, and plans to visit all TPP countries. Malaysia has given its approval for Canada (and Mexico) to participate, provided they agree to sign on to what has been agreed so far. Canadian officials have met their U.S. counterparts in Washington, where U.S. officials reported on input received from U.S. industry in response to a Federal Register notice soliciting comments on Canadian participation. Stakeholder comments included a range of sector-specific issues including comprehensive market access for goods, investment, intellectual property rights, insurance, and telecommunications, among others, in addition to cross-sectoral issues such as regulatory cooperation. Canadian officials underscored the Canadian government’s readiness to engage with the United States on a range of issues going forward. Trade Minister Fast claimed that, “More than 91 percent of the submissions supported Canada’s membership in the TPP.”

Indeed, it makes economic sense for Canada, the fourth-largest economy in APEC, to be part of the TPP, but whether Canada is truly prepared to adopt the so-called “dress code” of the TPP, and be ready to agree to a comprehensive, bold and far reaching agreement (including behind-the-border measures, investment, IPR and no sectoral exclusions) remains to be seen. The Harper government is close to finally enacting new copyright legislation, and has indicated that it wants to review and liberalize Canada’s investment restrictions, particularly in the sensitive telecommunications sector. Whether it’s prepared to tackle the disproportionately influential dairy and poultry lobby is another question, but the TPP might be the incentive needed to bring about a needed reform of some public policy positions in Canada.

All of the negotiating partners have defensive interests, and as with any agreement there will be give-and-take, so Canada needs to climb on board fast. There’s no question that the addition of three new entrants part way through the negotiating process won’t simplify the tasks of the negotiators. Despite that difficulty, Canada wants in – badly. It has concluded that it’s better to get inside the tent part way through the process than to wait on the outside and have no ability to shape the outcome.

Whether the other partners will be sufficiently convinced that adding Canada will be a net benefit remains to be seen. In the meantime, Canada continues its active chase of the TPP “holy grail,” hoping to be able to take a deep draught from that elusive cup. 

Hugh L. Stephens is a former senior official in the Canadian Department of Foreign Affairs and International Trade. He is currently Principal of Trans-Pacific Connections/TPC Consulting, based in Vancouver, BC, Canada (www.tpconnections.com).

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