CALGARY, AB June 12, 2017 – The 11 remaining countries in the Trans-Pacific Partnership agreement would all realize economic gains in a new trade deal even without the United States – while the U.S. would suffer a projected C$4.1 billion loss of exports, according to a new Canada West Foundation report.
The report, The Art of the Trade Deal: Quantifying the benefits of a TPP without the United States, has exclusive modelling that shows there are economic gains for every TPP country, even with the U.S. out of the pact.
Further, the new deal (a TPP11) would have significant economic benefits for Canada – benefits that were not there when the U.S. was part of the pact. Canada would see the highest gains after Mexico, according to the modelling. The U.S. would find itself a loser – turning a projected gain in exports to TPP countries under the original pact of C$17.3 billion into a C$4.1 billion loss.
The U.S. was initially seen as the “prize” of the TPP. While gains under a TPP11 would be smaller than in the original deal, moving ahead on a new agreement is clearly worthwhile for economic and political reasons, said report co-author Carlo Dade, Director of the Trade & Investment Centre. The modelling provides a quantifiable case for moving forward.
“Moving ahead with a TPP11 is clearly in Canada’s economic self interest. In an era of Trump, this is a way to turn threatened losses into gains,” said Dade.
In some areas of the TPP framework, where regulatory issues remain fluid – such as investor-state dispute mechanisms, intellectual property, and data – the TPP11 negotiators face policy challenges, said co-author Dan Ciuriak of Ciuriak Consulting. But on traditional grounds, there is a case to be made for the remaining signatories to go it alone.
“A TPP11 is a viable deal and a ready-made response to any sort of protectionist wave coming out of the U.S.,” Ciuriak said.
In Canada, the agriculture sector in particular would be better off with preferential access to lucrative opportunities in countries such as Japan. A TPP11 is also an opportunity for Canada to stop losing market share to the U.S. and other countries in Asia.
The report found that a TPP11 would:
• Generate an increase of 2.43% in exports among partners (40% of what would have occurred under the original deal)
• Raise real GDP of the TPP11 bloc by about 0.074%
• Improve Canada’s gains to C$3.4 billion, up from C$2.8 billion
• Turn a projected gain in exports from the U.S. to TPP countries of C$17.3 billion to a C$4.1 billion loss.