Calgary, AB – The last-minute decision by Canada to proceed with a new version of the the Trans-Pacific Partnership (TPP) trade agreement without the United States is arguably the most important trade development for Canada in the Trump era.
Reports out of Vietnam indicated that the 11 nations working on a new version of the TPP reached an agreement on “core elements” of a deal overnight local time on Friday, although a final agreement in principle is still in the works. The pact was thrown in doubt earlier in the day when a planned meeting of the remaining TPP signatory countries in Vietnam was unexpectedly cancelled after Prime Minister Justin Trudeau skipped the talks.
“While the TPP isn’t perfect, it is overwhelmingly in the best interests of Canadians. The decision to embrace the TPP will send a message that Canada stands with Japan, Chile, New Zealand and others in favour of open trade and greater economic engagement,” said Martha Hall Findlay, President and CEO of the Canada West Foundation.
“If TPP11 is indeed ratified, Canada will leapfrog from last place among its competitors in the Asian trade agreement race to a position of first among equals – and perhaps most importantly, given our similar export profiles, ahead of the U.S.” said Carlo Dade, director of the Trade & Investment Centre at the Canada West Foundation.
There are three main reasons why the deal matters for Canada.
1) Modelling by the Canada West Foundation shows the deal will bring a windfall of hundreds of millions of dollars a year as Canadian exporters take market share from the U.S. in TPP markets.
2) Had Canada not joined, the country would be stuck in last place among our competitors in Asia with only one agreement, while our competitors leap further ahead. Proceeding sends a signal that Canada is serious about engaging Asia.
3) Standing with the TPP nations sends a message to the U.S. administration that the era of open, win-win trade is not dead – something that will help Canada and Mexico with NAFTA negotiations.
“Canada came close to paying a heavy price for walking away from TPP – as well as handing Trump a major victory. Given the state of NAFTA negotiations, this news couldn’t come at a better time for Canada and Mexico,” said Dade.