Canada left on sidelines of emerging trade body
By Jason Fekete, Postmedia News November 12, 2011
HONOLULU — The Harper government says it's interested in joining the emerging Trans-Pacific Partnership trade group that's being heralded by the Obama administration, but Ottawa acknowledges Canada's attempts to gain access to the club are being resisted by some countries.
Several Canadian business groups are calling on the Conservative government to join the nascent Trans-Pacific Partnership, but Canada’s supply management system for less than 20,000 Canadian dairy and poultry farmers appears to be the major impediment.
Prime Minister Stephen Harper and leaders from Pacific Rim countries are in Honolulu for the Asia-Pacific Economic Cooperation summit, but it was a meeting that Canada wasn’t invited to on Saturday that’s one of the most notable on the agenda.
Harper held a series of bilateral tete-a-tetes with leaders from one economic powerhouse and two emerging economies — meeting Chinese President Hu Jintao, Chilean President Sebastian Pinera and Peruvian President Ollanta Humala — as well as hosting a roundtable discussion with the Canadian members of the APEC business advisory council.
However, it was a gathering of leaders from nine Asia-Pacific countries, including the United States, in the emerging TPP that seemed to be the club that everyone wanted in on — but Canada isn’t a member and is not being welcomed with open arms.
“We are looking at the Trans-Pacific Partnership. We have expressed interest inbeing part of that process, but we will only do so if that process is in the best interests of Canadians,” International Trade Minister Ed Fast told reporters Saturday in Honolulu.
“There has been some resistance and suggestions that we should be pre-negotiating our entry to the Trans-Pacific Partnership. We have made it very clear that Canada will not pre-negotiate. We believe all of those issues should be discussed at the negotiating table,” Fast added.
U.S. President Barack Obama announced the broad outlines of the agreement Saturday following a meeting of the members in the TPP, which the White House calls the “next generation” and “landmark” agreement for economic integration in Asia-Pacific region.
Canada’s entry into the TPP is being blocked by some countries — observers argue it’s the U.S. and New Zealand — because the government refuses to budge on its supply management system for fewer than 20,000 dairy and poultry farmers.
The system protects farmers behind tariffs, assigns them production quotas and forces Canadians to pay higher prices for products like milk, cheese, chicken and eggs.
Japan announced Friday it was entering negotiations into the TPP and appears willing to dismantle some of its tariff walls for rice and grain farmers. Canada isn’t convinced — at least for now — it’s the right deal.
“At this point in time we have not made the determination that it is in Canada’s best interests to join these negotiations,” Fast added. “We’ve made it very clear time and time again that our government will defend our system of supply management, we have not changed our position on that.”
Harper, who along with Fast met with Canadian members of the APEC business advisory council, said Canada’s future economic success is largely tied to the Pacific Rim.
“Canada’s growth is already significantly influenced positively by growth in Asia,” Harper told reporters. “Asia is already an important part of the growth we’ve had in trade and the creation of jobs in recent years, and obviously we are looking at ways of increasing that in the future.”
Around the same time, Obama was announcing the broad strokes of the Trans-Pacific Partnership, saying he’s “confident” the TPP members can complete the free-trade agreement and have it serve as a model for future pacts.
“With nearly 500 million consumers between us, there is so much more we can do together,” Obama said on the sidelines of the APEC summit.
“Together we can boost exports, create more goods available for our consumers, create new jobs, and compete and win in the markets of the future.”
The Trans-Pacific Partnership is currently a nine-member Asia-Pacific regional trade agreement being negotiated among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Japan would make it 10 members.
The broader goal is to create a tariff-free region and members view it as a critical multilateral agreement, particularly with the ongoing troubles from the Doha Round of World Trade Organization negotiations.
Back in Canada, the head of Canadian Manufacturers & Exporters, the country’s largest industry and trade organization, said he’s hoping the federal government will enter TPP negotiations and not let supply management block potential discussions.
“It’s important for Canada to be a part of the TPP,” said Jayson Myers, CEO of the Canadian Manufacturers & Exporters. “I don’t think entering into the trade negotiations means we need to dismantle supply management. Let’s be a part of the negotiations.”
The Harper government has been trumpeting the benefits of increased trade throughout Asia-Pacific, including less expensive consumer goods and new Canadian jobs.
The Conservatives have made Asia a priority since coming to power in 2006, with roughly 40 ministerial visits to China alone. Bilateral trade with China has tripled since 2001, totalling nearly $58 billion last year, and the country is now Canada’s second-largest trading partner behind only the U.S.
Canada has also been negotiating foreign investment and protection agreements with China and India, which the government expects will increase two-way trade.
The TPP, observers argue, would be an important club for marketing Canada’s agricultural crops and vast natural resources to a region growing in economic and political clout.
“The Canadians have in recent years been pretty MIA (missing in action) when it comes to the Asia-Pacific. Part of it is the fact that we are frozen out of the Trans-Pacific Partnership,” explained Kim Richard Nossal, a specialist in Canada-U.S. relations and director of the Centre for International and Defence Policy at Queen’s University.
“The fact that Canada is on the sidelines is a significant problem.”
A report recently published by the Canadian Council of Chief Executives and Canada China Business Council said the Conservative government must be more engaged across the Asia-Pacific region.
“Canada has a reputation in Asia of showing up there but not being serious about establishing long-term relationships,” said the report.
It said having Canada join the TPP would be the “most efficient” way for the country to sew stronger economic ties with Asian countries — but only if the Harper government reforms Canada’s supply management system and improves the relatively lax enforcement of intellectual property.
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