TPP deal protects Canadian jobs

Canada has become a founding member of the Trans-Pacific Partnership, a 12-country trading block that will enjoy a significant drop in tariffs nearly across the board while fundamentally changing the nature of the North American auto industry and nudging Canada’s supply-managed agricultural sectors towards greater international trade.

Conservative Leader Stephen Harper says the historic deal protects Canadian jobs today and creates more for generations to come as it secures access to hundreds of millions of new customers in the Asia-Pacific region.

But it won’t please everyone.

“This deal is, without any doubt whatsoever, in the best interests of the Canadian economy,” Harper told a news conference Monday after the deal was announced.

http://www.cbc.ca/i/caffeine/syndicate/?mediaId=2676613157

Trans-Pacific Partnership Agreement: How it could affect Canada’s Auto, Dairy Sectors

An article in Business (October 4, 2015) titled “Trans-Pacific Partnership Agreement: How it could affect Canada’s Auto, Dairy Sectors” (http://www.huffingtonpost.ca/2015/10/04/trans-pacific-partnership-agreement_n_8241614.html) describes the most sensitive issues for Canada’s auto and dairy industries in regards to the TPP agreement. Currently under NAFTA an auto part needs to contain 60% of North American content to remain duty free. Through the TPP Japan is pushing for only 30% to guarantee a tariff free movement of vehicles and auto parts across the TPP members. This proposal may cause Canadian auto parts makers to lose business to low-cost Asian producers that aren’t part of the TPP such as China and Vietnam. Also experts of the University of Windsor predict that 10,000’s of jobs in the auto sector could be at stake in Canada due to the TPP. How will Canada compensate for the unemployment rate that might increase due to the TPP agreement? What may be the optimal percentage for Canada of North American content in the auto parts industry to guarantee an internal economic equilibrium in this sector?

Stephen Harper says TPP deal ideal for Canadian Economy

Canada’s economy will be profited largely by significant drops in tariffs in the North American auto industry and by nudging Canada’s agricultural sectors towards greater international trade. Conservative leader Stephen Harper says the deal protects Canadian jobs and creates more for the future generations as it secures access to hundreds of new customers in the Asia-Pacific region.

Canadian officials have been briefing media over the possible opportunities for them from the TPP deal. For example, tariff rates on Canadian beef exports to Japan will be lowered to an astonishing 9% from 38% for the next 15 years. Also other tariffs on commodities like canola, fish and seafood, forestry and industrial goods will be eliminated or lowered across the TPP region in phase-in period of 5-15 years.

However, the deal means aspects of NAFTA changes to 60% of parts and vehicles sold tariff-free to be manufactured in North America. In order to qualify as tariff-free under TPP, 45% of net cost of the vehicle needs to originate in TPP countries. For auto-parts, 45% of core parts and priority parts and 40% of others parts need to originate in TPP countries. Canada granted new access for TPP countries for its agricultural sector.

With the implementation of TPP, two programs will be available to farmers that incur potential losses; a 15-year $2.4 billion income guarantee program and a 10-year $1.5 billion quota value guarantee program. A $450 million program to support improvements to Canadian dairy, poultry and egg processing facilities is also available. Cabinet has also approved a $15 million market development fund to help the supply-managed agriculture sector promote Canadian products, bringing the total price tag to $4.3 billion for the suite of transition assistance on offer.

So its all smiles for Canadian economy, but each country needs to ratify the final text, and in Canada it will take the form of a vote in Parliament.

Full report: http://www.cbc.ca/news/politics/canada-election-2015-tpp-agreement-atlanta-1.3254569

Trans-Pacific Partnership deal reached

The largest trade-liberalizing act of history has been announced by the trade ministers of 12 countries on Monday 5th October, 2015. Ministers from the major economies of the U.S., Japan and Australia called the Trans-Pacific Partnership an ambitious and challenging deal that will cut down the tariff barriers and will set the rules for trade in the 21st century

http://www.theguardian.com/business/2015/oct/05/trans-pacific-partnership-deal-reached-pacific-countries-international-trade

The US president, Barack Obama said that this deal would eliminate more than 18000 taxes that various countries have put on their products. It also includes more commitments related to labor and environment than any trade agreement in history. The deal is seen as a challenge to China’s growing dominance in the Pacific region. Now, the Lawmakers in TPP countries must approve the deal, setting up congressional wrangling on the deal.

There were worries about the monopoly period of the biologics between the US and Australia, but they were able to come to a compromise. The TPP deal was controversial because of the secrecy to the agreement and how it would affect an array of groups from Mexican auto industry to Canada’s dairy market. The issue which threatened to derail talks was the length of monopolies to developers of new biological drugs.

The United States had proposed 12 years of protection to encourage pharmaceutical companies to invest more in next-generation treatments but Australia, New Zealand and other health groups opposed and sought for a period of 5 years to bring down drug costs and burden on medical programs. Negotiators agreed on a compromise that the agreement would protect the data between five and eight years.

Another issue hovering was protections for dairy farmers. New Zealand wanted to increase access to US, Canada and Japanese markets. This issue was addressed in the final hours of the talks as said by the officials. Separately, the US, Mexico, Canada and Japan have agreed on the rules of origin of auto parts and auto trade within the TPP region to qualify for duty-free status. The TPP would give Japan’s automakers, led by Toyota Motor Corp, a freer hand to buy parts from Asia for vehicles sold in the United States but sets long phase-out periods for US tariffs on Japanese cars and light trucks.

The TPP deal announced on Monday also sets minimum standards on issues ranging from workers’ rights to environmental protection. It also sets up dispute settlement guidelines between governments and foreign investors separate from national courts.

Since the activist groups are still in protest with the TPP deal, it remains to see how the lawmakers handle the situation. Will they vote down the TPP or will it stay?

Dairy deal the toughest issue as TPP deal nears an end

The major item standing in the way of the one-of-a-kind free trade agreement, the TPP, is the most common: milk. The pressure is on the U.S., as the leading proponent of the deal, to break a longstanding impasse over trade in milk-products like powder, whey protein, and cheese.

A similar meeting in July in Hawaii resolved issues regarding e-commerce, investment and environment only leaving differences over pharmaceutical patents, vehicle trade and dairy business. Officials said that solution for the first two are in sight but the dairy trade would consume a lot of time in Atlanta.

The dairy issue is a potent political problem for Canadian Prime Minister Stephen Harper who faces an election later this month in a country where dairy farmers are numerous in voter rich provinces of Ontario and Quebec. Harper has promised farmers that he won’t destroy their livelihood, but still the dairy industry is not buying it. Also, staying out of the deal is not an option for the export-dependent agriculture and agri-food sector of Canada. Also Canada’s agriculture minister said that any loss to dairy farmers will be compensated by softening the Canadian system of higher imports with payments to producers.

In New Zealand, a milk-producing powerhouse, trade minister Tim Groser said that he has prepared his dairy farmers for a measure of disappointment but also he would try and get the best possible deal. There is one reason why Australia and New Zealand are waiting is to repeat the case for fewer trade barriers. New Zealand’s agricultural industry representative have said that they will fight hard as it is a major industry for their nation.

Canada, Mexico ‎drawn into deal-breaking auto talks in Trans-Pacific negotiations

Steven Chase – The Globe and Mail

Aside from the dairy market issues that Canada is facing with the current talks about the proposed TPP, it is now linked to Mexico in reaching an agreement with the 12 countries involved in regard to how many automotive parts can be manufactured within the TPP countries. Canada is currently the ninth largest vehicle manufacturer, and this particular sector represents a large portion of their economy. Therefore, they are working together to ensure their interests in the United States market as they have always had. A particular point of this article is that Canada and Mexico were excluded from these talks with Japan even though they are part of the NAFTA partners with the U.S. This was a Situation that surprised Japanese representatives.

Full article: http://www.theglobeandmail.com/news/politics/us-excludes-canada-mexico-from-tpp-auto-negotiations/article25842330/

Pacific Trade Ministers Aim to Seal TPP Trade Pact

According to the article (http://news.yahoo.com/pacific-trade-ministers-aim-seal-tpp-trade-pact-050700679–finance.html), top trade representatives of 12 Pacific Rim countries are hoping to finalize the TPP agreement this week following the failed negotiations that occurred in Hawaii earlier this year.

A handful of issues hindered the talks in Hawaii, including US treatment of Japanese auto-parts, the length of patent protections for biologic drugs, and open markets for dairy products from major producers.

While prospects look good that the deal could be sealed this week, nothing is certain. Vocal public groups are raising objection to several issues under discussion, and there have been multiple demonstrations protesting the TPP in both Canada and New Zealand.

Nonetheless, if a deal is struck, it could become a model for an even larger agreement, the Transatlantic Trade and Investment Partnership (TTIP) that Washington is negotiating with the European Union.