Tuft’s Study Predicts Negative Effects of TPP For Canada


In the article TPP’s Economic Impact Will Be Fewer Jobs, More Inequality, New Study Says, the author seeks to examine a study released at the beginning of this year regarding the TPP.  Interestingly, the study actually predicts a shrinking of the US and Japanese economies ten years after the TPP would come into being and a very modest growth in the Canadian economy.  Overall, the study claims that job losses will occur due to the TPP due to shifting production to goods for exportation as well increased competition.

The TTP would encompass 40% of the world’s economy so it’s not surprising that competition could get very fierce given new areas of trade for many of the countries involved.  The study conducted by Tufts’ Global Development and Environment Institute predicts that Canada’s economy would grow 0.28% as opposed to not being part of the TPP.  This 0.28% equivocates to only $5 billion dollars.  Interestingly, the Tuft’s research contradicts some early research that states there would be bigger benefits to employment and economic growth.  One contradictory study from the Fraser institute has the net benefits being at $9.9 billion for Canada, basically double what the Tuft’s research shows.

One finding the Tufts research that many have argued as a downside to the TPP is the loss of jobs and income inequality created by the TPP.  The amount of income flowing to business owners and shareholders would increase, relatively, while the amount of income flowing to wage earners would shrink, the Tufts study predicts.  A negative impact to income distribution scares many in Canada.  The exact numbers used are a reduction of the labor’s share of the GDP of 0.86%.  It’s important to note that Canada already more unequal than the US when it comes to the labor’s share of the GDP.  It will be interesting to see how Canada interprets conflicting studies about how the TPP will affect it’s economy in the future.


The Tuft’s study appears to confirm the fears of everyday citizens in countries that are included in the TPP, do you believe this study is valid?

If Canada does not ratify the TPP, could the results be worse than ratifying it?

If the TPP is scrapped, do you believe a new trade agreement will have to be crafted in its place?


TPP: What’s in it for Australia?

In this article we will discuss the impact of TPP on Australia.

Over the long term, Australia would probably benefit from increased productivity and access for Australian industry to parts of Asia that are currently closed to it. However, the advantages for Australian consumers are not that obvious.

SUGAR– One of the most lucrative markets that Australia wants access to is America’s sugar consumers but this may be a struggle as the US sugar lobby is very powerful.

DAIRY- The US and New Zealand all want more access to Canada’s milk market, which the government has traditionally restricted supply to thereby keeping prices high.

MEDICINE- Currently, the government sets the highest price and also subsidizes the cost of these medicines. But the US wants the market to be less regulated to benefit new medicine manufacturers.

REGIONAL COOPERATION- Members of the TPP account for nearly 40 per cent of the global GDP and Australia would benefit from being part of the regional supply chain.

Current Situation

Many of the sweeteners that Australia are hoping for, including access to America’s sugar consumers and to Canada’s dairy market, are probably unlikely to happen. This has some National MPs starting a “no sugar, no deal” campaign, which demands Australia abandon negotiations if access to new sugar markets is not included. Also, there is speculation that the US could be using the agreement as a way of limiting China’s expansion. This has triggered a rival Chinese deal, the RCEP, which excludes the US and which Australia is also involved with.

Source- http://www.news.com.au/finance/economy/the-transpacific-partnership-agreement-whats-in-it-for-australia/news-story/418aaf44c026a90a6febfc908481c838

Future Uncertain for TTP in Canada

In the article, Ratifying the TPP could be bad for Canada, but not ratifying it would be even worse: memo, the author examines the multiple options around the TTP as well the future of trade in Canada.  As most know, the TTP has been signed by all the countries involved, but it has yet to be ratified.  With growing sentiment against the TTP in the US, Canada, and other countries, it’s not surprising that some experts believe the agreement may never be ratified.

The previous finance minister of Canada, Joe Oliver, warned Canada in an October memo that not participating in the TTP could be disastrous.  In part, Canada needs to be part of the agreement if only for defensive measures.  If Canada were to opt out of the TTP, it would lose its ideal trade positions to the US and Mexico.  The memo noted specifically that these North American supply chains “underpin the [Canadian] economy.  On the positive side, the TTP would open the doors to trade with Asian countries, a position Canada does not hold strongly right now.

On the flip side, the TTP would dilute Canada’s great position within the NAFTA.  There would be significant competition from Asian countries.  Furthermore, the TTP could eliminate Canadian jobs and damage some sectors of the economy.  Interestingly, Nobel Prize-winning economist Joseph Stiglitz has urged Canada to abandon what he described as a “badly flawed” deal.  Suffice to say, the future of the TTP is in doubt.


Would the dissolution of the TTP be the best outcome for Canada?

Why hasn’t there been more sentiment in Canada about the TTP’s other provisions aside from trade?

Will Canada’s relations with Asian countries actually become worse if the TTP is not signed?



Canada Weighs Benefits and Drawbacks of TTP

In the article Not joining TPP will cost Canada billions in economic growth: report, the author investigates how Canada is examining its involvement in the Trans-Pacific Partnership (TTP), and how the release of a new study could say its opinion.  Canadians have been back and forth in deciding if signing on to the TTP is the right move for the country. It now appears that now signing on to the TTP, baring major countries, like the US, not signing on, is the right move because Canada could lose significant future trade revenue by not being part of the TTP.

Recently, one of Canada’s own top economists, Andre Downs, published a paper advising Canada’s ruling part, the Trudeau Liberals, that failure to sign onto the TTP would cost the country upwards of 5.3 billion dollars in lost trade revenue.  On the other hand, signing on to the agreement would generate long-term gains for the Canadian economy, expanding output by $4.3-billion.  With such large numbers in play, it’s obvious that a decision on the TTP is very important to Canada’s future economy.

The curveball in Canada’s decision is the ratification of the TTP by the other countries who could be involved, primarily the US.  All of Canada’s recent estimates assume the US will ratify the TTP.  It is interesting to consider that both US presidential candidates are currently publicly against the TTP.  Furthermore, there is protectionist sentiment in Canada, and there are voices that believe any benefit of the agreement will be nullified by its increased cost to Canadians.  These extra costs include billions of dollars in compensation for farmers as well as bigger price tags for copyrighted goods and patented medicines.  With all of this information in mind, it will be interesting how the future of trade unfolds for Canada based on the participation and ratification of the TTP.


Do you believe Canada will end up agreeing to the TPP?

If the US backs out of the TTP, will any other countries agree to the TPP?

Do you believe that Canada’s fears of lost trade revenue or justified or overblown?




Which Canadian agricultural companies stand to reap big rewards from the TPP trade deal

An article in Financial Post (April 26, 2016) titled “Which Canadian agricultural companies stand to reap big rewards from the TPP trade deal” (http://business.financialpost.com/investing/which-canadian-agricultural-companies-stand-to-reap-big-rewards-from-the-tpp-trade-deal) discusses the Canadian economic sectors that will and will not benefit from the TPP, as well as analyzes the agricultural companies that are expected to gain the most from this commercial deal. 65% of the current agricultural exports are destined to TPP members, meaning that the reduction of tariffs associated with this deal is expected to increase additional demand from these trading partners. On the other hand, the TPP is expected to have a negative impact on sectors such as textiles apparel, chemicals and metal products. The National Bank Financial has reviewed the companies in the agriculture space and has concluded that the ones that should gain the most from the TPP include AGT Food and Ingredients Inc. (AGT), Input Capital Corp., Cervus Equipment Corporation and Rocky Mountain Dealership Inc. Will the benefits of the agricultural sector outweigh the tradeoffs that this commercial deal will represent to the Canadian economy?

Trouble Behind the Scenes

In a recent article in the HuffPost, side talks between the U.S. and Japan during crucial TPP negotiations is discussed. Japanese officials reported that they were under the impression that the U.S. was representing both Canada and Mexico. Canadian and Mexican officials disputed this fact and were upset by the Japanese assumption. The negotiations were to allow more Japanese auto parts into the North American auto industry. How may Japanese relations with Canada and Mexico be affected in the future? How may U.S. relations with Canada and Mexico be affected? How may Japanese and U.S. relations be affected?

Lawrence MacAulay likely to support Trans-Pacific Partnership deal

An article in CBCNews (November 10, 2015) titled “Lawrence MacAulay likely to support Trans-Pacific Partnership deal” (http://www.cbc.ca/news/politics/tpp-trans-pacific-partnership-macaulay-1.3312670) describes the current status of the TPP agreement and the support that Canada provides to it. MacAulay considers fair a $4.3 billion compensation package offered by the previous government to dairy, poultry and egg farmers who will face more import competition after the TPP deal. Currently a tough debate is taking place in the US Congress to define the next steps. The members of the agreement have stated that renegotiating is not an option. Canada has requested authorization for tariffs on more than $3.1 billion per year of U.S exports. Will the U.S Congress approve the TPP? At what cost will the 12 members be willing to renegotiate the deal after the U.S Congress position is defined?