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?

Thailand could benefit from TPP

New Zealand has suggested that Thailand should consider joining TPP during the public scrutiny process by member states, saying that the partnership will be world’s largest trade agreement. NZ’s ambassador to Thailand said that since Thailand was a strong trading nation and heavily reliant on exports, which accounts for 70% of its GDP, joining TPP would increase trade opportunity and ensure the country’s future growth.

Thailand is moving forward to membership of Regional Comprehensive Economic Partnership (RCEP) which has 16 countries – 10 Asean members, but RCEP can’t compensate for non partnership in TPP, whose market size and larger GDP is much larger.

Thailand should consider joining every trade agreement possible as it is important to benefit from the different angles offered by each pact, and it would help open up opportunity for the Kingdom to increase market access to all. Following the TPP’s implementation, the combined trade of its member economies will double.

For instance, New Zealand has strengths in service businesses such as education and IT, and cooperation under the TPP should help promote those sectors’ growth into other markets while other service businesses will need more investment from other countries to help develop their growth. Meanwhile in regard to bilateral trade between Thailand and New Zealand, Levermore said that almost 10 years from the implementation of their free-trade agreement, he expected there would be a revision of the FTA to promote more trade and investment growth on both sides as well as leveraging closer cooperation in many sectors.

New Zealand’s special agricultural trade envoy, Mike Petersen, said that under the bilateral FTA he expected that Thailand and New Zealand would tighten their cooperation in many sectors, particularly in agriculture as New Zealand has high expertise in the industry. Since New Zealand has high expertise in five key agricultural sectors – dairy products, beef, sheep, farming and wine – the country foresees closer cooperation with Thailand as well as more trade and investment for both sides.

New Zealand could also help transfer technology and know-how in quality agricultural production and improve capacity for Thai farmers which would in turn increase consumer satisfaction according to Petersen. Bilateral trade amounted to about Bhat 60 billion last year.

Full report: http://www.nationmultimedia.com/business/TPP-could-benefit-Thailand-30271118.html

Australia and New Zealand want USA to rush the TPP

Previously I had posted how the TPP was formed from just the original 4 members to the current 12 members and how USA has become a driving leader for the ongoing negotiations.

Andrew Robbs, the minister for trade and investment for Australia has urged them to help rush the proceedings so that Australia and New Zealand do not have to suffer from stalling at this point of the negotiations as per http://www.afr.com/news/politics/andrew-robb-demands-us-tear-down-barriers-or-no-tpp-deal-20151001-gjz0pm

Over the past few weeks, Australia has pushed for 87000 tonne sugar quota from the USA and some of the US congressmen have backed this deal, but the majority have concerns whether such high import values would be good for the US market?  New Zealand wants more from the dairy point of view, asking for increased imports from the others especially USA for their kiwi butter, cheese and milk powder citing dairy accounting for at least 30% of their GDP.

USA feels that allowing Australia to a further 87000 tonne limit would jeopardize the other countries like Mexico and their local manufacturers. The same goes for New Zealand’s demand considering that USA itself is a huge manufacturer of dairy products. The USA imports are worth more than $100 Billion in agricultural products as per http://www.abc.net.au/news/2015-04-10/what-hope-for-us-sugar-concessions-in-tpp/6383638

With each countries prioritizing their own demands and the fact that soon the elections for Canada followed by USA and Japan will be held, will there be a mutual agreement soon?

http://www.reuters.com/article/2015/08/04/us-australia-usa-sugar-idUSKCN0Q909W20150804

 

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

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.

New Signs of TPP Dairy Movement

According to the article (http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11520114), there are reported signs of a deal coming together on access to dairy products in North America ahead of trade talks happening this week in Atlanta, Georgia. Reports over the weekend suggest that, despite protests from the dairy sector in both the US and Canada, both countries are preparing to move on their highly protected markets.

According to several news outlets, the US is signaling willingness to open its dairy market to some extent for imports from New Zealand and Australia.  The US National Milk Producers Federation and Dairy Export Council are expressing alarm at this, fearful that without sufficiently consulting the US industry they will potentially open the US market to Canadian imports without a reciprocal ability for US dairy producers to enter the Canadian market. “Tariff elimination on key products without reciprocal treatment by Canada would seriously undermine the US dairy economy,” the two organizations said in a joint statement.

Trans-Pacific Partnership: It’s Not Just About Chickens and Milk

This article (http://globalnews.ca/news/2244890/trans-pacific-partnership-its-not-just-about-chickens-and-milk/) outlines what the TPP is, why it matters, and what the federal parties are saying about it.

First, the TPP has been in the works for nearly a decade, and will touch on a variety of matters related to the economic policy of twelve countries on four continents. When it is signed, the TPP’s members will account for 40% of global GDP.

The TPP has been particularly contentious in Canada, one of its potential members, because it could mean an end of supply management in their dairy and poultry industries, which restricts the amount of milk, cheese, eggs, and poultry that farmers are permitted to produce. Although Canada has been repeatedly reassured that their supply management will survive, Canada is apprehensive to agree to the deal. However, there is evidence that if Canada does not relax its stance on the issue, they may be excluded from the TPP.

Additionally, the auto sector is bracing for possible changes that may come with the TPP. In particular, Japan has been pushing for more lenient rules to allow Japanese-made vehicles into North America duty-free, with fewer Canadian-made parts.

Furthermore, the TPP could give internet service providers new power to disable or block websites that violate copyright laws. It may also bring an end to rules that block cross-border transfers of data via the internet, or require sensitive personal data to be stored on servers within national borders.

Finally, signing the TPP will likely require multiple concessions from Canada, but conservatives argue that it will open up numerous foreign markets in which Canada had not previously been able to invest or export. The conservative party has relentlessly defended Canada’s participation in the deal, but could lose traction in its re-election campaign if the final TPP agreement hurts the dairy, poultry, or manufacturing industries.