March meeting should shed light on TPP fate
Trade minister working behind the scenes to sell member states on accepting Canada.
Canada's acceptance into the Trans-Pacific Partnership is not guaranteed but the government will likely have a better sense of whether it will be able to join the trade club in March, say trade analysts and observers.
That's when the nine current TPP member countries meet in Australia for the next round of free-trade talks.
Last November, after years of downplaying Canada's interest in the agreement, Prime Minister Stephen Harper changed course and surprised many with his sudden announcement that Canada was interested in joining the TPP. Now the government is on a mission to gain entry into the TPP.
"I think it's unlikely that Canada will be at the March negotiations, but I think it's reasonable for Canada to expect some feedback after that meeting on Canada's status with the TPP," said Yuen Pau Woo, president of the Asia Pacific Foundation of Canada. Japan and Mexico have also expressed interest in joining the talks.
In the "best case scenario," Canada would only be included in the talks towards the middle of the year, said John Weekes, who was Canada's chief negotiator for the North American Free Trade Agreement and is currently a senior business adviser at Bennett Jones LLP in Ottawa.
A spokesperson with the Office of the United States Trade Representative wrote in an email to Embassy that once countries express interest in joining, "each current TPP member begins a bilateral process with the prospective new member to discuss their readiness to join the high-standard TPP agreement and to address issues of concern."
The current TPP members—United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam—will decide by consensus whether the interested countries should be allowed in.
The March meeting would be one place where the chief negotiators from the nine countries could exchange views, Mr. Weekes said.
But if admitted, Canada and the other countries would need to wait a few months since the United States administration would have to give 90 days' notice to the US Congress, he said.
The US Trade Representative office spokesperson said the timing of the decision on whether or not to let Canada in has not yet been decided since the bilateral discussions are still happening.
Meanwhile, Trade Minister Ed Fast has been trying to garner support from TPP member countries.
Peter Clark, former Canadian trade negotiator and president of the international trade and public affairs consulting firm Grey, Clark, Shih and Associates, Ltd., pointed to Mr. Fast's visit to Geneva, Switzerland in December for the World Trade Organization eighth ministerial meeting.
Mr. Fast met with his counterparts from more than 20 countries on the sidelines to "discuss issues of bilateral importance," according to a government release.
"He met with every other potential partner in the TPP, selling them on the attractiveness of having Canada at the table and as a participant in the TPP," said Mr. Clark, who was also in Geneva at the time. "He's done a lot of homework to build it up; I understand that essentially around the table he got pretty good reaction."
Trade department spokesperson Me'shel Gulliver Bélanger said in a written response to questions that the government would continue to talk with TPP members about Canada's interest to join.
"We have reviewed the framework for the TPP and are confident we can meet or exceed the level of ambition TPP members are striving for," she wrote.
But analysts say Canada could face some challenges in being accepted.
Hurdles to cross
Canada is vulnerable on supply management of its dairy and poultry industries, said Debra Steger, a senior fellow with the Centre for International Governance Innovation and a professor with the University of Ottawa's law faculty.
Before Mr. Harper's Nov. 13 announcement, analysts often pointed to the country's supply management system as the reason why Canada was not entering the TPP talks. New Zealand has been vocal in criticizing the system. The country's prime minister, John Key, said in 2010 that Canada excluding dairy would be "unacceptable."
"All countries approach negotiations with a view to protecting their interests. Canada's approach to TPP will not be different in this regard," said Agriculture Minister Gerry Ritz in an email to Embassy in November. "Canada will seek to defend and promote our specific interests in every sector of our economy, including supply management."
It will be a difficult issue for Canada if it is on the table, Ms. Steger said. She added that if it is discussed, it is unclear whether countries such as the United States would challenge Canada on supply management before letting it join the negotiations or whether it's something that they would want to negotiate after letting Canada in.
But Mr. Woo said there are other forces that could affect the decision to admit new members.
"I think the big question around new entrants to TPP hinges, not on Canada, but on Japan," he said. Japan has also been called out for its system of supply-side managed agriculture products.
The position Tokyo takes on its agricultural protection will be an important factor for not just its entry into the TPP, but also on Canada's prospects, Mr. Woo said.
"If Japan is willing to put everything on the table, then we're the odd one out," he said. "If they are not willing to put everything on the table, and there is sufficient political will to bring them in to the club anyway, perhaps on the insistence of the Americans, one could conceive of Canada riding on Japan's coattails to get in on those same grounds."
Japan is of much greater interest to the Americans and other TPP members than Canada, said Mr. Woo. The "wiggle room" that they could give to Japan might not be afforded to Canada.
"Which is why Canada should put forward its best foot in seeking entry into the TPP and aim to join the negotiations with as high an ambition as possible for liberalizing trade in not only partner countries, but also at home."
But he also noted that Canada's trade strategy for Asia has to encompass more than just the TPP, since some issues remain controversial, such as the Americans' push for stricter intellectual property rules, raising questions about the prospects for a deal.
Mr. Clark said a free trade agreement with Japan would be far preferable to the TPP because it could probably be completed more quickly.
While the United States Trade Representative website states that TPP member countries would like to finalize an agreement this year, Mr. Clark said he doubts that will happen.
Canada launches consultations
Various groups are getting ready to submit their thoughts on Canada's participation in the TPP. The Department of Foreign Affairs and International Trade placed a notice in the Canada Gazette, the government's official newspaper, on Dec. 31 to launch a domestic consultation process.
"Domestic consultations play an important role in informing Canada's negotiating position before and during trade negotiations," wrote Ms. Gulliver Bélanger.
The government has asked interested citizens to submit their views by Feb. 14.
John Masswohl, director of government relations for the Canadian Cattlemen's Association, said its letter to the government would state its support for not only the TPP (assuming that Japan is part of the negotiations), but also a bilateral free trade agreement with Japan. Beef exports to Japan face both tariff and non-tariff barriers, such as the fact that beef exported from Canada to Japan has to be from cattle less than 21 months old, Mr. Masswohl said.
Meanwhile, the Dairy Farmers of Canada will reiterate its support for Canada entering into the trade talks, provided that the government maintains its position on supporting the country's supply management system.
"I fully trust the government will continue to defend our interests in the TPP context," said Yves Leduc, the organization's director of international trade. "The New Zealanders will pressure the Canadian government to do something on dairy, but as far as we're concerned the Canadian position is crystal clear."
The Council of Canadians will also be making a submission.
Trade campaigner Stuart Trew said his group's critique wouldn't be too different from what it has said about the deal being negotiated between Canada and the European Union. This would include issues related to intellectual property, tariffs, and supply management among others.
The US is likely asking for the same kinds of reforms in terms of intellectual property as the Europeans. Regarding supply management, "there should be no lowering of tariffs or undermining of systems in place," Mr. Trew said.
"We are not supportive of the free trade model that's tied up in these negotiations, we don't see it as leading to jobs or food security," he said.
He added that the group would also ask the government to hold a briefing on its interest in the TPP.
"We are trying to set up the same kind of system that we've seen with [the Canada-EU deal] where we get regular updates; that would be useful."