China has passed Canada as the United States’ largest trading partner, making trade agreements like the Trans-Pacific Partnership more important, says Sylvain Charlebois, a professor at the University of Guelph’s Food Institute.
Trade is about leveraging commodities, he said.
“If you actually start trading with a country, eventually that country will end up buying other commodities from your country, and so really there’s some momentum,” he said.
Canada has typically been the U.S.’s largest trading partner, but China moved ahead as of the end of September, largely because of lower energy prices.
However, the U.S. remains Canada’s largest partner.
Ratifying the 12-country TPP will open up more markets for products as diverse as maple syrup, grain and beef.
“If we are looking at TPP strategically, this is certainly good news for the Canadian economy because it can only create momentum moving forward,” Charlebois said.
He also sees value in the TPP chapter on dispute resolution, which offers member states a more expedited and transparent process, he said.
For example, it might have limited the many challenges that the Americans made against the Canadian Wheat Board.
“This is a process that could serve our country much better,” he said.
“If this deal supersedes NAFTA (North American Free Trade Agreement), which it will if ratified, then this is good news for Canada, I think.”
Charlebois also liked the inclusion of the economic role of small and medium-sized businesses in the TPP.
Trevor Tombe, assistant professor of economics at the University of Calgary, said the deal, on balance, is a good one with no immediate winners or losers because so many of the tariff reductions and quotas will be phased in.
“From the perspective of agriculture, I think some of the more subtle issues would be contained in the health measures,” he said.
The agreement intends to standardize and streamline phytosanitary measures, and Tombe said industry will have to watch how that proceeds.
“It may be a big improvement if the procedures are very much based on sensible, evidence-based analysis, which is what the treaty is attempting to do, but time will tell.”