Trans-Pacific Partnership | As larger deal drags, Canada pursues bilateral agreement
CHARLOTTETOWN, P.E.I. — Opinions are divided on how well Trans-Pacific Partnership negotiations are proceeding.
Canadian agriculture minister Gerry Ritz doesn’t have much faith it can move much further at this time because of elections in participating countries. On the other hand, New Zealand wants to forge ahead and get a deal inked a year from now.
“It is grinding very slowly,” Ritz said at the Canadian Cattlemen’s Association’s semiannual meeting in Charlottetown.
With that in mind, Canada is continuing negotiations with Japan towards a bilateral agreement, regardless of what’s happening elsewhere.
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Japan is Canada’s third largest agriculture buyer. In 2013, the country imported about $4 billion worth of Canadian agriculture goods, including oilseeds, pulses, pork, grains, soybeans, animal feed, beef, ice wine and maple syrup, said Doug Forsyth, head of Agriculture Canada’s strategic trade policy division.
“It’s a premium market,” said Forsyth.
He said there’s no formal deadline to conclude TPP talks, even though it represents a market of 790 million people with a gross domestic product of close to $30 trillion and the potential for growth.
The last set of TPP talks were in Ottawa in July and Canada remains committed to concluding an ambitious and balanced trade agreement that will address all agriculture concerns.
Japan and Canada are trying to exclude some products and that could affect the outcome. Japan wants to safeguard its rice and sugar sectors while Canada has vowed to protect its supply managed commodities.
“We all have sensitivities and we approach negotiations with a view to advancing all of our issues. We are going to continue to negotiate in the best interests of Canadians and only accept an agreement that meets all our objectives,” said Forsyth.
However, groups like the CCA support full tariff elimination with no exceptions.
If anyone is allowed to exclude commodities, other countries would follow and that might include protecting their beef sector, said John Masswohl of the CCA.
New Zealand is one of the four founding members of the TPP and is a strong opponent of the Canadian milk and poultry quota system.
“It’s a system that allows massive subsidies to be paid to an industry without having to come out of the taxpayers’ pocket. It comes directly out of the consumers’ pockets,” said Simon Tucker of the New Zealand high commission in Ottawa. He addressed the CCA foreign trade committee Aug. 13.
“You can’t expect to negotiate and want to be integrated into the Asia Pacific trading system on the basis that you can still maintain tariffs,” he said.
New Zealand is a major dairy producer and exports all over the world. Tucker said the world dairy product market is growing by two to three percent a year and Canada could be a major player because it has knowledgeable farmers, excellent genetics, a good feed supply and ample water supply.
As a nation dependent on exports, New Zealand ambitiously pursues free trade deals. One of its most successful was its 2007 pact with China.
Until the deal was signed, trade between the countries was flat. Since 2007, China has become its largest export market.
China ships manufactured products to New Zealand and New Zealand exports dairy, meat and horticulture products.
Success in China urged the Kiwis to push hard for a strong TPP agreement. Even with a general election this September, Tucker doesn’t anticipate a policy shift.
“It’s so important to get the model of the TPP right for us. If we do a bad deal on agriculture market access for example, it will haunt us for decades,” he said.
The TPP outcome could affect other deals. New Zealand is working with India, which could reject certain items because it relented with TPP.
“If people are allowed to start taking things off the table, the whole deal will spiral downward for all areas. I’m not sure we could even conclude a deal on that basis,” he said.
A large partnership is better than a bilateral agreement and if it becomes a strong deal, TPP could offer some powerful economic and strategic opportunities. Taiwan, South Korea, Philippines and Thailand have indicated they want to join the TPP.
