What is the trans-pacific partnership?

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Published in Arthur, issue 6

The Trans-Pacific Partnership (TPP) has been in the works since 2010. Intensive debate took place at the end of September 2015 and continued until a deal was reached on October 5. The 12 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, U.S., and Vietnam – will continue to review the details in the coming weeks and likely ratify the plurilateral agreement in the next few years.

Together, these 12 countries make up approximately 40% of the world’s gross domestic product, so this trade deal will have implications beyond the borders of the countries directly involved. Presuming the success of the agreement, other countries have now expressed interest in joining.  The conceit of the TPP is to better link the Americas to the Asia-Pacific region. The most significant aspect of the agreement is the elimination or reduction of tariffs within the signatory nations. For example, Japan is one of Canada’s best trade partners; the elimination of tariffs on industrial goods as well as agriculture will mean bigger profits for big Canadian businesses.

Prior to the TPP agreement, dairy farmers protested in Ottawa. The concern was lost profits and lost jobs. The deal, however, is manageable for Canadian dairy farmers. There was talk of allowing foreign dairy to take up 10% of the Canadian market, but the agreement proposed 3.25% instead and a compensation package of $4.3 billion for dairy farmers. The TPP will also allow Canadian dairy farmers easier access to new markets. According to some experts, however, the TPP won’t necessarily lower Canadian grocery prices.

There is larger concern for the automotive industry. Prior to the agreement, 60% of vehicles would need to come from countries within NAFTA. Now, only 40-45% of the parts need to come from TPP nations. Some believe this will result in a cut of up to 20,000 Canadian auto workers.  On the business side, the TPP will allow for “intracompany travel” and temporary work trips in various sectors including banking, engineering, architecture, and for environmental consultants. Within the TPP countries, telecommunications will get more rules and regulations in an effort to create fairness. There are also digital economy provisions that further aim to protect digital commerce, copyright, and intellectual property.

Stephen Harper’s government is happy with the deal. In an interview with Arthur, Michael Skinner, the Conservative MP candidate for Peterborough-Kawartha, noted the key feature of the agreement: further removing government from business. He believes that businesses can flourish with this new deal; with more profits, he said, more people will be hired and, the bigger businesses grow, the more taxes they will pay. He feels this is a “positive cycle.”  Skinner failed to mention the investor-state provisions of the TPP. Under the new agreement, corporations can sue governments over public policy and decision-making, in secret tribunals no less. In this “positive cycle,” money gained from corporate taxes goes back into the hands of corporations, as these claims can sometimes cost Canadians millions of dollars. For the Council of Canadians (CoC), this is one of the major points of contestation in the TPP.

A number of national and international individuals have also heavily criticized parts of the TPP, including the secretive aspects of the negotiations, the large scope of the agreement, and specific clauses deemed controversial.
While the trade agreement may benefit businesses, there are fewer rules about labour practices (despite some obvious ones such as no child labor and other workers’ rights) and environmental regulations. Further, it is no original observation that improving business profits usually just increases the wealth of the already wealthy. In Canada, jobs may be easily exported to cheaper labour in countries such as Peru and Vietnam.

Additionally, many have expressed concerns about patents and pharmaceuticals. On the U.S. side, intellectual property rights for new medicinal developments will result in more expensive medication. The CoC goes as far as to claim that the poorest countries within TPP itself will not be able to access new drugs. The TPP deal gives next-generation pharmaceuticals an eight-year patent, which, according to experts, will make medicines expensive for other countries. Five-year patents were recommended but not implemented.

For these reasons, among others, the NDP and Greens have taken a firm stance against the TPP. Dave Nickle (NDP MP candidate for Peterborough-Kawartha) bluntly stated in his Arthur interview that what we need is not “free trade,” but “fair trade.” On the other hand, Liberal leader Justin Trudeau supports “free trade”; he was reluctant to say whether he is for or against the agreement.

The agreement won’t be released until November 5. Many feel the document should have been released prior to the election. Until then, you can view the old chapters of the TPP via wikileaks.org.

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