Why Canada Should Take a Seat at Trans-Pacific Table: C.D. Howe Institute

TORONTO, Feb. 9, 2012 /CNW/ - Canada needs a seat at negotiations toward a new Trans-Pacific Partnership on trade to reap the full benefits of doing business with the emerging powerhouse economies of East Asia, according to a report released today by the C.D. Howe Institute. In Can Canada Join the Trans-Pacific Partnership? Why wanting it is not enough, trade expert Dr. Laura Dawson notes the new trade pact could eventually account for half of global output and 40 percent of world trade. "Membership would position Canada to build trade ties with Asia's rising economic powers, whose double-digit growth rates far outshine those in the West," notes Dr. Dawson. "Canada is coming late to the talks. The question now is whether Canada can join the action."

Membership in the TPP would facilitate a more solid foothold in emerging East Asia for Canadian businesses, says Dr. Dawson. The potential is for the TPP to expand and one day include all of APEC, even China; a grouping representing 54 percent of global GDP. The TPP seeks to cover a number of leading-edge issues affecting trans-Pacific business chains, and would modernize Canada's business links with potential TPP members with whom Canada already has trade agreements. Being at the table now, rather than joining a done deal later, will allow Canada to shape a beneficial deal that takes advantage of the early business expansion that accompanies new trade agreements.

There is a stumbling block, however: Canada had the chance in 2005 to join the nascent grouping, but chose not to, says Dr. Dawson. Now prospective partners will judge Canada's suitability to join negotiations already in progress. Among them, New Zealand is opposed to Canada's attempts to maintain existing dairy supply management. And in a 2010 review, US officials already declined to support Canada's case for entry.

"Canada has faced hurdles and hard choices - there is a domestic cost for Canadian participation," notes Dr. Dawson.

This paper argues that positive support from the United States this time could override objections by others, but Canada needs to play its cards better. This means emphasizing that Canada and the US have interests in common in these talks, and both would benefit from a strong agreement. Specifically, Dr. Dawson recommends appealing to US broader strategic interests in regional fora such as APEC, reminding Congressional leaders of Canada-US alignment on key issues such as standards, investment and labour, and emphasizing continued progress on Canada-US economic cooperation.

For the report go to: http://www.cdhowe.org/pdf/Commentary_340.pdf

Dr. Laura Dawson, President, Dawson Strategic and Member, International Economic Policy Advisory Council of the C.D. Howe Institute; 416-865-1904, email: [email protected]