Canada’s new Liberal government has taken the first tentative step toward adopting the controversial Trans-Pacific Partnership trade, investment and regulatory deal.
International Trade Minister Chrystia Freeland said the government’s decision to sign onto the pact next week doesn’t necessarily mean Canada is committed to it.
Technically, that’s true. In Canada, a government decision to sign an international treaty amounts to little more than agreement in principle.
The country won’t be legally committed to the TPP until cabinet has ratified the agreement, a decision it can make only after Parliament passes any laws needed to put the deal into practice.
That could take months.
But Freeland’s announcement Monday, that Canada will take part in a TPP signing ceremony Feb. 4 in New Zealand, does say something about the government’s intent.
That the Liberals are amenable to the 12-nation pact should come as no surprise. Trudeau has made it clear that he favours such deals. In fact, his position on them is near identical to that of former Conservative prime minister Stephen Harper.
In 2013, when Harper announced another trade and investment pact, this one with the European Union, Trudeau congratulated him and promised that his Liberals would support the deal in principle.
Trudeau was not quite as blasé about the Trans-Pacific pact. During last year’s election campaign, with the deal under attack from Quebec dairy farmers and Ontario auto workers, the Liberal leader accused Harper of being overly secretive about the TPP negotiations.
But Trudeau was careful not to oppose the pact itself, promising only that, as prime minister, he would hold a full debate in Parliament before making a final decision.
Certainly, there are reasons to criticize the pact. Like the North American Free Trade Agreement, it gives foreign companies the right to challenge Canadian laws and regulations that interfere with profit-making.
U.S firms used similar provisions under NAFTA to roll back Canadian environmental and public ownership laws.
Auto workers are furious about a provision in the deal that would allow the big car companies to bring in 65 per cent of their parts from cheap-labour countries such as Thailand that are outside the TPP bloc.
The big U.S.-owned auto manufacturers themselves are split on the merits of the deal, with Ford vocally opposed.
Ford has indicated, however, that it might be mollified if Ottawa gives it and other auto giants bigger handouts.
University of Ottawa law professor (and Toronto Star columnist) Michael Geist has been an unsparing critic of the deal, attacking the TPP on issues ranging from privacy to e-commerce.
Iconic tech entrepreneur Jim Balsillie has been even harsher, saying that the TPP promises to be “the worst thing in policy that Canada’s ever done.”
The deal’s intellectual property rules, he says, are biased toward the U.S. and will disadvantage Canadian innovators.
Given Trudeau’s emphasis on encouraging high-tech innovation, the government might find Balsillie’s complaint particularly worrying.
But the TPP has put the Liberals in a bind. Participating countries include Canada’s NAFTA partners, Mexico and the U.S. If these two ratify the new deal, they will be effectively changing the way NAFTA works — regardless of what Canada does.
Auto companies in particular would have an incentive to locate in whatever jurisdiction can best serve TPP members (including Japan and Australia) as well as North America.
If Canada stays out of the Trans-Pacific deal, it risks losing these potential jobs.
In effect, the TPP presents Ottawa with a Hobson’s choice. If Canada wants to remain in the world of trade and investment deals, it will find it near impossible to stay out of whatever new pact comes along — even if the terms of that pact are demonstrably worse than the status quo.
Theoretically, the Trudeau government can avoid this trap by rejecting the trade-deal model altogether and setting out an entirely new economic strategy.
But I don’t see any evidence of that happening.