The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, aka TPP-11, was proclaimed as a great “victory” by Canada after a deal was struck on the pact in Tokyo this week. Prime Minister Trudeau, in his speech at the World Economic Forum, implicitly warned the United states that the CPTPP would be an alternative if the US did not back down on its NAFTA (North American Free Trade Agreement) demands.
US Commerce Secretary Wilbur Ross was unamused at the pressure and made it publicly known when he arrived at Davos, Switzerland, for the WEF.
Recall that in November, on the eve of a trip to China to secure the formal opening of negotiations for a Canada-PRC free-trade deal, Trudeau and his minister of international trade, Francois-Philippe Champagne, sabotaged the TPP-11 signing ceremony by raising major last-minute objections.
At that time, Canada felt it had an alternative to both the TPP and NAFTA by rapidly concluding a free-trade deal with China. When that effort collapsed, Trudeau had to return to the TPP hat in hand, with very little goodwill left among the other parties to the pact.
Fortunately, Trudeau was able to send Ian McKay of the Vancouver Economic Commission to head the Canadian delegation to Tokyo in lieu of Champagne for TPP-11 negotiations this time. That helped Canada make a much-needed fresh start.
Back in November, Canada had demanded “progressive elements” such as labor rights, environmental provisions, aboriginal rights, and gender equality to be added 20 minutes before the signing ceremony, abruptly terminating the consensus, which could have set back the revised TPP by years. Subsequently, the TPP-11 co-chairs Australia and Japan worked miracles to rescue the deal while grappling with Canadian demands to enable the agreement to be ready for signing on March 8 in Chile.
‘Progressive’ agenda questioned
The Trudeau government’s “progressive” agenda, especially its purported commitment to racial equality, is questionable, especially when looked at through East Asian eyes. While Trudeau boasted that his first cabinet in 2015 “looks like Canada” in terms of ethnic and gender make-up, several major groups – including Chinese-Canadians – remained unrepresented. The situation only marginally improved after several Cabinet shuffles.
Not surprisingly, Canadians’ demands for their flavor of “progressive” did not go down well with TPP officials, most of whom were from East Asia. Nor did they play well in China.
Canada’s demands were viewed by TPP nations as enhancing long-standing racist practices by its governments. In the end, these demands were readily brushed aside and ended up as flowery statements in the new deal’s preamble that have little substance. The “victories” on labor and environmental issues touted by the Liberals were already in the original TPP as negotiated by the previous Conservative government of Stephen Harper.
Another so-called victory for Canada in the new agreement is the inclusion of a binding dispute-settlement mechanism for non-tariff barriers in a bilateral deal between Japan and Canada. However, this may end up surprising Canada as a double-edged sword when this issue surfaces.
Maintaining protection for culture is touted as a major accomplishment despite Canada’s demand for protection of cultural industries coming as an afterthought. The issue ended up being left to “legally binding” side letters to the CPTPP agreement. The side letters are apparently being negotiated individually with each nation and their content is currently not public.
The issue of Canada demanding that the intellectual-property chapter be suspended is a null issue, as it would almost certainly be reinstated as a condition of the US joining TPP, which despite President Donald Trump’s rhetoric is under consideration once NAFTA is renegotiated.
Veto is history
Perhaps the biggest and most dangerous concession by Canada is that for the first time in recent memory save for the expulsion of Russia from the Group of Eight conference, an ironclad rule of international organizations – that they operate by consensus – has been abandoned by a major industrialized democracy. That is to say, Canada has lost its ability to veto the TPP agreement.
Japan announced that Canada’s accession was no longer required for the deal to move forward. If an intractable Canadian problem arises as it did in November, Canada will simply be dropped and the other parties move ahead without it at the March 8 signing ceremony in Chile.
What this means in practice is that all the changes Canada is talking about, including the cultural-protection side letters, are entirely discretionary concessions by other CPTPP parties. Canada cannot withhold consent to the entire agreement as before and use that as leverage to get concessions. This, more than anything else, ensures that few meaningful concessions will be given to Canada “on the side.”
For Canada to accept the humiliation of losing its veto as the price to join the TPP-11 is a clear, unambiguous signal as to how low the country’s reputation and credibility have fallen. This also sets the stage for the US unilaterally to impose a NAFTA successor agreement on Canada and Mexico when negotiations fail.
Danny Lam’s hostility to the Trudeau government is a bit strange. Some of the comments he makes here are quite sound; others are highly questionable. The idea that it is some sort of rule, for example, that international organizations operate by consensus would be news to most international organizations. Even ASEAN, the groupiing that most promotes this idea, has various "ASEAN Plus" or "ASEAN Minus" arrangements that allow for members to go their own ways when consensus is not possible, without endangering the institution. Second, the Trudeau govt’s attempt to use the TPP as a bargaining chip in its dealings with NAFTA is only sensible. From all appearances, the Trump administration seems to have no desire whatsoever to save NAFTA, given the various "poison pills" it has offered up. The idea that the Trump administration will be able to impose anything on Canada and Mexico is also overdone. First, even if Trump declares that the US is going to withdraw from NAFTA, the ball then goes to Congress and it is not at all clear that Congress will pass the enabling legislation. The damage that will be done to the US by this move would be extraordinary and most Congresspeople, governors and mayors know this. Second, Canada and the US had extensive trade relations long before NAFTA. If the US declaring an exit from NAFTA caused the Canadian dollar to fall dramatically, that would immediately compensate for much of the tariffs that the Americans may then try to impose on goods coming from Canada. Even more, the integration of industry between the three countries cannot be undone overnight, if at all. The US may well be grossly overplaying its hand on NAFTA; at the least, its ability to "impose" anything is highly questionable.
To be fair to us Liberals (Trudeau) our Party was dead set against FTA (before Mexico joined in to form NAFTA) as then negotiated by Tory Mulroney. We feared that north-south integration rather than global one was putting our eggs in one basket, and will turn us into a one-customer sweat shop that it did. Now that single customer of 80% of our production is going broke, and putting trade wall against us and brick wall against Mexico.
The Liberals under Chretien did try to link up with the world, especially Asia, with highly successful Team-Canada trade missions that were abandoned after him in Tory Harper’s disastrous anti-world 10 years. Under Harper we lost the UNSC seat to little Portugal, of all countries.
Once a peacemaker dream and envy of the world, Canada is a has been. Much of our wealth is due to proximity with the US, a troublesome neighbor. As they say here, when US sneezes, Canada catches cold.
As China integrates 5/6th of globe (Europe, Asia, Africa) through BRI/Silk Roads’ high speed land routes, we are condemned by geography with Australia, UK, Japan, to be distant islands. Our links to the world are thwarted by waters, and land ones to our south American neighbors by the US.
Canada and its leadership is living in the past. When I land here from Asia it strikes me how much behind in everyday technology we are – phones, banking, transportation, architecture, joie de vivre. People here care little about STEM (science, technology, engineering, math). With the US we are producing high school youth that can neither read nor count.
Painful days lie ahead. Our destiny is to watch from afar the world go to stars. This has not sunk in the old guard, whether Tory or Liberal, who are still pushing for increasingly irrelevant snail slow sea lane based TPPs whereas the global customer wants same day delivery. China has paid attention to it and is responding.
Shaun
The US will do what it wants as it is one of the few countries that can feed its people with borders shut (Canada can not). Trade is not critical for American survival.
Trying to negotiate with the US today reminds me of the seminal scene in Churchill’s "Darkest Hour". "You can not negotiate with a tiger who has your head in his mouth".
Trudeau is a complete diaster. We sell oil to the Yanks for $35 a barrel and buy it back from the Saudis @ $50! We are laughing stock of the world.
Who DEMANDS 20 minutes before a signing to add so many items? Why pray tell does he crow about diversity then try and twist the arm of different cultures to make them conform ?He promotes an ideology that is backwards and has no advice for the countries they inhabit.No agvice for those cultures inhabiting our country.
Why would we be fair to the liberals. They play dirty all the time.Who makes changes 20 minutes before a signing? Over items Trudeau himself could not be enforced but were only symbolic.