A TPP without Japan won’t mean much for Canada

According to trade consultant Peter Clark, if Japan doesn’t join the Trans-Pacific Partnership negotiations, Canada doesn’t stand to benefit much from the 11-country deal.

Speaking to a group of journalists in Ottawa following the release of his 150-page paper on the state of the TPP, the 15th Round of which he’ll be attending in Auckland, New Zealand next week, the president of Grey, Clark, Shih and Associates argued there isn’t a lot of new market access available to Canada right now.

“The United States has already said that where they have free trade agreements already with a member, they’re not going to negotiate further with them,” Clark said. “Canada has free trade agreements which basically cover 90 per cent of what’s already in TPP.”

Testifying before the Senate Foreign Affairs and International Trade Committee on Wednesday, Trade Minister Ed Fast was predictably more optimistic.

“The advantage with the TPP is that the United States, Mexico and Canada get to walk shoulder to shoulder in opening up new opportunities within the Asia Pacific region, which was, of course, the whole goal of the TPP negotiation,” he said.

To a certain extent, Clark agreed about the TPP being a potential North American gateway to Asia — but he insisted that for it to be of any real economic significance to Canada it has to include Japan.

 “TPP doesn’t hold much for Canada unless Japan is inside, because we do need that access to Japan,” he said. “The TPP, once you include Japan, is worthwhile.”

Since Canada already is negotiating a bilateral deal with Japan outside of the TPP, however, some wonder why Japan’s inclusion even matters.

“We’ll get a good free trade agreement with Japan. It might be better in a few particular products than it would be in the TPP,” Clark said.

“But when you’re negotiating with Japan with all the leverage of the United States on the same side . . . you’re going to end up with a better overall deal.”

The good news for Canada in that regard is that the U.S. has done all it can to bring Japan into the fold.

The Harper government had to promise to put everything on the table just to get a seat; the Japanese have been — by comparison — coddled.

“Well, the Americans after telling us that we couldn’t get any exclusions, said, ‘Well, you know if Japan comes in we’ll open up the chapters that are important to Japan’ – a little bit of a double-standard,” Clark said.

Despite that American encouragement, however, Prime Minister Yoshihiko Noda’s Democratic Party of Japan is going to the polls on December 16th with a pro-TPP platform that’s drawn the ire of the country’s powerful farm lobby.

If he loses, it’s not clear what the fate of Japanese participation will be.

November 30, 2012

Source: ipolitics.ca