Trump’s withdrawal from TPP: What does it mean for Canada?

Published On November 22, 2016 | By Humber News | Business, International, News, Politics

By: Hunter Crowther

Canadian businesses are adjusting to Donald Trump’s announcement the United States will withdraw from the Trans-Pacific Partnership trade agreement once he takes office.

In a video released Monday night, the president-elect shared his priorities for when he succeeds President Barack Obama on Jan. 20. He called the TPP “a potential disaster” for the United States.

“We will negotiate fair, bilateral trade deals that bring jobs and industry back on to American shores,” said Trump.

The Republican presidential candidate campaigned that several international trade deals signed by the U.S. were poorly negotiated and needed to be ripped up. Critics of the TPP say its stipulations for the U.S. only favoured the wealthy and other nations at the expense of American jobs.

Stephen Harper and the Conservative Party were in government when Canada joined the Trans-Pacific Partnership. (Wikimedia Commons/Remy Steinegger)

Stephen Harper and the Conservative Party were in government when Canada joined the Trans-Pacific Partnership. (Wikimedia Commons/Remy Steinegger)

The impact of the U.S. withdrawing from the TPP, a deal signed by former prime minister Stephen Harper just two weeks before Justin Trudeau defeated him in the 2015 federal election, has severe consequences for all 12 countries involved.

Patrick Leblond, an associate professor of public and international affairs at the University of Ottawa, says if Americans don’t ratify the TPP, the Canadian government will have to pay closer attention to the North American Free Trade Agreement (NAFTA), another deal Trump heavily criticized through the presidential campaign.

“We know it’s in (Trump’s) transition plan that he wants to renegotiate NAFTA, although he hasn’t really said on what basis or what he’d like to change,” Leblond said in an interview with Humber News.

“It’s not clear if he just wants to make it better in terms of free trade, but it sounds more like he wants to make it more protectionist and less free,” he said. “If that’s the case, certainly it would hurt Canadian businesses.”

One of the members of the deal is Japan, the world’s third largest economy. Speaking at a press conference in Lima, Peru on Monday, Japanese Prime Minister Shinzo Abe said the TPP “has no meaning” without the U.S, and that renegotiating an 11-member deal was impossible.

“This would disturb the fundamental balance of benefits,” Abe said.

Leblond says apart from economic and trade opportunity, the American-led agreement was a geopolitically strategic move, tying the U.S. closer to Asia-Pacific and helping bring China in as a member of the TPP on American terms.

“If the Americans leave, that’s it,” said Leblond. “For Canada, it means remain with NAFTA. [They] already have a free trade agreement with Chile and Peru,” he said referring to two TPP signatories.

Leblond says Canada will restart negotiations with the Japanese, as the two were already doing so before joining the TPP.

Canadian dairy farmers have voiced their displeasure through the TPP’s negotiation. A 3.25 per cent increase in foreign products entering Canada forced the former Conservative federal government to promise spending $4.3 billion over a 15-year period to protect farmers from potential economic damage.

Laural Adams, the communications manager for the Dairy Farmers of Ontario, says it’s really too early to speculate on what Trump’s announcement means.

“I can tell you that as an industry, we recognize that trade, including the TPP is necessary for our country,” Adams told Humber News. “We trust that the government will continue to support the Canadian dairy industry regardless of what happens.”

The TPP was signed by 12 countries in February. Along with Canada, the United States, Japan, Chile and Peru, the other seven countries include Australia, Brunei, Malaysia, Mexico, New Zealand, Singapore and Vietnam.

Leave a Reply

Your email address will not be published. Required fields are marked *