Canada’s benefits from the North American Free Trade
Agreement (NAFTA) could be undermined if Canada fails to participate in a new
Trans-Pacific Partnership (TPP) deal.
That new wrinkle emerged from reporting at the trade
negotiations now underway in Hawaii.
Reporters were briefed that the TPP is likely to contain
terms that will be even better than NAFTA for gaining entry to the United
States market.
And if Canada isn’t part of the deal, it will lose out to
others, including Mexico.
The reporters also said Canadians and Americans met
privately during the TPP negotiations with a view to maintaining better terms
for trade between the two countries – i.e. better than a TPP deal.
The automotive industry is offered as an example. Canada and
Mexico are able to freely trade parts with the United States, but all three
maintain tariffs, albeit relatively low ones, against other countries.
The TPP could wipe out that advantage so there would be more
intense competition in the car-parts market.
The Globe and Mail also indicated that in the dairy
negotiations, Canada is being pressured to keep open its low-tariff and
no-tariff category for certain ingredients extracted from milk.
There has been a widespread assumption that the United
States and New Zealand in particular were pushing for a reduction in tariffs on
cheese, butter and other processed dairy products.
Imports into the less-protected ingredients market have been
mounting rapidly in recent years and months, reducing demand for Canadian milk
unless the supply-management marketing boards cut prices to remain competitive with
the imports.
There has been no detailed reporting about pressure on
Canada to reduce barriers to imports of poultry products, also under supply
management and protected by high tariffs.
There has been similar pressure in the poultry market,
especially a huge increase in imports of “spent fowl”, meaning egg-laying birds
at the end of their careers. There is no tariff on them.
