Veteran trade analyst Peter Clark is pessimistic about the
Trans-Pacific Partnership trade negotiations that Canada joined earlier this
He says the United States has taken negotiating positions
that are so difficult for the others that these negotiations are in danger of
collapsing just as the Doha Round of World Trade Negotiations collapsed last
The U.S. needs to become more flexible to win support from
the others, Clark says.
As for Canada, he sees little in the negotiations to benefit
Canadians, other than to “get inside the tent” of the partnership so it’s not
excluded from some markets for some products and services.
He says Canada has been losing manufacturing jobs and that’s
a key concern in these negotiations.
But the U.S. has kept a key provision out
of the negotiations – disciplines on state and municipal subsidies and
purchasing of supplies and services.
For example, Clark says Memphis, Tennessee, took Electrolux
company jobs out of L’Assomption, Quebec, by paying $188 million of the $190
million to build a new factory there.
Caterpillar moved jobs out of Goderich, Ont., because it
received subsidies to relocate in the U.S.
The bargaining chip the U.S. offers to get what it wants is
access to its markets, Clark said.
That is a powerful incentive for some of the countries at
the table, but not for others who already have individual free-trade
Canadian dairy farmers might be cheering if New Zealand,
which is hosting the talks next week, exercises its threat to walk out unless
Canada and the U.S. open their dairy markets.
On the other hand, there are complaints about how Australia
and New Zealand are using sanitary and phytosanitary regulations to block food
imports. Gaining better SPS disciplines would be a major gain for Canadian farmers, making the TPP better than the World Trade Organization's existing rules, he said.
The U.S. wants better access to Pacific markets for rice, but it offers rice producers huge subsidies and they have plenty of water. Pacific-nation farmers want protection for rice.
They would like to gain access to the U.S. sugar market, but U.S. sugar producers, who operate behind relatively high tariffs, don't want to budge.
Clark says the U.S. motives arise out of another set of
Pacific trade negotiations from which the U.S. is excluded – the Regional
Comprehensive Economic Partnership whose main participants are China, India,
Japan and Korea.
Clark says the TPP negotiations could become far more
valuable to Canada if Japan is allowed to join. Canada has opened direct trade
negotiations with Japan.
Clark says the TPP negotiations right now are “little more
than a gift to Washington,” but one that will be resisted by the other nations
which explains why he says the talks may go nowhere.
Failure of the TPP negotiations would please Canadian dairy
and poultry farmers, just as failure of the Doha Round of World Trade
negotiations comforted their anxieties that they would have to reduce the
prices they can charge Canadians and suffer significant losses of their profit
margins and quota values.