Looking Forward: TPP
TPP an economic opportunity, not a guarantee of economic success
The TPP will open new doors for Canadian exports and create significant international trade opportunities - By Constantine Passaris Professor of Economics University of New Brunswick
Frederiction, NB - The recent announcement of the Trans-Pacific Partnership (TPP) free-trade deal is one more confirmation of the importance of international trade for Canada. I anticipate that the new Liberal government of Justin Trudeau will endorse the TPP agreement. It was international trade in 1497 that started the economic heartbeat of the land mass that would become Canada. And international trade has nurtured Canada as one of the most prosperous countries in the world.
International trade is an important contributor to Canada's economic growth, business vitality, employment creation and the standard of living of its citizens.
Canada's domestic population is far too small to alone sustain the standard of living that we have become accustomed to. International trade is the trump card that helps us create a larger market, through our exports and outreach.
Canada is facing a demographic deficit, a fiscal deficit and a jobs deficit. Our economic salvation rests with an aggressive strategy for global outreach. The TPP will open new doors for our exports and create significant international trade opportunities.
The TPP consists of 12 countries: Brunei, Chile, New Zealand, Singapore, the United States, Canada, Mexico, Japan, Vietnam, Australia, Peru and Malaysia. It embraces the biggest trade zone in the world, spanning four continents and representing 40 per cent of the world's economy. With a combined population of 800 million people, it weighs in as an economic heavyweight in the world economy.
The TPP changes regulations and reduces trade barriers across a very large swathe of products and services. That list includes everything from machines to canola, beef and pork, minerals, forest products, sugar confectionary, chocolates and seafood. Most agricultural and agri-food products are also on the list, including potato products, maple sugar and syrup, and baked goods. It allows up to 3.25 per cent more international dairy into Canada, and allows foreign auto parts into North America without tariffs. It also creates new rules for the digital economy and restricts governments' right to shut off data flows.
As with all the free trade deals that Canada has signed, there are domestic winners and losers. There is no denying that Canada is vulnerable through its dairy industry and is exposed to more intense competition from abroad in its auto parts industry.
It is worth emphasizing that the TPP is simply an economic opportunity. It is not a guarantee of economic success. It opens the door for enhanced trade with one of the world's most coveted export regions. What will transform this opportunity into a success will be the vision and smarts of our entrepreneurs, plus the competitiveness of our products and services in terms of price and quality.
In this regard, Canada has a unique competitive advantage. Canada's multicultural profile is a tremendous asset. We can speak the languages of the Pacific Rim, build bridges to new export destinations, attract foreign investment and avoid missteps in a positive alignment with local religions, cultural customs and business etiquette.
In addition, Canadian exports will be granted unrestricted and preferential access to the EU domestic markets once the Comprehensive Economic and Trade Agreement (CETA) is ratified. The removal of the economic burden of tariffs will enhance our ability to be truly competitive in Europe.
The two trade agreements will generate an accelerated momentum of economic growth and job creation for our national economy.
Constantine Passaris is a Professor of Economics at the University of New Brunswick, an Onassis Foundation Fellow (Greece) and a national research affiliate of the Prentice Institute for Global Economy and Population at the University of Lethbridge (Canada).
Source Troy Media