Global ventures

This fall Canada was formally accepted into the Trans-Pacific Partnership (TPP) agreement, a deal that promises to open up trade between a range of countries doing business in the dynamic Asia Pacific region. For Canada’s agri-food industry, the TPP offers access to a potential market of 658 million people and $20.5 trillion in combined GDP.

A new deal

The TPP began in 2005 as the Trans-Pacific Strategic Economic Partnership Agreement, a trade pact designed to break down barriers to business between founding countries New Zealand, Brunei, Chile and Singapore. Also on the agenda was the development of production and supply chains, job creation, raising living standards, ensuring greater regulatory coherence, and promoting sustainable growth across the region.

After the U.S., Australia, Peru, Malaysia and Vietnam joined in 2008, and once it became apparent that the World Trade Organization’s momentum on free-trade talks had stalled following the Doha Round, the ambitious arrangement gained added prominence. For Canada, it became an attractive and dynamic trade opportunity, especially with the possibility of additional trade partners, such as Japan, Korea and China, joining in the future. It would also offer an advantage over competing non-TPP countries, and open another door to discussions on issues currently affecting trade, such as country of origin labelling.

The region is already becoming an increasingly lucrative destination for Canadian products. By 2011, agri-food exports to countries in the TPP topped $20 billion, according to Statistics Canada, comprising 51 per cent of total agri-food exports. Just some of the products doing significant trade here include wheat, canola oil, soybeans, pork, beef, pulses and other grains. It follows then that with further liberalization of tariff and non-tariff barriers, and the establishment of agreements with new trading partners, the deal will offer unique opportunities for Canada’s food industry.

A 21st-century agreement

Canada and Mexico officially joined the TPP in October. At the time, International Trade Minister Ed Fast said the TPP would create jobs, growth and long-term prosperity, referring to the deal as a “21st-century agreement that advances Canadian interests.” But there is still much uncertainty surrounding the pact, especially as there are many details of the agreement yet to be disclosed.

As a latecomer to the partnership, Canada was required to sign off on all previous provisions of the agreement, a fact that has drawn some criticism about the lack of transparency with which the negotiations are being handled. It’s also drawn the ire of advocacy groups such as OpenMedia and the Council of Canadians, which say the deal raises concerns about the protection of Internet freedoms, privacy, security and digital rights. Questions over potential challenges to Canadian domestic policy, such as environmental regulations and healthcare, have also been raised.

But of most concern for the Canadian agriculture and agri-food industry has been the matter of producer subsidies to sectors such as pork production, as well as our often-maligned supply management systems for poultry, dairy and eggs. Although initial concerns that these programs would bar Canada’s entry into the TPP this proved not to be the case, showing there’s still much room for negotiation between the countries.

Potential for growth