Canadian Manufacturing

Dramatic changes on horizon for Canadian industries as TPP agreement reached

No amount of spin can “claim the TPP as a victory,” Unifor says, as auto, dairy, meat and agriculture industries react to major TPP shakeup

OTTAWA—With the announcement of an agreement on the Trans-Pacific Partnership, a wide range of Canadian industries are about to experience dramatic changes to their markets both internationally and here at home.

The final deal between 12 countries, including Canada, covers 40 per cent of the world’s economy and will make it easier for Canadian exporters to sell some of their goods abroad. Alternatively, the deal will allow a wide range of products tariff-free entry into Canada, making the domestic market more competitive.

Prior to the agreement being struck, industry groups from across the Canadian business landscape emphatically urged Canadian negotiators to either take part in the historic agreement or walk away from the table to protect domestic industries. Following the marathon negotiations over the weekend, Canadian businesses are weighing in on the deal.

“As a comprehensive and ambitious trade agreement among 12 partners, the TPP will enable Canada to further expand our trade relationship with the Asia-Pacific region and to capitalize on the extensive trade ties we have established with our North American partners,” Joy Nott, the president of the Canadian Association of Importers and Exporters, said.

As has long been argued by those who support the TPP, Nott added the deal will create new export markets for Canadian businesses, enhance customer choices and increase employment opportunities for Canadians.

One of the TPP’s harshest critics, on the other hand, Unifor, slammed the Harper government for what it called a “job killing” deal.

“This is a trade deal that will have a significant impact on Canada. It will replace the NAFTA, our most important trade relationship. And all the signs point to the TPP posing a major threat to good-paying jobs in Canada,” Jerry Dias, the national president of Canada’s largest private sector, said.

Unifor said the agreement by the “caretaker” government puts as many as 20,000 Canadian auto jobs at risk by phasing in a “dramatic” reduction to the regional content rules set forth under NAFTA. Though few details of the deal have been released, it has emerged that regional content rules for auto parts will be reduced to 45 per cent from 62.5 per cent under NAFTA.

“It is outrageous that the Harper Conservatives have signed a deal that would allow the majority of a car to be made in China, yet still come into Canada tariff-free,” Dias, said.

“No spin from the Harper Conservatives to claim the TPP as a victory can be taken seriously when upwards of 20,000 auto jobs are going to be lost,” he added.

Meanwhile, another of the TPP’s harshest critics, Dairy Farmers of Canada, said the deal will result in lost revenue for Canadian farmers and the economy. The organization did note that the government fought hard to lessen to burden on Canadian dairy producers, however, saying the government struck a deal that was a long way from the threat of eliminating Canada’s supply management systems – a possibility that had been circulating during negotiations. The agreement includes a 3.25 per cent increase in the amount allotted for foreign imports in Canada’s dairy sector.

“Like my fellow dairy farmers, I am disappointed that additional access was granted in this deal,”DFC president, Wally Smith, said.

Still, he added, “We have come a long way from the threat of eliminating supply management. The government has clearly understood the importance of supply management dairy farms in rural Canada and the economic activities they generate.”

The Canadian government will also implement a $2.4 billion program designed to support dairy farmers.

As news of the TPP agreement spreads, numerous industries are also applauding the government’s efforts to ensure Canada was part of the deal.

Noting the significant tariffs it faces in many Asian countries, the Forest Products Association of Canada said the deal will be an important boost for the industry, adding it could pave the way to further diversifying its markets and expanding exports.

Agriculture and meat products are also expected to receive a significant boost from the agreement. The Canadian Agri-Food Trade Alliance, which represents sectors that produce nearly 80 per cent of Canada’s agriculture and agri-food exports, welcomed the agreement.

“This is an historic moment for the hundreds of thousands of Canadians who are employed by Canada’s export-based agriculture and agri-food sector,” CAFTA president, Brian Innes, said. “Our agriculture and agri-food sector is one of the most trade-dependent in the world. With 65 per cent of our agriculture and agri-food exports going to TPP markets, this trade agreement will put Canadian producers on a level playing field to help ensure that we can continue to be globally competitive.”

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