VANCOUVER, BC--Entering into the Trans-Pacific Partnership (TPP) could boost Canadian exports by $15.7 billion by securing new trading partners in the Asia-Pacific Region, says a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“With the Conservative government signalling that international trade is a top priority, the TPP offers a chance for Canada to gain a foothold in the prosperous and growing Asian markets and move the country away from trade dependence on the United States,” said Laura Dawson, international trade specialist and co-author with Stefania Bartucci of Canada and the Trans-Pacific Partnership: Entering a New Era of Strategic Trade Policy.
“Participating in the TPP is also important to safeguard Canada’s current trade agreements, particularly NAFTA.”
Indeed, while Dawson calculates that the TPP could be worth a $9.9 billion increase in Canada’s GDP, the agreement could be equally as important in shaping the rules of future trade agreements and ensuring gains already made, such as NAFTA, are protected so Canada does not have to undertake costly reforms to adapt to a new system, she said.
“The era of easy trade policy gains may be over but the disciplines imposed by the TPP on investment, regulatory alignment, rules of origin, and market access will, in the longer term, help increase certainty, reduce risk, and lower costs for Canadian exporters and investors in emerging markets,” Dawson said.
The TPP trade agreement will secure a trade alliance between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam, representing a combined economy of more than $27 trillion (35 per cent of global GDP) and about one third of global trade. Additionally, the TPP has the potential to expand to include all Asia-Pacific Economic Cooperation (APEC) countries, providing for greater market-access gains in the future.
“A significant attraction of the TPP is engaging China. If China were to join, the TPP would become the first regional agreement to include the world’s three largest economies: the United States, China, and Japan,” Dawson said.
The report also notes that when Canada negotiated the NAFTA and WTO agreements in the early 1990s, issues such as electronic commerce, digital media, and third-party logistics had not yet entered the commercial mainstream. The TPP agreement provides a platform for discussing and resolving these and other emerging issues.
“If Ottawa is serious about diversifying Canada’s trade relationships, then TPP membership is a golden opportunity to do so,” Dawson said.