Canadian business applauds Trans-Pacific Partnership

Canadian business applauds the Trans-Pacific Partnership, saying Canada can't afford not to be there.

Thestar.com
Oct. 5, 2015
By Dana Flavelle

Meat producers/Pork and Beef farming

Potential effects: TPP countries such as Vietnam and Japan currently impose substantial tariffs on agriculture and agri-food products. Under the deal, Canada could double or triple its annual beef exports to Japan to nearly $300 million, according to the Canadian Cattlemen’s Association. The beef industry would see a phase out in tariffs to those countries from 39 per cent to 9 per cent over 15 years. The deal also secures Canada’s ability to export more pork to Japan, where producers sell roughly $1 billion worth of the meat annually.

Fish and seafood

Potential effects: The deal means far greater access for Canadian producers to other Pacific Rim markets. Canadian seafood - from frozen fish to fresh crab and lobster - is currently slapped with tariffs of up to 15 per cent in Japan and Malaysia, 34 per cent in Vietnam and 5 per cent in New Zealand. The tariffs on fish and seafood to those countries would be gone within a decade. Japan imports a number of premium seafood products from Canada such as crab, shrimp, lobster, herring roe, sea urchins, salmon and halibut.

Forestry/wood products

Potential effects: While Japan is duty-free on most pulp and paper products, it has tariffs of up to 10 per cent on wood and wood products, including wood pulp and wood panels. On wood and forestry products, Vietnam applies tariffs of up to 31 per cent, Malaysia of up to 40 per cent, Australia and New Zealand of up to 5 per cent and Brunei of up to 20 per cent. The TPP would see a gradual reduction of these once passed. About $1 billion in Canadian forest products were subject to tariffs last year.

Metals and mining

Potential effects: Iron and steel products would benefit from Japan eliminating tariffs of up to 6.3 per cent within 10 years, Vietnam wiping out tariffs of up to 40 per cent within 10 years, Malaysia doing away with tariffs of up to 25 per cent within a decade, and Australia cutting tariffs of up to 5 per cent within four years. Aluminum products would see 7.5 per cent tariffs in Japan eliminated as soon as the deal is passed. In Vietnam, aluminum product tariffs of up to 27 per cent would be scrapped within three years, while Malaysia would remove tariffs of up to 30 per cent within a decade. Nickel products would see Japan cancel a 3 per cent tariff within 10 years.

Industrial goods

Potential effects: The agreement will strengthen or enhance Canada’s access to TPP markets. For example, in Australia, a 5 per cent tariff on aircraft engine parts, and medical, surgical, dental or veterinary equipment will be eliminated. In Vietnam, tariffs of up to 24 per cent on industrial pumps for liquids will be eliminated within three years. In Malaysia, tariffs of up to 30 per cent on agricultural harvester and mowers will be eliminated with five years. In Australia, tariffs of up to 5 per cent on bulldozers will be eliminated upon entry.

Automobiles and auto parts

Potential effects: An auto will need to contain just 45 per cent TPP content to qualify for free trade. And for auto parts, the figure is 40 per cent. that’s down from 62.5 per cent and 60 per cent respectively under the North American Free Trade Agreement, which this will replace. Japan already offers duty-free access to passenger vehicles and auto parts. Canada agreed to phase out its 6.1 per cent tariff on imported vehicles over five years. Malaysia and Vietnam, which have tariffs of 35 per cent and 74 per cent respectively, agree to phase them out over 12 years.

Dairy, eggs and poultry

Potential Effects: Canadian dairy farmers will give up 3.25 per cent of their market to imports while chicken and turkey producers will give up 2 per cent. Eggs will give up a bit more. Pressure on Canada’s supply-managed markets was intense. U.S. negotiators had originally sought access to 15 per cent of Canada’s dairy market. Canada’s restaurant industry, which spend $5 billion a year on supply managed products, was disappointed with the deal, saying it will keep costs artificially high.

Pharmaceuticals

Potential effects: An 11th-hour compromise between the United States and Australia reached on the length of monopoly protection allowed for new biotech drugs cleared the way for the Pacific Rim trade deal. The compromise means the amount of time allowed for pharmaceutical companies to have exclusive rights to the clinical data for biological drugs would be eight years, consistent with the current regime in Canada. But it could disappoint some countries who said anything beyond five years would be unacceptably expensive for patients and taxpayers.