No deal is better than a bad deal: Why Canada won the TPP stand-off
Michael Geist
Special to The Globe and Mail

The end-game in trade negotiations always generates more than its fair share of drama and this week's effort to rework the Trans Pacific Partnership without the United States was no different. Canada was squarely in the spotlight with Prime Minister Justin Trudeau a no-show at a ministerial meeting that was attributed to a scheduling error, but had the hallmarks of gamesmanship designed to demonstrate a willingness to walk away from the deal.

The result was a major win for Canada as the government leveraged its position as the second-largest economy left in the TPP to extract significant concessions on intellectual property, culture, and the auto sector. Indeed, despite pressure to cave on key demands from the Japanese and Australian governments, Canada stood its ground and is helping to craft a trade deal that better reflects a balanced approach on challenging policy issues.

In advance of the meetings in Vietnam, Mr. Trudeau had signalled that Canada would not be rushed into a deal simply for the sake of an agreement. With pressure on multiple trade fronts and misgivings about the terms of a trade deal that was concluded by the Conservatives weeks before the 2015 federal election, a few tweaks might not be enough to salvage the flawed TPP. The decision to go slow and seek further negotiations may draw the ire of a few governments anxious to conclude the TPP, but it made both strategic and policy sense.

From a strategic perspective, Canada was a late entrant to the TPP negotiations, arriving well after the basic framework had been established and several of the chapters concluded. In fact, the TPP only became a trade priority after the Harper government identified the risks of remaining on the outside of a deal that included the United States. The decision to participate was primarily defensive with some studies projecting only marginal economic gains.

With the United States out of the TPP, Canada's primary strategic objective was gone. That left a deal that offered some benefits for increased trade with Japan, but little else, given that Canada already has free-trade agreements with several other TPP countries such as Mexico, Chile, and Peru.

Further, the TPP never fully reflected some of the Liberal government's trade priorities, including adequately addressing labour regulation and indigenous rights. Addressing those issues to advance the goal of a "progressive" agreement would require far more than some modest drafting changes.

The contentious North American free-trade agreement renegotiation has upended Canada's trade priorities since the United States remains our dominant trading partner. The overlap between NAFTA and the TPP represents a particularly thorny issue. For example, auto sector provisions have emerged as some of the most challenging of the NAFTA talks, threatening to dramatically change longstanding rule of origin regulations that have served as the basis for a critical North America-wide industry. To hamstring the Canadian NAFTA position on the automotive sector in order to reach a TPP agreement would have swapped short-term gain for long-term pain. As a result, Canada successfully argued that the issue should remain subject to further negotiation.

The trouble with the TPP11 – dubbed this for the 11 countries that remain after the United States dropped out following the election of President Donald Trump – extended beyond strategic shortcomings as the substantive provisions in several areas were widely viewed as coming at a significant domestic cost. This is particularly true for the intellectual property chapter, where the original agreement included patent provisions that would likely increase the cost of pharmaceuticals and copyright rules that would lock down content for decades through the extension of the term of copyright beyond the standard established at international law.

The IP chapter largely reflected U.S. demands and with its exit from the TPP, an overhaul that more closely aligns the agreement to international standards was needed. Canada succeeded on that front too with an agreement to suspend most of the controversial IP provisions including those involving copyright term, patent extension, biologics protection, Internet provider liability, and digital lock rules.

The TPP was also an outlier on cultural policy, departing from the longstanding Canadian approach by omitting a full cultural exception and creating unprecedented restrictions on policies to support the creation of Canadian content. The absence of robust cultural protections in the TPP had been a simmering issue for months. With the issue becoming increasingly sensitive in light of the recent release of a digital cultural policy, acquiescing to a trade agreement that raised alarm bells within the cultural community would have bad policy and bad politics, leaving Canada to successfully argue for further discussions on a cultural exemption.

Global Affairs Minister Chrystia Freeland and International Trade Minister François-Philippe Champagne inherited a trade policy that seemed to prioritize any deal over a good deal. Agreement on the TPP11 (now rebranded the Comprehensive and Progressive Agreement for Trans Pacific Partnership) remains a possibility, but standing firm on Canadian interests with a willingness to walk away rightly recognized that no deal is better than a bad one.

How Canada allied with Mexico to fend off TPP pressure from Japan, AustraliaAndy Blatchford
DANANG, Vietnam
The Canadian Press
November 11, 2017
From the outside, it looked like yet another bilateral meeting between Justin Trudeau and his continental ally, Enrique Pena Nieto, on the sidelines of yet another leaders' summit.
But this time, the Canadian prime minister had a somewhat atypical agenda for his face-to-face chat with the Mexican president.
Trudeau and Pena Nieto, who have built a good relationship in NAFTA's negotiating trenches, gripped hands and exchanged warm greetings inside the meeting room.
It was the Canadian leader's first bilateral meeting on the margins of this year's Asia-Pacific Economic Co-operation summit at a palm-lined, seaside resort in Vietnam. The Canadian team had planned it that way.
A key topic of discussion, as they sank into the yellow cushions on their chairs, focused on the Trans-Pacific Partnership trade talks.
Heading into APEC, a senior Canadian government official said Ottawa had been anticipating pressure from TPP partners Japan and Australia, two countries that wanted to move forward quickly with sealing the 11-country deal.
The Trudeau government, on the other hand, wanted to throw some sand in the gears. Ottawa had been pushing the other parties to make changes to how the treaty would affect areas like culture, intellectual property and the auto sector.
"We were not going to be rushed into a deal," Trudeau told reporters at his closing APEC news conference on Saturday, echoing warnings he had issued repeatedly over the course of the week.
The official, who spoke on condition of anonymity due to the sensitivity of the matter, provided a peek behind the scenes of what followed during the TPP talks in Danang.
The Canadian team had no plans to agree to the deal at Friday's TPP leaders' meeting unless the modifications were made. And they knew they had some allies. They had also been informed about unease about the deal among a few of the other countries.
Indeed, the official said Japan and Australia tried to railroad Canada into committing to an agreement in principle Friday by arguing the other TPP members would be disappointed if they didn't deliver, the official said.
That's where Mexico fit in.
Trudeau explained his situation to Pena Nieto, who reassured him that if Canada didn't sign on to the TPP, Mexico wouldn't either, the official said.
Mexico had been sending similar signals of restraint about signing on to a new TPP. The talks were "very productive,' but more discussion was needed, Mexican Economy Minister Ildefonso Guajardo was reported to have said on Thursday.
The official added that Pena Nieto likely offered his support for two reasons: Mexico wasn't 100 per cent comfortable with the deal on the table and the fact Canada has stood by it through the tough NAFTA renegotiation with U.S. President Donald Trump.
Shortly after Pena Nieto left, Trudeau held his next bilateral of the day in the very same room — this time with Japanese Prime Minister Shinzo Abe. But this meeting lasted more than twice as long as the Mexico bilateral, a sign of tough talk.
Abe came to APEC looking for a win — an announcement from Pacific Rim leaders that their huge trade deal would move forward just months after it had been left for dead following Trump's withdrawal earlier in the year.
After the meeting, Trudeau and Abe were supposed to walk a short distance to a scheduled TPP leaders' meeting. Some of the TPP players, including Japan and Australia, had expected the meeting to be a signing ceremony for an agreement in principle, the official said.
But the signing never happened, much to the chagrin of many an Asian country.
Canada asked for a bilateral meeting with Japan out of his respect for Abe and the countries' strong relationship, the official said. The plan was to tell him where Canada was coming from.
Abe was also informed about Mexico's position on the matter, the official said.
Their meeting was positive and it stretched for about 50 minutes, even though it had only been scheduled for half that time. It cut into the planned TPP leaders' meeting and kept the other leaders waiting for them in the room.
Over the course of that meeting, Abe, the TPP meeting's co-chair, said he would have to postpone the event. He left to tell the others about the postponement and Trudeau stayed behind in the bilateral-meeting room.
Trudeau faced sharp criticism on social media and in news reports for not attending the TPP meeting. The official disputes the notion it was a snub because the leaders would mingle at APEC events over the next 24 hours anyway.
"We obviously had lots to talk about and at the end of that meeting it became clear that it was in everyone's interest to postpone the leaders' meeting on the TPP11," Trudeau said Saturday.
Staying away from the meeting wasn't a negotiating strategy, but it did yield results, the official claimed.
Late Friday, TPP trade ministers agreed to changes and new ways forward in areas Canada has been pressing for, like autos, cultural industries and the suspension of IP provisions from the original TPP. The official said the changes didn't come until after Canada informed the group it wasn't going to agree to the deal without them.

On TPP, Trudeau has his Canada-first moment

He went to Asia and created a ruckus, centred on trade, with behaviour described in many countries as downright rude. No, not Donald Trump. Justin Trudeau.

The story about the ugly Canadian and his ungracious behaviour – failing to show up to a meeting where the leaders of 10 other countries expected to sign an agreement-in-principle of the Trans-Pacific Partnership, Version 2.0 – is rejected by senior Liberal aides as mostly malarkey.

Sources from other TPP countries were telling reporters the Canadians "screwed" everyone, while Canadian officials said other countries got carried away before an agreement was ready and that the meeting of 11 leaders was cancelled after Mr. Trudeau's meeting with Japanese Prime Minister Shinzo Abe ran late.

Anyway, a deal was announced a day later.

But no matter who tells the tale, there are still real differences on the substance. And they remain even after an agreement-in-principle was signed on Friday.

The 11 governments still in the TPP talks wanted this to be a symbol that trade liberalization goes on even when Mr. Trump's United States is going the other way. The other 10 governments wanted to show that they were fully committed to TPP 2.0. Mr. Trudeau wasn't ready to go all in. This was his "Canada first" moment.

The Canadian government insisted on inserting into this "agreement" more pointed caveats about disagreements – Canada's disagreements.

Mr. Trudeau faced objections from home and that really did seem to cool his ardour for the TPP in recent weeks. There were concerns that provisions on cultural industries would create a political backlash in Quebec. And there was an outcry from the Canadian auto sector, including parts makers and unions, who considered the first TPP a bad deal.

Auto-sector interests mounted an intense lobby in the past month. Most notably, Flavio Volpe, the president of the Automotive Parts Manufacturers' Association, called ministers and senior aides. The message: The first TPP was a bad deal for the Canadian auto sector, so the Trudeau government should not agree to anything unless it's clear Canada wanted a different deal on autos. "I think they heard us," Mr. Volpe said.

The first TPP was a deal that included the United States.

The Obama administration and Japan cut a deal to open the North American market over the objections of Canada and Mexico, who felt it weakened their preferential access to the U.S. market.

And though they managed to ease the impact in later talks, the final deal was still seen as a bad one for the Canadian auto sector. This time, the talks don't include the United States. So why agree to the same terms?

Canada is sweating through NAFTA negotiations in which Mr. Trump's administration wants to raise the proportion of North American content in a vehicle before it can be shipped into the U.S. market duty-free.

Negotiating lower regional-content rules in the TPP may only complicate that.

So Canada insisted that provisions about autos, far from being agreed upon, be put into a "work plan" for renegotiation, guided by language that indicates Canada wants concessions from Japan.

The two biggest economies still in the TPP talks are at odds over a major sector. And Canada also sought concessions in other areas, including an agreement to discuss a special exemption for its cultural industries.

There are political reasons why Mr. Trudeau's desire for a new TPP has cooled. It's one thing to embrace trade deals, but another to rile the auto sector, dairy farmers, the political left and Quebec. But those political worries reflect trade concerns. New Zealand doesn't care about auto competition from Japan; Australia isn't renegotiating NAFTA.

But Mr. Trudeau did annoy the others. Other countries had raised late qualms, such as Vietnam. But Mr. Trudeau clearly put the chill on the drive for a symbolic announcement.

Even the Canadian account of what led to Friday's missed meeting demonstrates that. Canadian officials said Mr. Trudeau didn't stand up the other leaders at a signing ceremony.

He wasn't expecting a signing – though other leaders may have. And he was held up in a meeting with Mr. Abe, where he was explaining that Canada still wasn't satisfied.

It was Mr. Abe who walked into the leaders' meeting 30 minutes late to say it would be cancelled, as Mr. Trudeau wasn't ready to bless the deal.

The other TPP leaders wanted a symbol of commitment, but Mr. Trudeau has a nervous industry, touchy constituencies and a fragile NAFTA to worry about – good reasons not to go all in.


1 件のコメント:

匿名 さんのコメント...

実をとる/分けあう ための 交渉を、