In “Canada and the Trans-Pacific Partnership: Entering a New Era of Strategic Trade Policy”, recently published by the Fraser Institute, we examine some of the reasons why the TPP is important for achieving Canada’s trade objectives.
The TPP provides Canada and its other members with the opportunity to address issues such as electronic commerce, digital media, and third-party logistics that had not yet entered the commercial mainstream when Canada negotiated the NAFTA and WTO agreements in the early 1990s. The agreement also offers a defense against the erosion of NAFTA preferences. Canada’s presence at the negotiating table helps to ensure that the terms of the final agreement are at least consistent with NAFTA so that Canada does not have to undertake costly reforms to adapt to a new system.
As well, the TPP offers the opportunity to streamline rules of origin and harmonize customs procedures and technical standards, which will reduce production costs for Canadian businesses. Finally, because the TPP negotiations include coverage of competition, investor protection, regulatory coherence, sanitary and phytosanitary measures, and technical barriers to trade, among other issues, the trade deal will become a vehicle by which transparency and ease of doing business are improved in emerging markets.
We conclude that although the era of easy trade policy gains may be over, 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.