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Less than meets the eye in Pacific trade talks: report

A container ship enters the Port of Vancouver

DARRYL DYCK/The Globe and Mail

The Trans Pacific Partnership talks are often characterized as the latest and greatest in free trade agreements – a new "gold standard" and leading to a "next-generation" deal.

But in a new report, Ottawa trade consultant Peter Clark argues that the TPP has been over-hyped and oversold by its main proponent – the United States.

"This is a made-in-USA initiative," Mr. Clark says in the 150-page report. The deal is heavily skewed towards promoting the interests of Hollywood, drug companies and corporate America – a "gift to Washington," as Mr. Clark puts it.

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"It is also about enhancing and restoring U.S. military and political influence in Asia," according to the report.

One of the most significant flaws is that the U.S. is keeping U.S. states largely beyond the deal's scope, the report says. That means states will continue to offer manufacturers lavish subsidies to build new plants, such as Tennessee, which recently gave Electrolux $188-million for a $190-million plant.

Mr. Clark said these kinds of incentives hurt Canadian manufacturers and should be banned in new trade agreements.

Mr. Clark said much of the deal's initial great promise has been scaled back as countries insist on numerous "exclusions" or protected sectors. He predicted the negotiations will likely stretch well into 2014.

For Canada, which is poised to join the talks for the first time in New Zealand next week, the deal's benefits are almost exclusively defensive, Mr. Clark said. "The benefits to Canada appear illusory, as Canada already has deals with 90 per cent of the TPP economy," he says.

Canada stands to gain much more, however, if Japan eventually joins the talks, the report says.

The TPP now includes Canada, Mexico, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

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