The Trans-Pacific Partnership Agreement: Benefits and Challenges for Canadians
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THE TRANS-PACIFIC PARTNERSHIP AGREEMENT: BENEFITS AND CHALLENGES FOR CANADIANS Report of the Standing Committee on International Trade Hon. Mark Eyking Chair APRIL 2017 42nd PARLIAMENT, 1st SESSION Published under the authority of the Speaker of the House of Commons SPEAKER’S PERMISSION Reproduction of the proceedings of the House of Commons and its Committees, in whole or in part and in any medium, is hereby permitted provided that the reproduction is accurate and is not presented as official. This permission does not extend to reproduction, distribution or use for commercial purpose of financial gain. Reproduction or use outside this permission or without authorization may be treated as copyright infringement in accordance with the Copyright Act. Authorization may be obtained on written application to the Office of the Speaker of the House of Commons. Reproduction in accordance with this permission does not constitute publication under the authority of the House of Commons. 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Also available on the Parliament of Canada Web Site at the following address: http://www.parl.gc.ca THE TRANS-PACIFIC PARTNERSHIP AGREEMENT: BENEFITS AND CHALLENGES FOR CANADIANS Report of the Standing Committee on International Trade Hon. Mark Eyking Chair APRIL 2017 42nd PARLIAMENT, 1st SESSION STANDING COMMITTEE ON INTERNATIONAL TRADE CHAIR Hon. Mark Eyking VICE-CHAIRS Randy Hoback Tracey Ramsey MEMBERS Sukh Dhaliwal Kyle Peterson Peter Fonseca Hon. Gerry Ritz Linda Lapointe Dave Van Kesteren Karen Ludwig OTHER MEMBERS OF PARLIAMENT WHO PARTICIPATED Dean Allison Larry Maguire William Amos Bryan May René Arseneault Elizabeth May Matthew Dubé Phil McColeman Peter Fragiskatos Michel Picard Pam Goldsmith-Jones Terry Sheehan Cheryl Hardcastle Bev Shipley Gord Johns Wayne Stetski Peter Julian David Sweet David Lametti Brad Trost Hon. Denis Lebel Karine Trudel Denis Lemieux iii CLERK OF THE COMMITTEE Rémi Bourgault LIBRARY OF PARLIAMENT Parliamentary Information and Research Service Alexandre Gauthier, Analyst Simon Richards, Analyst iv THE STANDING COMMITTEE ON INTERNATIONAL TRADE has the honour to present its SIXTH REPORT Pursuant to its mandate under Standing Order 108(2), the Committee has held its Trans-Pacific Partnership Agreement (TPP) Public Consultation and has agreed to report the following: v TABLE OF CONTENTS THE TRANS-PACIFIC PARTNERSHIP AGREEMENT: BENEFITS AND CHALLENGES FOR CANADIANS ........................................................................................................... 1 INTRODUCTION ....................................................................................................... 1 BACKGROUND ......................................................................................................... 3 Canada’s Trade and Investment Relationship with Trans-Pacific Partnership Countries .............................................................................................................. 3 Process for Entry Into Force of the Trans-Pacific Partnership .............................. 7 GOVERNMENT CONSULTATIONS ........................................................................... 8 Consultations Prior to the Conclusion of the Trans-Pacific Partnership Negotiations.......................................................................................................... 8 Consultations Since the Conclusion of the Trans-Pacific Partnership Negotiations........................................................................................................ 10 EXPECTED IMPACTS OF THE TRANS-PACIFIC PARTNERSHIP ON CANADA ... 11 Expected Overall Benefits for Canada of the Trans-Pacific Partnership ............. 12 Expected Overall Costs for Canada of the Trans-Pacific Partnership ................. 14 Modelling the Economic Impacts for Canada of the Trans-Pacific Partnership .. 15 RATIFICATION OF THE TRANS-PACIFIC PARTNERSHIP ................................... 17 FEDERAL SUPPORT FOR CANADIAN BUSINESSES .......................................... 19 TRADE IN GOODS .................................................................................................. 21 Agriculture and Agri-Food ................................................................................... 22 Overall Impact of the Trans-Pacific Partnership on Canada’s Agricultural and Agri-Food Sector ................................................................................. 22 Tariffs and Quotas ...................................................................................... 26 Non-Tariff Barriers to Trade in Agricultural and Agri-Food Products ........... 28 Government Support for Canadian Agricultural Producers ......................... 30 Manufacturing ..................................................................................................... 32 Automobile and Auto Parts Manufacturing ................................................. 33 Other Manufacturing ................................................................................... 37 TRADE IN SERVICES ............................................................................................. 38 TEMPORARY ENTRY FOR BUSINESS PERSONS ............................................... 42 INVESTMENT PROTECTION ................................................................................. 45 Overall Impact of Investment Provisions ............................................................ 45 vii Investor–State Dispute Settlement Mechanism .................................................. 47 Tobacco Control Measures ................................................................................ 51 INTELLECTUAL PROPERTY RIGHTS .................................................................... 51 Patent Protection for Pharmaceutical Products .................................................. 52 Copyright Term Extension ................................................................................... 54 CONCLUSION AND RECOMMENDATIONS ........................................................... 57 APPENDIX A: LIST OF WITNESSES ........................................................................... 63 APPENDIX B: LIST OF BRIEFS ................................................................................... 85 REQUEST FOR GOVERNMENT RESPONSE ............................................................. 97 SUPPLEMENTARY OPINION OF THE CONSERVATIVE PARTY OF CANADA ......... 99 DISSENTING OPINION OF NEW DEMOCRATIC PARTY OF CANADA ................... 107 viii THE TRANS-PACIFIC PARTNERSHIP AGREEMENT: BENEFITS AND CHALLENGES FOR CANADIANS INTRODUCTION In response to the lack of progress in reaching a new multilateral trade agreement at the World Trade Organization (WTO), a number of countries – including Canada – are pursuing bilateral and regional trade liberalization agreements. Of these agreements, few have received as much attention as the Trans-Pacific Partnership Agreement, which is commonly known as the TPP. On 4 October 2015, ministers representing the 12 TPP countries1 – including Canada – announced the conclusion of their negotiations, and the TPP was officially signed on 4 February 2016. It contains more than 6,000 pages of text in addition to side letters.2 Along with the Canada–European Union (EU) Comprehensive Economic and Trade Agreement (CETA), the TPP is among the most high-profile free trade agreements (FTAs) negotiated by Canada since the North American Free Trade Agreement (NAFTA). The TPP countries represent approximately 40% of the global economy and 25% of the value of global trade.3 The Government of Canada and some organizations have described the TPP as a “21st century trade agreement” because it addresses traditional issues, such as tariff reductions and government procurement, and other issues, such as development, customs administration, electronic commerce, state-owned enterprises, regulatory coherence and trade facilitation. It also includes measures to help small- and medium- sized enterprises (SMEs) benefit from the TPP.4 Not all Asia-Pacific countries are part of the TPP; most notably, China is not a TPP country, but it could become one in the future. Some observers have suggested that the TPP would provide a way for signatory countries, particularly the United States, to offset China’s economic and political power in the Asia-Pacific region.5 In his weekly address to the nation on 10 October 2015, President Obama commented that, “[without 1 When the House of Commons Standing Committee on International Trade was undertaking its study on the TPP, the United States had not yet withdrawn from the TPP. Consequently, unless otherwise noted, the data and other information in this report assume that the United States is a TPP country. 2 The purpose of a side letter