OTTAWA — At long last, Canadians are getting a look — well, more like a peek — at the impact on consumers and companies of the Trans-Pacific Partnership agreement.
So far, it looks like it could be more positive than negative. The text of the 12-nation trade deal, signed by Canada and the others over a month ago, was released Thursday, and “the gains for consumers are there, for sure,” according to one trade expert.
Others believe the TPP will also level much of the playing field for industries around the region.
“Most of the visible gains are in trade liberalization in goods,” said Trevor Tombe, assistant professor of economics at the University of Calgary, specializing in international agreements.
“A lot of things that people had been fearing — changes in prescription drug prices — they’re just not there. Canada’s rules in that regard were already stricter than what is coming in with TPP,” Tombe said.
“Gains for consumers are there, for sure.”
Trans-Pacific Partnership Full Text! Now you can read the mysterious trade deal everybody is talking about
For example, autos imported from Japan will be cheaper by about $1,500 per a $25,000 vehicle — roughly the average price of a Honda Civic. Other examples — milk protein products will cost less, as will some furnishing items.
The agreement also means “Canadian goods are going to have easier access to all the TPP countries, as well. The big one being Japan,” Tombe said.
“There’s something like 8,300 tariff lines contained in the agreement over 290 pages just detailing what the tariff changes are — and some of them can be quite substantial.”
Others are quite small. Tombe had some fun with the tariff lines on Twitter, Thursday, tweeting “Consume more than 32 grams of ice cream per year? Well…. the 265% tariff remains.”; “Currently there’s a 10% tariff on imported Liquorice — will be eliminated gradually over 10 years.”; “How many tariff free eggs will cdns be allowed? 1 at first, rising to just over 6, *per year*.”; and “Under
#TPP, cdns get just over 1.5L of tariff-free milk per year. Thanks #SupplyManagement.”
I know there are surprises lurking in there
Overall, Canada paid about $650 million to TPP countries last year, he said in an interview. “So, almost all of that will be eliminated.”
Meanwhile, the auto sector has been a major concern for Canadian car manufacturers.
Given the TPP agreement runs in the thousands of pages, “we’ll need a big collective effort to look through (it) and figure out what it means,” said Jim Stanford, an economist with Unifor union, which represents auto workers.
“Sometime over the coming weeks we’ll be able to assemble a portrait and find out what surprises are lurking in there — because I know there are surprises lurking in there,” he said.
“We know that there were rules that said that as little as 35 per cent of the content for auto parts could come from within the TPP. That means 65 per cent of the content could come from China. But the government never acknowledged that or said what parts would specify which content threshold,” Stanford said.
“So, now we’re going to have go through and see to exactly what is affected. And that is a really important issue that will have major implications for the auto supply chain.”
But Tombe, at the University of Calgary, said the majority of auto parts are already imported into Canada.
“So, assembling is the big activity here in the auto sector and cheaper access to imported parts is going to benefit them.”
As for the timing of TPP, the deal would kick in 60 days after the last country ratifies the agreement. Under that scenario, the deal could come into force two years from now.
“If the U.S. moves quick and gets this done in the spring, in order to avoid the presidential stuff later on in the year. Canada will pass it fairly quickly, I would image, same with Australia, New Zealand and Japan,” Tombe said.
“Then, that’s a done deal and it may begin Jan. 1, 2017.”