No special treatment for U.S. if it wants to rejoin TPP: official

OTTAWA – The United States will receive no preferential treatment if it seeks to rejoin the sweeping Trans-Pacific Partnership that Canada and 10 partners signed Thursday, says a senior Canadian trade official.

The signing of the new 11-country TPP marks the culmination of a massive salvage operation that kicked into gear after President Donald Trump pulled the United States out of the deal after he was sworn into the Oval Office last January.

“The United States will not receive any fast-track access to this agreement if they choose to return one day,” a senior Canadian trade official told a teleconference Thursday from Santiago, Chile.

Despite the president’s repeated attacks on a trade deal that he said was unfair to Americans, senior Trump administration officials have said recently they’re looking at ways to possibly rejoin the pact.

That may not be so easy.

The new TPP, known as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, or CPTPP, contains 22 provisions that were suspended from the original 12-country agreement, which included the U.S.

Under the terms of letting new members into the CPTPP, all 11 members would have to agree to lift those suspended provisions.

“Whether they’re a carrot or a stick depends on the eyes of the beholder,” the official said during a technical briefing for the media.

“If the United States were to indicate to us seriously that they were prepared to enter into discussions with us to enter into the CPTPP, those suspended provisions would not be automatically lifted simply by them expressing their interest in joining.

“That gives us all some leverage around the table in terms of negotiating the potential terms of the United States coming back.”

International Trade Minister Francois-Philippe Champagne was in Chile to sign the CPTPP on Canada’s behalf. He reiterated his belief that Canada will only ratify the deal later this fall, because it has to pass legislation through Parliament.

Champagne travels to Paraguay on Friday to announce the start of free trade talks with the four-country Mercosur group of South American countries, which also includes Brazil, Argentina and Uruguay.

Those negotiations could begin in earnest in the next 10 days, said Champagne’s spokesman Joseph Pickerill.

The progress on both deals is a sign that Canada’s efforts to diversify its international trade portfolio have paid off in the face of growing uncertainty with its top trading partner, the United States, said Pickerill.

This week’s inroads into the Pacific Rim and South America come as Trump threatens to levy stiff tariffs on steel and aluminum and with persistent uncertainty continuing to plague the renegotiation of the North American Free Trade Agreement.

Canada was able to win exemptions on digital content in the renegotiated TPP, but the government has faced heavy criticism from Canadian auto workers and manufacturers for signing side deals with Japan, Australia and Malaysia on automobiles.

Flavio Volpe, president of the Automotive Parts Manufacturers Association, said Thursday that Champagne’s claims of benefits to the Canadian automotive sector are “laughable.”

“He doesn’t understand the industry or he doesn’t care about the people it employs in Canada and that bodes very poorly for future trade deals under his watch.”

But David Worts, the executive director of Japan Automobile Manufacturers Association of Canada, welcomed the pact, saying it levelled the playing field for Japanese automakers.

Champagne said the auto side deals reduce trade barriers that will provide benefits to Canadian automakers. The side letter with Japan, released Thursday, also provides for a dispute settlement mechanism with Japan.

The new TPP will give Canada access to a market comprising 13 per cent of the world’s gross domestic product.

Mercosur is much smaller — just 260 million consumers — but would deliver Canada a deal with Brazil, the biggest country in the Mercosur bloc.

But striking a deal with Mercosur won’t be easy, said Carlo Dade, an expert on Latin American affairs with the Alberta-based Canada West Foundation.

Brazil and Argentina have been reluctant to talk free trade with Canada in the past and, though they’ve opened the window, uncertainty remains, he said.

Potential irritants with Brazil include its likely demands for greater access for its beef into Canada and the ongoing aerospace dispute between Canada’s Bombardier and Brazil’s Embraer, he added.

“This is going to be a tough negotiation. Brazil is a large market, so is Argentina,” said Dade.

Champagne acknowledged the challenges but called Mercosur “a very significant bloc” and said Brazil and Argentina have been asking Canada to re-engage.