The Trans-Pacific Partnership (TPP) is a proposed trade agreement between twelve Pacific Rim countries, which evoked quite a bit of controversy among the general public due to its secretive negotiation process.

According to Global Affairs Canada, “[the TPP] is a comprehensive, economic, strategic and balanced agreement that will increase Canada’s foothold in the Asia-Pacific, a region that is expected to comprise two-thirds of the world’s middle class by 2030, and one-half of global gross domestic product (GDP) by 2050.”

Unprecedented access to a vast global market

The twelve countries involved represent a vast market of nearly 800 million consumers and almost 40 per cent of the global economy, with a combined GDP of about $28.5 trillion.

Some key parts of the agreement are the reduction (or elimination) of tariffs on a wide variety of goods and services, ranging from alcohol to beef and pork, and the creation of an investor-state dispute settlement mechanism.

Although trade experts and government officials are still combing through the fine print, it is clear that the TPP will lead to fewer international trade barriers among the twelve participating members.

The dispute-resolution provisions, which Canadian officials have claimed are similar to those contained in NAFTA, would also allow private companies to contest government decisions.

For Canada, the agreement will likely result in an increase in both imports and exports, including products such as machinery, canola, beef, pork, minerals and seafood.

Canadian companies will gain a competitive advantage over exporters from non-TPP countries who must still face the existing tariffs, while the same will be true for organizations importing goods to Canada.

A new world of opportunities for Canadian consumers, exporters and small business owners

The TPP has faced criticism due to the secretive nature of its negotiations, and provisions which industry experts say will have a negative impact on the Canadian auto and dairy industries.

The TPP would reduce the percentage of a vehicle’s content that must come from Canada to avoid import tariffs to 45 (down from 62.5) and would allow TPP countries duty-free access to 3.25 percent of Canada’s dairy market and 2.1 percent of its poultry market.

Despite the controversy, freer trade has a lot of potential for Canada that should not be ignored.

The benefits include:

• Increased purchasing power for consumers (even as real wages for millions remain stagnant) due to the elimination of a wide range of tariffs that will lead to more choice and lower prices for consumer goods.
• Increased recognition in the international market. One popular opinion is that it would be foolish to abandon the trading bloc and allow China to dominate the region because, once ratified, the TPP will result in free-trade agreements with roughly 60 per cent of the global economy.
• Potential benefits for small businesses. Opening new markets for Canadian products and services can give small businesses an opportunity to expand into the international markets and stay competitive – which is good news, considering that their revenues often rely on their ability to export products and services.

The urgent need for highly skilled global trade professionals

The increased level of trade in Canada (and around the world) is also likely to result in higher demand for international trade professionals, increasing the importance of international trade education and training programs.

Sylvain Charbonneau, CITP|FIBP, an international trade professional and educator at Ashton College, is particularly optimistic about the effect of the TPP on the Canadian trade job market.

“I believe that people in the trade industry are very lucky because it’s a field where the opportunities are growing, and we’re on the verge of some really exciting developments.”

“With the announcement of the TPP, it has suddenly become more important than ever to have knowledge of global supply chain management, international market entry strategies, and the legal aspects of international trade. There are so many different areas where individuals with knowledge in international business practices and trade relations can pursue a career.”

In the era of globalization and increased use of information technology, the goal is not to close off our borders, but to recognize emerging trends and take advantage of the world’s interconnectedness.

While some may argue against the TPP, it is hard to deny the potential for a competitive advantage in the global marketplace.

The TPP agreement facilitates the opening of new markets for international businesses of all sizes, and the focus should be on developing the skills and expertise to endure the increase of the volume and quality of our exports.

Understanding the realities of international trade is becoming more critical for Canadian businesses, and trade professionals with internationally-recognized qualifications like the CITP®|FIBP® designation now have more opportunities to utilize their education and training, and contribute to the growth and prosperity of the Canadian economy.

While the TPP is controversial, the benefits to Canadians and our economy cannot be overstated, and our inclusion in the partnership would be a major victory.

As President of the United States Barack Obama has made clear, the U.S. plans to ratify the TPP as soon as possible, meaning Canada would be isolated if we are unable to do so.

While the auto and dairy industries’ fear of cheaper import products and increased competition is understandable, the solution is not to close our doors to global trade and risk eroding Canada’s position in the world economy.

Do you think the TPP will be good for the Canadian economy? Do the pros outweigh the cons for Canadian industry and agriculture?

The post The TPP: What does it mean for Canadian international trade professionals? appeared first on Trade Ready.

The Trans-Pacific Partnership was finalized in October, and has since been a topic of intense debate.

However, due to the size of the final document and its many specifics concerning tariff liberalization, customs, trade facilitation, competition, and other critical topics, it’s understandably taking time for all of the new stipulations to be digested by the larger public.

As environmental groups and analysts make headway with reading through and analyzing the agreement, some groups have come out resolutely against the agreement, arguing that tying these economies together more tightly will make it harder to pass more stringent environmental regulations in the future.

Environmental regulations don’t go far enough

One U.S. law professor pointed out that this is the first multilateral treaty in recent years which required the adoption of only one multilateral environmental agreement, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Previous trade treaties required constituent parties to abide by seven of these types of agreements.

Moreover, environmental groups point out that according to the terms of the trade agreement, a state will not be in violation of these regulations if it fails to comply with the stipulations set out in the agreement.

Violating an environmental aspect of the TPP requires proof that the measures taken by the country in question not only go against the environmental rules, but also affect trade and investment with other signatory states.

Complete silence on climate change

Environmentalists are also upset by the treaty’s lack of regulations on Japan’s whaling trade or Singapore’s trade in shark fins, and are particularly concerned that the trade agreement fails to mention climate change or global warming at all.

“Beyond making no effort to combat climate disruption, the TPP would actually fuel the climate crisis,” the Sierra Club said in its report, “A Dirty Deal,” released earlier in December.

If approved, the pact would increase greenhouse gas emissions and undermine efforts to transition to clean energy.

The organization also maintains that the deal would open up avenues for oil and gas firms to overturn energy policies in trade dispute tribunals, and increase greenhouse gas emissions by spurring companies to move their manufacturing hubs to less environmentally friendly economies.

Overfishing provisions the one bright spot

It’s not all doom and gloom for the environment, however, with specific regulations attached to try to stem overfishing.

The environmental chapter includes provisions that prohibit signatory nations from providing subsidies to fishing practices which promote or support overfishing of marine species deemed to be in danger by national governments, regional fishery management organizations, or scientific evidence.

Moreover, TPP participant nations are now prohibited from extending existing subsidies that would endanger low stocks of endangered fish.

Countries are also required to notify trade partners of fishing subsidies which are part of their policies, as well as additional information about the state of the fish population.

The measure is significant, as participants in the TPP trade agreement – which encompasses 12 nations, or an estimated 40% of the world’s economy – account for eight of the top 20 global fishing nations.

Mixed opinions sparking conversations about next steps

Though the Sierra Club is decidedly disappointed in the agreement, the World Wildlife Fund is encouraged.

“No major trade agreement before this one has gone so far to address growing pressures on natural resources like overexploited fish, wildlife, and forests,” WWF-US President and CEO Carter Roberts said in October, shortly after the talks were completed.

With the right implementation and compliance procedures, the conservation commitments in this trade agreement could be game-changers.

Roberts added that each nation will have to individually undertake the appropriate policies to comply with the regulations.

While some environmental groups claim the TPP agreement will make it harder to implement new, more ambitious environmental regulations, one lawyer pointed out that the agreement is an important step to ensure that countries which fail to comply with existing environmental regulations will catch up to their peers.

Furthermore, making it harder for participant nations to introduce new economic policies is not as dangerous as some environmental groups make it seem.

Governments have used environmental policies to limit foreign competition, which has led to protectionist policies, resulting in domestic industries continuing to violate existing environmental protocols.

Do you think the TPP agreement goes far enough to address environmental issues?

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