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article imageOp-Ed: TPP trade text shows Canada's auto sector will be badly hurt

By Ken Hanly     Nov 6, 2015 in Business
Ottawa - Former Prime Minister Stephen Harper made sure the text of the Trans-Pacific Partnership trade deal was not revealed before the federal election. If it had been released, he might have faced an even more resounding defeat.
The Liberal government of Justin Trudeau will now be faced with deciding whether it should seek changes in the deal. Given that there were 12 different countries involved in the negotiations it may be difficult if not impossible to negotiate changes. Mark Nantais, president of the Canadian Vehicle Manufacturer's Association, said the Liberals will need to take a close look at the agreement and see if they can make changes. The 12 nations all have to ratify the document. Perhaps some will decide to reject the terms,.
The full text of the agreement was just made available yesterday. It is available here. The document is 6,000 pages in all. Mr. Nantais pointed out that Canada consented to eliminate a tariff on imported Japanese vehicles in five years while the United States will eliminate its tariff over a period as long as 30 years.
The deal will offer Canadian companies access to the Japanese consumer market but at the same time would eliminate Canadian tariffs and also make it easier for companies to use offshore parts creating a good market in Canada for low-cost Asian parts producers, making it difficult for higher-cost Canadian auto manufacturers to compete.
The text shows that local-content protections for vehicle components are much less stringent than the Harper government had claimed. Harper claimed that the requirements would be from 40 to 45 percent. Actually engine parts, frames and metal roof panels will only require TPP content of 35 percent. Companies will be able to use low cost parts from any country such as China even though it is not a member of the TPP. This helps out the big global auto companies if they are manufacturing within the TPP.
Flavio Volpe, president of the Canadian Automotive Parts Manufacturer's Association, which employs 81,000, said that Canada got worse terms on key parts than they had been told by the Harper government. There are 26 Canadian companies that make stamped metal components and another 18 that make engine parts, according to Volpe.
The Trudeau government has not yet promised anything with respect to changing the pact. International Trade Minister Chrystia Freeland urged Canadians to review the pact and send feedback to her. The Liberals claim they will consult with Canadians before approving the deal. Such consultation is unlikely to result in any changes. As trade lawyer Lawrence Herman pointed out, any attempt to renegotiate parts of the deal would prompt other signatories to do the same, causing the whole deal to fall apart like a house of cards. This is unlikely to happen since all the countries signatory to the agreement are beholden to the corporate interests who want the deal. There will be moves asking for government compensation by companies hurt by the deal. In the United States, President Obama has signified he intends to sign the TPP.
There has already been a significant negative reaction to the TPP in Ontario. Mayors of 20 Ontario cities who have significant numbers of auto sector jobs called on Trudeau to protect their industry.
UNIFOR, the trade union of which Canadian Auto Workers are part, also released a critical account of the TPP deal. UNIFOR National President, Jerry Dias, said: "The former Conservative government was in a rush to reach a deal before the national election. We now have a chance to see what concessions they made so that could happen. The new government needs to commit to fixing whatever mistakes lurk in the TPP text because the former Conservative government was in such a rush." Dias said the big question was what Harper had to give up to get the deal and claimed that even with present knowledge of the deal there were concerns not only with the auto provisions but patent laws related to publishing, and prescription drugs, as well as the impact on dairy farmers. Jim Stanford a UNIFOR economist calculates that the weaker regional content rules alone will threaten 20,000 well-paying jobs in Canada.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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