Canada has become a founding member of the Trans-Pacific Partnership, a 12-country trading block that will enjoy a significant drop in tariffs nearly across the board while fundamentally changing the nature of the North American auto industry and nudging Canada's supply-managed agricultural sectors towards greater international trade.
Conservative Leader Stephen Harper says the historic deal protects Canadian jobs today and creates more for generations to come as it secures access to hundreds of millions of new customers in the Asia-Pacific region.
But it won't please everyone.
"This deal is, without any doubt whatsoever, in the best interests of the Canadian economy," Harper told a news conference Monday after the deal was announced.
"Ten years from now, I predict with 100 per cent certainty people are looking back, they will say if we've got in it, they'll say that was a great thing. And if we haven't, they'll say that was a terrible error."
Canadian officials briefing media and industry stakeholders in Ottawa Monday morning outlined a wide range of new export opportunities for Canadian industries that the deal offers.
For example, Canadian beef exports to Japan — the world's third largest economy — currently subject to tariffs of over 38 per cent, will have tariffs lowered to 9 per cent over the next 15 years.
Other tariffs on a large range of commodities like canola, fish and seafood, forestry products and industrial goods will be eliminated or lowered across the TPP region, either immediately or over a phase-in period ranging from five to 15 years.
Canada will also have new access to government procurement projects abroad, including opportunities to bid on projects for six regional power authorities in the U.S.
But the compromise required to reach the deal means that aspects of the North American Free Trade Agreement pertaining to the auto sector will change. That deal required roughly 60 per cent of parts and vehicles sold tariff-free to be manufactured in North America.
In order to qualify as a tariff-free vehicle under the TPP, 45 per cent of the net cost of the vehicle will need to originate in TPP countries — not just North America. For auto parts, 45 per cent of core parts and priority parts identified by the Canadian industry, and 40 per cent of the net cost of other parts, will need to originate in TPP countries.
Canada has also granted new access for TPP member countries to its supply-managed agricultural sector. Imports representing roughly 3.25 per cent of Canada's current annual dairy production will be allowed, as well as 2.3 per cent for eggs, 2.1 per cent for chicken, 2 per cent for turkey and 1.5 per cent for hatching eggs.
Offsetting this is a phased-in tariff reduction for artisanal cheese producers who wish to export to the United States.
'Once-in-a-lifetime opportunity'
Fluid milk will be included in the dairy allotment, but 85 per cent of the milk will be directed to Canadian processors. All TPP countries will have equal access to the new dairy allotment, although exporters like New Zealand and Australia are more likely to ship butter or cheese across the longer distances than fluid milk.
All dairy imports will be subject to Canadian regulations, including phytosanitary rules like permissible livestock drugs.
"We certainly don't anticipate that there will be job losses," said International Trade Minister Ed Fast, who represented Canada at the talks.
"Obviously there will be some industries that will adapt but what we've done is we've positioned Canada very strongly to be part of a much larger trade agreement, the largest in the world, providing Canada with a once-in-a-lifetime opportunity."
Fast added the deal will allow Canada to "shape outcomes and rules within the Asia-Pacific region, to walk shoulder-to-shoulder with our NAFTA partners, to expand our opportunity within the Asia-Pacific."
Source : CBC