What trade agreements like the TPP mean to us.
I would like to first thank the Committee for giving us the opportunity to submit our opinion.
We have read the TPP briefs submitted to the International Trade Committee over the last few months and are confident that both the purported pros and cons of the TPP have been comprehensively addressed. What is interesting from our perspective is where the support for the TPP lies and where it does not.
Not surprisingly, the pro TPP submissions came from Big Business. The majority, we noticed, were written in support of the export of agricultural commodities. There were almost no pro TPP submissions from Canada’s value added industries with production in Canada. That is very telling, is it not?
It is in the anti TPP camp that you will find the family farmers, the unions, civil society groups and, above all, ordinary citizens. Their priorities are very different.
Overwhelmingly, these submissions assert that trade agreements like the TPP constrain government’s ability to protect the quality of life of Canadians. Whether it is issues around affordable health care, the outsourcing of jobs, environmental protection, government procurement and so much more, the point is being repeatedly made that the TPP and its predecessor, CETA, are a corporate assault on Canada’s legislative and judicial sovereignty.
The big question is: Which perspective is government going to favour? Will government come down on the side of keeping our democratic institutions strong? Or will you choose the side of Big Business?
We cite two reasons for our inclination to think the voice of ordinary Canadians will not win out.
The Brexit Reaction: Roughly one third of Canada’s trade with the European Union (EU) is with Great Britain1, a country whose citizens have just voted to exit the EU. In light of this development, one might have expected our federal government to choose to reassess CETA.
Instead, Canada, along with the unelected European Commission, has pushed for the preliminary or provisional ratification of CETA as quickly as possible. To use a business analogy, imagine a corporation has negotiated a 20 year contract at a fixed price. Then, unexpectedly at the 11th hour they discover that the other party can only deliver two thirds of the promised market access. Would the company respond by rushing through the deal?
No way, yet that’s exactly what has happened. We think it unequivocally suggests that government is not logical in its ideological enthusiasm for free trade.
“Excessive power in the hands of the few”2. In an interview before her 2014 Mallory Lecture at McGill University, Elizabeth May made two very strong statements to clarify her claim. She referred to “the excessive control by the unelected top party brass in all three main parties” . It’s flip side, she pointed out, was that “MPs are expected to toe the party line on every issue, big and small.”
By extension we can’t help wondering whether the International Trade Committee, (and this is not a critique of the hard work and integrity of individual members) will ultimately be required to toe the line. International trade was the top lobbying topic for Canada in 2015.3 Clearly, powerful business interests want this deal to go through.
Indeed, it has occurred to us and others that the Trade Committee might be merely a side show, conveniently filling time while the top party brass waits to see what happens with the TPP in the U.S. After all, it would be embarrassing if we rushed the TPP through and then found that the American people succeeded in having it rejected, in spite of President Obama’s enthusiasm for the deal.
For the last 15 years the international business community and their advocates within government have pushed Canada into signing multiple trade agreements. The results have been, to put it mildly, disappointing. Exports to countries with which Canada does not presently have a free trade agreement (FTA) grew six times as fast4 as to those with whom we do have an FTA during that period.4 Meanwhile, imports from our trade agreement partners grew twice as fast as our exports to them. And Canada’s export performance has been the 2nd worst5 of any OECD country.
As if that is not bad enough, respected simulation studies predict that the TPP will
- not only increase unemployment in Canada, but will do so at a higher per capita level than in any other country.6
- increase inequality worldwide.7
- cause a 26% drop in Canada’s value added exports.8
It seems irrational to us that any democratically elected government, aware of all of the above, might want to ratify a deal as huge as the TPP.
Unfortunately, we Newfoundlanders and Labradorians have learned the hard way how easy it is for bad deals to irrationally proceed. Our province has a hydro-electric project in Labrador that is massively over budget, is economically unfeasible, will extravagantly raise NL electricity rates, and could come close to bankrupting the province. It was imposed on us by a provincial government that chose to refuse any meaningful consultation process with the public but listened intensely to the advice of powerful business interests.
There is another potential problem. In spite of the fact that most Newfoundlanders and Labradorians want to shut down and cut our losses in this massive boondoggle of a project, that could be difficult to do. That’s because our contractual obligations with big international corporations could conceivably leave us open to huge NAFTA, and future CETA or TPP ISDS lawsuits challenges.
We raise this point because past and present Canadian governments have tended to portray ISDS lawsuits as a necessary and acceptable risk of engaging in trade agreements. This view continues in spite of mounting international evidence of the extensive economic and political damage these ISDS lawsuits have caused in other countries. Presumably, it’s more ideologically convenient to believe all those corporate lobbyists who assert that the trend towards multi-billion dollar lawsuits is not something that could happen in this country.
Civil society groups understand very clearly that ISDS lawsuits -- and there will be lots under the TPP -- are an unnecessary corporate assault on the democratic right to govern. Government is in denial on that point.
We would also suggest that, at this point in time, civil society groups apparently understand what’s better for the Canadian economy than the international business interests that push so hard for the ratification of these trade deals. Government again appears to be in denial of the evidence that supports this assessment.
In conclusion, we believe the International Trade Committee has an enormous responsibility to do what’s right for the citizens that elected you to office. That would be, in our opinion, a recommendation against the TPP.
for the St. John's chapter of the Council of Canadians
- Why the Canada – EU Trade Deal is in More Trouble Than the Government Admits http://www.michaelgeist.ca/2016/07/cetaintrouble/
- Council of Canadians: Michael Butler’s Blog http://canadians.org/blog/bad-medicine-pt-2
- Stanford, Jim. Signing trade deals is not synonymous with promoting trade. Progressive Economics (2016) http://www.progressive-economics.ca/2016/04/14/signing-trade-deals-is-not-synonymous-with-promoting-trade/
- Capaldo, Jeronim, Izurieta, Alex and Sundaram Jomo Kwame Trading Down:Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement.GDAE Working Paper 16-01 January 2016 http://www.ase.tufts.edu/gdae/policy_research/tpp_simulations.html
- Rashmi Banga. Trans-Pacific Partnership Agreement (TPPA): Implications for Malaysia's Domestic Value-Added Trade http://unctad.org/en/PublicationsLibrary/ecidc2014misc1_bp12.pdf