Twelve nations, including Canada, announced a tentative agreement Monday on the massive Trans-Pacific Partnership deal.
Speaking shortly after the agreement was announced, Stephen Harper billed it as the largest-ever deal of its kind. However, not everyone is welcoming the agreement with open arms, like SaskMilk, which is wary of the impact the deal will have on dairy farmers in Saskatchewan.
When it comes to Canadian consumers, Sylvain Charlebois – a professor of distribution and food policy at the University of Guelph – says the biggest difference will be the variety and prices of certain products at the grocery store.
“It would be fair to say that consumers are going to have access to more different kinds of products, more variety,” Charlebois explained. “In terms of prices, I actually do expect prices for certain products like milk, some cheeses and perhaps in eggs and chicken, to actually drop for the next two or three years after the deal has been ratified.”
He says the Trans-Pacific Partnership will reduce 90 per cent of all duties on traded goods between 12 countries. He says excluding China is key because the U.S., Japan and Canada are trying to tap into the market share for exports on the Asian-Pacific rim. He says eliminating tariffs will provide a big competitive advantage for selling beef and pork to growing markets in Asia.
When it comes to Canada importing new products from these markets, Charlebois says the threshold for the market share is manageable at 3.25 per cent for dairy products, three per cent for chicken, and one per cent for eggs.
“These are all manageable thresholds for our commodity groups I would say,” he said. “But also it is enough to entice them to think differently about trades, to think differently about competitiveness.”
The deal still has to be ratified by all the governments involved, and it may hang on the outcome of the Canadian federal election.
TRADE GROUP CALLS TPP GREAT DEAL
The head of Saskatchewan Trade & Export Partnership (STEP) is seeing a lot of potential positives for the province if the TPP agreement is ratified.
“We’re one of the most trade dependent provinces and one of the most trade dependent countries in the world, so any agreement that opens access to our goods is good for Saskatchewan,” said STEP President and CEO, Chris Dekker.
He explained with our population roughly at 1.2 million people, it’s an extremely small market. Therefore, we have to export our goods in order to grow, Saskatchewan did just that, exporting over $35 billion in goods and services in 2014. Dekker said that makes us the number one province in exports per capita.
He understands there could be some drawbacks to certain sectors, like the dairy industry. But overall, Dekker indicated the positives far outweigh the negatives.
“Our diary industry is miniscule compared to the grains and oilseeds and ag implement and manufacturing areas. So, all in all, net effect is far beneficial to the province.”
PROVINCE APPLAUDS TPP
The Wall government calls the TPP a huge deal for Canada and Saskatchewan as a trading partner.
More than $25 billion in goods was exported to countries within the TPP in 2014, representing 71 per cent of Saskatchewan’s international exports. About one in five jobs in the province depend on international exports.
“Having these trade barriers eliminated entirely means we’re even more competitive,” said Trade Minister Jeremy Harrison. “We’re going to see very, very real gains.”
Harrison pointed to a number of sectors benefiting, like agriculture, manufacturing and forestry. He explained if Canada’s not in on the deal, then we’ll still be paying certain tariffs whereas other countries won’t, setting us back considerably.
“Whether that be ag manufacturing, whether that be canola growers, whether that be wheat growers it would mean that we would be at a five to 30 per cent disadvantage.”