The Power of Perspectives

The Canadian Bar Association

Yves Faguy

Post TPP, what are Canada's trade alternatives?

January 23 2017 23 January 2017

 

In addition to signing an executive order to renegotiate NAFTA, U.S. President Trump is formally withdrawing his country from the Trans-Pacific Partnership today. Under the terms of the trade deal, it cannot come into force without the participation of the U.S. Meanwhile, a China-led trade deal for Asia Pacific is reportedly nearing completion.

Trade Minister Francois-Philippe Champagne expressed hope last week that Canada could pursue an alternative multilateral trade deal in the Pacific Rim. It could also negotiate a bilateral free trade agreement with Japan. It is planning exploratory trade talks with China.

Whatever the scenario, Michael Geist writes that Canada should follow Trump’s lead and hit the reset button:

For Canada to move forward with an agreement that does not offer the benefits of better access to the U.S. market, cannot be enforced (since it cannot take effect), and which involves provisions of little interest to many other TPP members does not make sense.

The future of Canadian trade policy is clearly now wrapped up the NAFTA renegotiation, the attempts to push CETA over the finish line, and efforts to kickstart bi-lateral trade negotiations with the major Asian countries, including China, Japan, and India.  Many TPP provisions may resurface in the NAFTA talks (despite today’s withdrawal, the TPP will likely serve as a blueprint for U.S. negotiators on many issues), but conceding on those issues without clear U.S. gains would not advance Canadian interests and would weaken the NAFTA negotiating position with the U.S.

It is far from certain, however, whether Trump will pursue bilateral trade deals in Asia, and what an Asisna trade pivot would mean for Canada as it renegotiates the terms of NAFTA.

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