Canadian exports could grow by as much as $15.7-billion if the federal government pulls the trigger on entering into the Trans-Pacific Partnership (TPP), according to the Fraser Institute.
According to a new study from the public policy think-tank, joining the TPP would provide a huge boost to the national economy and help move Canada away from its dependence on the United States as a trading partner.
“With the Conservative government signalling that international trade is a top priority, the TPP offers a chance for Canada to gain a foothold in the prosperous and growing Asian markets and move the country away from trade dependence on the United States,” international trade specialist and study co-author Laura Dawson said in a statement. “Participating in the TPP is also important to safeguard Canada’s current trade agreements, particularly (the North American Free Trade Agreement) NAFTA.”
While Dawson calculates that the TPP could provide a $9.9-billion increase in Canada’s gross domestic product (GDP), she said the agreement could be equally as important in shaping the rules of future trade agreements and ensuring gains already made, such as NAFTA, are protected so Canada does not have to undertake costly reforms to adapt to a new system.
“The era of easy trade policy gains may be over but the disciplines imposed by the TPP on investment, regulatory alignment, rules of origin and market access will, in the longer term, help increase certainty, reduce risk, and lower costs for Canadian exporters and investors in emerging markets,” Dawson said.
Entering the TPP trade agreement would secure a trade alliance between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore the U.S. and Vietnam, representing a combined economy of more than $27-trillion and about one third of global trade.
Additionally, the TPP has the potential to expand to include all Asia-Pacific Economic Cooperation (APEC) countries, providing for greater market-access gains in the future, the study.
“A significant attraction of the TPP is engaging China,” Dawson continued. “If China were to join, the TPP would become the first regional agreement to include the world’s three largest economies: the United States, China and Japan.”
The study also notes that when Canada negotiated the NAFTA and World Trade Organization (WTO) agreements in the early 1990s, issues such as electronic commerce, digital media and third-party logistics had not yet entered the commercial mainstream.
The TPP agreement provides a platform for discussing and resolving these and other emerging issues.
“If Ottawa is serious about diversifying Canada’s trade relationships, then TPP membership is a golden opportunity to do so,” Dawson said.
The full report can be accessed here.