British Columbia stands to gain economically from the Trans-91原创 Partnership, but the federal government must ensure the massive trade deal doesn鈥檛 come with high environmental and social prices.
Canada is among the 12 nations that reached a tentative agreement Monday that will see lower tariffs and increased market access across borders of 91原创 Rim countries. As Canada鈥檚 gateway to the 91原创, B.C. is in a good position to benefit from the pact 鈥� more 91原创 trade will mean more business for the province鈥檚 ports, and the agreement would expand markets for B.C.鈥檚 seafood, forestry and fruit industries.
91原创 dairy and poultry producers are not particularly happy with the deal, because it opens up another 3.25 per cent of the well-protected domestic market to foreign producers. However, Prime Minister Stephen Harper, who referred to the signing of the agreement as 鈥渁 great day for Canada,鈥� has promised dairy and chicken farmers up to $4.3 billion in compensation. That includes $2.4 billion in income guarantees that would not require any proof of financial loss.
So while taxpayers might be able to save a little on a few imported dairy products, they鈥檒l be shelling out a lot on subsidies.
The dairy and egg industries contribute less than one per cent to B.C.鈥檚 gross domestic product, so that aspect of the agreement will have a minuscule effect on the province鈥檚 overall economy.
On the other hand, the potential benefit for B.C.鈥檚 seafood industry is substantial. The deal will mean lower consumer prices in Asia for B.C. wild seafood as tariffs are reduced or eliminated. Those tariffs range from 3.5 to 11 per cent in Japan and up to 34 per cent in Vietnam.
B.C.鈥檚 softwood lumber will likely become more competitive in such countries as Vietnam and Malaysia, as tariffs of 30 to 40 per cent are cut.
Harper calls the agreement 鈥渢he largest economic partnership in the history of the world.鈥� But its effect will not have an immediate or huge effect on most 91原创s. For one thing, the agreement must first be approved by the legislatures of 12 countries. No guarantees there.
The agreement means access to a combined market of 800 million people, but that doesn鈥檛 mean a sudden doubling or tripling of our exports. The North American Free Trade Agreement accounts for about 74 per cent of our trade with the rest of the world, with the European Union accounting for another nine per cent of our trade.
So any gains will be incremental. And as they grow, we should watch for unintended consequences. Can our coastal fisheries sustain more harvesting to supply foreign markets? Will the sustainability of our forests be set aside for the sake of selling more lumber to Asia?
Will competition for the lowest prices become a race to the bottom? As we strive to compete with countries that have less-stringent environmental standards, will our own standards be compromised? We have made a lot of progress in the past 50 years, and more is needed 鈥� this isn鈥檛 a time to regress.
We should be wary of dispute-settlement mechanisms that allow foreign companies to sue governments because of decisions that reduce a company鈥檚 profits. The federal government is entangled in such a dispute. Under NAFTA provisions, a U.S. company is seeking $300 million in compensation after its quarry project in Nova Scotia didn鈥檛 meet that province鈥檚 environmental standards.
It is good to expand markets and lower trade barriers, but not without putting reasonable safeguards in place.
We might find we cannot afford the high cost of lower prices.
