Trans-Pacific Partnership (TPP) Free Trade Negotiations
Benefits Across Canada of a Trans-Pacific Partnership Agreement
The Trans-Pacific Partnership (TPP) is the most ambitious trade initiative currently being negotiated in the Asia-Pacific region. The TPP is a key pillar of Canada’s pro-trade plan because it will deepen Canada’s trading relationships with dynamic and fast-growing markets in the Asia-Pacific region, as well as strengthen Canada’s traditional partnerships in the Americas.
The TPP will increase Canada’s foothold in Asia, a region that is expected to contain two thirds of the world’s middle class by 2030 and one half of global GDP by 2050. Canada and its competitors recognize the significant potential Asia has to offer. Being part of the TPP is consistent with Canada’s concerted efforts to expand Canada’s trade opportunities in the region and will help ensure that Canadian business is not disadvantaged with respect to its global competitors.
A TPP agreement would lower tariffs on a wide range of Canadian products and would benefit exporters across Canada in a number of sectors, including agriculture, wood and wood products, chemicals and plastics, and fish and seafood. An agreement would also bring enhanced and more predictable market access for Canada’s services providers.
Beyond facilitating the exchange of goods and services across borders, the TPP will also increase the flow of people, data and capital, adding significantly to current estimates. The TPP’s strong, rules-based framework will help provide Canadian investors with a stable investment environment in TPP countries. Investment provisions could help attract capital to support Canadian business ventures in Canada. The TPP will also support Canadian innovation and enhance value chain participation by Canadian suppliers.
Benefits for Atlantic Canada
An ambitious TPP agreement would generate benefits for every region of Canada. The following are among the many key sectors in Atlantic Canada that would benefit from the TPP.
Fish and Seafood
- This sector employs close to 15,000 people in Atlantic Canada. In 2012, Newfoundland and Labrador’s exports in this sector alone amounted to over $771 million.
- Current tariffs on fish and seafood exports range up to 15 percent in Japan and as high as 34 percent in Vietnam.
- Eliminating tariff barriers would support efforts by Atlantic Canada’s world-class fish and seafood suppliers to access the lucrative TPP market of 792 million consumers. Enhanced access to this market would directly benefit hard-working Canadians in Atlantic Canada through more jobs, higher wages and greater long-term prosperity.
- The services sector is a key driver of Atlantic Canada’s economy, accounting for between 53 and 80 percent of the economy in each province in Atlantic Canada.
- The contribution of services to the combined economies of these provinces has gradually increased, from 65 percent in 1984 to almost 71 percent in 2013.
- The financial services sector, which includes banks, insurance companies and asset management firms, is the largest subsector of Canada’s services economy. Canadian financial and insurance services exports have increased by almost 40 percent during the last five years, reaching $9.1 billion in 2012. Canadian insurers are active in several TPP countries, including Malaysia and Vietnam.
- Canadian services providers currently face many barriers in TPP countries, including citizenship or residency requirements, lack of temporary entry rules, and ownership and investment restrictions. Canada is pursuing strong commitments on services in the TPP to ensure transparent, predictable and enhanced access for Canadian services suppliers that want to do business in the Asia-Pacific region.
Benefits for Central Canada
The following are among Central Canada’s key sectors that would benefit from the TPP.
Chemicals and Plastics
- This sector employs more than 143,000 people in Ontario and Quebec.
- Ontario’s exports of chemicals and plastics to TPP member countries were worth close to $10.1 billion in 2012, making chemicals and plastics one of Ontario’s top export sectors. Quebec exported an estimated $6.3-billion worth of chemicals and plastics to TPP members in 2012.
- Canadian chemicals and plastics exports often face tariffs when entering Asia-Pacific markets. For example, Malaysia currently applies tariffs of up to 30 percent on plastics. Japan maintains tariffs on chemicals of up to 6.5 percent. Vietnam applies tariffs of up to 27 percent on chemicals and 31 percent on plastics.
- Eliminating tariff barriers could help support sales of Ontario’s and Quebec’s world-class chemical and plastic products in the lucrative TPP market of 792 million consumers. Enhanced access to this market would directly benefit hard-working Canadians in Central Canada through more jobs, higher wages and greater long-term prosperity.
- Central Canada boasts world-leading expertise in advanced manufacturing products. The information technology, industrial machinery and other manufacturing sectors are important players in this region.
- More than 151,000 workers and their families in Ontario and Quebec depend on the non-automotive manufacturing sector for their livelihoods.
- Advanced manufacturing is a major provider of jobs and prosperity in Ontario and Quebec, contributing over $14.7 billion to their combined GDP in 2012.
- Tariffs on information and communications technology range up to 30 percent in Malaysia and 25 percent in Vietnam. On industrial machinery products, Malaysia applies tariffs of up to 30 percent on Canadian exports, while Vietnam applies tariffs of up to 34 percent.
- Eliminating tariff barriers could help support sales of Ontario’s and Quebec’s world-class manufacturing products in the lucrative TPP market of 792 million consumers. Enhanced access to this market would directly benefit hard-working Canadians in Central Canada through more jobs, higher wages and greater long-term prosperity.
Benefits for Western Canada
Many of Western Canada’s key sectors would benefit from the TPP.
Wood and Related Products
- This sector employs nearly 68,000 people in British Columbia and Alberta.
- In 2012, Alberta exported $1 billion in wood and related products globally while British Columbia exported $7.5 billion in wood and related products, of which almost $4.9-billion worth went to TPP member countries.
- Canada’s exports of wood and related products currently face tariffs of up to 10 percent in Japan, 31 percent in Vietnam and 40 percent in Malaysia. Australia has tariffs of up to 5 percent on Canadian lumber. Paper and paperboard products face tariffs of up to 27 percent in Vietnam and 25 percent in Malaysia.
- Eliminating tariff barriers could help support sales of Alberta’s and British Columbia’s world-class wood and related products in the lucrative TPP market of 792 million consumers. Enhanced access to this market would directly benefit hard-working Canadians in Western Canada through more jobs, higher wages and greater long-term prosperity.
- The agriculture sector is a key component of Western Canada’s economy, employing almost 172,000 people in British Columbia, Alberta and Saskatchewan.
- Agriculture is also one of Western Canada’s largest export sectors. In 2012, Saskatchewan alone accounted for exports totalling $11.1 billion.
- Significant export commodities include grains, beef and pork products, wheat, oils and other food products.
- Among the TPP member countries, tariffs on agricultural goods are wide-ranging. For example, Japan maintains average most-favoured nation (MFN) applied tariffs of 23 percent on agricultural goods; Malaysia maintains average MFN applied tariffs of almost 11 percent; Vietnam’s average applied MFN tariff is 17 percent; and Peru maintains an average MFN applied tariff of 4 percent on agricultural goods. Canada’s agriculture and agri-food exports to TPP members include oilseeds and oils (such as canola), pork, beef, grains, pulses, fruits and vegetables, maple syrup and processed agricultural products.
- Eliminating tariff barriers could help support sales of Western Canada’s world-class agricultural products in the lucrative TPP market of 792 million consumers. Enhanced access to this market would directly benefit hard-working Canadians in Western Canada through more jobs, higher wages and greater long-term prosperity.
- Date Modified: