The new and improved version of the Trans-Pacific Partnership, called TPP 11 or the CPTPP – short for Comprehensive and Progressive Agreement for Trans-Pacific Partnership – was signed by 11 countries in Chile in March.
And the chance to access the 494 million people of Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam has got members of the Energy Council of Canada pumped up about the future. “Being able to access foreign markets would help us realize the full value of our products,” said Jacob Irving, president of the Ottawa-based organization. That’s particularly welcome because, due to refinery capacities, the U.S. pays Canadian producers about half of what its oil and gas could fetch on the international market.
Pierre Gratton, president and CEO of the Mining Association of Canada, was equally upbeat. Canada, quite simply, is a trading nation, he said. “This massive trading block is not only important to our sector, which requires access to new and emerging markets, but for the (entire) Canadian economy,” he said.
The TPP started out more than a decade ago with a handful of southeast Asian countries before growing over time to include the U.S. That meant Canada had to get involved because if any of the three countries in the North American Free Trade Agreement (NAFTA) struck a deal with another country or group, they would have a leg up and could shift investment in their direction. The U.S. pulled out on Donald Trump’s first day as president last year but he has openly mused about getting back in.
Asia’s rise is the most important development for the global economy in many years, according to Ross Laver, senior vice-president of policy and communications at The Business Council of Canada, a long-time advocate of signing the TPP. Negotiating individual agreements one country at a time is doable but time consuming so the revamped TPP was the “perfect opportunity” for Canada to take a big step forward. “Now that Canada is part of this and the U.S. isn’t, a company that wished to produce something for North America, Asia and Europe, could see Canada as a good place to locate because we have negotiated privileged access to all three of those markets. Hopefully, NAFTA’s future will be secured in the next year or two,” he said.
Irving said the TPP will play a critical role in helping find new markets for energy. The member countries have a combined GDP exceeding US$10 trillion, or 13 per cent of the global total. “The U.S. is moving from being our sole customer in many ways to becoming a competitor in terms of the sale of energy. They’ve found new natural gas deposits through fracking and new oil from shale. They’re going to be selling oil and gas to customers elsewhere and we need to be mindful of that,” he said.
The fact that NAFTA is in danger of being cancelled by the U.S. makes the re-emergence of TPP even more crucial, he said. “Any and all trade deals that allow us to realize the full value for our energy are important to explore and be a part of,” he said.