The unexpected announcement by the Canadian government that we’ve agreed to sign on to the revised Trans-Pacific Partnership trade deal, dubbed TPP II, is certainly going to have an impact on NAFTA negotiations, but the overriding question is, how?
Like any trade deal, there’s good news and bad news in TPP II for Canada; the big win is access to the Japanese market, which will be a big boost for grain producers and the beef and cattle industry. But that new relationship with Japan has Canada’s auto sector nervous.
The concern is that the Japanese could flood the market with low-cost auto parts which could undermine Canada’s auto parts industry.
But, an even greater concern is the impact that TPP II will have on NAFTA negotiations dealing with the auto sector.
It appears that the auto sector provisions run contrary to the American protectionist position of higher tariffs and less foreign product and that could make the NAFTA auto sector talks more problematic.
Given Trump’s “my way or the highway” attitude toward NAFTA, it’s good that Canada has a TPP deal in its back pocket as the talks continue.
Let’s face it; if the Americans follow up on Trump’s threat to walk away from NAFTA, Canada’s deal with the Japanese and other Far East markets is a pretty good backup plan for Canada’s economy.
Bill Kelly is the host of Bill Kelly Show on AM 900 CHML and a commentator for Global News