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After Doha


August 15, 2012
By Jim Knisley


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It seems to be official – Doha is done. Federal Trade Minister Ed Fast said recently that a new WTO trade deal is unlikely for some years and that Canada must focus on new bilateral or regional trade deals.

One of the new deals involves the ongoing negotiations with the EU, and the talks seem to be progressing. Another involves Canada’s attempt to expand the Trans-Pacific Partnership (TPP).

The United States is actively engaged in joining the TPP, and Canada has decided to tag along. Mexico also plans to enter the negotiations, but Japan remains on the outside looking in.

Japan doesn’t seem particularly put out by this, as it is involved in a much more interesting third set of regional talks.

These involve China and South Korea, and after being rebuffed by the TPP, Japan has signed on as a third party.

We can expect to see a lot of headlines in Canadian newspapers and reports from a variety of think tanks about the TPP. But compared to the discussions between China, South Korea and Japan, the TPP – even with the U.S. involvement –  is the minor leagues.

The U.S is the world’s largest economy, but we have a trade deal with it. Meanwhile, others in the TPP club include the 13th largest economy, Australia, along with number 39 Chile, number 55 New Zealand, and a several other small players. Canada is number 10.

The other talks involve number two China, number three Japan, and South Korea at number 15. In total combined GDP, the Asian three are more significant than the TPP. They are also much more interesting in terms of trade than the TPP because they need what we have.

China, Japan and South Korea are already large markets for Canada’s agricultural products, as well as for oil minerals, fertilizer, lumber and other natural resource exports that are expected to rise. And Canadian aerospace, rail, technology and financial services would benefit from freer trade, particularly with China.

South Korean and Japanese manufacturing companies have already invested in Canada creating tens of thousands of jobs. Therefore, it would be a welcome development if freer trade encouraged more of that, especially when the current economic struggles of Europe and the United States are taken into consideration.

A bonus for Canadian poultry producers is that none of the Asian three is likely to export dairy or poultry to Canada, so supply management would be a non-issue.

This would be a welcome relief after listening to lectures from officials from New Zealand, Australia and the United States.

It might even mute some of the Canadian critics who complained that Canada’s defence of supply management was jeopardizing Doha. That was not true, as Doha was doomed by much bigger disputes, mostly involving the United States.

Supply management may have been a big deal in Ottawa’s think tanks and Toronto’s editorial offices, but it barely ranked as a sideshow in Geneva.

Minister Fast, speaking at a business luncheon put on by the Canadian Chamber of Commerce, said that in addition to trying to join talks at the TPP, the government wants to open markets in China, Japan, India and Brazil. He has signed up a panel of experts to advise him on the next phase of the government’s global commerce strategy.

The panel members are: Murad Al-Katib, president and chief executive officer of Alliance Grain Traders Inc.; Paul Reynolds, Canaccord Financial Inc; Kathleen Sullivan, executive director of the Canadian Agri-Food Trade Alliance; Perrin Beatty, Canadian Chamber of Commerce; John Manley, Canadian Council of Chief Executives; Catherine Swift, Canadian Federation of Independent Business; Jayson Myers, Canadian Manufacturers & Exporters; Brian Ferguson, Cenovus Energy Inc; Serge Godin, CGI Group Inc.; and Indira Samarasekera, president of the University of Alberta.

All the panelists are likely to encourage the government to get into the TPP, but it would be more interesting if they suggested the government look at joining talks with Japan, China and South Korea. If it went forward, it would be a huge trade deal of great significance and much bigger than the TPP. It would also be fascinating to see the reaction in the United States and from other TPP participants to a trade agreement with China and South Korea.

The government and the new panel of experts should look beyond a club that only reluctantly allowed Canada to try to join and consider attempting to join a bigger and better community that is in the process of being formed. Getting into the bigger club won’t be easy, but it is certainly worth the effort.

And if the effort paid off, it’s likely Australia, New Zealand and the United States would busy themselves trying to figure out how to join and accommodate us. That would be much better than bending over backwards to accommodate them at the TPP.