In October 2015, Canada concluded negotiations with eleven other countries – including Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – on the Trans-Pacific Partnership (TPP), which is considered to be the most comprehensive trade agreement presently in existence. Taking into account the Comprehensive Economic and Trade Agreement (CETA) that Canada concluded with the European Union last year, the North American Free Trade Agreement, and a growing number of bilateral trade agreements, Canada is entering into a new era of unprecedented free trade with the United States, Mexico Asia. When these agreements are eventually ratified and implemented into Canadian law, they will and many other countries throughout Central and South America, the European Union, and Pacific affect the competitive landscape for agricultural, manufacturing and service industries throughout Canada. At the same time, they will also affect the conditions of competition for Canadian exporters of goods and services to the relevant foreign markets.
Upon coming into force, the TPP and the CETA will eliminate customs duties on almost all goods imported into Canada from the covered countries. While the elimination of some duties will apply immediately, the elimination of others will be done more gradually, so as to provide some protection while the duties are incrementally phased out over a number of years. In addition, Canadian regulation of some service sectors will be liberalized, in order to accommodate suppliers from the European Union and TPP countries.
The next stage, for both the TPP and the CETA, involves a “legal scrubbing” process to ensure that the entire text is internally consistent and coherent. Once the text of each agreement is finalized, it will be translated (in the case of the TPP, into French and Spanish; in the case of the CETA, into the official languages of each of the parties). The final stages are ratification, where each party formally accepts and enters into the agreement, and implementation, in which each party amends its domestic laws to “implement” its obligations before the date on which the agreement comes into force. There is some uncertainty about whether all of the parties, including Canada, will ratify these agreements as they presently stand. While the dates on which the TPP and the CETA will ultimately come into force are not yet known, we can expect there to be progress in the processes outlined above throughout 2016.
Now is the time when all stakeholders should be carefully investigating the potential risks and opportunities created by the TPP and the CETA with respect to specific goods and services, not only in the Canadian market but also in the relevant export markets.