Canada is in TPP talks, but will price of admission be too costly?

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OTTAWA - The Trans-Pacific Partnership was a largely unknown brand beyond trade circles and policy wonks last fall when Stephen Harper signalled his desire to join the secretive nine-member club.

Ottawa has since embarked on an intense lobbying campaign to be admitted — including recently dispatching the trade minister on a week's mission to Australia and New Zealand, and Harper's chief of staff Nigel Wright to Washington.

It paid off Tuesday at the G20 in Los Cabos, Mexico, when the announcement was made that Canada would indeed be invited.

But with few details available, and no published studies to estimate what's in it for Canada, critics and some neutrals are wondering what price the government has already agreed to pay for the entry ticket, and whether it will be worth it in the end.

To NDP trade critic Don Davies, the announcement on the heels of Mexico being given the go-ahead, smells of "desperation" on the part of government, which had originally been cool to the group.

"In a panic, what exactly has the prime minister given away?" he asked in the House of Commons.

The process for joining the TPP has been unusual, if not unprecedented.

By the time Canada joins the United States, Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei at the table — with Mexico also coming in late — 12 rounds of negotiations will have already taken place since 2010.

Canada's admission into the free-trade deal must be approved by all the other countries.

Unlike past negotiations with Europe and India, the government has not released a cost-benefits study to speculate how much could be gained and at what possible price.

As a latecomer, Canada has had to accept without question all that has already been agreed to by the TPP partners, although Harper said he believes the talks are still in the early stages.

As well, according to the online publication Inside U.S. Trade, Canada would be given second tier status, meaning it would have to accept any new chapter or sectoral deal agreed to by the nine original members.

The conditions worry Michael Geist, a law professor at the University of Ottawa, who wonders if Canada knows what terms it has bought into.

Geist says besides having to allow greater competition in agriculture — particularly the supply management system in eggs, poultry and dairy products — Ottawa may need to rip its own copyright reform Bill C-11 it passed just this week.

"Leaked versions of the TPP intellectual property chapter suggest that Canada would be required to re-write much of the bill," he said on his blog.

"The leaked TPP draft requires an extension of the term of copyright, new statutory damages provisions that would undo the C-11 approach, even tougher digital lock rules than those found in the bill, and new Internet provider liability provisions.

"Having just passed legislation it claims strikes the right balance, is the government already prepared to go back to the drawing board on copyright based on new U.S. demands?"

Critics believe Canada may have to agree to extensions on patents, which would delay production of generic pharmaceuticals and increase drug costs.

Speaking to reporters in Mexico, Harper said that Canada "has not agreed to any specific measures.”

Even some supporters of the TPP believe the circumstances have placed Canada at a disadvantage.

But John Manley, a former Liberal trade minister who now heads the Canadian Council of Chief Executives, says once the U.S. joined the club, Canada could no longer sit out.

The reason, he said, is more to do with protecting what Canada has than what it can gain through greater access to markets like Vietnam or even Australia.

Given the degree of economic integration in North America, Canada sitting out from a trade deal that includes the U.S. and Mexico could disrupt existing supply chains.

"It's partly defensive for sure. The risk of disrupting the U.S. relationship is not one to be ignored," he said.

"For every trade agreement, there are complex rules of origin to determine whether a country gets the benefits. That becomes inordinately complex if Canada is out of it."

Trade lawyer Lawrence Herman of Cassels Brock agreed that it would be potentially damaging to Canada to stay outside a trade bloc that includes its pre-eminent trading partner.

Not only could Canada lose preferential treatment in the U.S. in sectors such as government procurement or agriculture that are not covered by NAFTA, but it would also be at a disadvantage in trying to build markets in the other TPP nations.

"These agreements are all about getting a better deal when you are in the agreement than when you are outside," he said, and with the collapse of the World Trade Organization comprehensive talks, the TPP is the only multi-national game in town.

"You can't be a Pacific gateway country if you are not involved in the major negotiations involving the Asia-Pacific region as a whole," he said.