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November 11, 2015

Canada Should Wait and See on the TPP

The Trans-Pacific Partnership is the most ambitious trade agreement negotiated in twenty years and – at close to 6,000 pages – an international omnibus bill with complex implications for many different areas of domestic policy. Pending successful ratification of the deal, the TPP will impact intellectual property rights, government procurement, electronic commerce, and immigration policy for years to come.

Unsurprisingly, reaction to the Agreement has been polarizing. Former BlackBerry CEO Jim Balsillie, for example, has argued that the TPP could come to be viewed as “the worst thing in policy that Canada’s ever done.” Balsillie and others have been particularly critical of the treaty’s intellectual property provisions, which include an extension of copyright protections for an additional twenty years. The Agreement’s restrictions on data localization have also attracted criticism from privacy advocates, who have expressed concern that the TPP’s electronic commerce provisions provide insufficient protection for personal data and could threaten privacy measures already enacted in some Canadian provinces. Still others have raised issues both with the treaty’s investor-state dispute resolution provisions – which allow companies to take legal action against governments via tribunals – and with the secretive process through which the Agreement was negotiated.

Proponents of the deal, in contrast, have argued that it represents an important pillar of Canada’s future economic prosperity. Danielle Goldfarb, Director of the Global Commerce Centre at the Conference Board of Canada claims that the TPP “is a hugely important deal and Canada needs to be part of it,” particularly in light of the participation of the US, Canada’s largest trading partner. If the US is in – so the theory goes – we have to follow, lest other countries usurp our preferential access to the world’s largest consumer market. In a similar vein, both the Canadian Manufacturers and Exporters and the Canadian Council of Chief Executives have welcomed the conclusion of the TPP, arguing that it will create greater opportunities for Canadian exporters.

Given the length and complexity of the agreement, strong differences of opinion are unsurprising. Indeed as economist Jeffrey Sachs recently argued in the Boston Globe, the TPP is really four separate deals packaged into one.

From a Canadian perspective, a handful of the treaty’s provisions are objectively bad. Increasing copyright terms by an additional twenty years – equaling author life-plus seventy years – will do nothing to incentivize domestic creativity and innovation, but merely transfer additional rents to rights-holders at the expense of the public domain. Others, such as those which would deny governments the ability to audit source code and mandate data localization, as well as the inclusion of intellectual property provisions under the treaty’s IDSP, are potentially troubling and require more scrutiny. As Wired recently noted, for example, the Agreement’s source code provisions could make it more difficult for regulators to police violations and ensure security in the emerging Internet of Things.

On the flip side, certain elements of the deal represent unambiguous wins for Canadian producers able to take advantage of enhanced export opportunities in the Asia-Pacific region. But are victories for Canada’s agricultural and industrial producers enough to offset losses on e-commerce and the public domain?

Pressure is surely mounting on Prime Minister Trudeau to quickly clarify his government’s position on the TPP. And he may be listening. In late October it was reported that Trudeau had agreed, in a phone conversation with Japanese Prime Minister Schinzo Abe, to promote the successful conclusion of the deal.

This would be a mistake. But both the complexity and breadth of the agreement – coupled with the secrecy in which it was negotiated – suggest that our leaders should not rush to provide an answer on the TPP question. Rather, what is needed now is a combination of expert analysis and robust public debate.

Time is also on our side. The Agreement is set to enter into force following its ratification by all countries or – if ratification is delayed by two years or more –ratification by six or more countries representing 85% the group’s economic weight. In practice, this gives the United States an effective veto on whether or not the TPP enters into force. And while Congress has granted President Obama Trade Promotion Authority – which forces the Congress to vote yes or no on the deal without offering amendments – the successful ratification of the TPP in the US is not a foregone conclusion. At the very least, it appears that a Congressional vote will wait until the spring or fall of 2016.

In light of the procedural hurdles still faced by the Agreement, the Canadian government should delay a vote on TPP ratification until 2017. The government can use this time to develop a fuller understanding of the deal’s implications for various sectors of the Canadian economy and solicit commentary from experts and civil society organizations alike. Not only will this help ensure that the TPP is right for Canada, but it will facilitate the type of robust and transparent debate that has been lacking throughout the TPP negotiations.

Is the TPP a good deal? Let’s not rush to judgment.

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