The following is AEG’s monthly column by AEG President Josh Bilyk appearing in the February edition of Business in Edmonton Magazine. If you have tips or suggestions for future columns, please feel free to write or call.
Nearly lost in the noise of last year’s federal election was the finalization of the historic Trans-Pacific Partnership Agreement (TPP). The TPP is a sweeping trade agreement between 12 Pacific Rim countries including Canada, the United States, Japan, Australia, Vietnam and Mexico.
After seven years of negotiations the deal phases out countless tariffs and other trade barriers, protects intellectual property rights and enhances labour and environmental protections.
And it’s a slam dunk win for the Alberta economy.
Alberta exports to TPP countries averaged 97.7 billion between 2012 and 2014, despite the existence of a labyrinth of trade restrictions. In an enormous leap, the total inflation-adjusted value of that trade increased by 51 per cent between 2010 and 2014.
The TPP over time, will get rid of restrictions and tariffs on a number of important Alberta exports. Over the next 10 years, the agreement will phase out tariffs on chemicals and plastics – benefitting a $5.7 billion Alberta export industry. A 6.5 per cent Japanese tariff (20 per cent in Malaysia) on ethylene polymers will be gone.
Alberta businesses export $5.4 billion in agricultural products to TPP countries. The deal eliminates a heavy Japanese tariff (13.20 yen per kilogram) on canola oil and tariffs of 38.5 per cent on fresh and frozen beef. A 50 per cent Japanese tariff on certain offal will be reduced to nine percent within 15 years. Tariffs of up to 31 percent on fresh/chilled and frozen beef in Vietnam will be eliminated within two years.
Substantial tariffs on Alberta forestry products in Japan, Vietnam, Malaysia, Australia and New Zealand? Gone under the proposed deal.
One of the biggest differences, and perhaps the least discussed, are improvements to copyright protection and intellectual property. That means Alberta creators of music, film and software will have additional protections under the agreement – which bodes well for Alberta’s growing knowledge economy.
Make no mistake about it – the TPP is a good deal for Alberta. It’s a win for Saskatchewan too, as evidenced by Premier Brad Wall’s vocal support for the agreement. Our own government was, shall we say, a little more reserved in its reaction to the deal.
In a two-sentence statement, Alberta Agriculture Minister Oneil Carlier said on behalf of government that “we need to review in detail before we know what the overall consequences are for Albertans.” We haven’t heard much from the province since.
Taking some time to fully analyze a massive international trade agreement is sensible, but enough time has passed for the province to have made its position clear. After all, the Alberta government had representatives working with their federal counterparts for years to get to this point. It’s not news to them.
Leadership from Alberta is important because it’s not entirely certain the deal will be officially signed by the Trudeau government. Prime Minister Trudeau is officially non-committal and there are voices in Ontario loudly opposing it.
Premier Notley should join Premiers Brad Wall and Christy Clark in sending a message to Ottawa that this deal should be signed, and the sooner the better. It’s a real winner for Alberta.
Alberta Enterprise Group is a member-based, non-profit business advocacy organization. AEG members employ more than 150,000 Canadians in all sectors of the economy.