The TPP: What does it mean for Canadian international trade professionals?

18/12/2015

TPP Canadian International Trade Professionals

TPP Canadian International Trade Professionals

The Trans-Pacific Partnership (TPP) is a proposed trade agreement between twelve Pacific Rim countries, which evoked quite a bit of controversy among the general public due to its secretive negotiation process.

According to Global Affairs Canada, “[the TPP] is a comprehensive, economic, strategic and balanced agreement that will increase Canada’s foothold in the Asia-Pacific, a region that is expected to comprise two-thirds of the world’s middle class by 2030, and one-half of global gross domestic product (GDP) by 2050.”

Unprecedented access to a vast global market

The twelve countries involved represent a vast market of nearly 800 million consumers and almost 40 per cent of the global economy, with a combined GDP of about $28.5 trillion.

Some key parts of the agreement are the reduction (or elimination) of tariffs on a wide variety of goods and services, ranging from alcohol to beef and pork, and the creation of an investor-state dispute settlement mechanism.

Although trade experts and government officials are still combing through the fine print, it is clear that the TPP will lead to fewer international trade barriers among the twelve participating members.

The dispute-resolution provisions, which Canadian officials have claimed are similar to those contained in NAFTA, would also allow private companies to contest government decisions.

For Canada, the agreement will likely result in an increase in both imports and exports, including products such as machinery, canola, beef, pork, minerals and seafood.

Canadian companies will gain a competitive advantage over exporters from non-TPP countries who must still face the existing tariffs, while the same will be true for organizations importing goods to Canada.

A new world of opportunities for Canadian consumers, exporters and small business owners

The TPP has faced criticism due to the secretive nature of its negotiations, and provisions which industry experts say will have a negative impact on the Canadian auto and dairy industries.

The TPP would reduce the percentage of a vehicle’s content that must come from Canada to avoid import tariffs to 45 (down from 62.5) and would allow TPP countries duty-free access to 3.25 percent of Canada’s dairy market and 2.1 percent of its poultry market.

Despite the controversy, freer trade has a lot of potential for Canada that should not be ignored.

The benefits include:

  • Increased purchasing power for consumers (even as real wages for millions remain stagnant) due to the elimination of a wide range of tariffs that will lead to more choice and lower prices for consumer goods.
  • Increased recognition in the international market. One popular opinion is that it would be foolish to abandon the trading bloc and allow China to dominate the region because, once ratified, the TPP will result in free-trade agreements with roughly 60 per cent of the global economy.
  • Potential benefits for small businesses. Opening new markets for Canadian products and services can give small businesses an opportunity to expand into the international markets and stay competitive – which is good news, considering that their revenues often rely on their ability to export products and services.

The urgent need for highly skilled global trade professionals

The increased level of trade in Canada (and around the world) is also likely to result in higher demand for international trade professionals, increasing the importance of international trade education and training programs.

Sylvain Charbonneau, CITP|FIBP, an international trade professional and educator at Ashton College, is particularly optimistic about the effect of the TPP on the Canadian trade job market.

“I believe that people in the trade industry are very lucky because it’s a field where the opportunities are growing, and we’re on the verge of some really exciting developments.”

“With the announcement of the TPP, it has suddenly become more important than ever to have knowledge of global supply chain management, international market entry strategies, and the legal aspects of international trade. There are so many different areas where individuals with knowledge in international business practices and trade relations can pursue a career.”

In the era of globalization and increased use of information technology, the goal is not to close off our borders, but to recognize emerging trends and take advantage of the world’s interconnectedness.

While some may argue against the TPP, it is hard to deny the potential for a competitive advantage in the global marketplace.

The TPP agreement facilitates the opening of new markets for international businesses of all sizes, and the focus should be on developing the skills and expertise to endure the increase of the volume and quality of our exports.

Understanding the realities of international trade is becoming more critical for Canadian businesses, and trade professionals with internationally-recognized qualifications like the CITP®|FIBP® designation now have more opportunities to utilize their education and training, and contribute to the growth and prosperity of the Canadian economy.

While the TPP is controversial, the benefits to Canadians and our economy cannot be overstated, and our inclusion in the partnership would be a major victory.

As President of the United States Barack Obama has made clear, the U.S. plans to ratify the TPP as soon as possible, meaning Canada would be isolated if we are unable to do so.

While the auto and dairy industries’ fear of cheaper import products and increased competition is understandable, the solution is not to close our doors to global trade and risk eroding Canada’s position in the world economy.

Do you think the TPP will be good for the Canadian economy? Do the pros outweigh the cons for Canadian industry and agriculture?

Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Janice Bandick

Author: Janice Bandick

Janice Bandick is the Communications Assistant at Ashton College, a private college in Vancouver. Founded in 1998, Ashton College has since become a national and international force in the field of education. Ashton College's International Trade diploma and certificate programs endow students with the skills, knowledge and preparation necessary to succeed in this career.

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