New TPP Deal Could Hurt Liberals, Help NDP in Ontario and Quebec

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New TPP Deal Could Hurt Liberals, Help NDP in Ontario and Quebec

The Trudeau Liberal government is already getting flack over the new TPP deal especially over the effects on the auto sector, which is central to the Ontario economy, and the dairy industry which is important in parts of Ontario and Quebec. Although it looks like it may help the beef industry, this sector is located mostly in Western Canada and mostly votes Conservative. Since the Conservatives are at least as supportive of free trade as the Liberals, this provides the NDP with an opportunity. The new TPP deal could also throw a boomerang into NAFTA negotiations with the US. 

Some representatives of the Canadian auto industry slammed Canada’s decision to sign a revised Trans-Pacific Partnership on Tuesday, calling the deal harmful to the auto sector and warning that it undermines Canada’s position in NAFTA negotiations.

International Trade Minister François-Philippe Champagne announced Tuesday that Canada and the ten countries that remained in the deal after the U.S. backed out had agreed to sign the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

But the agreement was swiftly criticized by several representatives of the Canadian auto industry, including Flavio Volpe, president of the Auto Parts Manufacturers’ Association, who said in an interview with the Financial Post that “this could not be a worse time to make a dumb move.” Canada struck the TPP deal just as negotiators began the sixth — and pivotal — round of NAFTA talks in Montreal.

Volpe said the TPP agreement’s automotive rules of origin, which originally stipulated that vehicles must contain between 35 and 45 per cent TPP-produced content in order to gain duty-free access to the Canadian market, will make it easier for TPP countries to import vehicles to Canada while hampering the national auto industry’s ability to compete. At the same time, the U.S. has proposed increasing the North American content rule under NAFTA to 85 per cent, and introducing a U.S.-content rule of 50 per cent.

“That regional content means the majority of the parts and materials for vehicles can come from outside TPP countries — namely China — and you didn’t get anything in return,” Volpe said.

“What they’ve done is given access to the Canadian and the Mexican markets to nine additional countries at the exact same time that we’re hosting the Americans in NAFTA negotiations, who want to increase regional value content to keep out parts from China… You lose moral authority to say that you’re a defender of fortress North America.” ...

Despite the side-letter with Japan, Canadian Vehicle Manufacturers’ Association president Mark Nantais said he is still concerned that market access to TPP countries will not improve under the new agreement.

“This will disadvantage auto companies that have invested millions in jobs and sustaining manufacturing in Canada, while providing a competitive advantage to the TPP countries involved,” he said. “We are concerned that access to various TPP markets has not been materially improved at all by this agreement.”

Volpe said the Canadian government should not have signed the TPP deal — or, at least, left the automotive portion out of it — until the uncertainty surrounding NAFTA negotiations was resolved.

“If you want to sell cars out of the back door of the factory to Canadian consumers, you are going to have to compete with a TPP-sourced car that does not have to meet any of the higher NAFTA requirements…. You are conceding your home market,” he said.

Unifor president Jerry Dias, whose union represents more than 23,000 Canadian auto workers, said Canada moving ahead with TPP “completely undermines the entire negotiating strategy in Montreal.”

“In one fell swoop, they cut off the legs of the NAFTA negotiating committee,” Dias said in an interview, adding that the biggest winner of the TPP deal was U.S. President Donald Trump.

“Canada was in such a rush to show Trump that we can trade with others that we completely undermined ourselves…. This shows that we have no strategic vision. It makes absolutely no sense.”




Dairy farmers have also denounced the deal. 

The Dairy Farmers of Canada decried the agreement, pointing out that it grants the same level of tariff-free access to this country's dairy market that Canada conceded in 2015 when the United States was still part of TPP negotiations.

Jacques Lefebvre, CEO of the Dairy Farmers of Canada, said it makes no sense to give as much tariff-free dairy market access to the other countries in TPP talks without the benefits of U.S. participation.

"The negotiating logic is really hard to understand," Mr. Lefebvre said.



The fact that the new TPP grants the same lack of protection to dairy farmers as the 2015 deal is particularly problematic in Quebec where the deal was heavily criticized in 2015. How important it was can be seen in the fact that Conservative leadership candidate Maxime Bernier lost the support of his riding and neighbouring regions which were heavily involved in the dairy industry even though he had repeatedly won elections for MP by more than 30% because he supported TPP and opening up the dairy sector to foreign competition due to his libertarian views. This loss of local support was more than enough to cost him the Conservative leadership in a close race.

The Bloc no doubt will attack the new TPP deal as being against Quebec interests, but the NDP can also claim it is against the interests of Quebec and other dairy farmers as well. 

Quebecers and the "extremely strong" lobby of the province's professional farmers' union are to blame for Maxime Bernier's defeat in the Conservative leadership race, according to an ex-mayor in Bernier's hometown in Quebec's Beauce region.

Roger Carette, a Bernier supporter who served as mayor of Saint-Georges from 1994 to 2009, says he can't understand how Quebec let the candidate down.

"It's Quebec that took him out of there," he said, moments after learning Bernier had lost the race to Andrew Scheer.

"If you look at the difference of one per cent of votes, that's the difference in Quebec."

According to Conservative party data, Bernier was beaten by Scheer in his home riding of Beauce, collecting 48.89 per cent of support compared to 51.11 per cent for the Saskatchewan native.

With the support of farmers, Scheer campaigned in Beauce against Bernier's plan to gradually abolish supply management, the quota and price control system that ensures a stable income to dairy, egg and poultry farmers despite market fluctuations.

Bernier wanted to liberalize the system, arguing it keeps prices artificially high and limits competition. He suggested a transition period with compensation.



Jerry Dias, who has sometimes cozied up to the Liberals, and CLC President Hassan Yussuf are extremely angry over the deal, and may well be more vocal in supporting the NDP as a result. With 500,000 jobs directly and indirectly tied to the auto manufacturing and parts sector in Canada and mostly in Ontario, this could make for a lot of unhappy voters. 

Jerry Dias, whose union represents auto-workers, was livid over Canada’s move to agree to low rules of origin in the new Trans-Pacific Partnership trade deal, saying it weakened the country’s bargaining position in NAFTA talks. ...

Canadian Labour Congress president Hassan Yussuf says the TPP concessions have undermined Canada’s pitch at the NAFTA table on autos and on its goal of enshrining new labour safeguards.

In an interview he said the TPP’s labour provisions contain no real enforceability mechanism, and have allowed Vietnam to escape compliance, however he added many other details haven’t yet been outlined to stakeholders here.

“I think we played right into the Americans’ hands in regards to what we are able to do” at the NAFTA table, he said. “They made even a stronger argument for both Mexico and the United States to stay steadfastly on their positions and not alter it . . . because what they’ve agreed to in the TPP is so weak and ineffective that this is not really going to help.”

Auto manufacturing contributes approximately $20 billion to GDP, directly employs 115,000 people (500,000 direct/indirect) and drives Canada’s productivity growth. Canadian assembled vehicles are the number one manufactured export and second export overall.




This reveals the Liberals underlying neoliberal principles. The freer the market the better. Can we still reject it? Is this an agreement in principle or in law?


Chantal Hébert also feels that the TPP could hurt the Liberals and help the NDP, via uniting some of the NDP's activist and union allies against the Liberals.

Tom Parkin also wrote on the subject:

Pogo Pogo's picture

If I remember from the FTA debate there was a lot of divisions even in the labour movement (I remember Gerry Stoney of the IWA speaking pretty passionately about not being dictated to by a central Canadian consensus).


Pogo wrote:

If I remember from the FTA debate there was a lot of divisions even in the labour movement (I remember Gerry Stoney of the IWA speaking pretty passionately about not being dictated to by a central Canadian consensus).

That approach did not seem to help the IWA and unions in the West, especially British Columbia to put it mildly. Differences between unions and their members because of issues such as employment/environment because of a difference in interests are understandable and many other factors affected union number declines, but such splits on  chip-on-the-shoulder issues between unions only help employers and right-wing politicians. 

In 1987, the Canadian section of the union separated from the previously international union, and established an independent Canadian union, retaining only the familiar "IWA" initials in the new name "IWA-Canada". Membership has declined from a peak of about 55 000 in 1981 to about 43 000 in 1994, concentrated in sawmilling and logging in BC, northern Ontario and the Prairie provinces.

“From 1981 to 2012 unionization declined in all provinces but the largest declines took place in British Columbia — 13 percentage points,” Statistics Canada says.

“While most provincial declines took place in the 1980s and 1990s, the decline in British Columbia continued into the 2000s.” ...

As B.C. becomes less reliant on the resource sector, its unionization rate will likely continue to decline, he says.

“They’ve been unable to offset those losses with victories in new sectors,” he says. “That’s not due to a failure of the labour movement. It’s just the way the economy is changing.” ...

Some people in labour oppose pipelines because of a perceived risk to the environment, whereas other unions support building them because it creates jobs, he says.

“This makes it difficult for unions to present a unified face in dealing with employers, be it the private sector or government,” Leier says.