AIMING HIGH: The Trans-Pacific Partnership

The author is President and CEO of Montréal International, an organization whose mission is to attract foreign investment, international organizations and talent to Greater Montréal.

According to a recent poll, three out of four Canadians have no idea that the federal government is negotiating an ambitious free trade deal known as the Trans-Pacific Partnership (TPP) with 11 other countries in Asia-Pacific and the Americas. Right now, people’s attention is focused on the Canada and European Union Comprehensive Economic and Trade Agreement (CETA), which does open up some interesting opportunities.

Still, we need to clearly understand the potential benefits of the TPP for Canada’s economy and explore the business opportunities it holds for Canada’s provinces and territories.

Asia-Pacific is an immense region that covers almost half the planet and includes all Pacific Rim countries. The 12 countries currently negotiating the TPP, including Australia, Japan, New Zealand, the United States, Mexico and Vietnam, make up a market of close to 800 million consumers and account for 38% of the world’s GDP. Signing an agreement with those countries would give Canada the chance to strengthen its traditional partnerships in the Americas, while tapping into a huge market and gaining a stronger foothold in a region that has become increasingly integrated into the world economy.

Generally speaking, the main goal of any free trade agreement is to enhance trade and investment among partner countries, in addition to fostering innovation and job creation. The best example is the North American Free Trade Agreement (NAFTA), in effect since 1994. Over the past 20 years, NAFTA has given Canada, the United States and Mexico free access to a market of 500 million consumers—about one quarter of the world’s economy—and generated substantial benefits for the people of all three member countries.

If Canada signed an agreement with other countries in the Asia-Pacific region, Canadian businesses could have easier access to the large Asian market, and that would help them better integrate into global value chains. More trade equals more foreign direct investment and more foreign businesses expanding into Canada. In the long run, that would mean more highly skilled foreign talent coming to Canada, enabling our businesses to become more global, while supporting the innovative and creative ideas that the new workforce brings.

In short, Canada needs to enter new markets to be competitive and attract investment. If CETA and the TPP are ratified, Canada could become a major investment and export hub. It all depends on the provisions of the two agreements.

So remember: AIM HIGH—for the benefit of all Canadians!

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