NRLC's statement on TPP to the House Standing Commitee

NRLC submitted a positional brief on Trans Pacific Partnership to the House of Commons Standing Committee on International Trade:


Submission to the Standing Committee on International Trade Re: Opposition to the Trans- Pacific Partnership


With this submission, the Niagara Regional Labour Council (NRLC) would like to express its opposition to the Trans-Pacific Partnership (TPP) and call on the government to reject this deal.
Ultimately, the TPP will have negative consequences for the Canadian economy in general and for the working class in particular. More specifically, a study from Tufts University projects Canada will lose 58,000 jobs by 2025 and the economy would only be 0.28% larger.1 The report also predicts that the unemployment rate will increase and wages which are already stagnating will be driven down even further, resulting in the expansion of wealth and income inequality.2 Furthermore, the Investor-State Dispute Settlement (ISDS) provisions contained within the agreement further consolidates corporate power to the detriment of Canada’s national sovereignty, democratic institutions, and environment.

The above mentioned concerns, along with others, are outlined below in more detail. With that being said, the grievances below focus on the most troubling aspects of the agreement, meaning that this document is not exhaustive. 

Background 

The TPP is a proposed agreement between Canada and 11 other countries. However, the TPP is not a typical trade deal, but rather it is a wide-ranging agreement that extends beyond traditional issues of market access. According to the Canadian Labour Congress (CLC), “today, 97 percent of commercial goods that Canada trades in the TPP zone are already duty-free. In exchange for a fractional increase in potential market access, Canadians are being asked to give up tens of thousands of jobs in the automotive and dairy industries, to name just two sectors that would be impacted.”3
In October of 2015, the 12 countries, which represent more than 40 per cent of the global economy, announced the conclusion of negotiations. In February 2016, the Canadian government signed the agreement; however, the government has not committed to ratifying. Nonetheless, the treaty can take effect if it's ratified by half the participating countries representing 85 per cent of the proposed trade zone's economy. Each country has up to two years to consider ratification before making a final decision.
The general public is largely unaware of the TPP and the contents contained within the agreement. Polls from earlier this year reveal that half of Canadians did not have an informed opinion on the TPP, largely because the deal was negotiated behind closed doors.4 Prominent business leaders such as BlackBerry co- 

1 http://www.ase.tufts.edu/gdae/policy_research/tpp_simulations.html
2 Ibid.
3 Canadian Labour Congress, “Opposing the Trans-Pacific Partnership.” 4 http://www.cbc.ca/news/politics/grenier-ari-tpp-poll-1.3432143 

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founder Jim Balsille have been highly critical of the agreement.5 In the U.S., the Democratic and Republican presidential candidates have vocally opposed the TPP for the harm that it will cause to local industry and workers.6
Anti-Democratic Provisions Within the TPP
Disturbingly, “the TPP includes the same unaccountable, anti-democratic framework as the North America Free Trade Agreement (NAFTA) Chapter 11,”7 which contains the ISDS provision. The TPP extends the ISDS provision, giving corporations more power to sue over regulations adopted by agencies like Health Canada, Environment Canada, the Canadian Food Inspection Agency, and Transport Canada.8 A corporation can sue if it can argue that the regulations implemented by the government leads to the loss of economic gain on their investment. Consequently, ISDS provisions give corporations an almost equal status to states in international affairs through their ability to challenge laws and regulations put in place by democratically- elected governments.9
Canada is already the most sued developed country in the world due to NAFTA’s ISDS process. With the TPP, the door will be opened further, exposing Canada to significantly more lawsuits.10 Decisions reached by these tribunals are often confidential and the entire process lacks transparency. It is important to note that individuals, trade unions, and governments are unable to initiate a claim against a state or a corporation with the TPP only corporations have the ability to do so. There is good reason to believe that corporations will utilize the ISDS provisions to fight government regulations aimed at transitioning to a greener economy this can sending a chilling effect to governments, preventing them from instituting new regulations to protect the environment, such as setting targets for stronger air quality standards, to monitor emissions, etc.11
As stated above, since NAFTA became law, Canada has faced more ISDS challenges than any other developed country, costing the Canadian government hundreds of millions of dollars. Indeed, a study from the Canadian Centre for Policy Alternatives (CCPA) found that more than 70 per cent of claims under NAFTA since 2005 have been brought against Canada. A recent NAFTA ISDS loss reveals the troubling nature of these provisions. The “NAFTA tribunal ruled 2-1 that an environmental assessment process, which resulted in a U.S. firm being denied a permit to dig a massive quarry in an ecologically sensitive region of Nova Scotia, violated the firm’s NAFTA investor protections. The dissenting member called this finding “a remarkable step backwards” for environmental protection. Bilcon is now seeking over $300 million in damages from the federal government.”12
Impact on Workers, the Government, and Industry
Pharmaceuticals: With the TPP, concessions to the pharmaceutical industry are expected to cost the government $800 million annually in higher drug costs, as pharmaceutical companies would be provided with more monopoly patent protection, meaning that we will have to wait longer for generic versions of the drugs many Canadians need. Furthermore, the government’s ability to introduce a universal and national 

5 http://www.cbc.ca/news/business/jim-balsillie-tpp-1.3310179
6 https://www.theguardian.com/us-news/2016/aug/20/trump-clinton-free-trade-policies-tpp
7 Canadian Labour Congress, “Opposing the Trans-Pacific Partnership.”
8 Ibid.
9 Ibid.
10 https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2015/05/TPP_and_Canada.pdf. 11 Canadian Labour Congress, “Opposing the Trans-Pacific Partnership.”
12 https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2015/05/TPP_and_Canada.pdf. 

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pharmacare plan would be greatly diminished.13 Pharmaceuticals are increasingly inaccessible to low-wage and young workers the TPP will only exacerbate this health care crisis.
Dairy Industry: Dairy farmers have also raised concerns with regard to the supply management system. The supply management system exists to ensure Canadians have access to safe and locally-produced food. Since 2006, however, Canada has been importing more dairy products. With the TPP, foreign dairy companies would carve out an even larger share of the dairy market, putting those family farms and the jobs associated with them at risk.14
Auto Industry: Unifor’s Research Department projects that the TPP will lead to a potential loss of as many as 20,000 auto and auto parts jobs in this country.15 This is because the TPP will further reduce the percentage of required domestic vehicle content to 45% from 62.5%. For auto parts, the percentage of required domestic content will decrease from 60% to 45% or 35% depending on which specific auto part.16 It is particularly concerning that the TPP provides for a 5 year phase out of existing Canadian auto tariffs, yet the phase out for U.S. auto tariffs will take place over 20 years.17 Should the TPP be ratified, it is clear that the agreement will facilitate the continuing demise of auto and auto parts production in Canada to the considerable detriment of the communities whose well-being in significant measure depends upon vibrant auto and auto parts industries.
Conclusion
The NRLC believes that trade is necessary for economies to flourish and for workers to live prosperous lives; however, with the TPP, the abovementioned statement will not come to fruition. This is because provisions contained within the TPP will lead to thousands of lost jobs, higher levels of unemployment, and stagnating wages, meaning that inequality will continue unabated. The power of multi-national corporations will be enhanced, impeding the government’s ability to introduce a universal and national pharmacare plan and/or legislation aimed at staving off environmental catastrophe. For these stated reasons, the NRLC remains opposed to the TPP and calls upon the government to reject this deal. 

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13 Canadian Labour Congress, “Opposing the Trans-Pacific Partnership.”
14 Ibid.
15 http://www.unifor.org/sites/default/files/attachments/tpp_summary_3.pdf
16 http://www.stcatharinesstandard.ca/2015/10/05/tpp-fosters-fears-for-domestic-auto-industry 17 Ibid.