Advantages of the Trans-Pacific Partnership Agreement for New Brunswick
The Trans-Pacific Partnership is the most comprehensive trade agreement in the world. The TPP will help deepen Canada’s trade ties in the dynamic and fast-growing Asia-Pacific region while strengthening our existing economic partnerships with our partners in the North America Free Trade Agreement and across the Americas. It currently comprises 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), representing a combined market of nearly 800 million people and a gross domestic product (GDP) of $28.5 trillion. With the TPP, Canada has now concluded free trade agreements with 51 nations, ensuring Canadian businesses have access to over 60 percent of the world’s economy. The TPP and trade agreements with the European Union and South Korea make Canada the only G-7 nation with free trade access to the United States and the Americas, Europe, and the Asia-Pacific region.
New Brunswick merchandise exports to TPP countries averaged $12.8 billion annually from 2012 to 2014, despite the presence of many impediments to trade. The TPP will eliminate tariffs on almost all of New Brunswick’s key exports and provide access to new opportunities in the Asia-Pacific. The TPP also creates strong and enforceable rules that will help Canadians do business in TPP countries – with provisions that will reduce regulatory barriers, increase transparency and reinforce intellectual property rights.
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Main advantages for New Brunswick:
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duty-free market access for the majority of industrial goods, including metal and mineral products;
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duty-free market access for wood and other forestry products, including lumber, uncoated paper and paperboard, sanitary and household papers, and cartons, boxes and packing containers;
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duty-free market access for fish and seafood products, including frozen snow crab, herring roes, lobster and salmon;
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duty-free market access for most agricultural and agri-food products, including potato products, maple sugar and syrup, baked goods, and miscellaneous food preparations, as well as enhanced market access for chocolate and food preparations containing cacao, and sugar confectionery;
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improved market access commitments for temporary entry of highly-skilled Canadian business persons;
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more transparent and predictable access for services suppliers in key sectors, such as professional and environmental services;
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predictable, non-discriminatory rules for Canadian investors;
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strong provisions on non-tariff measures, backed up by fast and effective dispute settlement provisions.
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Opening new markets for New Brunswick’s products in the TPP
Industrial goods
Some 28,000 New Brunswickers work in the industrial goods sector, with the sector accounting for 2.2 percent of New Brunswick’s GDP in 2014.
Trade snapshot
From 2012 to 2014, New Brunswick’s exports of industrial goods to TPP countries were worth an annual average of $10.3 billion. The TPP will significantly improve market access opportunities for New Brunswick’s industrial goods sector, including metals and minerals.
Tariff elimination will help make New Brunswick’s exports of industrial products more price-competitive with domestic production in all TPP countries.
Tariff elimination
The majority of Canadian industrial goods exported to TPP countries will be duty-free immediately upon entry into force. With certain exceptions, the TPP will eliminate the majority of remaining tariffs on industrial goods within 10 years. This will create market access opportunities for New Brunswick’s exporters across a number of industries.
Metals and minerals
Canada, one of the most resource-rich countries in the world, is a global leader in mineral exploration and mining. Canadian firms produce more than 60 minerals and metals domestically and operate in 100 countries around the world. From 2012 to 2014, New Brunswick exported an annual average of $9.9 billion worth of metals and minerals to TPP countries. This included petroleum products, potash and lead. The growth in emerging markets, including those in the TPP, means significant potential for strong, long-term demand for the minerals and metals produced in New Brunswick.
While exports of potash and most lead products are not subject to tariffs in TPP countries, for petroleum products, the elimination of tariffs in Japan of up to 7.9 percent and tariffs in Vietnam of up to 30 percent could create new market access opportunities.
Small and medium-sized enterprises
Canada’s small and medium-sized enterprises (SMEs) make up the vast majority of Canadian businesses and employ more than 7.5 million Canadians, about 70 percent of the private sector labour force.
For the first time in any Canadian free trade agreement (FTA), the TPP includes a dedicated chapter with specific measures to assist SMEs to help them take full advantage of the opportunities that the Agreement will create. This reflects the Government of Canada’s commitment to significantly increase the number of Canadian SMEs exporting to emerging markets.
Complementing commitments across the Agreement – including on market access, paperwork reduction, Internet access, trade facilitation and express delivery – the TPP SME chapter includes provisions specifically targeted at positioning SMEs for success. In order to ensure SMEs have access to information they need to do business in the TPP markets, Parties will establish user-friendly websites with information on the Agreement text and explanations of key provisions, as well as information on customs procedures, technical standards, foreign investment regulations, business registration procedures, employment regulations and taxation.
The SME chapter also establishes a committee to review how well the TPP is serving SMEs and to consider ways to enhance its benefits. The committee will oversee cooperation and capacity building activities that support SMEs, including through export counseling, assistance and training programs, information sharing and trade finance.
Beyond tariffs
The TPP will include a chapter on technical barriers to trade (TBT). The provisions build on the World Trade Organization Agreement on Technical Barriers to Trade and the NAFTA, helping to ensure that unnecessary or discriminatory regulatory requirements do not undermine key market access gains negotiated elsewhere in the Agreement.
The TBT Chapter requires that technical regulations not be used as barriers to trade and aims to create a fair, predictable and open regulatory system that promotes, rather than hinders, the flow of goods. It also includes provisions that will help identify ways to either prevent non-tariff barriers or deal with them when they do arise. In addition, sector-specific outcomes have been negotiated through seven sector annexes, covering cosmetics, medical devices, pharmaceuticals, wines and spirits, information and communications technologies (ICT), proprietary formulas for certain food products and additives, and organics.
In the Regulatory Coherence Chapter, each of the TPP parties will endeavour to put in place mechanisms to facilitate interagency coordination and review of domestic regulatory measures, prevent conflicting or duplicative regulations, and make recommendations for improvements.
Minimizing technical barriers to trade will help maximize market access for New Brunswick’s exports.
Advantages of the TPP
Canada has obtained a tariff outcome that will help level the playing field with key competitors and provide enhanced market access opportunities in specific areas of interest to New Brunswick.
Fish and seafood products
Some 6,400 New Brunswickers work in the fish and seafood sector, with the sector accounting for 1.5 percent of New Brunswick’s GDP in 2014.
Trade snapshot
Canada’s fishing industry contributed more than $2.3 billion to Canada’s GDP in 2014. The industry is the economic mainstay of approximately 1,500 communities in rural and coastal Canada. This sector makes Canada the eighth-largest exporter of fish and seafood products in the world, exporting an estimated 76 percent, by value, of its fish and seafood production.
From 2012 to 2014, New Brunswick’s exports of fish and seafood to TPP countries were worth an annual average of $914.6 million. Japan and Malaysia apply tariffs on fish and seafood of up to 15 percent, Vietnam of up to 34 percent, and New Zealand of up to 5 percent.
Tariff elimination
Examples of fish and seafood products that will benefit from tariff elimination include:
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Frozen snow crab:
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In Japan, tariffs of 4 percent will be eliminated upon entry into force.
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Herring roes:
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In Japan, tariffs of up to 11 percent will be eliminated upon entry into force;
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In Vietnam, tariffs of up to 34 percent will be eliminated within three years;
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In Malaysia, tariffs of up to 8 percent will be eliminated upon entry into force.
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Lobster:
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In Japan, tariffs of up to 5 percent will be eliminated upon entry into force;
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In Vietnam, tariffs of up to 34 percent on prepared lobster will be eliminated within three years;
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In Malaysia, tariffs of up to 8 percent will be eliminated upon entry into force.
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In New Zealand, tariffs of up to 5 percent will be eliminated upon entry into force.
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Fresh, chilled or frozen salmon (including fillets):
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In Japan, tariffs of up to 3.5 percent will be eliminated within 10 years;
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In Vietnam, tariffs of up to 18 percent will be eliminated upon entry into force.
Beyond tariffs
The TPP includes a robust chapter on sanitary and phytosanitary (SPS) measures, which will help ensure that TPP market access gains for Canadian fish and seafood exporters are not undermined by unnecessary and unjustified SPS-related trade restrictions.
The TPP SPS provisions build on the obligations of the World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures and establish new commitments with respect to regionalization, equivalence, and science and risk analysis. The SPS Chapter also establishes an SPS committee, which will allow experts from TPP Parties to discuss SPS issues, thus facilitating trade and enhancing cooperation.
Advantages of the TPP
Eliminating high tariffs on fish and seafood products will generate a price advantage for New Brunswick’s exports, which will facilitate the expansion of Canadian exports to high-value markets such as Japan as well as growing markets such as Vietnam and Malaysia.
Agricultural and agri-food products
Some 4,700 New Brunswickers work in the agricultural and agri-food sector for their livelihood, with the sector accounting for 2.8 percent of New Brunswick’s GDP in 2014.
Trade snapshot
Canada is one of the largest agricultural producers and exporters in the world. As almost half of Canada's total agricultural production is exported, the potential for growth in this sector lies in its ability to expand into markets abroad. Agricultural exports from New Brunswick to TPP countries averaged $349.4 million per year from 2012 to 2014, including prepared potatoes (including French fries), maple syrup and baked goods. Under the TPP, New Brunswick will benefit from new market opportunities for its agricultural products.
Tariff elimination
Examples of agricultural products that will receive improved access include:
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Maple syrup and maple sugar:
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In Japan, tariffs of 17.5 percent or 13.50 yen/kg (whichever is greater) will be eliminated within three years;
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In Vietnam, tariffs of 3 percent will be eliminated upon entry into force.
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Breads, cookies and other baked products:
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In Japan, tariffs of up to 25.5 percent will be eliminated within 10 years;
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In Vietnam, tariffs of up to 40 percent will be eliminated within three years;
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In Malaysia, tariffs of up to 6 percent will be eliminated upon entry into force;
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In Australia, tariffs of up to 5 percent will be eliminated upon entry into force.
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Miscellaneous food preparations:
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In Japan, tariffs range from 5 percent to 29.8 percent (plus a specific tariff of 1,155 yen/kg). The TPP will improve access through a combination of phase-outs, reductions and quotas;
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In Vietnam, tariffs of up to 25 percent will be eliminated within five years;
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In Malaysia, tariffs of up to 20 percent will be eliminated upon entry into force;
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In Australia, tariffs of up to 5 percent will be eliminated upon entry into force.
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Sugar and chocolate confectionery, and food preparations containing cacao:
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In Japan, tariffs range from 10 percent to 23.8 percent (plus a specific tariff of 679 yen/kg). The TPP will improve access through a combination of phase-outs, reductions and quotas;
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In Vietnam, tariffs of up to 25 percent will be eliminated within six years;
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In Malaysia, tariffs of 15 percent will be eliminated upon entry into force;
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In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
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In New Zealand, tariffs of up to 5 percent will be eliminated within 5 years.
New access for New Brunswick’s prepared potatoes
New Brunswick’s annual exports to TPP countries of frozen and prepared potatoes, including French fries and potato chips, were worth, on average, $150.6 million from 2012 to 2014.
The TPP will eliminate tariffs on the following potato products:
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In Japan, tariffs of up to 13.6 percent on prepared potatoes will be eliminated within three years for frozen French fries and within ten years for other potato products;
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In Vietnam, tariffs of up to 34 percent on prepared potatoes will be eliminated within four years;
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In Malaysia, tariffs of up to 8 percent on prepared potatoes will be eliminated upon entry into force;
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In Australia, tariffs of up to 5 percent on frozen French fries, will be eliminated upon entry into force;
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In New Zealand, tariffs of up to 5 percent on prepared potatoes, including French fries, will be eliminated upon entry into force.
Beyond tariffs
It is essential for all countries to be able to maintain measures to ensure that food is safe for consumers, and to prevent the spread of pests or diseases in animals and plants. It is important, however, that these measures not be used to unnecessarily restrict trade or create unfair barriers for exporters.
Strong and enforceable SPS provisions will also help to ensure that TPP market access gains for agricultural and agri-food products are not undermined by unnecessary or overly burdensome SPS-related requirements.
Advantages of the TPP
Many TPP members are net importers of agricultural and agri-food products, while Canada is a significant global supplier of high-quality agricultural products. The TPP will help position New Brunswick to take advantage of significant market opportunities in established as well as new and emerging markets.
Protecting and preserving Canada’s supply management system
The Government of Canada announced a series of new programs and initiatives for supply-managed producers and processors to support them throughout the implementation of the Trans-Pacific Partnership (TPP) and the Canada-EU Trade Agreement. Under both agreements, the three pillars of the supply management system will remain protected.
The following programs will be implemented:
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The Income Guarantee Program will keep producers whole by providing 100 per cent income protection to producers for a full 10 years from the day TPP comes into force. Income support assistance will continue on a tapered basis for an additional five years, for a total of 15 years. $2.4 billion is available for this program.
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The Quota Value Guarantee Program will protect producers against reduction in quota value when the quota is sold following the implementation of TPP. $1.5 billion has been set aside for this demand-driven program, which will be in place for 10 years.
The Government also announced two additional programs:
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The $450 million-Processor Modernization Program will provide processors in the supply-managed value chain with support to further advance their competitiveness and growth.
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The Market Development Initiative will assist supply-managed groups in promoting and marketing their top-quality products. To support the initiative $15 million in new funding will be added to the AgriMarketing Program.
In addition to the long-term $4.3-billion investment outlined above, the Government will intensify on-going anti-circumvention measures that will enhance our border controls. These measures include requiring certification for spent fowl, preventing importers from circumventing import quotas by adding sauce packets to chicken products, and excluding supply-managed products from the Government of Canada’s Duties Relief Program. Cheese compositional standards, introduced by the Government of Canada in 2008, have been maintained. The Government remains committed to ensuring they are enforced, so the standards we have for Canadian cheese are fully maintained.
The Canadian Dairy Commission and the Farm Products Council of Canada will work with Agriculture and Agri-Food Canada to ensure the Income Guarantee and Quota Value Guarantee programs are delivered to producers in an effective and efficient manner. The Government will continue to work closely with dairy, poultry and egg producers and the entire supply-managed sector to implement these initiatives.
These Cabinet-approved initiatives will support producers and processors throughout the implementation period of TPP and the Canada-EU Trade Agreement.
The TPP will secure new market access opportunities for Canadian dairy, poultry and egg exports. Dairy, poultry and egg producers and processors will benefit over time from increased duty-free access to the United States and all other TPP countries. This will include complete tariff elimination on some specialty cheeses, including several artisanal cheeses, entering the United States.
Despite significant and broad demands from several of our TPP negotiating partners, Canada has offered only limited new access for supply-managed products. This access, which will be granted through quotas phased in over five years, amounts to a small fraction of Canada’s current annual production: 3.25% for dairy (with a significant majority of the additional milk and butter being directed to value-added processing), 2.3% for eggs, 2.1% for chicken, 2% for turkey and 1.5% for broiler hatching eggs.
Protecting the food safety system and the health of Canadians
Protecting the health and safety of Canadians is of the utmost priority for the Government of Canada. All food products imported into Canada must meet robust health and safety regulations to ensure maximum protection for Canadian consumers.
The TPP protects Canada’s right to maintain and implement measures to ensure food safety for consumers as well as to protect animal or plant life or health. Food product imports will only be accepted if they meet Canada’s rigorous health and safety requirements, which have been fully protected.
Wood and other forestry products
Some 9,400 New Brunswickers work in the wood and other forestry products sector, with the sector accounting for 2.4 percent of New Brunswick’s GDP in 2014.
Trade snapshot
New Brunswick’s exports of wood and other forestry products to TPP countries averaged $452.3 million per year from 2012 to 2014, and exports of pulp and paper averaged $718.3 million per year during the same period.
Japan applies tariffs of up to 10 percent on wood and other forestry products, Vietnam of up to 31 percent, Malaysia of up to 40 percent, Brunei of up to 20 percent, and Australia and New Zealand of up to 5 percent. Vietnam applies tariffs of up to 27 percent on pulp and paper products, Malaysia of up to 25 percent and Australia of up to 5 percent.
Tariffs for these products will be eliminated under the TPP.
Tariff elimination
Examples of wood and other forestry products exported by New Brunswick that will benefit from duty-free access include:
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Lumber:
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In Japan, tariffs of up to 6 percent will be eliminated within 15 years;
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In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
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In Brunei, tariffs of up to 20 percent will be eliminated upon entry into force.
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Uncoated paper and paperboard:
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In Vietnam, tariffs of up to 27 percent will be eliminated within three years;
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In Malaysia, tariffs of up to 25 percent will be eliminated within 10 years;
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In Australia, tariffs of up to 5 percent will be eliminated upon entry into force.
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Sanitary and household papers:
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In Vietnam, tariffs of up to 25 percent will be eliminated within three years;
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In Malaysia, tariffs of up to 30 percent will be eliminated within five years;
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In Australia, tariffs of up to 5 percent will be eliminated upon entry into force.
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Carton boxes and packing containers:
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In Vietnam, tariffs of up to 24 percent will be eliminated within three years;
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In Malaysia, tariffs of 25 percent will be eliminated within three years;
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In Australia, tariffs of 5 percent will be eliminated upon entry into force.
Beyond tariffs
Technical barriers to trade (TBT) are technical regulations that can include various testing and certification requirements. While these measures are usually designed to achieve legitimate policy objectives in a country, they can sometimes restrict trade by being overly burdensome or discriminatory against imported goods. The TPP includes robust TBT provisions that, for example, promote the use of international standards and greater transparency in the development of technical regulations.
Strong and enforceable SPS provisions will also help to ensure that TPP market access gains for wood and other forestry products are not undermined by unnecessary or overly burdensome SPS-related requirements.
Advantages of the TPP
As one of the top exporters of wood and other forestry products worldwide, the TPP will provide Canada with a significant price advantage over key competitors that are not in the TPP.
Opening new markets for New Brunswick’s services in TPP markets
Trade snapshot
Some 245,000 New Brunswickers work in the services sector, with the sector accounting for 76.3 percent of the province’s total GDP in 2014. Jobs in this sector are traditionally highly-skilled and well-paying.
Enhanced market access commitments
The Agreement will provide Canadian service suppliers with greater predictability, guaranteeing both existing levels of access as well as improvements to existing measures by TPP Parties in the future.
The TPP has secured commitments that go beyond the World Trade Organization General Agreement on Trade in Services (GATS) and beyond Canada’s FTA commitments with several of the TPP countries.
Canadian service sector suppliers will benefit from enhanced market access commitments, including for:
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construction and/or transport services in markets such as Australia, Vietnam and New Zealand;
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research and development in markets such as the United States, Australia, Japan, Chile, Malaysia, New Zealand, Singapore and Vietnam;
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computer-related services in Mexico, Chile, Malaysia and the United States;
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professional services (e.g. legal, engineering and architectural) in markets such as Mexico, Chile, Singapore and the United States;
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mining-related services in Chile, Malaysia, New Zealand and Brunei;
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environmental services in markets such as Vietnam and Malaysia;
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services incidental to energy distribution in Chile, Malaysia and Singapore.
Temporary entry for business persons
The TPP improves upon commitments for temporary entry of highly-skilled business persons, making it easier for them to temporarily move between Canada and TPP markets. For example, the TPP includes commitments that facilitate the temporary entry of Canadian business visitors, intra-corporate transferees, investors, and highly-skilled professionals and technicians. The TPP also includes commitments for the spouses of some of these Canadian business persons. In addition, the Agreement includes commitments from Australia and Chile to remove existing economic needs tests, resulting in a competitive advantage for Canada over non-TPP markets. Overall, the TPP will contribute to greater certainty and predictability for New Brunswick companies and business persons.
Telecommunications
Not only is telecommunications a rapidly growing service sector, it is also one of the most important enablers in the modern economy. The TPP includes key obligations on the access to and use of telecommunications services, interconnection of telecommunications networks, independence of the regulatory body, licensing procedures, and resolution of domestic disputes, all of which ensure that Canadian service suppliers and consumers will be treated in a fair and objective manner when providing or receiving telecommunications services in TPP markets.
Electronic commerce
In recognition of the growing economic importance of electronic commerce, as well as the transformative nature of the technology that enables it, the TPP expands on commitments made in previous FTAs, including with respect to the cross-border movement of information and the localization of computing facilities. Furthermore, the chapter includes commitments to protect users from the unauthorized disclosure of their personal information, online fraudulent and deceptive commercial practices, and unsolicited commercial electronic messages, or spam. TPP Parties have also agreed not to levy customs duties, fees or other charges on digital products that are transmitted electronically. Businesses from New Brunswick, including SMEs, will be able to take advantage of the expanding online commercial opportunities.
Protecting Canadian culture and public services
As in all of Canada’s international trade agreements, Canada has preserved the right to protect policies and regulatory activities undertaken in the public interest. Nothing in the TPP prevents governments from regulating in the public interest, including with regard to adopting measures to protect or promote culture, delivering public services (like health and education) or providing protections for Aboriginal peoples.
Preserving the flexibility of all levels of government to adopt and maintain policies and programs that support the creation, production and development of Canadian content was a core obctive for Canada in the TPP, and we have fully achieved this objective. The TPP reflects and protects Canada’s existing policies for supporting Canadian cultural content.
The TPP is an opportunity to set the future terms of trade across the Asia-Pacific region, and Canada and our allies in TPP share a vital common interest in ensuring the internet remains free and open, and have taken obligations to help ensure that restrictions cannot be imposed on the free flow of information online.
Consistent with the approach taken in our FTA with the European Union, Canada has achieved these objectives through a targeted approach where exceptions for culture are included in specific chapters that could have an impact on our ability to make cultural policies, including:
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preamble
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services
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investment
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national treatment and market access for goods
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state-owned enterprises
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government procurement
Advantages of the TPP
The TPP provides Canadian service suppliers with greater predictability and transparency for conducting their business in established and growing TPP services markets.
Canadian gains in the TPP will provide our companies with a competitive advantage in these dynamic and growing markets.
Facilitating two-way investment between New Brunswick and TPP markets
The TPP’s investment rules will provide stability for our investors, encouraging Canadian businesses to invest in new TPP markets and share their expertise in niche sectors, such as asset management and energy finance. Canadian investors in such areas as energy, mining, manufacturing, financial services and professional services will enjoy transparent and predictable access to TPP markets.
Specifically, the TPP includes:
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strong rules to ensure that investors from Canada and TPP countries are treated in a fair, equitable and non-discriminatory manner, while preserving the full rights of governments to legislate and regulate in the public interest;
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rules ensuring that Canadian investors can compete on an equal footing with other investors in TPP countries;
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access to an investor-state dispute settlement (ISDS) mechanism that is prompt, fair and transparent and is subject to appropriate safeguards.
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Date Modified:
2015-10-04
