New Trade Deal Could Hurt NAFTA

Ottawa is saying U.S. imports into Canada could fall by $3.3 billion under the recently rebooted Trans-Pacific Partnership, sparking fears the new pact could hurt the ongoing renegotiation of the North American Free Trade Agreement.

The text of the 11-country Pacific Rim trade deal — a pact President Donald Trump pulled the United States out of last year — was released late Tuesday, but a Global Affairs Canada analysis of the deal also delves into the impact on the North American Free Trade Agreement talks, which are to resume in five days in Mexico City.

The Trump administration has blasted trade deficits with Canada as an underlying reason for wanting to renegotiate or tear up NAFTA. The Canadian government rejects that position, saying the statistics don't back the U.S. deficit assertions.

But the most recent analysis of the new TPP — known by the acronym CPTPP — predicts lower U.S. imports into Canada.

The president of Canada's Automotive Parts Manufacturers Association, says that will hurt Canada at the upcoming NAFTA round, where auto remains a major obstacle between Canada and the U.S.

Flavio Volpe says "The report states that U.S. imports into Canada would drop $3.3 billion, mainly in automotive. If true, that is a gap smart U.S. negotiators could then be seeking to close in NAFTA 2.0."

Canadian auto workers and manufacturers have been critical of the new TPP, including the government's assertion that it has gained more access to the protected Japanese market.

International Trade Minister Francois-Philippe Champagne has said a side letter with Japan guarantees greater access and enshrines a dispute resolution mechanism. But that side letter and others with Malaysia and Australia have yet to be made public.