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Oct 6, 2015
TPP Deal has potential to provide $9.9 billion in gains
Yesterday's announcement that Canada has successfully concluded negotiations to the Trans-Pacific Partnership (TPP) came as a great relief to the Chamber. The economic benefit and jobs this trade agreement will bring our country's communities and businesses is substantial.
Canada could not afford to sit on the sidelines as others build economic bridges throughout the Asia-Pacific. With this monumental, ground-breaking TPP agreement, Canada has the opportunity to see long-term economic benefits, in a time of on-going global economic uncertainty.
This deal means more jobs and income in our province. The Kelowna Chamber has been a strong supporter of the need for a successful conclusion to these talks and as Canada's only Pacific province, B.C. businesses and residents stand to benefit significantly.
Key benefits for B.C. include:
- Fish and Seafood: Upon implementation, the TPP will eliminate tariffs on over 95 percent of fish and seafood tariffs, such as fresh, chilled and frozen salmon, prepared and preserved salmon and shrimp. Current duties on fish and seafood entering TPP countries ranged up to 15 percent in Japan and Malaysia, up to 34 percent in Vietnam, and up to 5 percent in New Zealand. Currently, B.C. exports $626.9 million worth of fish and seafood to TPP countries.
- Mining: Upon implementation, the majority of industrial goods exported to TPP countries will be duty-free immediately with the majority of remaining tariffs on industrial goods eliminated within 10 years. For B.C. metals and minerals, such as aluminum, iron and steel products and petroleum products, tariffs range from 5% in Australia to 40% in Vietnam depending on the product.
- Forestry: Upon implementation, forestry will see significant reductions in tariff immediately and further over the next 15 years. Current duties range from up to 10 percent on wood and other forestry products in Japan, up to 31 percent in Vietnam, up to 40 percent in Malaysia, up to 20 percent in Brunei, and up to 5 percent in Australia and New Zealand. For pulp and paper products, current duties range from up to 27 percent in Vietnam, up to 25 percent Malaysia and up to 5 percent in Australia. Currently, B.C. average $4.8 billion per year in exports of wood and other forestry products to TPP countries, and $1.5 billion per year in exports of pulp and paper.
- Agriculture: Upon implementation of the TPP, the agricultural sector in B.C. will see significant reductions in tariffs immediately and over the next 15 years to beef, fresh and frozen vegetable as well as fresh cherries and fresh and frozen blueberries. Tariffs currently range from 5 percent to 56 percent depending on the country and product. Currently, B.C. exports an average of $1.6 billion to TPP countries.
- Service Sector: The agreement increases access to the TPP market for B.C. professional service providers, such as mining-related services in Chile, Malaysia, New Zealand and Brunei, environmental services in markets such as Vietnam and Malaysia, and construction and/or transport services in markets such as Australia, Vietnam and New Zealand. This agreement improves upon access for temporary entry of highly-skilled business persons, making it easier for them and their spouses to temporarily move between Canada and TPP markets.
The TPP represents a total population of almost 800 million people and a combined GDP of $27.5 trillion, which represents 40 percent of global GDP and about 33 percent of all world trade. The TPP could provide annual income gains of $9.9 billion and increase our exports by $15.7 billion.
Negotiations are about give and take and are never easy; while Canada had to move on key vested interests such as supply-managed dairy and poultry, the net benefit from gaining better market access for goods, while removing restrictions on services, investments, financial services, temporary entry and government procurement is too great to pass-up . The TPP will set the standard for 21st century multilateral agreements.
The TPP is a comprehensive agreement opening new opportunities for businesses in our province and across the country, the economic impact on our nation's future is substantive.