Wednesday, June 15, 2016

On Thursday, Canadian Labour Congress President Hassan Yussuff and Senior Economist Angella MacEwen spoke to the House of Commons Committee on International Trade to outline serious concerns with the Conservative-negotiated Trans-Pacific Partnership (TPP). Below is Hassan Yussuff’s statement to the committee. To learn more and add your voice to stop the TPP, visit stoptpp.ca.

Presentation by the Canadian Labour Congress to the House of Commons Standing Committee on International Trade regardint he TPP public consultations

On behalf of the 3.3 million members of the Canadian Labour Congress, we want to thank you for giving us the opportunity to present our views on the impact on Canada of a possible Trans-Pacific Partnership (TPP) agreement.  

I want to begin by expressing my sincere appreciation of your willingness, and that of Minister Freeland and your government, to sustain an open and frank dialogue regarding the Trans-Pacific Partnership Agreement (TPP) negotiated under the previous administration. 

It is a deeply flawed agreement, and our view is the costs of the TPP outweigh the limited benefits that might arise from the deal.

Proponents of the deal only expect it to boost Canada’s GDP by about 0.5 per cent - ten years down the road.

That’s about as much as the previous administration promised to pay the dairy industry in compensation for TPP losses.

This leaves nothing to cover losses to the auto sector and other areas.

A key study from Tuft’s University predicts that workers in all 12 TPP countries would lose out because the TPP would increase income inequality.

This flawed agreement is about protecting multinational corporation’s rights. It does nothing to help workers or the environment.

The two sectors with the most to lose are the auto sector and the dairy sector, but I also want to touch on our concerns about the provision of public services, rising drug costs, and investor challenges to environmental regulations. 

The automotive sector

The automotive sector is centrally important to Canada’s research and development, high value-added production and manufacturing exports. In 2014, approximately 40,000 Canadians worked in motor vehicle manufacturing and another 70,000 in parts manufacturing.

A five-year phase-out of tariffs on Canadian imports of Japanese vehicles will quickly eliminate the incentive to manufacture in Canada and encourage Japanese assemblers to import vehicles.

Unifor has estimated that the TPP could lead to the loss of 20,000 jobs in the auto sector alone.

The dairy sector

The Canadian dairy sector provides high-quality, locally-produced food while supporting small family farms and rural communities. Under the TPP agreement, foreign dairy producers will be able to access an additional 3.25 per cent of Canada’s 2016 dairy milk production. This comes at a time when the dairy industry is already under considerable stress – 250 million litres of milk and subsequent production jobs are at risk annually.

Investor State Dispute Settlement

We have many concerns with the model of Investor State Dispute Settlement. 

By now, the problems with this model of dispute settlement are well-known: the unaccountable and ad hoc nature of the arbitral panels; their expansive definition of what constitutes an investment; the fact that they do not operate in subsidiarity to national court systems, but above them; the apparent lack of deference to the prerogatives of governments, or even to national jurisprudence on any given issue.

Public Services

The TPP chapter on public services locks in the current level of privatization with so-called ‘ratchet’ and ‘standstill’ clauses, and makes it more difficult for governments to introduce new public services, such as pharmacare or child care without subjecting themselves to an ISDS claim. Canada already has the second highest per capita drug costs in the world, and the TPP will further constrain efforts to reform prescription drug purchasing and provision in Canada.

Environment

The TPP also contains broad prohibitions on economic or environmental performance requirement, such as requiring technology transfer or local sourcing to foster green industry.

Such restrictions will serve as a “chill” on governments contemplating steps required to make the transition toward a low-carbon and climate-resilient economy.

It is time to come back to more reasonable forms of investor protection which should be subsidiary to national judicial processes, should privilege state-to-state settlements, and should emphasize investors’ responsibilities just as much as the protection of their assets.

Conclusion

We have called on the federal government to conduct its own impact analysis of the TPP, and to make this analysis public. In closing, I want to ask the committee today if you have requested a thorough study or analysis from Global Affairs Canada, and if you have not I would like to recommend that you do so.

Given the high economic and political stakes, Canadians deserve no less than a full and substantive discussion on the potential consequences of this draft agreement.