The Trans-Pacific Partnership (TPP) negotiations could wrap up this week. Headlines focus largely on the impact on Canada’s dairy and auto sectors. However, this will be a ground-breaking deal that goes far beyond dairy and autos. It is the most ambitious trade negotiation under way globally today. The TPP will mean moving beyond the rules established under the North American Free Trade Agreement (NAFTA) to set the new rules for the next era of global trade.
The negotiations aim to create a high-standard and comprehensive agreement, opening up trade in nearly all goods and services and establishing rules that go beyond those set out under the World Trade Organization or NAFTA. There are 12 partner countries, including the U.S., Japan, Australia, New Zealand, and Canada, as well as several fast-growth Latin American and Asian markets.
One less visible aspect of the deal is that it intends to open up services markets. This matters for Canada, because our economy is 70% services. And services—such as engineering and computer services—are among our fastest-growing exports.
These are high-value services, supporting high-wage jobs in Canada. As new Conference Board research shows, demand for these high-value services is strong and growing, not only in the U.S. (Canada’s main market for services), but also in other parts of the world, including in TPP partners.
Our strong, high-value services foundation, combined with significant demand, means Canada has much to gain from more transparency and fewer barriers to selling services globally. This may not make headlines but is critically important for Canada’s economic future.
This is but one aspect of TPP. Moreover, we do not yet know the details of the deal—and the details matter a great deal. What is clear is that if the TPP gets completed, it will set the new rules for global trade, in which Canada has a critical stake.
Danielle Goldfarb is director of the Global Commerce Centre at the Conference Board of Canada.
MORE ABOUT INTERNATIONAL TRADE:
- Amid the recession gloom, service exports are still going strong
- Canada’s big opportunity in China is services, not just resources
- CETA could be huge for Canada—if companies are ready to adapt
- How Mexico’s manufacturing sector is eclipsing Canada’s
- The oil industry’s loss is the manufacturing sector’s gain
This post originally appeared at the Conference Board of Canada.