Trump Will Pull The US Out Of The TPP And This Is What It Means For Canada
It's the first thing the President-elect will do once he's in office.
In a YouTube video posted on Monday, Trump outlined his plans for his first 100 days in office, and it appears that pulling the US out of the TPP is one of the first things he’s going to do.
The TPP, in a gist, is a free trade agreement that involves 12 countries in the Pacific Rim. This includes Canada, the US and Japan. The latter two, which have the largest economies among the other nations, have a greater degree of influence in the negotiations. If the US and Japan both refuse to ratify the deal, the TPP will be dismantled regardless of the efforts of the other countries involved.
In recent developments, leaders in Japan seemed to still be in support of ratifying the deal. But that won't matter if Trump decides to pull the US out. Such decision would be a huge reversal of what Barack Obama has been working towards during his time in office.
PM Justin Trudeau has never really demonstrated a full-on support for the TPP to begin with. During his campaign, all his team promised was that they would "look into it" - there was never a formal confirmation of their commitment to signing it.
However, the TPP does present a few benefits to Canada. Three of Canada's top trading partners would have been included in the deal, and it would also have had the chance to gain Japan, which has the third largest economy in the world, as another one. With the TPP lowering tariffs in these Asian countries, Canada would have better opportunities for exports, especially in agricultural commodities. It would have also seen a boost in its supply chain industries (particularly those related to the auto sector in southwestern Ontario) from new foreign investments the TPP would bring.
But aside from Japan, Canada's losses from a discarded TPP deal wouldn't be as bad as they might seem. A study released by Global Affairs Canada earlier this fall may have suggested otherwise; however, when looking at the estimated economic gains that Canada would make from being part of the deal, it adds just 0.1% to its GDP. That's around $4.3 billion yearly.
So all in all, the death of the TPP likely wouldn't be the end of the world for Canada... Perhaps Trump is actually doing us a favour?
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