TPP: of benefit or cost to Canada?
THE MATH: Corporate leaders are hoping the TPP will add 0.5% to GDP. A half percent of Canada’s GDP of 1.8 trillion = 9 billion.
The costs? 3-5 billion in pharmaceutical price increases, 4.3 dairy farmer compensation, 1-3 billion loss of government tariff revenue, EI and welfare for a projected 58,000 lost jobs… … and many billion for ISDS lawsuits.
A best case scenario 9 billion in corporate gain : weighed against probable billions of government costs that look to outweigh the gains.
NAFTA has shown that GDP gains go to the 1%; job loss and wage decreases go to the 99%.
While corporate leaders say TPP will create jobs, union leaders, farmers, manufacturers and environmentalists are looking to find where any benefits could possibly be found.
Who benefits from tariff reduction?
The benefit is not to Canada per se, but to multi-nationally trading corporations based in Canada who stand to pay less tariffs to countries they export to. Canada will lose the revenue stream of tariffs from imports AND lose the ability to regulate home markets through these tariffs. Once tariffs are removed, Canadian workers will be directly competing with low wage workers in Vietnam. Consumers will only benefit from the tariff reduction if corporations pass on the lower price. There is little evidence that this happened through NAFTA, and plenty of evidence of job loss, depressed wages, and rapidly increasing social inequality.
Tariffs are government revenue. Tariffs between countries at least somewhat cancel each other out. Who loses? Governments lose tariff revenue. Who gains? Corporations who trade internationally. Dropping all tariffs is effectively a tax dodge by another name.
There’s an attempt to excite us with the prospect of $366 billion in sales to TPP countries, so let’s break this down. $324 billion of this is trade with the USA – under NAFTA since 1994. Of the remaining 42 billion, $1.59 billion exports to Australia, $1.13 billion to Chile and $606 million to Peru – countries we already have trade agreements with. No big change there.
The big excitement is shipping more beef to Japan, so let’s look at that. 70% of Canadian beef goes to USA, just 5% to Japan. Japan is lowering its tariff from 38.5% to 27.5% over the next 15 years which will after that time result in a saving of $10.45 million annually. This relatively small gain must be compared to the billions of easily seen losses, plus unseen losses in outsourcing and unemployment.
$10 million may sound a nice gain until we consider how very much more it is going to cost us to ratify TPP. Just ONE multi-million/billion dollar lawsuit could wipe all gains from exports. Canada will have lost money, AND lost it’s ability to protect jobs, health and the environment.
Medical costs will ratchet up, one way up. CETA (Canada-EU trade agreement) if ratified will already increase drug costs by $850 million – 1.6 billion annually. The Council of Canadians writes, “Currently, 1 in 10 Canadians are unable to fill their prescriptions due to cost, leading to inhumane health outcomes for much of the population. With over 3 million Canadians not being able to afford their prescription medication a year, it is estimated that between $7 and $9 billion in additional costs are added to the health care system as a result (1 in every 6 cases where people end up in the hospital could have been prevented if prescription drugs were used appropriately). TPP will accelerate this problem. We could be looking at USA style health care where a disease bankrupts us. REF
It doesn’t matter how much hype there is about all the rhetoric ‘this is your only chance’ ‘ you’ll be left behind if you don’t sign on…’ It’s all corporate manoeuvring. It’s crazy to sign a free trade agreement that represents little, no, or negative economic benefit to the Canadian economy when the agreement has such deep-reaching political and social down-sides, including the potential to undermine the health of all Canadians and remove aspects of our government, democracy and social services forever. Unlike NAFTA that has a 6 month notice get out clause, TPP has no end date and so is FOREVER. ‘Forever’ isn’t something we should rush into, or even consider venturing into. It’s a one way street into undemocratically elected corporate control of our lands and services.
Tyee.ca article: TPP No Boon to Public Purse, Says Taxpayer Group
An advocacy group for Canadian taxpayers says that a major, multi-nation trade deal reached today is a win for foreign companies, less so for local taxpayers. Dennis Howlett of Canadians for Tax Fairness panned the Trans-Pacific Partnership, negotiated in secret among 12 member states, as a deal that could weaken Canada’s economy and deplete tax coffers. Howlett said two issues are the costs of prescription drugs that provinces will have to pay, along with $4.3 billion in compensation promised to farmers for having to relinquish some of their long-shielded market in Canada. Ref