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TPP gains negated by farm losses


OTTAWA – The purported benefits of the Trans-Pacific Partnership (TPP) outlined in Global Affairs Canada’s study of the deal evaporate when offset against the cost of compensating farmers for their losses, according to the Council of Canadians.

“The department’s study predicts additional economic growth of just 0.127 per cent over two decades. Coincidentally, that growth – estimated to be worth $4.3 billion – is the exact same amount that was promised to farmers to compensate them for their losses,” said Maude Barlow, national chairperson of the Council of Canadians. “So the net economic gain is zero, and Canadians are still on the hook for more expensive prescription drugs and costly corporate lawsuits.”

The Council of Canadians is asking the Standing Committee on International Trade to commission an independent study by the Parliamentary Budget Officer.

Here are some other problems with the analysis:

  • The study relies on the discredited Global Trade Analysis Project from Purdue University. Its Computable Generalized Equilibrium (CGE) model makes assumptions that do not exist in the real world: full employment, unchanging trade balances, limited capital mobility and equal distribution of gains between countries. As the Austrian Chamber of Labour notes, “most of these CGE studies are constructed upon a methodology that is heavily biased towards demonstrating the positive effects, while sidelining potential negative effects.” 
  • The study’s predicted GDP growth of 0.127 per cent by the year 2040 is not in keeping with other similar studies. The C.D. Howe Institute and the World Bank predict GDP increases of 0.02 per cent by 2018 and 0.08 per cent by 2035 respectively.
  • The study admits that there will be losses in the auto industry, with production shifting to non-NAFTA countries. It does not quantify how many Canadian jobs will be lost.
  • The study does not consider unemployment rates, one of the most important variables for Canadians’ wellbeing. Growth and employment are not necessarily synonymous, and trade deals often exert downward pressure on wages. A Tufts University analysis using the United Nations Global Policy model predicts a loss of 58,000 jobs. 
  • The study does not mention the high-tech sector, which will suffer under new intellectual property rules in the TPP, nor does it mention the increased costs of prescription drugs for Canadian families and the public health care system due to strengthened pharmaceutical patents.
  • The study excludes the cost of investor-state dispute settlement cases, estimated at $4 million per case to defend.
  • The study does not touch on the environment, health, human rights, First Nations or other related elements of the deal, which have significant economic impacts.

The Australian government’s Productivity Commission analyzed the TPP Australia and found it offered “questionable benefits” while lambasting the provisions that allow companies to sue states over policy and regulatory changes.

“Even this rosy study shows major losses for the auto industry. It doesn’t begin to measure the things that matter most to Canadians – their jobs, their health and their environment,” said Sujata Dey, trade campaigner with the Council of Canadians. “The government needs a comprehensive analysis from the independent Parliamentary Budget Officer to make an informed decision on the TPP.”