The federal government put on a brave face for last week’s Trans-Pacific Partnership (TPP) Commission meeting in Vancouver. Prior to the November 27-28 gathering, Trade Minister Mary Ng, current chair of the 12-country treaty, said the TPP remains the gold standard for inclusive, rules-based trade and a key feature of the government’s Indo-Pacific Strategy. 
 
Then Trump promised to nuke the Canadian and Mexican economies with a 25 per cent tariff on everything we export to the U.S. Whether he’s bluffing or not (I don’t think he is), the chaos induced by Trump’s announcement likely dampened the mood at an otherwise low-key TPP trade ministers’ meeting in B.C. 

Current treaty members agreed to consider Costa Rica’s accession but put off requests from China and Taiwan. And they discussed next steps in a general review of the TPP that has been anything but clear in any of the participating countries. “As a current and future driver of economic growth, the importance of the [TPP] will only continue to grow,” said a joint statement from the Vancouver meeting.
 
This is a highly questionable proposition. Canadian export growth to the region has been modest. And even before the revenge of Trump, the Trudeau government signalled it was going all-in on America. Trump’s tariff threat doesn’t seem to have shaken those plans.

In reality, we can’t depend on stable export-led growth in North America—or expect the TPP to provide an effective foundation for diversification. Neither the TPP nor CUSMA provide a foundation for addressing international economic inequalities or climate emergency, which should be all countries’ top priority. 
 
The global playing field has shifted, probably permanently. We should be realistic about the implications—and throw out the neoliberal playbook in developing our responses. In the context of the TPP, as the CCPA proposed in a recent government consultation, Canada should accept that the treaty is drastically out of step with the times and press for reform.
  
What is, or was, the TPP?
 
Let’s put the TPP in perspective. The deal, part of former president Barack Obama’s “pivot” to Asia, attempted to constrain China’s influence in the region while accommodating the interests of U.S. and European firms profiting off its low-wage workforce. Canada, which had free trade deals with many TPP countries already, initially wanted nothing to do with it. But the Harper government relented to pressure from Canadian corporations worried about losing their share of the U.S. market.
 
When Trump pulled the U.S. out of the deal that equation changed. Canada’s U.S. market share would remain undiluted by potential competition from the TPP region. What’s more, the rules in the TPP agreement—like longer patents on already exorbitantly priced pharmaceuticals and prohibitions on regulating the transfer of personal data across borders—were largely set by the Obama administration to benefit U.S. capital. Canada could live without them and in fact would be better off.
 
For a moment, the Trudeau Liberals—in campaign mode in 2015 and following their landslide election—seemed to acknowledge these downsides to TPP participation. A trade committee was struck to discuss the agreement while Canada and other TPP parties renegotiated certain outcomes based on the U.S. departure. 

Some of the intellectual property rights provisions were paused rather than cancelled, for example, in the hope the U.S. may one day return to the treaty. Labour unions and civil society groups in Canada opposed the deal, with or without these minor adjustments, and urged the new government to walk away.
 
At the end of it all, the Trudeau government signed the pact despite the negative impacts it was likely to have on Canada’s auto and dairy industries, and with the treaty’s harmful investor-state dispute settlement process—the system of private tribunals which allows corporations to take legal action against governments that impose regulations that harm profits. At Canada’s request, the TPP was given a silly and disingenuous new name: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
 
The TPP record in Canada
 
The TPP has had inconclusive effects on Canadian trade outside of a few sectors such as Canadian meat exports (mainly to Japan) and apparel and furniture imports (mainly from Vietnam), which have seen growth that may not have occurred without the treaty. This growth is not consequence free, given high emissions from the meat sector and serious ongoing core labour rights violations in Vietnamese factories.

Government data shows the TPP did not change the character of Canadian trade relations with participating countries. While two-way trade with Malaysia and Vietnam has grown since 2020, for example, Canada is significantly a supplier of agricultural commodities and inputs (fertilizer) and minerals, and an importer of high-value electrical and other finished goods.

Due to the TPP’s lax rules-of-origin (i.e., minimum regional content requirements on a product’s component parts), it is likely that many of the inputs in duty-free products were sourced in non-TPP countries including China. This was a key reason why U.S. labour unions opposed the deal and why the Trump administration eventually pulled the plug on it. 
 
At the same time, the Trudeau government scored an own goal on dairy. New Zealand, a dairy export powerhouse, successfully challenged Canada’s tariff-rate quotas for milk products, a key plank of our supply management system, using the TPP’s dispute settlement system. It is the first and only such challenge to date under the agreement and justifies parliamentary support for a Bloc Québécois private member’s bill that would make sure supply management is never again put on the trade negotiating table. 
 
The TPP dispute panel found that Canada’s practice of giving domestic dairy processors priority access to international import quotas impaired New Zealand’s market access guarantees. As a result, Canada faces a difficult choice: further compromise the integrity of its dairy supply management system by giving New Zealand’s high-intensity and high-methane-emission dairy producers what they want, or face countermeasures against Canadian exports. 
 
Canadian ISDS cases target Mexico
 
While the TPP has been of limited value to most Canadian exporters and directly threatens Canadian dairy farmers, investors are using the treaty’s troubling ISDS system to undermine human rights and environmental policy abroad. There have only been two ISDS cases initiated so far under the TPP, but they are both from Canada-based investors and both target fundamentally legitimate public interest decisions in Mexico.  
 
The first case, from the Caisse de dépôt et placement du Québec, challenged Mexican energy reforms under the previous government of Andres Manuel López Obrador that could eat into the profits of the pension fund’s private power investments. The Canadian and U.S. governments requested USMCA Chapter 31 consultations with Mexico for the same measures and for the same reasons as the Caisse, namely that they “prioritize electricity produced by CFE [Mexico’s state-owned utility] over electricity produced by private producers” in violation of investment guarantees in the renegotiated NAFTA. 
 
While both the ISDS claim and USMCA state-to-state dispute proceedings have been suspended, the Caisse and Canadian governments have kept the threat of a dispute simmering. Imagine how someone like Premier Doug Ford would respond to Mexican investors meddling in Ontario’s policy affairs. President Sheinbaum enacted constitutional amendments on energy at the beginning of November which enshrined the CFE’s role as the country’s preferential electricity provider, saying she was returning what was rightfully a public asset into public hands. The totally responsible move is likely to draw further ISDS challenges.
 
The second, extremely troubling challenge comes from Vancouver-based mining firms Almaden Minerals and Almadex Minerals, who are suing Mexico for $200 million under the TPP due to the cancellation of an open-pit mining concession in the municipality of Ixtacamaxtitlán, in the Sierra Norte of Puebla. The Mexican state revoked the permit following a supreme court ruling that the Nahua and Totonaco Indigenous communities’ right to free, prior and informed consent had been violated. 
 
The conflict between ISDS and state obligations with respect to human rights, including Indigenous Peoples’ rights, and the protection of the environment is well documented. If Canada wanted to correct that in the TPP, by removing or defusing the ISDS process, they would find public and political support in many of the participating countries. Prime Minister Trudeau could try to mend fences with President Sheinbaum by directing his trade minister to broach the subject at this week’s TPP meetings.
 
This may be too much to ask. Canada continues to provide diplomatic cover to bad actors in the mining sector, despite a policy to the contrary. The government is negotiating new ISDS clauses into trade deals, like those with Indonesia (recently concluded) and Ecuador, once again largely in support of its mining and fossil fuel companies. 

This is an anti-inclusive trade agenda, totally contrary to anything you could call progressive. A rhetoric-reality gap you could drive a truckload of gold through, perhaps. It is also self-defeating. 

TPP countries including Singapore and Malaysia are significant investors in Canadian LNG projects at varying states of development. Should governments rethink any of these projects for environmental reasons, they could face punishing ISDS lawsuits such as that from Ruby River Capital against Quebec’s decision to refuse a final permit for the Énergie Saguenay LNG terminal and pipeline.
 
A Trumped up TPP
  
Now there is the Trump question mark. On top of U.S. tariffs on Mexico and Canada, Trump may decide to clamp down on goods from Vietnam, Indonesia, Malaysia and other Asian countries benefiting from Chinese investment, in part to skirt U.S. tariffs. 

It’s conceivable that Trump would ask America’s neighbours and allies to reciprocate, as the Trudeau government did for the Biden administration by raising tariffs on Chinese electric vehicles, aluminum and steel this year. This admittedly hypothetical situation would seriously compromise the TPP project and throw doubt on the feasibility of Canadian free trade deals with Indonesia and ASEAN.

Whether this was discussed in Vancouver we do not know. Nor was the final declaration clear about the TPP review process for 2025. An annex to the ministerial statement makes 12 recommendations for deepening TPP consultations and establishing working groups in a number of areas, but these are without prejudice to other possible review outcomes, which may include renegotiation of the treaty in some areas. 

Financial services and ecommerce are listed as potential targets for renegotiation. Labour, environment and investment protection are not. There is a section on investment facilitation, but this seems to refer to a TPP ministerial dialogue on how member countries can collaboratively discuss investment projects with non-TPP countries outside of the regular accession process.

Canada and Chile appear to have signed a technical cooperation agreement on trade policy analysis. A TPP working group on “inclusive trade” has been established. 

Finally, the statement welcomes that a private think-tank, the Asia Pacific Foundation of Canada, will serve as a repository of public facing TPP materials including joint statements, committee reports, commission decisions, links to TPP information on members’ government websites, and digital tools to support traders, investors, academics, and other stakeholders. 

The CCPA and other civil society groups have been calling on the federal government to provide this service, but it appears the Trudeau government cannot stop contracting out tasks it could easily do itself.

Let’s be honest. The importance of the TPP for Canada’s trade diversification strategy (to the extent we have one) is questionable. The need to reform the agreement, especially its investor-state dispute process, is clear. 

Canada should use the mandatory TPP review period to align the government’s sustainable and inclusive trade rhetoric with its actions, as recommended recently by the Canadian Centre for Policy Alternatives.

For example, as Risa Schwarz proposes in the CCPA submission, the treaty could better protect and facilitate trading relationships with, between and among Indigenous Peoples. The Vancouver meeting provided a space for Canada or other TPP countries to challenge the New Zealand government’s effort to unilaterally weaken the treaty rights of Māori. It’s not clear from meeting documentation that anyone even raised the issue.

The TPP’s labour rights enforcement system could be upgraded through the addition of a worker-initiated dispute process independent of state-to-state dispute settlement, like the one in the new NAFTA. A current request for Canada to investigate core labour rights violations in Vietnam is still under review long after an initial finding was due. As it stands, the TPP’s last-generation labour chapter is only effective to the extent countries are willing to spend political capital to enforce it.
 
Perhaps most critically, for the sake of the planet, the TPP should be aligned and made subservient to binding human rights obligations and environmental treaties including the Paris Climate Agreement, as Kyla Tienhaara describes in the CCPA submission. The fastest way to do that would be to remove the TPP’s outdated investor rights chapter and investor-state dispute settlement (ISDS) process.