Lexpert Magazine

58 LEXPERT MAGAZINE | JUNE 2017 | INTERNATIONAL TRADE | strong trade team in Ottawa, including Jonathan Fried [Canada's ambassador to the World Trade Organization] and Steve Verheul [Canada's chief trade negotiator for CETA]." History also militates in Canada's fa- vour. "Since the days of the Civil War, security has trumped trade," Swick says. "e potential for cooperation in manage- ment of the Canadian-US border, perhaps through some form of perimeter security regime, could be an incentive for the US to see Canada as an even more preferred part- ner than we have historically been. at in turn would solidify our position as a springboard for foreign businesses looking to US markets." As CETA demonstrates, the pros- pects for the "springboard" notion rise and fall to the extent that Canada is successful in negotiating other free trade agreements (FTA). Here, the elephants in the room are Japan and China. Japan is a significant trade partner for Canada, particularly for agricultural products. It is the second largest market for Canadian pork, the fourth largest for beef, and it imports significant quantities of grains and seeds. However, the Japanese market for Canadian goods is facing in- creased uncertainty: Australia has beaten Canada to the punch by becoming the first significant agricultural exporter to enter into a new trading relationship with Japan. e United States has, in addition, indi- cated its own desire to enter into bilateral talks with Japan, an initiative that Trump has deemed a high priority. As it turns out, the Japanese market was a catalyst for Canada's interest in the e approach has worked extremely well for Japan. It also proved beneficial in the 1980s when the notion of "Québec Inc." flourished in French-speaking markets like Algeria. "During the time of the révolution tranquille, we saw a phenomenon where Quebec-based businesses of all sizes co- operated with government to make trade policy work," Woods recalls. "ey treated government as an ally rather than some- thing they had to live with — and we've got to get back to that approach." Fortunately, it's already started happen- ing, particularly with regard to CETA. "Our trade people have been working with the private sector by pointing out what's good for local companies and what they should be doing," Woods notes. "e same thing is happening in Europe." In a worst-case NAFTA scenario, trade will drop off and access will diminish to the US market. New or broadened mar- kets will be critical for our economy. "So let's get busy creating opportunities in Eu- rope and in encouraging partnerships with companies," Woods says. "e EU will un- derstand public-private partnerships, for example, much better than the US does." It's all about building alternative mar- kets in Europe, then, and a similar push in the Asia-Pacific region, perhaps through a reconstituted TPP without the US, or by way of separate agreements with China and Japan. Success here could also prove potent in negotiations with the US. "ey'll see that we're not standing still, that we have something else we can do other than make concessions to them," Woods says. "So if we're strategic and play our cards properly, we could even win in those negotiations, especially because we have a particularly original TPP talks (which included the US). Bilat- eral discussions with Japan were set aside as the TPP negotiations ramped up. It's only recently, during the trade ministers meeting in Chile on the fate of the TPP, that the Canadian govern- ment reached out to Japan to consider talks again. At press time, Japan had not re- sponded and an answer was not expected until at least the Asia Pacific Economic Co-operation (APEC) meeting in Vietnam in May. e answer may not be positive: in testimony to the House of Commons international trade committee in Febru- ary, Japan's ambassador to Canada made it clear that the Japanese government has not given up on the TPP: he urged Canada to ratify it despite the American withdrawal. ere's also considerable domestic sup- port for the TPP's continuance. Conser- vative trade critic and former agriculture minister Jerry Ritz and his colleague Fast both believe that some form of the TPP will survive: "e TPP is hugely important to Canada in the current environment be- cause the US has no trade agreement with Japan," Fast says. "If the TPP survives with Canada as a partner, we will have a huge competitive advantage on the US, as we do with CETA. at's one way in which we can be instrumental in shaping trade in the global marketplace." The conversation about TPP's re- incarnation began at the trade ministers' meeting in Chile in March. It will continue at the APEC meetings. By all appearances, a reconstituted TPP (sometimes called TPP11) could still be game-changing: Can- ada, Japan, Australia and Mexico, four of the world's 20 largest economies, were all partners to the original agreement, with China and South Korea emerging as poten- tial signatories. China in particular may see a TPP without the US as an opportunity to solidify its regional influence. Carlos Dade, Director of the Trade and Investment Centre at the Canada West Foundation, and Deborah Elms, Executive Director of the Asian Trade Centre in Sin- gapore, argue that a revived TPP11 is criti- CLIFFORD SOSNOW > FASKEN MARTINEAU DUMOULIN LLP "Canada is the only country in the world to have such an agreement as deep, complex, and broad as CETA with the EU. Japan and Australia are also trying to negotiate something with the EU, but they're playing catch-up, so right now Canada does have a leg up on the rest of the world."

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