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Submission of Comments to the USTR on Canada's Expression of Interest in the Proposed TPP Agreement

January 13, 2012

Council of the Americas appreciates the opportunity to provide the Office of the United States Trade Representative with comments concerning Canada’s expression of interest in the Trans-Pacific Partnership (TPP). Since 1965 the Council has been dedicated to the promotion of democracy, open markets, and economic and social development based on the rule of law, and we are widely recognized for our policy and commercial leadership throughout the Americas. The Council represents some 200 member companies invested in and doing business throughout the Western Hemisphere.

Council of the Americas strongly supports Canadian participation in the TPP

We view the TPP as the most promising opportunity to drive hemispheric trade expansion with a high-standards approach, and Canada, as our largest trade partner, is a crucial party in that process.

The Council has broad and deep expertise in this regard. We were instrumental in marshaling private sector support for the negotiation and passage of the US-Canada Free Trade Agreement. With the addition of Mexico, this was expanded in 1994 to become the North American Free Trade Agreement. After working for several years on NAFTA implementation issues, the Council of the Americas established the North American Business Committee, which organized the trilateral meeting in Louisville in 2006 that convinced the US Government to invite the Council of the Americas to serve as the co-secretariat for the United States of the North American Competitiveness Council, a group of business leaders from Canada, Mexico, and the United States formed in 2006 and active until 2009. Under Council leadership, the NACC coordinated advice from the private sector for the three North American leaders on enhancing North America’s competitive position, promote increased employment, and foster higher living standards.

Given this background, the Council continues to believe that steps that enhance economic integration between the United States and Canada are both logical and meaningful as we seek to build global competitiveness for the United States. To provide a better idea of what the commercial partnership with Canada means to our country, the bilateral trade relationship is the world’s largest. Total merchandise trade reached some $525 billion in 2010. Canada is the largest market for US products, our top supplier of foreign energy, and a vibrant contributor to US economic health.

North America is increasingly integrated

Canada’s inclusion in the TPP would potentially deliver an important boost to the economy of North America. NAFTA has enhanced prosperity for the people of all three countries that are party to the agreement through increased trade and investment, stronger economic growth, and lower prices for consumers. But NAFTA is now nearly 20 years old, and technologies, products, and trade disciplines that did not exist when NAFTA was signed were, unsurprisingly, not adequately considered. As well, we have now developed joint production and supply chains to such an extent that, from the commercial perspective at least, national borders no longer define products. It is no longer accurate to think in terms of “US” or “Mexican” or “Canadian” products when North America itself has become the production platform. We are strategic production partners. From this perspective, it makes little sense for the United States to enter into potentially significant trade arrangements with countries in the Pacific region without our NAFTA partners. The TPP offers a promising vehicle to support the updating of our bilateral and trilateral trading relationships within North America to the high standards of 21st-century free-trade agreements.

Canada would be a valued party to the negotiations

As a nation that shares US commercial and political values, Canada can also be an important ally in promoting the new disciplines that would improve the efficiency of North American supply chains and allow the United States and Canada to explore new markets for jointly-produced goods. TPP issues, including regulatory cooperation, trade facilitation, and innovation, would parallel the North American competitiveness agenda, mutually reinforcing both agendas.

As a nation with an impressive trade expansion pedigree—in addition to their many other initiatives, for example, Canada concluded hemispheric trade agreements with Chile and Colombia prior to the United States—Canada has shown leadership on these issues at times surpassing even ourselves.

As a member of the G8 and G20, as well as NATO and with boots on the ground in the Middle East, Canada is a global player and strategic ally of the United States.

As a Western Hemisphere nation, the addition of Canada would help balance the scales to ensure that the TPP is a true pan-Pacific agreement, rather than an agreement that is primarily focused on Asia.

Canada’s participation would have regional benefits

Down the line, Canada’s participation in the TPP could also create a critical mass encouraging other nations in the region to come to the table to build a broader trade-integration paradigm based on a comprehensive approach. In this regard, the Council believes that membership in the TPP should not exclude non-APEC members, but potentially include all nations of the Pacific region willing and able to sign on to the high standards, comprehensive approach to trade and investment liberalization represented by the TPP. On trade, economic development, and foreign policy grounds, it should also be open to additional Latin American countries such as Colombia, Panama, and others as appropriate.

The path forward should be expedited

In sum, public backing for expedited Canadian entry into the TPP would be a strong signal of continued US support for arguably our closest ally. This is not to say that there are no outstanding issues of bilateral concern; all negotiating partners must be willing to put all issues on the table and commit to meeting the TPP’s high standards. Nonetheless, it is time to move forward with the next chapter of the hemispheric trade agenda, and the TPP offers a unique opportunity to update and improve on existing trade agreements.

The Council urges the Administration to prioritize the Trans-Pacific Partnership as a vehicle for advancing economic integration with like-minded countries not only in Asia, but also in the Western Hemisphere.