For Ottawa, Obama’s fast track trade is both nightmare and opportunity

The U.S. Congress passed President Barack Obama’s long-sought trade negotiating authority this week...

This “fast track” Trade Promotion Authority (TPA) is an essential condition for countries negotiating trade deals with the United States. First, because Congress has as much constitutional authority as the executive branch in international trade, the President needs a legislative mandate from that body to conclude trade deals.

Second, under this authority, Congress relinquishes its power to tinker with a concluded agreement in demanding further concessions from other countries as the price of its ratification. Its scope of action is limited to approving the treaty or rejecting it entirely.

There’s more to come, however. While this week’s fast-track bill gives comfort to the 11 other governments in the Trans-Pacific Partnership (TPP) trade negotiations, it doesn’t guarantee free sailing to a finalized agreement.

First, the bill sets out dozens of mandated objectives for Mr. Obama’s team, detailed ingredients to be pursued and achieved for a final TPP deal to pass congressional muster. These stated objectives put considerable pressure on the other participants to agree to substantial market-opening concessions.

Second, there are strict conditions for congressional oversight and, in many respects, direct involvement in the talks on a continuous basis. Under the TPA bill, the U.S. team must give Congress continual reports and allow ongoing involvement as the last stages of talks unfold.

This means that, at any point, on any particular item, Senate and House committees, pushed by domestic lobbying, can express disagreement and make it clear that more concessions from other countries, including Canada, are needed to get the final TPP package approved.

The TPA bill places Canada in a very tricky position. Indeed, it’s a dual nightmare, one that enmeshes Canada’s dairy lobby and the federal Conservative government in the same set of issues. As many have written, Canada has lost significant leverage in the TPP exercise because of the government’s unyielding defence of Canada’s Soviet-style supply management system, which basically prevents imports and provides protectionist cover for dairy producers, as well as poultry and egg farmers...

Instead of the regrettable “small Canada” defence of an increasingly indefensible system, supply managed industries should redirect their efforts, with Ottawa’s leadership plus some financial incentives, aiming to be global leaders in their industries and embracing the manifold commercial opportunities out there in the real world. But time is short. Thanks to the U.S. Congress, the TPP is moving forward. For Canada, standing pat on decades-old policies is not the answer.

This has been excerpted from 25 June 2015 article by Lawrence Herman, international trade lawyer, for The Globe and Mail.