First, I'd like to thank this committee for holding these hearings today on the Trans-Pacific Partnership and for inviting us to speak.
The USW is the largest industrial union in North America, representing more than 250,000 active and retired members in Canada. Our members proudly work in virtually every tradeable sector, from mining and metals, glass and rubber, paper and forestry, automotive and aerospace to countless other areas, including services, universities, health care, and security.
In the TPP text we see little to suggest that this deal will provide a net benefit for ordinary Canadians. We believe the TPP will not resolve the most important challenges that have decimated our manufacturing base in recent years, and we worry that this government has not fully considered the broad impacts the TPP will have on the Canadian economy, on public policy, and on Canadian workers and their families.
To be clear, the USW is not opposed to trade agreements. We recognize that Canada is a trading nation. Trade agreements that include reasonable reciprocity and fair trading provisions and adequate labour and environmental standards can serve to strengthen our economy.
But this agreement is not about free trade. It is worth remembering that currently 97% of Canadian exports to TPP countries already occur duty-free. Shockingly, the federal government has yet to complete a comprehensive economic and sectoral impact assessment of the TPP. We have signed on to a deal with little evidence that it will benefit Canadians.
In fact, independent studies suggest that the alleged benefits of the TPP have been grossly overstated. One recent study predicts the TPP will cause more than 58,000 job losses and will shift substantial wealth from workers to the corporate sector and exacerbate inequality. We believe that the very purpose of the TPP is to coerce governments into making concessions that they would not be able to justify to their constituents.
These treaties are better called investor rights agreements, and we do Canadians a disservice by not recognizing this fact. What we have is a managed trade regime, and the question we must ask ourselves is cui bono, or in whose interests the rules of the market economy are made.
Turning briefly to tariff reduction, we believe that the TPP will undermine an already weakened manufacturing base in this country. The privileged access of Canada's auto parts manufacturers to North American markets will be eroded, and Canada's 6.1% tariff on vehicle imports from Asia will be eliminated in just over five years, which will threaten 20,000 well-paying jobs.
The impact of these provisions will surely bleed into other areas of this country's industrial and manufacturing base and further lock Canada into a pattern of unprocessed raw materials export.
We are worried about the damage this deal could cause to the steel industry, which is already under severe stress as a result of foreign competition, dumping, and currency manipulation. The TPP will also drastically erode national and international protections for labour, among other things driving down the wages of workers in Canada by putting them into competition with poorly paid foreign workers, both at home and abroad.
Restrictions on generic medicines will increase drug prices throughout the world with serious implications on global health and well-being.
The TPP reduces environmental protection that minimizes the harm caused by logging, resource extraction, pollution, and global warming.
Most troubling however, are the controversial investor-state dispute settlement provisions—chapter 28—which are really at the heart of the TPP. ISDS operates beyond the domestic jurisdiction of states and national legal systems as it forces sovereigns into private arbitration systems dominated by international trade lawyers and economists.
In effect, ISDS severely constrains environmental, health and safety, and financial regulations deemed to have significant impacts on the ability of foreign companies to profit from their investments, but ISDS does not require of investors equivalent responsibilities to respect environmental, anti-corruption, or labour standards. ISDS leaves governments vulnerable to costly legal battles when foreign investors say they have suffered financial losses. For example, under NAFTA's chapter 11, Canada has been subject to 35 ISDS claims, with 63% of them challenging environmental protection or resource management measures.
ISDS under the TPP reflects a further evisceration of the roles of domestic policy and institutions in the Canadian economy and poses even greater risks for governments and domestic stakeholders.
Under the previous federal government, TPP negotiations were conducted behind closed doors with no input from civil society. We regard these discussions as illegitimate. We commend this committee for its efforts to consult the public in advance of making any decision to ratify the treaty, but there is no reason for this government to ratify the TPP, even as the leading U.S. presidential candidates, as well as congressional Democrats and Republicans, voice concerns. There are ways to reopen the treaty in order to preserve jobs, protect the environment, limit the power of multi-national corporations, and avoid higher drug prices.
There is a better deal for Canada, and this government can push for renegotiation or decline to ratify the deal on Canada's behalf. We strongly urge you to make this recommendation.
Thank you.