Madam Speaker, I am pleased to split my time with the fabulous, hard-working member for Cowichan—Malahat—Langford.
When we talk trade in the House it always strikes me that we have two solitudes. One wants to approach trade from a position of jingoism and simplification and attack anybody who may want to question a particular trade deal as being “not interested” in trade, versus another approach to trade that values the concepts of consultation, of taking care in signing these large major agreements, and in making sure that there is a net benefit to Canada.
I would like to start my remarks today by assessing what the real state of affairs is around the impact of TPP today. There are a lot of exaggerated claims about what these trade agreements would do or would not do and there are some numbers, of course, that get generated.
The previous Conservative government liked to produce an economic impact assessment, keep it to itself, base it on completely wild assumptions like full employment and 100% capital reinvestment of all of the tariff savings back into the economy and all sorts of things that every reputable economist would tell us is just simply nonsense, and then just repeat those numbers.
Let us look at what the most recent numbers are, by sources that study these agreements, on the impact of TPP on Canada.
First of all I would like to point out that there is often confusion, particularly on the Conservative side of the House, when they talk about the size of the market of TPP. They often portray it as if signing this agreement would give us access to a market of so many billions of dollars and so many hundreds of millions of people, when in fact Canada already has access to those markets. The TPP would not give us new access. We already have access to these markets and we are already trading with them.
Similarly, what is not pointed out enough is that of the 12 countries participating in the TPP, five of them already have free trade agreements, including Canada. We already trade with the United States on a free trade basis and with Mexico, Chile, and Peru. Those five countries make up over 80% of the GDP of this region already. What often is not said as well about the TPP is that 97% of Canadian exports entering TPP countries enter those markets tariff free today.
When we start assessing the impact of TPP, we have to put it in perspective but let us see what some reputable groups outside the House have to say.
The C.D. Howe Institute, no left-wing group here, has assessed the impact of TPP 10 years out as having a 0.6% boost to Canada's GDP. The World Bank has estimated that 10 years after TPP is signed it would have a 0.8% boost to Canada's GDP. The most recent study done by Tufts University's centre for global studies estimates it would be 0.28% boost to Canada's GDP 10 years out. If we average these three numbers, the consensus boost to the Canadian economy as a result of signing the TPP would be 0.56%.
In a $1.8 trillion economy, we will call it $2 trillion, that is $10 billion of GDP 10 years out. That is not nothing. That is important. However, clearly, on any rational assessment of the true state of affairs now and what the impact of TPP would be on GDP, it would not have the blockbuster impact touted by its most fervent boosters.
As a matter of fact, economists looking at the TPP also point out that the benefits of TPP would not flow uniformly among the 12 countries. They find that there would be negligible to negative impact on the United States and Canada as a result of this deal, when we look at a number of macroeconomic factors. Maybe that is why the two leading contenders for the U.S. president, Donald Trump and Hillary Clinton, are on record as opposing the TPP in the United States.
They are joined by other people, and again, no left-wingers here. Jim Balsillie, one of Canada's premier entrepreneurs has called TPP an innovation killer for Canada. Nobel Prize-winning economist Joseph Stiglitz, as well, has said the TPP represents the worst trade deal negotiated in the globe today.
Let us talk about jobs. I was fortunate enough to be trade critic for the New Democratic Party for three years and I had the privilege of meeting and talking to many economists about their positions on trade. What I was told repeatedly is that the consensus in economics is that trade deals do not necessarily create jobs. There are many reasons, perhaps, to enter trade agreements, but job creation is not considered one of them by classical economics.
Generally, the consensus is that a trade deal may have a plus or minus 1% impact on jobs, depending on who the parties are and the terms of the deal. What trade deals do, however, is create job dislocation. In other words, some sectors benefit from the trade agreement and employment growth may go up and other sectors suffer damages by the trade agreement and lose employment. Therefore, we have to measure not only the quantitative aspect of job creation or loss but the types of jobs, because good jobs may be lost in one sector and lower-paying jobs may be increased in another sector.
What is the assessment of TPP? It is that TPP is estimated to cost the Canadian economy 58,000 jobs. As I have been pointing out in the debate all day today, that is well known and acknowledged by the Conservatives, whose motion lies before the House, because they themselves told the Canadian public that if they signed the TPP, Canadian taxpayers would have to pay $5.3 billion, and that is not contingent upon losses like they said in other agreements. They would pay $5.3 billion to the agriculture and auto sectors in Canada to compensate them for the damage that even they acknowledged would happen to those two sectors. There is proof of that here.
I now want to talk about the auto sector. If we look at the actual provisions of the TPP, in the auto industry, as has been pointed out by my colleague from Windsor West today, this agreement was poorly negotiated in terms of protecting the Canadian auto sector, because the phase-out of tariffs among Canada and Malaysia and the United States differ.
The United States got a 25-year phase-out period for its auto tariffs. Malaysia got 12 years. Canada got five. Not only that, but the damage to the rules of origin provisions are even worse. Currently, for a car manufactured in North America to qualify for tariff removal between NAFTA countries, 65% of that car and the parts in it have to be made within that jurisdiction. What does the TPP say? It says 35%. That means a car made 65% in Malaysia or China can come into Canada tariff free. If anybody in the House thinks that cars coming into Canada tariff free are not going to damage auto production in Canada, then I want them to stand in the House and say so today, and we will see what happens in five years if this agreement is signed.
I will talk, as well, about agriculture. We all know that Australia and New Zealand were attacking Canada's supply-managed sector relentlessly throughout these negotiations. I will give credit, actually, to the Conservative government for holding firm on the supply-managed sector. However, again, the fact that $4.3 billion would have to be allocated to Canada's agricultural sector, including the supply-managed sector, tells us all we need to know about the impact of the TPP on the agriculture sector.
I want to talk about human rights, because that has not been mentioned enough in the House. Two of the countries that are partners in the TPP are Brunei and Vietnam. Brunei, last year, passed a form of sharia law that makes homosexuality and adultery crimes punishable by stoning to death. Vietnam today uses child labour, prison labour, and in some people's view, virtual slave labour, in addition to being a country that has no respect for democratic traditions whatsoever. Those are not the kinds of countries New Democrats say should be rewarded with economic preferences.
Conservatives have said in the House that they want sanctions on Iran. As recently as last week, they were criticizing the Liberal government for warming relations with Iran. They say we should have sanctions, which is the opposite of preferential economic benefits. They want to punish Iran economically. Why? It is because the Conservatives do not like the politics of Iran. Why do they not say the same thing about the politics of Brunei? Let the Conservatives stand in the House and tell the GLBTQ community in this country that they should be sending economic privileges to a country where people will be put to death for their sexual preference.