A tentative agreement reached on a sweeping Pacific Rim trade pact is expected to be a net benefit to British Columbia, which already has extensive trade links with Asia. Most business and industry leaders here said had Canada — and British Columbia — not been part of the 12-country Trans-Pacific Partnership, it would likely have lost market share and faced the threat of becoming marginalized in the growing Asian economy. B.C. will face reduced tariffs and trade barriers — along with the U.S. — into Japan, Malaysia, Vietnam, Singapore, Brunei, Chile and Peru. Australia, New Zealand and Mexico are also part of the deal. First, however, the deal requires political approval. To take effect, the pact must be ratified by the parliaments and law-making authorities of all 12 member countries. Canada will be the first political testing ground — the agreement lands smack in the midst of a federal election campaign that will decide who will control the Parliament that determines whether it lives or dies. The Canadian government appears to have guaranteed the long-term entrenchment of the supply-managed sector, which is detested by free-market economists but backed by every major political party and provincial government, and the domestic dairy lobby. Canada agreed to 3.25-per-cent more imports, a minuscule change compared to what some countries asked for. That means a bit more of international products like butter on grocery shelves now 90-per-cent dominated by domestic content. For their loss, the government would compensate Canadian farmers billions of dollars under a series of programs over at least 10 years. Among business and industry groups in the province that support the deal are the B.C. Business Council, the B.C. Chamber of Commerce, the Vancouver Board of Trade, the Mining Association of B.C., the Council of Forest Industries and the B.C. Seafood Alliance. However, producers in some of B.C.’s supply-managed sectors whose product is mostly sold domestically, such as dairy and poultry, don’t like the deal because it means they will lose Canadian market share to foreigners. Some expressed frustration that the deal was negotiated in secret, a common criticism of the agreement. University of B.C. professor Keith Head said just as the North American Free Trade Agreement was about embracing Mexico into a new trading block, the Trans-Pacific trade pact is about Japan becoming part of a new Asia-Pacific trading block. Japan has the third-largest economy in the world behind the U.S. and China, but has previously resisted trade agreements. Head, a professor of Asian commerce, said he also believes the deal signals an important shift by the U.S. under president Barack Obama toward a Pacific economy. Had Canada stayed out of the deal, it would have been at a disadvantage to the United States, which would faced lower or eliminated tariffs, he said. “I actually find it kind of exciting because we in Vancouver are so closely linked to these countries. To move forward with this kind of agreement, it does have positive aspects,” said Head. The two largest complaints of the deal — loosening protection for dairy, poultry and egg producers and for the auto sector — are not big hits for British Columbia, he said. The dairy and egg sectors are estimated to contribute less than one per cent of B.C.’s gross domestic product, a measure of the economy, and the province’s auto sector is small.

On the other hand, the countries that are part of the new trade deal accounted for $22.5 billion in exports from B.C. in 2014, nearly two thirds of its total international exports, according to Canadian and B.C. data. Japan alone accounted for $3.64 billion in exports from B.C., led by copper, coal and lumber. B.C. trades less with some other countries in the pact: $104 million with Vietnam and $67 million with Malaysia. The deal will eliminate or reduce tariffs over time on a broad series of products including pork, fruit, wine and spirits, canola, barley, machinery, minerals and forestry products. As one example, the Canadian beef industry expects to see exports triple to Japan, with a multi-year phase-out in tariffs there from 39 per cent to nine per cent. B.C. Business Council chief policy officer Jock Finlayson said a big concern is what would have happened had Canada and B.C. not been part of the trade deal. “Some are saying we should say no, but the reality is we would become completely marginalized in terms of the emerging Asia-Pacific trade block,” said Finlayson. As of Monday, there was still no publicly available version of the text of the agreement. While two B.C. government ministers, Teresa Wat and Shirley Bond, put out statements touting the benefits of the deal for this province, the government admitted that while it had reviewed some iterations of the agreement text, it did not have a copy of the final draft text and would have to review that final version when it is released in the coming weeks. Bond, the jobs minister, said the province had negotiators at the table and its interests were represented well. “We have amazing products, if you look at areas like cherries, blueberries, if you look at forestry products — we think we have the ability to be the lead in looking at North America and that connection in the Asia-Pacific,” said Bond. One concern is that the deal is likely to increase drug costs because it extends the amount of time pharmaceutical companies have patent protection, which delays the production of lower-cost generic drugs, said drug policy researcher Alan Cassels. “It’s going to drive prices higher for us, but I think the more concerning thing is higher prices for life-saving drugs in the developing world,” Cassels said. “So, drugs for tuberculosis or anti-malarials … when you start tinkering with the patent protection in the poorer countries in the world, people die.” ghoekstra@vancouversun.comtcarman@vancouversun.comWith files from Rob Shaw, Vancouver Sun, and The Canadian Press B.C. reaction to the Trans-Pacific Partnership B.C. Poultry Association The head of the B.C. Poultry Association, Ray Nickel, said he had few details Monday of what the TPP would mean for this province’s industry. He called the lack of information “frustrating.” “We’re trying to figure out what this means,” he said, noting that poultry producers in B.C. sell primarily to the Canadian market, in which producers control the prices, a practice known as supply management.

The big worry for poultry producers is losing market share to heavily subsidized American competitors, he said. This is what makes poultry so much cheaper in the U.S. “Americans would constantly like to have more access into our markets because they potentially see prices being higher here, which may or may not be true,” he said. “At face value it seems that we’ve obviously given up some (market) access, but there seems to have been a pretty good intention by those negotiating to hold the line,” he said, adding that he believes the TPP is an important deal for the country to have signed on to. B.C. Dairy Association Chair Dave Taylor was strongly critical of the deal, which he said amounted to “taking cows out of the barn” and a loss of ability to produce milk within B.C. The TPP allows 3.25 per cent more imports, which amounts to 23 million litres of milk that could have been produced in B.C. but will now be produced abroad next year, Taylor said. “We have taken a hit here in B.C. when it comes to future production … we’re really disappointed.” The government is offering billions in compensation to affected farmers, but Taylor said farmers would rather produce the milk in Canada. B.C. Seafood Alliance Executive director Christina Burridge called the deal a “very positive move for wild seafood in B.C.” “Asian markets account for a very substantial proportion of our exports and this keeps us in the market in a competitive position,” she said. “I think that the Japanese market in particular is one that’s going to make a significant difference to us because it means that our prices will be reduced to our Japanese customers as the tariffs come off.” B.C. exports products such as herring roe, sablefish, urchins, prawns and salmon to Japan, Burridge said, and tariffs can range between 3.5 and 11 per cent. Increased access to the market in Vietnam, where tariffs on B.C. seafood products can be as high as 34 per cent, will also be a huge benefit, she said. B.C. Agriculture Council Chair Stan Vander Waal said the deal will be good for many of B.C.’s farmers and ranchers. Sectors such as grain, cattle and pork will have access to new markets, he said. Reduced tariffs for Canadian beef products in Japan are likely to be especially beneficial. “I think that’s an affluent market that they’re hoping to tap into,” he said. Reductions in tariffs for fruits, wines and spirits in other countries will also help B.C. producers, Vander Waal said. Supply-managed sectors such as poultry and dairy have some “legitimate concerns” with the TPP, he added, calling on the government to work with these sectors to mitigate the losses. B.C. Mining Association