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Income and quota value guarantees are expensive and seem destined to impede

The new Liberal government will consult with Canadians regarding our involvement in the Trans-Pacific Partnership (TPP) — the 12-country trade deal that was recently announced. International Trade Minister Chrystia Freeland indicated this review will include the $4.3 billion package that the previous government promised to supply-managed sectors (the dairy, chicken, turkey, egg and hatching egg industries) as compensation for TPP.

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These consultations are a welcome development as Canada looks to potentially implement major trade deals — not only TPP, but also an earlier agreement with the European Union (CETA). Taking the opportunity to rethink whether to offer government compensation, and if so, how best to do it, is a worthwhile exercise.

While trade liberalization offers long-term economic benefits, trade deals can entail difficult adjustments for some firms and workers. To aid the transition, some countries — including the United States — offer dedicated trade adjustment assistance (TAA) programs to affected workers or firms. These programs typically provide workers with temporary income support and retraining subsidies.