How does the TPP help Saskatchewan?
Advantages of the Trans-Pacific Partnership Agreement for Saskatchewan
The Trans-Pacific Partnership is the most comprehensive trade agreement in the world. The TPP will help deepen Canada’s trade ties in the dynamic and fast-growing Asia-Pacific region while strengthening our existing economic partnerships with our partners in the North America Free Trade Agreement and across the Americas. It currently comprises 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), representing a combined market of nearly 800 million people and a gross domestic product (GDP) of $28.5 trillion. With the TPP, Canada has now concluded free trade agreements with 51 nations, ensuring Canadian businesses have access to over 60 percent of the world’s economy. The TPP and trade agreements with the European Union and South Korea make Canada the only G-7 nation with free trade access to the United States and the Americas, Europe, and the Asia-Pacific region.
Saskatchewan merchandise exports to TPP countries averaged $23.6 billion annually from 2012 to 2014, despite the presence of many impediments to trade. The TPP will eliminate tariffs on almost all of Saskatchewan’s key exports and provide access to new opportunities in the Asia-Pacific. The TPP also creates strong and enforceable rules that will help Canadians do business in TPP countries – with provisions that will reduce regulatory barriers, increase transparency and reinforce intellectual property rights.
Saskatchewan Exports to TPP Countries (2010-14) (millions of Canadian dollars)
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Saskatchewan Exports to TPP Countries by Sector (2012-2014) (millions of Canadian dollars)
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Main advantages for Saskatchewan :
duty-free market access for the majority of industrial goods, including metals and minerals, and agricultural equipment;
duty-free market access for most agricultural and agri-food products, including feed wheat and feed barley,canola seed and oils, dried peas/beans, and dog and cat food, as well as enhanced market access for food wheat, food barley and malt;
duty-free market access for wood and other forestry products, including lumber and oriented strand board;
improved market access commitments for temporary entry of highly-skilled Canadian business persons;
more transparent and predictable access for services suppliers in key sectors, such as construction and research and development services;
predictable, non-discriminatory rules for Canadian investors;
strong provisions on non-tariff measures, backed up by fast and effective dispute settlement provisions.
Examples of Tariffs Applicable to Saskatchewan's Exports
Text Version
Opening new markets for Saskatchewan’s products in the TPP
Industrial goods
Some 45,500 Saskatchewanians work in the industrial goods sector, with the sector accounting for 24.6 percent of Saskatchewan’s GDP in 2014.
Trade snapshot
From 2012 to 2014, Saskatchewan’s exports of industrial goods to TPP countries were worth an annual average of $17.7 billion. The TPP will significantly improve market access opportunities for Saskatchewan’s industrial goods sector, including metals and minerals and industrial machinery.
Tariff elimination will help make Saskatchewan’s exports of industrial products more price-competitive with domestic production in all TPP countries.
Tariff elimination
The majority of Canadian industrial goods exported to TPP countries will be duty-free immediately upon entry into force. With certain exceptions, the TPP will eliminate the majority of remaining tariffs on industrial goods within 10 years. This will create market access opportunities for Saskatchewan’s exporters across a number of industries.
Metals and minerals
Saskatchewan is one of Canada’s leading metal producers. It also has two of the most desired minerals in the world, potash and uranium, and is the world's leading supplier of both commodities, accounting for about 30 percent of global potash production and 18 percent of global uranium production. From 2012 to 2014, Saskatchewan exported an annual average of $16.7 billion worth of metals and minerals to TPP countries. This included petroleum products, potash, as well as metals such as iron and steel and aluminum. The growth in emerging markets, including those in the TPP, means significant potential for strong, long-term demand for minerals and metals produced in Saskatchewan.
Examples of metal and mineral products exported by Saskatchewan to TPP countries that will benefit from tariff elimination include:
Aluminum products:
In Japan, tariffs of up to 7.5 percent will be eliminated upon entry into force;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
In Malaysia, tariffs of up to 30 percent will be eliminated within 10 years;
In Vietnam, tariffs of up to 27 percent will be eliminated within three years.
Iron and steel products:
In Japan, tariffs of up to 6.3 percent will be eliminated within 10 years;
In Malaysia, tariffs up to 25 percent will be eliminated within 10 years;
In Vietnam, tariffs of up to 40 percent will be eliminated within 10 years;
In Australia, tariffs of up to 5 percent will be eliminated within four years.
Petroleum products:
In Japan, tariffs of up to 7.9 percent will be eliminated within 10 years;
In Vietnam, tariffs of up to 30 percent will be eliminated within 10 years.
Agricultural equipment
Saskatchewan is headquarters to several large agricultural equipment manufacturers. From 2012 to 2014, exports of agricultural equipment to TPP countries averaged $405.8 million per year. By eliminating tariffs on key exports, the TPP will create new market access opportunities for this innovative Canadian industry.
Examples of agricultural equipment products that will benefit from tariff elimination include:
Harvesters, mowers and other agricultural equipment:
In Vietnam, tariffs of up to 5 percent will be eliminated within three years;
In Malaysia, tariffs of up to 30 percent will be eliminated within three years;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
In New Zealand, tariffs of up to 5 percent will be eliminated upon entry into force.
Miscellaneous agricultural machinery:
In Vietnam, tariffs of up to 20 percent will be eliminated within three years;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force.
Beyond tariffs
The TPP includes a chapter on technical barriers to trade (TBT). The provisions build on the World Trade Organization Agreement on Technical Barriers to Trade and the NAFTA, helping to ensure that unnecessary or discriminatory regulatory requirements do not undermine key market access gains negotiated elsewhere in the Agreement.
The TBT Chapter requires that technical regulations not be used as barriers to trade and aims to create a fair, predictable, and open regulatory system that promotes, rather than hinders, the flow of goods. It also includes provisions that will help identify ways to either prevent non-tariff barriers or deal with them when they do arise. In addition, sector-specific outcomes have been negotiated through seven sector annexes, covering cosmetics, medical devices, pharmaceuticals, wines and spirits, information and communications technologies (ICT), proprietary formulas for certain food products and additives, and organics.
In the Regulatory Coherence Chapter, each of the TPP Parties will endeavour to put in place mechanisms to facilitate interagency coordination and review of domestic regulatory measures, prevent conflicting or duplicative regulations, and make recommendations for improvements.
Minimizing technical barriers to trade will help maximize market access for Saskatchewan’s exports.
Small and medium-sized enterprises
Canada’s small and medium-sized enterprises (SMEs) make up the vast majority of Canadian businesses and employ more than 7.5 million Canadians, about 70 percent of the private sector labour force.
For the first time in any Canadian free trade agreement (FTA), the TPP includes a dedicated chapter with specific measures to assist SMEs to help them take full advantage of the opportunities that the Agreement will create. This reflects the Government of Canada’s commitment to significantly increase the number of Canadian SMEs exporting to emerging markets.
Complementing commitments across the Agreement – including on market access, paperwork reduction, Internet access, trade facilitation and express delivery – the TPP SME chapter includes provisions specifically targeted at positioning SMEs for success. In order to ensure SMEs have access to information they need to do business in the TPP markets, Parties will establish user-friendly websites with information on the Agreement text and explanations of key provisions, as well as information on customs procedures, technical standards, foreign investment regulations, business registration procedures, employment regulations and taxation.
The SME chapter also establishes a committee to review how well the TPP is serving SMEs and to consider ways to enhance its benefits. The committee will oversee cooperation and capacity building activities that support SMEs, including through export counseling, assistance and training programs, information sharing and trade finance.
Advantages of the TPP
Canada has obtained a tariff outcome that will help level the playing field with key competitors and provide enhanced market access opportunities in specific areas of interest to Saskatchewan.
Agricultural and agri-food products
Some 47,500 Saskatchewanians work in the agricultural and agri-food sector, with the sector accounting for 7.7 percent of Saskatchewan’s GDP in 2014.
Trade snapshot
Canada is one of the largest agricultural producers and exporters in the world. With almost half of Canada's total agricultural production exported, the potential for growth in the sector lies in its ability to expand into markets abroad. Agricultural exports from Saskatchewan to TPP countries averaged $5.7 billion per year from 2012 to 2014, including canola, wheat, barley and malt. Under the TPP, Saskatchewan will benefit from new market opportunities for its agricultural products.
Tariff elimination
Examples of agricultural products that will receive improved market access include:
Canola seed and canola oil:
In Japan, tariffs of up to 13.20 yen/kg on canola oil will be eliminated within five years;
In Vietnam, tariffs of 5 percent will be eliminated within five years.
Malt:
While malt already enters Japan duty-free under a quota system open to multiple countries, a duty-free Canada-specific quota of 89,000 tonnes for unroasted malt will be available upon entry into force, and will provide greater certainty to Canadian exporters;
In Vietnam, tariffs of 5 percent will be eliminated within three years.
Dried peas:
In Japan, in-quota tariffs of 10 percent will be eliminated upon entry into force, while over-quota tariffs of 354 yen/kg will be eliminated within 10 years;
In Vietnam, tariffs of up to 10 percent will be eliminated within two years.
Dried beans:
In Japan, in-quota tariffs of 10 percent will be eliminated upon entry into force;
In Vietnam, tariffs of 10 percent in Vietnam will be eliminated within two years.
Dog and cat food for retail sale:
In Japan, tariffs of more than 59.50 yen/kg will be eliminated within five years;
In Vietnam, tariffs of 7 percent will be eliminated upon entry into force.
Honey:
In Japan, tariffs of 25.5 percent will be eliminated within seven years;
In Vietnam, tariffs of 10 percent will be eliminated upon entry into force.
New access for Saskatchewan wheat and barley
Saskatchewan is home to the most important grain-producing region in Canada. More than 14 million acres of wheat and barley are in production every year in Saskatchewan, about one-third of the province’s total annual cropped acreage. Saskatchewan also ships, on average, 6.5 percent of the world’s wheat exports and 5.6 percent of barley exports.
From 2012 to 2014, Saskatchewan’s annual exports of wheat and barley to TPP countries were worth, on average, $1.2 billion per year.
Wheat
In Japan, feed wheat will be duty-free, quota-free upon entry into force. Mark-ups on food wheat will be reduced by 45 percent within eight years;
Canada will also have access to a Canada-specific quota for food wheat which starts at 40,000 tonnes and grows to 53,000 tonnes within six years. Mark-ups within this country-specific quota will be reduced by 45 or 50 percent;
In Vietnam, tariffs of up to 5 percent on all wheat will be eliminated upon entry into force.
Barley:
In Japan, food and feed barley fall under a quota system with mark-ups. Feed barley in Japan will be duty-free, quota-free upon entry into force;
Mark-ups applied to the price of food barley by Japan will be reduced by 45 percent within eight years;
Canada will also have access to a TPP-wide quota for food barley which starts at 25,000 tonnes and grows to 65,000 tonnes within eight years.
Protecting and preserving Canada’s supply management system
The Government of Canada announced a series of new programs and initiatives for supply-managed producers and processors to support them throughout the implementation of the Trans-Pacific Partnership (TPP) and the Canada-EU Trade Agreement. Under both agreements, the three pillars of the supply management system will remain protected.
The following programs will be implemented:
The Income Guarantee Program will keep producers whole by providing 100 per cent income protection to producers for a full 10 years from the day TPP comes into force. Income support assistance will continue on a tapered basis for an additional five years, for a total of 15 years. $2.4 billion is available for this program.
The Quota Value Guarantee Program will protect producers against reduction in quota value when the quota is sold following the implementation of TPP. $1.5 billion has been set aside for this demand-driven program, which will be in place for 10 years.
The Government also announced two additional programs:
The $450 million-Processor Modernization Program will provide processors in the supply-managed value chain with support to further advance their competitiveness and growth.
The Market Development Initiative will assist supply-managed groups in promoting and marketing their top-quality products. To support the initiative $15 million in new funding will be added to the AgriMarketing Program.
In addition to the long-term $4.3-billion investment outlined above, the Government will intensify on-going anti-circumvention measures that will enhance our border controls. These measures include requiring certification for spent fowl, preventing importers from circumventing import quotas by adding sauce packets to chicken products, and excluding supply-managed products from the Government of Canada’s Duties Relief Program. Cheese compositional standards, introduced by the Government of Canada in 2008, have been maintained. The Government remains committed to ensuring they are enforced, so the standards we have for Canadian cheese are fully maintained.
The Canadian Dairy Commission and the Farm Products Council of Canada will work with Agriculture and Agri-Food Canada to ensure the Income Guarantee and Quota Value Guarantee programs are delivered to producers in an effective and efficient manner. The Government will continue to work closely with dairy, poultry and egg producers and the entire supply-managed sector to implement these initiatives.
These Cabinet-approved initiatives will support producers and processors throughout the implementation period of TPP and the Canada-EU Trade Agreement.
The TPP will secure new market access opportunities for Canadian dairy, poultry and egg exports. Dairy, poultry and egg producers and processors will benefit over time from increased duty-free access to the United States and all other TPP countries. This will include complete tariff elimination on some specialty cheeses, including several artisanal cheeses, entering the United States.
Despite significant and broad demands from several of our TPP negotiating partners, Canada has offered only limited new access for supply-managed products. This access, which will be granted through quotas phased in over five years, amounts to a small fraction of Canada’s current annual production: 3.25% for dairy (with a significant majority of the additional milk and butter being directed to value-added processing), 2.3% for eggs, 2.1% for chicken, 2% for turkey and 1.5% for broiler hatching eggs.
Beyond tariffs
It is essential for all countries to be able to maintain measures to ensure that food is safe for consumers, and to prevent the spread of pests or diseases in animals and plants. It is also important that these measures not be used to unnecessarily restrict trade or create unfair barriers for exporters.
That is why the TPP includes a chapter on sanitary and phytosanitary (SPS) measures. The provisions build on the World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures and will help ensure that TPP market access gains for Canadian agricultural and agri-food and other products are not undermined by unnecessary and unjustified SPS-related trade restrictions. The SPS Chapter also establishes a committee, which will allow experts from TPP Parties to discuss SPS issues, thus facilitating trade and enhancing cooperation.
Protecting the food safety system and the health of Canadians
Protecting the health and safety of Canadians is of the utmost priority for the Government of Canada. All food products imported into Canada must meet robust health and safety regulations to ensure maximum protection for Canadian consumers.
The TPP protects Canada’s right to maintain and implement measures to ensure food safety for consumers as well as to protect animal or plant life or health. Food product imports will only be accepted if they meet Canada’s rigorous health and safety requirements, which have been fully protected.
Advantages of the TPP
Many of the TPP members are net importers of agricultural and agri-food products, while Canada is a significant global supplier of high-quality agricultural products. The TPP will help position Saskatchewan to take advantage of significant market opportunities in established as well as in new and emerging markets.
Wood and other forestry products
Some 2,600 Saskatchewanians work in the wood and forestry sector in 2014.
Trade snapshot
Saskatchewan has a well-established and competitive forest industry, with leading-edge technology. There are ten large forest product manufacturing facilities producing lumber, pulp and panels, and over 100 small forest businesses producing a variety of forest products.
Saskatchewan’s exports of wood and other forestry products to TPP countries averaged $210.7 million per year from 2012 to 2014. Japan applies tariffs of up to 10 percent on wood and other forestry products, Vietnam of up to 31 percent, Malaysia of up to 40 percent, Brunei of up to 20 percent, and Australia and New Zealand of up to 5 percent.
Tariffs for these products will be eliminated under the TPP.
Tariff elimination
Examples of wood and other forestry products exported by Saskatchewan to TPP countries that will benefit from tariff elimination include:
Lumber:
In Japan, tariffs of up to 6 percent will be eliminated within 15 years;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
In Brunei, tariffs of up to 20 percent will be eliminated upon entry into force.
Oriented strand board:
In Japan, tariffs of up to 6 percent will be eliminated within 15 years;
In Malaysia, tariffs of 20 percent will be eliminated upon entry into force;
In Brunei, tariffs of up to 20 percent will be eliminated upon entry into force;
In Australia, tariffs of 5 percent will be eliminated upon entry into force;
In New Zealand, tariffs of 5 percent will be eliminated upon entry into force.
Beyond tariffs
Technical barriers to trade (TBT) are technical regulations that can include various testing and certification requirements. While these measures are usually designed to achieve legitimate policy objectives in a country, they can sometimes restrict trade by being overly burdensome or discriminatory against imported goods. The TPP includes robust TBT provisions that, for example, promote the use of international standards and greater transparency in the development of technical regulations.
Strong and enforceable SPS provisions will also help to ensure that TPP market access gains for wood and other forestry products are not undermined by unnecessary or overly burdensome SPS-related requirements.
Advantages of the TPP
As one of the top exporters of wood and other forestry products worldwide, the TPP will provide Canada with a significant price advantage over key competitors who are not in the TPP.
Opening new markets for Saskatchewan’s services in TPP markets
Trade snapshot
The services sector employs some 392,600 Saskatchewanians, with the sector accounting for 55.4 percent of the province’s total GDP in 2014. Jobs in this sector are traditionally highly-skilled and well-paying.
Enhanced market access commitments
The Agreement will provide Canadian service suppliers with greater predictability, guaranteeing both existing levels of access as well as improvements to existing measures by TPP Parties in the future.
The TPP has secured commitments that go beyond the WTO General Agreement on Trade in Services (GATS) and beyond Canada’s FTA commitments with several of the TPP countries.
Canadian service sector suppliers will benefit from enhanced market access commitments, including for:
construction and/or transport services in markets such as Australia, Vietnam and New Zealand;
research and development in markets such as the United States, Australia, Japan, Chile, Malaysia, New Zealand, Singapore and Vietnam;
computer-related services in Mexico, Chile, Malaysia and the United States;
professional services (e.g. legal, engineering and architectural) in markets such as Mexico, Chile, Singapore and the United States;
mining-related services in Chile, Malaysia, New Zealand and Brunei;
environmental services in markets such as Vietnam and Malaysia;
services incidental to energy distribution in Chile, Malaysia and Singapore.
Temporary entry for business persons
The TPP improves upon commitments for temporary entry of highly-skilled business persons, making it easier for them to temporarily move between Canada and TPP markets. For example, the TPP includes commitments that facilitate the temporary entry of Canadian business visitors, intra-corporate transferees, investors, and highly-skilled professionals and technicians. The TPP also includes commitments for the spouses of some of these Canadian business persons. In addition, the Agreement includes commitments from Australia and Chile to remove existing economic needs tests, resulting in a competitive advantage for Canada over non-TPP markets. Overall, the TPP will contribute to greater certainty and predictability for Saskatchewan companies and business persons.
Telecommunications
Not only is telecommunications a rapidly growing service sector, it is also one of the most important enablers in the modern economy. The TPP includes key obligations on the access to and use of telecommunications services, interconnection of telecommunications networks, independence of the regulatory body, licensing procedures, and resolution of domestic disputes all of which ensure that Canadian service suppliers and consumers will be treated in a fair and objective manner when providing or receiving telecommunications services in TPP markets.
Electronic commerce
In recognition of the growing economic importance of electronic commerce, as well as the transformative nature of the technology that enables it, the TPP expands on commitments made in previous FTAs, including with respect to the cross-border movement of information and the localization of computing facilities. Furthermore, the chapter includes commitments to protect users from the unauthorized disclosure of their personal information, online fraudulent and deceptive commercial practices, and unsolicited commercial electronic messages, or spam. TPP Parties have also agreed not to levy customs duties, fees or other charges on digital products that are transmitted electronically. Businessess from Saskatchewan, including SMEs, will be able to take advantage of the expanding online commercial opportunities.
Advantages of the TPP
The TPP provides Canadian service suppliers with greater predictability and transparency for conducting their business in established and growing TPP services markets.
Canadian gains in the TPP will provide our companies with a competitive advantage in these dynamic and growing markets.
Protecting Canadian culture and public services
As in all of Canada’s international trade agreements, Canada has preserved the right to protect policies and regulatory activities undertaken in the public interest. Nothing in the TPP prevents governments from regulating in the public interest, including with regard to adopting measures to protect or promote culture, delivering public services (like health and education) or providing protections for Aboriginal peoples.
Preserving the flexibility of all levels of government to adopt and maintain policies and programs that support the creation, production and development of Canadian content was a core objective for Canada in the TPP, and we have fully achieved this objective. The TPP reflects and protects Canada’s existing policies for supporting Canadian cultural content.
The TPP is an opportunity to set the future terms of trade across the Asia-Pacific region, and Canada and our allies in TPP share a vital common interest in ensuring the internet remains free and open, and have taken obligations to help ensure that restrictions cannot be imposed on the free flow of information online.
Consistent with the approach taken in our FTA with the European Union, Canada has achieved these objectives through a targeted approach where exceptions for culture are included in specific chapters that could have an impact on our ability to make cultural policies, including:
preamble
services
investment
national treatment and market access for goods
state-owned enterprises
government procurement
Facilitating two-way investment between Saskatchewan and TPP markets
The TPP’s investment rules will provide stability for our investors, encouraging Canadian businesses to invest in new TPP markets and share their expertise in niche sectors, such as asset management and energy finance. Canadian investors in such areas as energy, mining, manufacturing, financial services and professional services will enjoy transparent and predictable access to TPP markets.
Specifically, the TPP includes:
strong rules to ensure that investors from Canada and TPP countries are treated in a fair, equitable, and non-discriminatory manner, while preserving the full rights of governments to legislate and regulate in the public interest;
rules ensuring that Canadian investors can compete on an equal footing with other investors in TPP countries;
access to an investor-state dispute settlement (ISDS) mechanism that is prompt, fair and transparent and is subject to appropriate safeguards.
Supporting Saskatchewan’s strong life sciences cluster
Saskatchewan is home to life sciences companies and research activities renowned for breakthrough discoveries. In the last decade, the number of life sciences companies in Saskatchewan has tripled to 57, and employment in the field has more than doubled. This sector draws on Saskatchewan's demonstrated strengths in agriculture, food science and food processing technologies, pharmacy, medicine, botany and animal sciences.
In addition to eliminating tariffs for products of Canada’s life sciences sector, Canada has secured an Annex on Modern Biotechnology, which emphasizes the importance of transparency in each Party’s science-based approval processes for biotechnology products, addresses low-level presence in a way that minimizes adverse trade impacts of current regulatory practices, and includes a working group to address issues related to biotechnology. This will benefit Canadian producers and exporters of biotechnology products.
Advantages of the Trans-Pacific Partnership Agreement for Saskatchewan
The Trans-Pacific Partnership is the most comprehensive trade agreement in the world. The TPP will help deepen Canada’s trade ties in the dynamic and fast-growing Asia-Pacific region while strengthening our existing economic partnerships with our partners in the North America Free Trade Agreement and across the Americas. It currently comprises 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), representing a combined market of nearly 800 million people and a gross domestic product (GDP) of $28.5 trillion. With the TPP, Canada has now concluded free trade agreements with 51 nations, ensuring Canadian businesses have access to over 60 percent of the world’s economy. The TPP and trade agreements with the European Union and South Korea make Canada the only G-7 nation with free trade access to the United States and the Americas, Europe, and the Asia-Pacific region.
Saskatchewan merchandise exports to TPP countries averaged $23.6 billion annually from 2012 to 2014, despite the presence of many impediments to trade. The TPP will eliminate tariffs on almost all of Saskatchewan’s key exports and provide access to new opportunities in the Asia-Pacific. The TPP also creates strong and enforceable rules that will help Canadians do business in TPP countries – with provisions that will reduce regulatory barriers, increase transparency and reinforce intellectual property rights.
Saskatchewan Exports to TPP Countries (2010-14) (millions of Canadian dollars)
Text Version
Saskatchewan Exports to TPP Countries by Sector (2012-2014) (millions of Canadian dollars)
Text Version
Main advantages for Saskatchewan :
duty-free market access for the majority of industrial goods, including metals and minerals, and agricultural equipment;
duty-free market access for most agricultural and agri-food products, including feed wheat and feed barley,canola seed and oils, dried peas/beans, and dog and cat food, as well as enhanced market access for food wheat, food barley and malt;
duty-free market access for wood and other forestry products, including lumber and oriented strand board;
improved market access commitments for temporary entry of highly-skilled Canadian business persons;
more transparent and predictable access for services suppliers in key sectors, such as construction and research and development services;
predictable, non-discriminatory rules for Canadian investors;
strong provisions on non-tariff measures, backed up by fast and effective dispute settlement provisions.
Examples of Tariffs Applicable to Saskatchewan's Exports
Text Version
Opening new markets for Saskatchewan’s products in the TPP
Industrial goods
Some 45,500 Saskatchewanians work in the industrial goods sector, with the sector accounting for 24.6 percent of Saskatchewan’s GDP in 2014.
Trade snapshot
From 2012 to 2014, Saskatchewan’s exports of industrial goods to TPP countries were worth an annual average of $17.7 billion. The TPP will significantly improve market access opportunities for Saskatchewan’s industrial goods sector, including metals and minerals and industrial machinery.
Tariff elimination will help make Saskatchewan’s exports of industrial products more price-competitive with domestic production in all TPP countries.
Tariff elimination
The majority of Canadian industrial goods exported to TPP countries will be duty-free immediately upon entry into force. With certain exceptions, the TPP will eliminate the majority of remaining tariffs on industrial goods within 10 years. This will create market access opportunities for Saskatchewan’s exporters across a number of industries.
Metals and minerals
Saskatchewan is one of Canada’s leading metal producers. It also has two of the most desired minerals in the world, potash and uranium, and is the world's leading supplier of both commodities, accounting for about 30 percent of global potash production and 18 percent of global uranium production. From 2012 to 2014, Saskatchewan exported an annual average of $16.7 billion worth of metals and minerals to TPP countries. This included petroleum products, potash, as well as metals such as iron and steel and aluminum. The growth in emerging markets, including those in the TPP, means significant potential for strong, long-term demand for minerals and metals produced in Saskatchewan.
Examples of metal and mineral products exported by Saskatchewan to TPP countries that will benefit from tariff elimination include:
Aluminum products:
In Japan, tariffs of up to 7.5 percent will be eliminated upon entry into force;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
In Malaysia, tariffs of up to 30 percent will be eliminated within 10 years;
In Vietnam, tariffs of up to 27 percent will be eliminated within three years.
Iron and steel products:
In Japan, tariffs of up to 6.3 percent will be eliminated within 10 years;
In Malaysia, tariffs up to 25 percent will be eliminated within 10 years;
In Vietnam, tariffs of up to 40 percent will be eliminated within 10 years;
In Australia, tariffs of up to 5 percent will be eliminated within four years.
Petroleum products:
In Japan, tariffs of up to 7.9 percent will be eliminated within 10 years;
In Vietnam, tariffs of up to 30 percent will be eliminated within 10 years.
Agricultural equipment
Saskatchewan is headquarters to several large agricultural equipment manufacturers. From 2012 to 2014, exports of agricultural equipment to TPP countries averaged $405.8 million per year. By eliminating tariffs on key exports, the TPP will create new market access opportunities for this innovative Canadian industry.
Examples of agricultural equipment products that will benefit from tariff elimination include:
Harvesters, mowers and other agricultural equipment:
In Vietnam, tariffs of up to 5 percent will be eliminated within three years;
In Malaysia, tariffs of up to 30 percent will be eliminated within three years;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
In New Zealand, tariffs of up to 5 percent will be eliminated upon entry into force.
Miscellaneous agricultural machinery:
In Vietnam, tariffs of up to 20 percent will be eliminated within three years;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force.
Beyond tariffs
The TPP includes a chapter on technical barriers to trade (TBT). The provisions build on the World Trade Organization Agreement on Technical Barriers to Trade and the NAFTA, helping to ensure that unnecessary or discriminatory regulatory requirements do not undermine key market access gains negotiated elsewhere in the Agreement.
The TBT Chapter requires that technical regulations not be used as barriers to trade and aims to create a fair, predictable, and open regulatory system that promotes, rather than hinders, the flow of goods. It also includes provisions that will help identify ways to either prevent non-tariff barriers or deal with them when they do arise. In addition, sector-specific outcomes have been negotiated through seven sector annexes, covering cosmetics, medical devices, pharmaceuticals, wines and spirits, information and communications technologies (ICT), proprietary formulas for certain food products and additives, and organics.
In the Regulatory Coherence Chapter, each of the TPP Parties will endeavour to put in place mechanisms to facilitate interagency coordination and review of domestic regulatory measures, prevent conflicting or duplicative regulations, and make recommendations for improvements.
Minimizing technical barriers to trade will help maximize market access for Saskatchewan’s exports.
Small and medium-sized enterprises
Canada’s small and medium-sized enterprises (SMEs) make up the vast majority of Canadian businesses and employ more than 7.5 million Canadians, about 70 percent of the private sector labour force.
For the first time in any Canadian free trade agreement (FTA), the TPP includes a dedicated chapter with specific measures to assist SMEs to help them take full advantage of the opportunities that the Agreement will create. This reflects the Government of Canada’s commitment to significantly increase the number of Canadian SMEs exporting to emerging markets.
Complementing commitments across the Agreement – including on market access, paperwork reduction, Internet access, trade facilitation and express delivery – the TPP SME chapter includes provisions specifically targeted at positioning SMEs for success. In order to ensure SMEs have access to information they need to do business in the TPP markets, Parties will establish user-friendly websites with information on the Agreement text and explanations of key provisions, as well as information on customs procedures, technical standards, foreign investment regulations, business registration procedures, employment regulations and taxation.
The SME chapter also establishes a committee to review how well the TPP is serving SMEs and to consider ways to enhance its benefits. The committee will oversee cooperation and capacity building activities that support SMEs, including through export counseling, assistance and training programs, information sharing and trade finance.
Advantages of the TPP
Canada has obtained a tariff outcome that will help level the playing field with key competitors and provide enhanced market access opportunities in specific areas of interest to Saskatchewan.
Agricultural and agri-food products
Some 47,500 Saskatchewanians work in the agricultural and agri-food sector, with the sector accounting for 7.7 percent of Saskatchewan’s GDP in 2014.
Trade snapshot
Canada is one of the largest agricultural producers and exporters in the world. With almost half of Canada's total agricultural production exported, the potential for growth in the sector lies in its ability to expand into markets abroad. Agricultural exports from Saskatchewan to TPP countries averaged $5.7 billion per year from 2012 to 2014, including canola, wheat, barley and malt. Under the TPP, Saskatchewan will benefit from new market opportunities for its agricultural products.
Tariff elimination
Examples of agricultural products that will receive improved market access include:
Canola seed and canola oil:
In Japan, tariffs of up to 13.20 yen/kg on canola oil will be eliminated within five years;
In Vietnam, tariffs of 5 percent will be eliminated within five years.
Malt:
While malt already enters Japan duty-free under a quota system open to multiple countries, a duty-free Canada-specific quota of 89,000 tonnes for unroasted malt will be available upon entry into force, and will provide greater certainty to Canadian exporters;
In Vietnam, tariffs of 5 percent will be eliminated within three years.
Dried peas:
In Japan, in-quota tariffs of 10 percent will be eliminated upon entry into force, while over-quota tariffs of 354 yen/kg will be eliminated within 10 years;
In Vietnam, tariffs of up to 10 percent will be eliminated within two years.
Dried beans:
In Japan, in-quota tariffs of 10 percent will be eliminated upon entry into force;
In Vietnam, tariffs of 10 percent in Vietnam will be eliminated within two years.
Dog and cat food for retail sale:
In Japan, tariffs of more than 59.50 yen/kg will be eliminated within five years;
In Vietnam, tariffs of 7 percent will be eliminated upon entry into force.
Honey:
In Japan, tariffs of 25.5 percent will be eliminated within seven years;
In Vietnam, tariffs of 10 percent will be eliminated upon entry into force.
New access for Saskatchewan wheat and barley
Saskatchewan is home to the most important grain-producing region in Canada. More than 14 million acres of wheat and barley are in production every year in Saskatchewan, about one-third of the province’s total annual cropped acreage. Saskatchewan also ships, on average, 6.5 percent of the world’s wheat exports and 5.6 percent of barley exports.
From 2012 to 2014, Saskatchewan’s annual exports of wheat and barley to TPP countries were worth, on average, $1.2 billion per year.
Wheat
In Japan, feed wheat will be duty-free, quota-free upon entry into force. Mark-ups on food wheat will be reduced by 45 percent within eight years;
Canada will also have access to a Canada-specific quota for food wheat which starts at 40,000 tonnes and grows to 53,000 tonnes within six years. Mark-ups within this country-specific quota will be reduced by 45 or 50 percent;
In Vietnam, tariffs of up to 5 percent on all wheat will be eliminated upon entry into force.
Barley:
In Japan, food and feed barley fall under a quota system with mark-ups. Feed barley in Japan will be duty-free, quota-free upon entry into force;
Mark-ups applied to the price of food barley by Japan will be reduced by 45 percent within eight years;
Canada will also have access to a TPP-wide quota for food barley which starts at 25,000 tonnes and grows to 65,000 tonnes within eight years.
Protecting and preserving Canada’s supply management system
The Government of Canada announced a series of new programs and initiatives for supply-managed producers and processors to support them throughout the implementation of the Trans-Pacific Partnership (TPP) and the Canada-EU Trade Agreement. Under both agreements, the three pillars of the supply management system will remain protected.
The following programs will be implemented:
The Income Guarantee Program will keep producers whole by providing 100 per cent income protection to producers for a full 10 years from the day TPP comes into force. Income support assistance will continue on a tapered basis for an additional five years, for a total of 15 years. $2.4 billion is available for this program.
The Quota Value Guarantee Program will protect producers against reduction in quota value when the quota is sold following the implementation of TPP. $1.5 billion has been set aside for this demand-driven program, which will be in place for 10 years.
The Government also announced two additional programs:
The $450 million-Processor Modernization Program will provide processors in the supply-managed value chain with support to further advance their competitiveness and growth.
The Market Development Initiative will assist supply-managed groups in promoting and marketing their top-quality products. To support the initiative $15 million in new funding will be added to the AgriMarketing Program.
In addition to the long-term $4.3-billion investment outlined above, the Government will intensify on-going anti-circumvention measures that will enhance our border controls. These measures include requiring certification for spent fowl, preventing importers from circumventing import quotas by adding sauce packets to chicken products, and excluding supply-managed products from the Government of Canada’s Duties Relief Program. Cheese compositional standards, introduced by the Government of Canada in 2008, have been maintained. The Government remains committed to ensuring they are enforced, so the standards we have for Canadian cheese are fully maintained.
The Canadian Dairy Commission and the Farm Products Council of Canada will work with Agriculture and Agri-Food Canada to ensure the Income Guarantee and Quota Value Guarantee programs are delivered to producers in an effective and efficient manner. The Government will continue to work closely with dairy, poultry and egg producers and the entire supply-managed sector to implement these initiatives.
These Cabinet-approved initiatives will support producers and processors throughout the implementation period of TPP and the Canada-EU Trade Agreement.
The TPP will secure new market access opportunities for Canadian dairy, poultry and egg exports. Dairy, poultry and egg producers and processors will benefit over time from increased duty-free access to the United States and all other TPP countries. This will include complete tariff elimination on some specialty cheeses, including several artisanal cheeses, entering the United States.
Despite significant and broad demands from several of our TPP negotiating partners, Canada has offered only limited new access for supply-managed products. This access, which will be granted through quotas phased in over five years, amounts to a small fraction of Canada’s current annual production: 3.25% for dairy (with a significant majority of the additional milk and butter being directed to value-added processing), 2.3% for eggs, 2.1% for chicken, 2% for turkey and 1.5% for broiler hatching eggs.
Beyond tariffs
It is essential for all countries to be able to maintain measures to ensure that food is safe for consumers, and to prevent the spread of pests or diseases in animals and plants. It is also important that these measures not be used to unnecessarily restrict trade or create unfair barriers for exporters.
That is why the TPP includes a chapter on sanitary and phytosanitary (SPS) measures. The provisions build on the World Trade Organization Agreement on the Application of Sanitary and Phytosanitary Measures and will help ensure that TPP market access gains for Canadian agricultural and agri-food and other products are not undermined by unnecessary and unjustified SPS-related trade restrictions. The SPS Chapter also establishes a committee, which will allow experts from TPP Parties to discuss SPS issues, thus facilitating trade and enhancing cooperation.
Protecting the food safety system and the health of Canadians
Protecting the health and safety of Canadians is of the utmost priority for the Government of Canada. All food products imported into Canada must meet robust health and safety regulations to ensure maximum protection for Canadian consumers.
The TPP protects Canada’s right to maintain and implement measures to ensure food safety for consumers as well as to protect animal or plant life or health. Food product imports will only be accepted if they meet Canada’s rigorous health and safety requirements, which have been fully protected.
Advantages of the TPP
Many of the TPP members are net importers of agricultural and agri-food products, while Canada is a significant global supplier of high-quality agricultural products. The TPP will help position Saskatchewan to take advantage of significant market opportunities in established as well as in new and emerging markets.
Wood and other forestry products
Some 2,600 Saskatchewanians work in the wood and forestry sector in 2014.
Trade snapshot
Saskatchewan has a well-established and competitive forest industry, with leading-edge technology. There are ten large forest product manufacturing facilities producing lumber, pulp and panels, and over 100 small forest businesses producing a variety of forest products.
Saskatchewan’s exports of wood and other forestry products to TPP countries averaged $210.7 million per year from 2012 to 2014. Japan applies tariffs of up to 10 percent on wood and other forestry products, Vietnam of up to 31 percent, Malaysia of up to 40 percent, Brunei of up to 20 percent, and Australia and New Zealand of up to 5 percent.
Tariffs for these products will be eliminated under the TPP.
Tariff elimination
Examples of wood and other forestry products exported by Saskatchewan to TPP countries that will benefit from tariff elimination include:
Lumber:
In Japan, tariffs of up to 6 percent will be eliminated within 15 years;
In Australia, tariffs of up to 5 percent will be eliminated upon entry into force;
In Brunei, tariffs of up to 20 percent will be eliminated upon entry into force.
Oriented strand board:
In Japan, tariffs of up to 6 percent will be eliminated within 15 years;
In Malaysia, tariffs of 20 percent will be eliminated upon entry into force;
In Brunei, tariffs of up to 20 percent will be eliminated upon entry into force;
In Australia, tariffs of 5 percent will be eliminated upon entry into force;
In New Zealand, tariffs of 5 percent will be eliminated upon entry into force.
Beyond tariffs
Technical barriers to trade (TBT) are technical regulations that can include various testing and certification requirements. While these measures are usually designed to achieve legitimate policy objectives in a country, they can sometimes restrict trade by being overly burdensome or discriminatory against imported goods. The TPP includes robust TBT provisions that, for example, promote the use of international standards and greater transparency in the development of technical regulations.
Strong and enforceable SPS provisions will also help to ensure that TPP market access gains for wood and other forestry products are not undermined by unnecessary or overly burdensome SPS-related requirements.
Advantages of the TPP
As one of the top exporters of wood and other forestry products worldwide, the TPP will provide Canada with a significant price advantage over key competitors who are not in the TPP.
Opening new markets for Saskatchewan’s services in TPP markets
Trade snapshot
The services sector employs some 392,600 Saskatchewanians, with the sector accounting for 55.4 percent of the province’s total GDP in 2014. Jobs in this sector are traditionally highly-skilled and well-paying.
Enhanced market access commitments
The Agreement will provide Canadian service suppliers with greater predictability, guaranteeing both existing levels of access as well as improvements to existing measures by TPP Parties in the future.
The TPP has secured commitments that go beyond the WTO General Agreement on Trade in Services (GATS) and beyond Canada’s FTA commitments with several of the TPP countries.
Canadian service sector suppliers will benefit from enhanced market access commitments, including for:
construction and/or transport services in markets such as Australia, Vietnam and New Zealand;
research and development in markets such as the United States, Australia, Japan, Chile, Malaysia, New Zealand, Singapore and Vietnam;
computer-related services in Mexico, Chile, Malaysia and the United States;
professional services (e.g. legal, engineering and architectural) in markets such as Mexico, Chile, Singapore and the United States;
mining-related services in Chile, Malaysia, New Zealand and Brunei;
environmental services in markets such as Vietnam and Malaysia;
services incidental to energy distribution in Chile, Malaysia and Singapore.
Temporary entry for business persons
The TPP improves upon commitments for temporary entry of highly-skilled business persons, making it easier for them to temporarily move between Canada and TPP markets. For example, the TPP includes commitments that facilitate the temporary entry of Canadian business visitors, intra-corporate transferees, investors, and highly-skilled professionals and technicians. The TPP also includes commitments for the spouses of some of these Canadian business persons. In addition, the Agreement includes commitments from Australia and Chile to remove existing economic needs tests, resulting in a competitive advantage for Canada over non-TPP markets. Overall, the TPP will contribute to greater certainty and predictability for Saskatchewan companies and business persons.
Telecommunications
Not only is telecommunications a rapidly growing service sector, it is also one of the most important enablers in the modern economy. The TPP includes key obligations on the access to and use of telecommunications services, interconnection of telecommunications networks, independence of the regulatory body, licensing procedures, and resolution of domestic disputes all of which ensure that Canadian service suppliers and consumers will be treated in a fair and objective manner when providing or receiving telecommunications services in TPP markets.
Electronic commerce
In recognition of the growing economic importance of electronic commerce, as well as the transformative nature of the technology that enables it, the TPP expands on commitments made in previous FTAs, including with respect to the cross-border movement of information and the localization of computing facilities. Furthermore, the chapter includes commitments to protect users from the unauthorized disclosure of their personal information, online fraudulent and deceptive commercial practices, and unsolicited commercial electronic messages, or spam. TPP Parties have also agreed not to levy customs duties, fees or other charges on digital products that are transmitted electronically. Businessess from Saskatchewan, including SMEs, will be able to take advantage of the expanding online commercial opportunities.
Advantages of the TPP
The TPP provides Canadian service suppliers with greater predictability and transparency for conducting their business in established and growing TPP services markets.
Canadian gains in the TPP will provide our companies with a competitive advantage in these dynamic and growing markets.
Protecting Canadian culture and public services
As in all of Canada’s international trade agreements, Canada has preserved the right to protect policies and regulatory activities undertaken in the public interest. Nothing in the TPP prevents governments from regulating in the public interest, including with regard to adopting measures to protect or promote culture, delivering public services (like health and education) or providing protections for Aboriginal peoples.
Preserving the flexibility of all levels of government to adopt and maintain policies and programs that support the creation, production and development of Canadian content was a core objective for Canada in the TPP, and we have fully achieved this objective. The TPP reflects and protects Canada’s existing policies for supporting Canadian cultural content.
The TPP is an opportunity to set the future terms of trade across the Asia-Pacific region, and Canada and our allies in TPP share a vital common interest in ensuring the internet remains free and open, and have taken obligations to help ensure that restrictions cannot be imposed on the free flow of information online.
Consistent with the approach taken in our FTA with the European Union, Canada has achieved these objectives through a targeted approach where exceptions for culture are included in specific chapters that could have an impact on our ability to make cultural policies, including:
preamble
services
investment
national treatment and market access for goods
state-owned enterprises
government procurement
Facilitating two-way investment between Saskatchewan and TPP markets
The TPP’s investment rules will provide stability for our investors, encouraging Canadian businesses to invest in new TPP markets and share their expertise in niche sectors, such as asset management and energy finance. Canadian investors in such areas as energy, mining, manufacturing, financial services and professional services will enjoy transparent and predictable access to TPP markets.
Specifically, the TPP includes:
strong rules to ensure that investors from Canada and TPP countries are treated in a fair, equitable, and non-discriminatory manner, while preserving the full rights of governments to legislate and regulate in the public interest;
rules ensuring that Canadian investors can compete on an equal footing with other investors in TPP countries;
access to an investor-state dispute settlement (ISDS) mechanism that is prompt, fair and transparent and is subject to appropriate safeguards.
Supporting Saskatchewan’s strong life sciences cluster
Saskatchewan is home to life sciences companies and research activities renowned for breakthrough discoveries. In the last decade, the number of life sciences companies in Saskatchewan has tripled to 57, and employment in the field has more than doubled. This sector draws on Saskatchewan's demonstrated strengths in agriculture, food science and food processing technologies, pharmacy, medicine, botany and animal sciences.
In addition to eliminating tariffs for products of Canada’s life sciences sector, Canada has secured an Annex on Modern Biotechnology, which emphasizes the importance of transparency in each Party’s science-based approval processes for biotechnology products, addresses low-level presence in a way that minimizes adverse trade impacts of current regulatory practices, and includes a working group to address issues related to biotechnology. This will benefit Canadian producers and exporters of biotechnology products.
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