An oil jetty in Port Lincoln, South Australia
The pending Trans-Pacific Partnership (TPP) has sparked passionate debate in nearly every country that has signed onto the deal. Finalized just a few weeks ago, the treaty is just another sign that the global economy and political sphere is quickly tilting away from the United States and its trans-Atlantic partners, and toward Asia and that region’s partners around the Pacific rim. The US, to be sure, will continue to play a very significant role in the new global economic order. However, it will not be able to preserve its historically dominant role.
This dynamic leaves two countries – Australia and Canada – in a unique position. Long political and economic allies of the US, they are geographically, economically and politically positioned to play a much greater role in the world economy through their Asian partners than the trans-Atlantic economy ever allowed. But unlike the US, their prominence within the new order is far from assured. If the political leadership in the True North and the Land Down Under doesn’t act quickly, both nations will once again be relegated to their familiar old roles of friendly middle-powers.
Australia has long been a powerful political and economic voice in the Pacific region, forging strong friendships with Japan and other key players in the hemisphere. As for Canada, its western provinces – particularly British Columbia – have long held strong trading links with China and Japan. The TPP gives Canada the opportunity to build on those relationships and win new trading partners for industries and businesses in the central and eastern parts of the country as well.
Strengthened trade relationships with Asia – a region with political clout and economic share that both seem to be growing exponentially every year – will in turn grant Canada and Australia a much larger political presence in the Pacific. For Canada, the exact same thing happened several decades ago with the passage of the North American Free Trade Agreement, though on a far smaller scale than the opportunity the TPP offers.
There are many valid arguments circulating in both countries that advocate turning down the TPP. There are concerns in both Australia and Canada that the deal will lead to significantly higher pharmaceutical prices than the norm in their single-payer systems. In the realm of agriculture, both nations worry about the impact increased competition might have on their beef and dairy industries. Manufacturers, particularly in Canada, are worried that jobs will be exported to nations with looser labour regulations; this is exactly what has happened to the Canadian auto industry since Mexico’s inclusion in North America’s free-trade zone twenty years ago. But many of these short-term changes are to some extent inevitable in an increasingly globalized world. Looking through a long-term lens, the TPP assures inclusion in the world’s largest common economic zone and stronger geopolitical positions for Canada and Australia.
Although passage of the TPP is crucial for both nations’ economic and political future, it is far from a certainty. While Australia’s Liberal-National coalition government commands a healthy majority in the House of Representatives, the protectionist Australian Greens hold the balance of power in the country’s powerful Senate, and will likely make passage of the TPP difficult for the Turnbull government.
Newly-elected Prime Minister Justin Trudeau will probably not face too much of a fight from the Canadian Senate over the TPP. However, rebellious left-leaning members of his centrist Liberal Party will surely oppose the agreement in the House of Commons. With just a 14-seat majority in the lower house, Trudeau will likely need support from the Conservative Party (freshly relegated to the opposition benches after an election two weeks ago) to ensure the TPP is passed there.
The TPP comes at an ideal time for Canada and Australia – both very recently elected a new national leadership that improves the deal’s chances of passing. Canada’s Justin Trudeau and Australia’s Malcolm Turnbull are far more centrist than their predecessors, Stephen Harper and Tony Abbott. Hopefully, they will be able to promote the merits of the TPP to their Parliaments and electorates in the context of at least a slightly less polarized political climate.
The economic and political power of Asia is growing. Now is the time to engage with South Korea, Malaysia, China, Japan, Vietnam, and other major players in the Asia-Pacific region. Doing so quickly will mean increased economic and political opportunities as the world transitions into a new geopolitical order. Australia and Canada stand to benefit from this change. But they must do what it takes to make it a reality, regardless of the growing pains that process might entail.