Sluggish economy could make TPP trickier for Trudeau
By Shachi Kurl
January 27, 2016 – News the Trudeau Liberals will sign the Trans-Pacific Partnership – the 12-country trade deal involving nations that line the Pacific Rim – has the potential to take a different tone against the backdrop of a loonie that’s been dropping against the US dollar like a curling rock someone chucked into the Great Lakes, oil prices in the tank, and a federal government under pressure to prove its fiscal plan will create jobs and improve the economic optimism of Canadians.
Broadly, one could make the argument that people in this country see themselves as belonging to a trading nation. Indeed, the government of the day sees itself as pro-trade.
Sentiment didn’t always skew that way though. Think about the fraught debate over the Canada-US Free Trade Agreement that dominated the mid-to-late 1980s. Or, the skepticism a few years later when the North American Free Trade Agreement – this time including Mexico – was on the table. At the time, pollster Angus Reid asked Canadians about that deal. Two decades later, we asked about the Canada-EU Trade Agreement (CETA). The graph below shows how Canadians felt about those two trade pacts, then and now:
And here we are now, on the precipice of another trade deal that finds more Canadians – when polled by the Angus Reid Institute – saying they don’t know enough about it to render an opinion than support or oppose the agreement:
Awareness of the TPP increased – albeit only slightly – during last fall’s election campaign. Will opinions harden now that Canada will actually put signature to the deal? It certainly puts the issue back on the radar. But will current economic realities change existing views?
Take for example, that as recently as last fall, people in this country saw the deal having a significant positive impact on consumer choices:
But with the value of the Canadian dollar some thirty per cent lower against the USD than it was this time three years ago, and with Canadians appearing to be hoarding their cash, will economic anxiety squash any enthusiasm to shop for newly available – and presumably cheaper – imports?
And then there’s the TPP’s perceived impact on the economy. Canadians with an opinion have been similarly upbeat about prospects on that front – with twice as many saying the deal with be a net positive than negative on our financial system:
On this front, a lower dollar may go some way to boosting the manufacturing and export economy – which may, in turn, benefit from less red tape and freer access to international markets. Time will tell. The bigger question remains, what will signing – and ultimately ratifying – the TPP do to employment in this country? Canadians already have some concerns:
As evidenced in the above graph, employment is the only area where people we polled are more likely to see the trade agreement as a net negative. And it’s here where the Trudeau government will have to walk a fine line. On one hand, it seems unlikely that Canada will not ultimately ratify the agreement, any more than any of the other Pacific Rim signatories will walk away. After all, even if there are clauses countries don’t like about the deal, are they really going to risk being left out of the club?
On the other hand, sluggish national job growth in 2015, combined with the undeniable unemployment crisis in oil-dependent Alberta and fears the TPP will result in the shedding of tens of thousands of manufacturing jobs (fears that are also being dismissed), all mean Prime Minister Justin Trudeau will have to play therapist-in-chief to uneasy Canadians.
Our next round of polling on this subject in the coming week will yield some telling results on just how difficult this job could be.
Image Credit: www.GlynLowe.com
