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U.S. trade barrier hit list shows what's at stake for Canada in Trans-Pacific Partnership

The United States Trade Representative (USTR) has released its annual list of global trade barriers -- policies in countries from Angola to Vietnam it wants changed or eliminated so U.S. firms can make more money. You can read the whole report here. Or you can take a look at Public Citizen's very useful summary, which focuses on the 10 non-U.S. countries, including Canada, negotiating the Trans-Pacific Partnership agreement, right here.

According to the government and corporate watchdog, "The 406-page USTR report indicts a wide array of public health policies, financial regulations, politically sensitive manufacturing and agricultural policies and even religious standards as 'trade barriers' that should be dismantled." The section on Canada begins at page 63. But Public Citizen has conveniently pulled out most of the Canadian examples as follows (this is all their work, I just add a few hyperlinks for further reading):

- The report conveys concerns of the U.S. pharmaceutical industry, mentioning the Notice of Intent filed last year by U.S. pharmaceutical corporation Eli Lilly, in which the company announced plans to use NAFTA's investor privileges to directly challenge Canada's entire patent policy. This investor-state attack was launched in response to Canadian courts' invalidation of a patent on an Eli Lilly medicine for which the firm had not met Canada's patentability standards. USTR also notes another recent patent invalidation -- for Pfizer's Viagra -- that has yet to produce a NAFTA investor-state case. USTR's inclusion of these cases could be intended to provide political backing for the U.S. corporate challenges to Canadian patent law, which have generated wide-spread consternation among public health officials.

- The report takes issue with Canada's policy that major foreign investments and acquisitions must be reviewed to ensure that they offer a "net benefit" to the country. This standard, according to USTR, is "overly broad." (Note: the European Union, Germany in particular, objects to European investment into Canada being screened this way and is pushing to eliminate the review process in the Canada-EU free trade negotiations.)

- USTR laments that Canadian provincial policies to control alcohol distribution "greatly hamper exports of U.S. wine and spirits to Canada." The report particularly blames "province-run liquor control boards," which enact policies closely resembling those used by U.S. state-level counterparts, such as the Pennsylvania Liquor Control Board.

- After describing a Canadian project to consolidate a wide array of federal government data, the report criticizes a stipulation that companies involved in the consolidation will not be permitted to move the government data outside of Canada. USTR implies that the Canadian government should not have qualms with the offshoring of a wide range of government data because doing so aligns with "today's information-based economy."

- The report blasts Canada's popular supply management program for sensitive dairy and poultry products. While the program provides support and stability to Canadian farmers, USTR explains that it "severely limits the ability of U.S. producers to increase exports to Canada…"

- USTR singles out one item as an illustrative example of U.S. "dairy products" that have been particularly impaired by Canada's import barriers: "breaded cheese sticks."

- The report disparages Canada's "compositional standards for cheese," which USTR blames for blocking U.S. "dairy" products from being sold in Canada. The primary standard that USTR cites as concerning is Canada's establishment of "a minimum for raw milk in the cheese making process."

But wait, there's more

Now if you really don't want to read the USTR report (why wouldn't you?), here are some of the remaining Canadian trade barriers it mentions. Like the above, these are certainly going to come up in the TPP, which for Canada is essentially a NAFTA renegotiation on mostly U.S. terms.

- The Canadian Wheat Board is in here despite the U.S. government winning that one with the passage of Harper's Marketing Freedom for Grain Growers Act in 2011, which abolished the single marketing desk. The USTR also mentions that Canada (Harper) eliminated a quality control measure called Kernel Visual Distinguishability (KVD) -- a simple way to sort different types of wheat by their end-use based on visual qualities which had the unintended effect of limiting U.S. grain exports because they are not visually distinct. As Scott Sinclair of the Canadian Centre for Policy Alternatives wrote in his 2009 report Threatened Harvest:

The [Canadian Grain Commission] had announced changes to address the concern without unduly threatening Canada's exports of the highest-value bread and pasta wheats. Ignoring warnings from industry observers, government officials and legislators, the Harper government rejected the Commission initiative to modify the K V D system. Instead, it adopted the approach favoured by U.S. wheat growers and the U.S. government by terminating Canada's K V D system outright.

"While this policy change is an improvement," says this year's USTR report, "it will take years before U.S. wheat varieties are able to complete the necessary field trials to determine whether they will be registered for use in Canada." But as USTR notes, "Legislation to amend the Canada Grains Act is currently under consideration in the Canadian Parliament."

- The U.S. wants Canadians who enter the U.S. for less than 24 hours to be able to bring back $200 worth of goods on their return, just as U.S. residents can when they enter Canada for that long. Harper recently increased the limits from $50 to $200 for travel of more than 24 hours, and from $400 to $800 for travel of more than a week.

- The U.S. objects to Canada's aerospace support programs, for example which support sales of Bombardier's CSeries aircraft in the United States.

- Financial support programs for Canada's pork producers are in here.

- The Ontario Green Energy Act is too, because of local content requirements on wind and solar projects. As the USTR notes, the United States participated as a third party in the WTO dispute brought by the EU and Japan against these "buy local" conditions, which was successful late last year. The case is still at the appeal stage. Labour and environmental groups are preparing to defend the Green Energy Act should the WTO's Appellate Body uphold the earlier panel ruling that declared the local content rules illegal.

- The Canada-U.S. Government Procurement Agreement apparently didn't go far enough, says USTR, despite Canada being the one who granted much more access to its procurement market than the U.S. government did.

- Foreign ownership limits on telecommunications companies and Canadian content rules in broadcasting are both cited as barriers to U.S. exports, so expect them to come up in the TPP negotiations (as they did in the CETA negotiations).

The next round of TPP negotiations will take place in Lima, Peru in mid-May. Canadian, U.S. and Mexican groups part of the TPPxBorder campaign against the TPP have called for a week of action starting May 11. You can see what's planned and register an event or community assembly on the TPP by clicking here. You can read our shared Call to Action on that site, too.

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