The Trans-Pacific Partnership (TPP), considered the largest, most ambitious free trade initiative in history, is also expected to boost B.C.’s forest industry.
The comprehensive agreement comprises Canada and 11 other nations - Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
Steve Zika, Chief Executive Officer of Hampton Affiliates – company that owns Babine Forest Products and Decker Lake Forest Products, said he’s confident this deal will positively impact the forest industry in B.C.
“Free and fair trade agreements will be positive for us and anyone selling products overseas,” he said.
However, Zika warned most of the benefits of this deal will not be seen in the short term.
“Global trade changes can be slow as they involve several different countries, customers and markets,” he explained.
Tariffs imposed by certain TPP countries on forestry and value-added wood products have prevented Canadian exporters from achieving their full export potential. Japan, for example, has tariffs of up to 10 percent on forestry and value-added wood products. On forestry and value-added wood products, Vietnam applies tariffs of up to 31 percent, Malaysia of up to 40 percent, Australia and New Zealand of up to five percent, and Brunei of up to 20 percent.
The TPP will eliminate tariffs on forestry and value-added wood products and create new opportunities in key markets such as Japan, Malaysia and Vietnam.
The province’s council of forest industries (COFI) said this agreement will create new opportunities for the B.C.’s forest industry, especially in emerging Asian markets.
“We’re particularly encouraged by Japan’s willingness to gradually eliminate tariffs on forest products imports,” said Susan Yurkovich, President of COFI. “We have long and productive relationships in the Japanese market, and we believe the TPP will only strengthen those relationships.”
By generating opportunities for Canadian forestry and value-added wood products, the TPP is expected to create advantages for Canadian businesses and workers.
Teresa Wat, Minister of International Trade, said the importance of signing on to the TPP agreement cannot be overstated for its potential impact on the provincial economy and the jobs created for British Columbians.
“Already, one in five jobs is generated in B.C. as a result of exports, so greater access to markets through this agreement will strengthen job creation from trade,” said Wat. “Sectors like fish and seafood, agriculture, forestry, technology and manufactured goods - where tariffs are high and will now be reduced or eliminated - will be winners from the deal once ratified.”
Wat said this agreement will also help attract foreign direct investment to the province and level the playing field for B.C. companies by establishing a common set of rules for trade and investment.
The Forest Products Association of Canada (FPAC) said the TPP agreement could “pave the way to further diversifying markets” and expanding exports.
“The forest products industry in Canada has always been one of the country’s major exporters and this agreement is a historic opportunity to improve access to rapidly growing markets in the Asia Pacific”, said David Lindsay, President of FPAC.
According to the provincial government, export markets for the wood products manufacturing industry are critically important to the B.C. economy. Forest products account for 24 per cent of all cargo exports from Port Metro Vancouver. The forest industry contributes $12 billion annually to provincial gross domestic product and 150,000 jobs in the province rely on the industry.