Canada boosts size of proposed Pacific trade pact

Canada won approval to enter talks on forging a Pacific-wide trade deal on Tuesday, becoming the second largest economy to take part in the ambitious but difficult negotiations. At a summit of the Group of 20 major economies in the Mexican resort of Los Cabos, nations negotiating to form the Trans-Pacific Partnership agreed to let in Canada as the 11th member, one day after including Mexico. Canadian Prime Minister Stephen Harper and US President Barack Obama, who have been at odds over a controversial pipeline proposal, agreed in a joint statement to pursue the "high-ambition, next-generation" trade pact. "The United States and Canada share a common goal of expeditiously concluding the TPP agreement, which will promote innovation, support the creation and retention of jobs and contribute to the growth of our highly integrated economies," it said. Harper, speaking separately, called the partnership "a further example of our determination to diversify our exports and to create jobs, growth and long-term prosperity for Canadian families." Once obscure, the Trans-Pacific Partnership has emerged as a trade priority for Obama who has cast the potential pact as a way to boost US exports and jobs while preserving labor and environmental standards dear to his political base. Canada will be the second largest economy in talks on the Trans-Pacific Partnership which also includes Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. Under the rules of the pact, any member can block another nation from entering the talks. The nations have not offered a place in the talks to Japan, the world's third largest economy, where the TPP is deeply controversial. Japan's Prime Minister Yoshihiko Noda last year voiced interest in the TPP but faced fierce opposition from farmers, who have long enjoyed protection from foreign competitors and fear being swamped if the pact goes ahead. Canada's inclusion could also complicate the talks. Canada's previous aspirations to enter the TPP faced opposition from New Zealand, which has insisted in the past that Ottawa liberalize its dairy industry. New Zealand is the world's largest dairy exporter, with its cooperative Fonterra accounting for more than one-third of global dairy trade, while Canada tightly manages its dairy farmers to control supply and demand. New Zealand's inclusion has also brought opposition to the TPP in some US agricultural states. In Australia and New Zealand, activists have voiced fear that the inclusion of US pharmaceutical companies would drive up drug prices. Canada is the largest trading partner of the United States and the neighbors have had a three-way pact on free commercial borders -- the North American Free Trade Agreement (NAFTA) -- since 1994. NAFTA remains deeply unpopular with US labor unions who blame the free border with lower-wage Mexico for the loss of US manufacturing jobs. Unions form a key constituency in Obama's Democratic Party as he runs for re-election. Richard Trumka, president of the AFL-CIO, the largest US labor group, said in a statement that the Trans-Pacific Partnership could improve on NAFTA regulations and bring "the potential to benefit working families both here and in Mexico." But he added: "To the extent that weaker rules prevail, workers will continue to pay a high price for the job displacement and regulatory erosion caused by NAFTA and other trade agreements, while corporations will continue to benefit." The US Chamber of Commerce, which promotes businesses, welcomed the inclusion of Canada and Mexico. It praised Canada's parliament for Monday approving copyright laws long sought by Hollywood studios.