Trade officials had been meeting in Tokyo to resolve rifts including Canada’s insistence on protections for its cultural industries such as movies, TV and music.

An agreement is a win for Japanese Prime Minister Shinzo Abe’s government, which has been lobbying hard to save the pact, originally called the Trans-Pacific Partnership. In one of his first acts as U.S. president in January 2017, Donald Trump pulled the United States out of the original 12-nation treaty.

Abe has painted the deal as a spur to growth and reform in Japan and a symbol of commitment to free and multilateral trade at a time when Trump stresses “America First” policies.

A Canadian government source confirmed Ottawa would sign on to what’s called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), saying it had “secured real gains.”

“We are happy to confirm the achievement of a significant outcome on culture as well as an improved arrangement on autos with Japan, along with the suspension of many intellectual property provisions of concern to Canadian stakeholders,” Canadian Trade Minister Francois-Philippe Champagne said Tuesday in a statement.

Champagne and Agriculture Minister Lawrence MacAulay, in a separate statement later Tuesday, said the deal “will give the Canadian agricultural industry preferential access to all CPTPP countries and will provide new market access opportunities for a wide range of Canadian products, including meat, grains, pulses, maple syrup, wines and spirits, seafood and agri-food products.”

“The agreement reached in Tokyo today is the right deal,” Prime Minister Justin Trudeau said Tuesday at the World Economic Forum in Davos, Switzerland.

“Our government stood up for Canadian interest and this agreement meets our objectives of creating and sustaining growth, prosperity and well paying middle class jobs today and for generations to come.”

‘Comforted’

Canadian Cattlemen’s Association president Dan Darling hailed Tuesday’s announcement as an “extremely positive development for Canada’s entire beef sector.”

The CCA noted Canadian beef, once a TPP deal is implemented, will “enjoy a competitive advantage” over U.S. beef in Japan, entering that country at the same preferential tariff rate as Australian beef.

The Canadian Pork Council said Tuesday that producers “can be comforted in knowing that Canadian pork will have competitive access to key markets such as Japan, and developing markets such as Singapore, Vietnam and Malaysia.”

Canadian pork exports to nine of the pact’s 10 member countries in 2016 totalled 380,000 tonnes, worth over $1.4 billion, the council said.

The Canadian Meat Council said Tuesday it’s “confident that this deal has the potential to increase beef and pork sales by at least $500 million, creating the potential to support an additional 5,800 jobs here in Canada.”

TPP countries already take about 20 per cent of Canada’s wheat exports, according to Cereals Canada, which said Tuesday it expects “additional growth in existing markets like Japan as well as development in emerging customers” in Asia such as Vietnam.

“The elimination of all import tariffs on soy products as well as the comprehensive framework of rights and obligations applicable to the use of technical measures will provide invaluable support to Soy Canada’s target of a doubling of production to 13 million tonnes by 2027,” Soy Canada chair Mark Huston said in a separate release.

Dairy Farmers of Canada, however, on Tuesday cited reports that the new CPTPP deal will include the market access concessions originally agreed to in October 2015.

“Although the loss of the U.S. represents a loss of approximately 60 per cent of the original TPP market (gross domestic product), the original concessions to our domestic dairy market remain,” DFC said in a release. “How is this in the best interests of Canadians?”

‘Collective commitment’

Japanese Economy Minister Toshimitsu Motegi said the new CPTPP, or TPP-11, would be an “engine to overcome protectionism” emerging in parts of the world.

He added Japan would explain the importance of the deal to Washington in hopes of persuading it to join.

Ministers from the 11 countries, including Japan, Australia and Canada, agreed in November on core elements to move ahead without the U.S., but demands by countries including Canada for measures to ensure the deal protects jobs blocked a final agreement.

“This outcome reaffirms the CPTPP countries’ collective commitment towards greater trade liberalization and regional integration,” Singapore’s Ministry of Trade and Industry said in a statement.

Australian Prime Minister Malcolm Turnbull said last week the new agreement would leave a door open for eventual U.S. participation.

Canada, which wanted protection of its cultural industries, and Vietnam, which has worried about labour protection rules, will exchange separate side letters with other members on those topics at the time of the signing, Motegi said.

The timing of the deal is significant for Canada, which is trying to diversify its exports. Talks with Mexico and the U.S. on modernizing the North American Free Trade Agreement (NAFTA) have run into trouble and may fail.

— Reporting for Reuters by Kaori Kaneko and Takashi Umekawa in Tokyo; additional reporting by Jack Kim in Singapore and David Ljunggren in Montreal; writing by Linda Sieg. Includes files from AGCanada.com Network staff.

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The proposal will be made at the second round of the U.S.-Japan economic dialogue in Washington on Oct. 16, but it is uncertain if the U.S. side will go along, said the two sources, who have direct knowledge of the matter.

If successful, the proposal could help ward off trade friction with the U.S., which is renegotiating free trade agreements with other countries to protect jobs and lower its trade deficit.

Under current measures, Japan automatically imposes higher tariffs if quarterly imports of specific beef products from any country rise more than 17 per cent from the previous year.

Japan hiked tariffs from Aug. 1 on imports of frozen beef, popular in beef bowl dishes, from countries including the United States to 50 per cent from 38.5 per cent.

The move followed U.S. President Donald Trump’s withdraw from the long-planned Trans-Pacific Partnership trade deal earlier this year.

Japan says the tariff hike, set to be in place until next March, is a “safeguard” mechanism to protect domestic farmers, but it has prompted some concern in Washington.

Instead of reviewing import data on a quarterly basis, Japan will propose shortening this period to every 10 days, the sources said. This will make it easier for companies that import beef to adjust volumes and avoid triggering tariffs, the sources said.

However, the plan is far from certain to work because frozen U.S. beef imports could surge next year in April after the current tariff increase expires, one source said.

“Once the safeguard is triggered, there is a concern that it will repeatedly be triggered in the future,” the source said.

The first round of the U.S.-Japan economic dialogue, which was held in Tokyo in April, ended largely without incident. However, there is some concern among Japanese officials that the U.S. side could strongly push for trade concession during the second dialogue meeting.

Japan had a $69 billion trade surplus with the U.S. last year, according to the U.S. Treasury Department, which has expressed concern over what it called the “persistence” of the imbalance.

Japanese officials counter that Tokyo accounts for a much smaller slice of the U.S. deficit than in the past, while China’s imbalance is much bigger.

— Reporting for Reuters by Takashi Umekawa, writing by Stanley White.

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