LOS CABOS, Mexico - Canada will join 10 other nations in talks aimed at creating an Asia Pacific free trade agreement, Prime Minister Stephen Harper announced on Tuesday, part of a bid to reduce reliance on the U.S. market in favor of fast-growing emerging economies.
The Trans-Pacific Partnership (TPP) talks are aimed at creating a free-trade zone with a combined population of 658 million people and a gross domestic product of more than C$20 trillion ($19.65 trillion).
"This is a further example of our determination to diversify our exports and to create jobs, growth and long-term prosperity for Canadian families," Harper told reporters in the Mexican beach resort of Los Cabos on the sidelines of a G20 summit.
Harper and U.S. President Barack Obama said in a joint statement that the two countries shared the goal of "expeditiously" reaching a "high standard agreement that will build on the commitments of NAFTA (the North American Free Trade Agreement)," which went into force in 1994 and phased out most trade barriers between the United States, Canada and Mexico.
The deal will likely increase pressure on Canada to scrap a farm support program that other countries see as protectionist. Canada limits domestic production of dairy, poultry and eggs to match demand, and high tariffs are imposed on imports to protect farmers, a scheme considered unfair by competitors but one that has been politically sacrosanct.
Many of Canada's farmers consider supply management essential to their survival since it allows them to compete against much larger U.S. competitors. Defending supply management has always been Canadian government policy.
Keen to avoid losing votes in the province of Quebec, home to a big dairy industry, the Conservatives have promised to keep the program intact and exempt it from any eventual TPP negotiations.
U.S. business groups welcomed Canada's entry to the talks, which came fast on the heels of Monday's announcement that G20 host Mexico would also join the negotiations.
"Companies and workers in our three countries literally make things together, with supply chains that cross our borders and make North America more competitive on the global stage. As a result, negotiating the TPP together is an excellent strategic decision for North America," said Thomas Donohue, president of the U.S. Chamber of Commerce.
U.S. Trade Representative Ron Kirk said the White House would soon formally notify Congress of its intentions to enter trade talks with Canada, beginning a 90-day consultation period on U.S. negotiating objectives.