Election timing puts Canada gov't in bind on Pacific trade talks

Fri May 8, 2015 1:43pm EDT
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By David Ljunggren

OTTAWA May 8 (Reuters) - Canada is facing a tough squeeze at talks on a major Pacific trade treaty because the concessions other nations want it to make could cause serious problems for the governing Conservatives in this October's general election.

Canada, one of 12 nations aiming to create the Trans-Pacific Partnership (TPP), is under pressure to start dismantling protections for its dairy and poultry industry that keep domestic prices high and make imports expensive.

If Canada cannot strike a deal it will be left out of the first round of TPP, and that would put it at a disadvantage if it wants to join later.

Canada's powerful dairy lobby opposes major changes to the country's so-called supply management system, and altering it could cost the Conservatives votes in agricultural areas that tend to favor the right-of-center party.

This might make all the difference in an election that opinion polls suggest is too tight to call.

Time is running short for Canada to reveal what it is prepared to give up in TPP, but Ottawa has not yet made a move.

Months of behind-the-scenes pressure and complaints broke into the open on Thursday, when the U.S. agriculture secretary said the Canadians might run out of time.

"The Americans have clearly decided they want to make Ottawa sweat," said one non-Canadian source with direct knowledge of the talks. The source said if Ottawa is left out of the first round it would be "strategically disastrous", noting it could take five years for a second round to start.   Continued...