CCPA: TPP poses unnecessary risks to Canada’s postal services: report
August 11, 2016
Ottawa—A new assessment of the Trans-Pacific Partnership by two legal experts finds that the trade agreement’s provisions related to mail delivery and courier services pose a threat to how Canada Post functions today and restrict how the Crown corporation might be reformed or the services it provides expanded in the future.
Signed, Sealed and Delivered? The TPP and Canada’s Public Postal Service, by Daniel Sheppard and Louis Century of Goldblatt Partners LLP, and released today by the Canadian Centre for Policy Alternatives, attempts to determine the extent to which rules contained in the TPP may constrain the current and future activities of Canada Post. While the authors conclude the TPP “does not necessarily render Canada Post’s current activities unlawful,” it will create unnecessary risks of future trade litigation.
“The TPP’s convoluted, overlapping and ambiguous rules, many of which directly respond to U.S. courier industry lobbying, create real risks of future trade and investment disputes triggered by corporations or member states unhappy with Canada’s policy choices in the area of postal services,” say Sheppard and Century. “In contrast to the Canada Post review currently underway by the Trudeau government, these rules in the TPP were negotiated in secret by trade negotiators and lobbyists, on a fast-tracked basis, without parliamentary oversight or public consultation.”
The authors review the history of Canada Post, its entry into the express delivery market in the 1990s, and industry efforts since then to dismantle the integrated public postal service model in Canada and elsewhere. These efforts have included two trade disputes by UPS: one against Canada under the investment rules in NAFTA, the other against the European Commission under EU law for Deutsche Post’s acquisition of a significant interest in courier DHL.
The TPP’s express delivery services annex expands the potential opportunities for courier services to challenge Canada Post. It does this in one way by prohibiting the use of money from monopoly activities (e.g., letter mail) to “cross-subsidize” its own or anyone else’s express delivery services. The annex also requires that postal monopolies not “abuse [their] monopoly position” in a way that treats foreign companies (like UPS) less favourably than domestic ones (like Purolator, which is majority-owned by Canada Post). Other restrictions on state-owned enterprises and “designated monopolies” further compromise the current and possible future expanded activities of Canada Post.
“It is unfortunate that Canada agreed to these ill-defined new rules, which cast doubt on the federal government’s policy-making authority in respect of postal services at the very moment when the public is participating in a consultative project to reimagine the role of our public postal service,” say the authors. “Legal interpretations aside, the TPP is a powerful tool that can and will be used by companies to lobby against, and potentially challenge, Canada Post initiatives that cut into their bottom line.”
Signed, Sealed and Delivered is the latest study in the CCPA’s ongoing research series on the TPP, What’s the Big Deal: Understanding the Trans-Pacific Partnership, and is available on the CCPA website at www.policyalternatives.ca.
For more information, contact Kerri-Anne Finn, CCPA Director of Communications, at 613-563-1341 x306.
International trade and investment, deep integration
Public services and privatization
Projects: Trade and Investment Research Project
Offices: National Office