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To celebrate the University of British Columbia’s centennial, we asked UBC Sauder professors to tell us about imminent changes in business that will transform our daily lives. From the green economy to internet security we asked them, “What’s next?”

 

Who:

James Brander, professor of economics at the UBC Sauder School of Business, and Asia Pacific Professor in International Business and Public Policy. Brander is also past president of the Canadian Economics Association and has served as managing editor of the Canadian Journal of Economics and co-editor of the Journal of International Economics.

What's Now:

Brander explains that, from the Second World War until roughly 10 years ago, and especially through the 1994 North American Free Trade Agreement, barriers to trade were dramatically reduced, and tariffs, quotas and currency issues were addressed.

“There was a lot of progress on those fronts, and not much has happened over the past decade, because frankly, there’s not much left,” explains Brander. “Trade barriers are at a very low level.”

So what remains for the Trans-Pacific Partnership, the massive multinational trade agreement pending ratification by Canada and others, to target? Much of it has to do with a primarily 21st century problem: intellectual property.

The agreement covers everything from patents on pharmaceuticals to copyrights on movies, music and books, says Brander, giving more teeth to those fighting piracy and theft.

James Brander

He says the agreement, which includes 12 nations, among them Japan, Australia, Mexico, Chile and Brunei, also more tightly ties trade and the environment.

What's Next:

Once ratified by member nations, the agreement will take several years to come into force. Brander adds that, because the American and Canadian economies are so intricately interwoven, if the U.S. joins, Canada should join; if it backs out, Canada should follow suit.

The pharmaceutical industry could see significant changes, extending U.S.-style intellectual property protection to countries such as Vietnam, Peru and other low income TPP members. The result would likely be higher drug prices in those countries. 

“There will still be a lot of individual discretion and flexibility from country to country, but the basic idea is to increase harmonization of drug patent protection,” he explains. “This helps the U.S., where most drug companies are based, but could also help other countries by increasing incentives for companies to make new drugs available throughout the region.”

When it comes to the environment, Brander expects to see stronger links between international trade and environmental performance on everything from overfishing to greenhouse gas emissions — and unlike previous deals, they would be subject to dispute resolution.

“Teeth is too strong a word. Maybe baby teeth,” says Brander with a laugh about his expectations for the strength of the dispute mechanisms in the agreement. “It’s more than previously existed for environmental issues, but not as much as people were hoping for.”

Despite public concerns over the deal, Brander says its impact on Canada will be relatively minimal; and because two of the world’s largest economies, China and India, are not signatories, it has significant limits. Still, anything that helps minimize trade conflicts and promotes economic development will likely benefit Canada in the long run.

“Canada has a stake in the performance of the overall world economy — and not only in GDP growth, but in the environment and world health,” says Brander. “So I think the main effect on Canada will be through the impact on global trading, and the international environment.”