TPP Advantages And Disadvantages
States, and Canada. The TPP covers a lot of sectors from copyright laws to medicine and even import and export regulation. One sector that the TPP regulates is dairy importing and exporting. Canada has a high tariff on importing dairy products and a production limit on its dairy product. Both system makes the price of dairy product high in Canada. The high tariff makes it hard to import milk from countries that have a lower …show more content…
The price no longer conveys the correct information, which is the demand for dairy and distort the decisions of firms and customer (pg. 142).
The TPP, if approved, will make it easier to import dairy product, not only milk but also ice cream, cheese and yogurt. Sylvain Charlebois, a professor of distribution and food policy at the University of Guelph, says that the TPP will increase cheese and milk imports. Specifically it will add 17,700 tons of cheese and 250 million liters of milk from overseas. More imported products will make the price of cheese and milk cheaper for the customers and will increase the revenue of the importing companies. While this is a boon for customers and importing companies, it is a loss for the dairy farmers. People will buy the cheaper imported products, which means less revenue for the farmers.
An Economist would argue that the decrease in tariff is a good thing as it decreases the deadweight loss and make the market more similar to a free market. Within a free market, individuals has a free choice what to buy and how much are they willing to pay for it, while the producers has the freedom to choose how to produce the product and how much