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The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

The CPTPP, formerly known as the Trans-Pacific Partnership (TPP), helps to facilitate a variety of opportunities for Canadian importers and exporters. Signed in 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will soon expand to include the United Kingdom, expanding the reach of this agreement.

Despite the United States withdrawing from the trade deal, Canada and the remaining countries continued negotiations to create a large global trade bloc. Canadian businesses benefit from the CPTPP in a variety of ways, such as lower tariffs and reduced red tape.

What is the CPTPP?

The CPTPP is a free trade agreement ratified by 11 countries, including Canada. This free trade agreement governs many aspects of trade, with concrete rules for issues such as competition, labour mobility, digital trade, intellectual property rights, government procurement, and more. BLog Customs Brokers -1

A primary goal for CPTPP members revolves around opening up markets for investment, trade, and improved economic relations. Through the agreement, member countries aim to get rid of trade barriers in multiple ways, such as eliminating tariffs and streamlining regulations.

A list of current CPTPP countries include:

  • Canada
  • Japan
  • Singapore
  • Australia
  • Brunei
  • Chile
  • Malaysia
  • Mexico
  • New Zealand
  • Peru
  • Vietnam

The United Kingdom is slated to join the CPTPP in the latter half of 2024. When the U.K. officially becomes a member, the CPTPP will make up one of the biggest trading blocs in the world, representing 15% of global GDP and over 580 million consumers. The UK would be the first European country to join the agreement, and the second largest economy after Japan.

What does the CPTPP cover?

The CPTPP covers many economic aspects of international trade, such as cross-border investments, service provisions, and the movement of goods. This trans-pacific partnership cuts regulatory red tape to make it easier for Canadians to do business with companies located in member nations.

The agreement eliminates tariffs and reduces barriers for about 98% of exports to CPTPP members. Member countries agree to simplify customs procedures to reduce processing times at the border, facilitating smooth trade. The CPTPP also defines how the origins of goods are determined and streamlines procedures to assist importers, exporters and producers.

It upholds member countries’ respective standards on labour and the environment, with clear rules to help create a fair, transparent business environment. For example, Canadian companies can receive equal standing as local suppliers when bidding on cross-border government procurement opportunities.

Some border obstacles have also been eliminated so Canadians can travel for business or work temporarily in CPTPP member countries. Canadian creators and innovators will also appreciate the creation of a regional standard for intellectual property protection and enforcement in the Indo-Pacific region.

CPTPP Benefits for Canada

The CPTPP creates opportunities for Canadian businesses across multiple industries, from aerospace and agriculture to engineering and information technology. The main business benefits of the CPTPP include:

Preferential access

Canada gets preferential access to markets across CPTPP member nations, compared to companies in regions outside the trade agreement.

Expanding market borders

The CPTPP includes an accession agreement that allows new memberships for countries that can meet rigorous rules, achieve market commitments, and earn a consensus vote from existing CPTPP members. Costa Rica and Ecuador have applied to join. Uruguay, Thailand, the Philippines, and South Korea have also expressed interest.

Transparency and consistency

Canadians who conduct trade or invest in CPTPP markets can be confident that Canadian interests and values are being advanced, including the protection of labour rights and participation in environmental agreements.

Reduced taxes

After implementation of the CPTPP, it’s expected that 99% of CPTPP markets’ tariff lines will be eliminated.

As Chair of the CPTPP for 2024, Canada will be working on an effective path forward for expanding the trade agreement. If new countries continue to apply for participation in the CPTPP, the deal could soon become the largest free trade agreement.

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