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

Background: the Trans-Pacific Partnership (TPP)

Early negotiations for what would become the TPP began with four countries in 2006, which would grow to 12 members by 2013. Canada joined the TPP trade negotiations in 2012. The TPP is an Asia-Pacific regional trade deal that included the United States, Japan, Mexico, Malaysia, Vietnam, Australia, New Zealand Singapore, Chile, Peru, and Brunei. Negotiations concluded in 2015 and the TPP was subsequently signed in 2016 by all 12 State Parties.

The TPP was one of the most significant free trade agreements (FTAs) initiatives around the globe. The TPP represented a Gross Domestic Product (GDP) of US$21 trillion, 40 percent of the global economy, and 25 percent of the global value of trade in 2017. In the same year, the region accounted for over 65 percent of Canada’s agri-food exports.

From the TPP to the CPTPP

In January 2017, under the leadership of President Donald J. Trump, the U.S. formally withdrew from the TPP. Due to the rules and procedures for implementation of the TPP, the TPP could not enter into force without the U.S. This left the remaining 11 members of the deal to try to find a path forward, which led to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Less than a year after the U.S. withdrawal, the 11 remaining members agreed to a revised trade agreement on Jan. 23 2018 that would forge ahead without the U.S. The pact was rebranded to become the CPTPP.

Negotiations for the CPTPP concluded on January 23, 2018, in Tokyo, Japan, and included much of the original content of the TPP. The CPTPP was signed on March 8, 2018, at a ceremony in Santiago, Chile that was attended by International Trade Minister François-Philippe Champagne and the 10 other trade ministers from the CPTPP countries.

On December 23, 2022, Chile formally notified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Depositary, New Zealand, that it has completed the necessary domestic procedures to ratify and implement the Agreement. Along with Chile, ten other CPTPP countries have ratified the agreement: Canada, Australia, Japan, Mexico, New Zealand, Singapore, Vietnam, Peru, and Malaysia. Brunei Darussalam is still undertaking its domestic procedures to ratify and implement the Agreement.

Overall Benefits

The agreement secured access to a region that has a combined GDP of $13.5 trillion, and, once implemented, made Canada the only G7 country with free trade access to the Americas, Europe, and Asia-Pacific. Total bilateral trade between Canada and the CPTPP region amounted to $105 billion in 2016, which is equal to 8.1 percent of Canada’s total trade. The CPTPP market continues to present significant potential for growth for Canadian agriculture and agri-food exporters. 

In particular, the CPTPP retains the same rules and market access outcomes and most of the provisions of the TPP. This includes the reduction of tariffs that is expected to result in savings of $428 million a year for Canadians.2 Further, 22 provisions have been suspended or changed, largely in areas that were priorities for the U.S. such as investment and intellectual property.

 

Once the CPTPP entered into force, it became one of the largest FTAs in the world with 11 countries representing almost 500 million people and a combined GDP of $13.5 trillion, or 13.5 percent of global GDP.3 The gains from the CPTPP have benefited many sectors including financial services, fish and seafood, metals and minerals, and agri-food.

The CPTPP was expected to increase exports among the partners by 2.43 percent, increase exports to non-CPTPP parties by .23 percent, and generate economic welfare benefits of C$22 billion by 20354.

 

CPTPP has brought great economic benefits to Canada. In the first 3 years after CPTPP entered into force, total merchandise trade between Canada and Australia, Japan, New Zealand, Singapore and Vietnam (the 5 ratified CPTPP signatories without other trade agreements with Canada) grew almost 10%—from $47.3 billion in 2018 to $52.1 billion in 2021. 

Outcomes for Canadian Agri-Food Exporters

In 2021, agri-food exports to CPTPP countries reached CDN $2.4 billion. The CPTPP provides unprecedented and preferential access to large and fast-growing markets in the Asia-Pacific.

On entry into force some notable gains for Canadian agriculture included:

    • Japan eliminated 32 percent of tariff lines,

    • Vietnam eliminated 31 percent of tariff lines (67 percent within 15 years),

    • and Malaysia eliminated 92 percent of tariff lines.

    • Beyond tariffs, the TPP also created a new Asia-Pacific framework for trade with rules to increase cooperation and transparency on non-tariff barriers related to sanitary and phytosanitary measures, biotechnology, and plant health.

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