Technical Barriers to Trade Chapter
In addition to tariffs, there are other types of barriers that affect trade across borders, some of which are known as technical barriers to trade. Technical barriers to trade often take the form of mandatory technical regulations that deal with such things as product characteristics, testing and certification requirements, and labelling. Technical regulations can affect all manufacturing sectors and any product that a consumer might purchase. The TPP requires that technical regulations not be used as barriers to trade. To that end, the TPP creates a fair, predictable and open regulatory system that promotes, rather than hinders, the flow of goods.
Regulatory measures are usually designed to address legitimate objectives, such as establishing health and safety measures. However, if they are poorly designed or improperly conceived, they can restrict trade by being overly burdensome or discriminatory against imported goods. Minimizing the impact of technical barriers will help to maximize access into TPP markets for Canada’s exports.
Technical Summary of Negotiated Outcomes: Technical Barriers to Trade
- Promotes the use of internationally accepted standards and acknowledges their role in supporting greater regulatory alignment and good regulatory practices and in reducing unnecessary barriers to trade.
- Provides national treatment for conformity assessment bodies within TPP member countries.
- Contains a number of WTO-plus obligations that foster closer cooperation between TPP members’ organizations that are responsible for standardization, conformity assessment and accreditation.
- Improves transparency by requiring notification and publication of technical regulations and conformity assessment procedures.
- Promotes information exchanges and technical discussions between the Parties so that concerns may be addressed and dealt with as quickly as possible.
- This also helps to avoid the creation of new barriers, while minimizing or eliminating the negative impacts of those that already exist.
Sector specific outcomes
- Provides added proprietary protection for information and communications technology products that use cryptography.
- Facilitates trade in wine and distilled spirits through enhanced regulatory practices, including through provisions on labelling and certification.
- Protects the icewine standard that Canada uses, preventing “freezer” wine from using the term “icewine.”
- Improves regulatory transparency in the areas of cosmetics, medical devices and pharmaceutical products.
- Helps to ensure the confidentiality of proprietary formulas for pre-packaged foods and food additives.
- Facilitates the trade of organic products by encouraging information exchange, cooperation, and participation of Parties on matters related to organics.
Technical Barriers to Trade
A company has developed a new line of innovative cosmetics products in response to the growth potential of the sector. While the company primarily sells to customers in Canada and the U.S., its Board of Directors has started to consider expanding into Asian markets. The Board sees potential from new market access opportunities and provisions in the TPP that will make it easier for the company to do business in the markets they are targeting. In particular, a dedicated annex on cosmetics will mean that the company only has to obtain one marketing authorization rather than multiple authorizations for product lines that feature comparable products but differ only in shade or fragrance. Moreover, the company will also benefit from trade-facilitating rules for re-labelling and re-packaging. They know that more sales mean greater opportunities, and are excited to see where the company will go once the TPP is implemented.
Automotive and Automotive Parts Manufacturing
Canada’s autos outcome in TPP protects the integration of the auto industry in North America, a key competitive advantage. Canada has secured a specialized, permanent dispute settlement mechanism with Japan in the TPP that is faster than any other dispute settlement process agreed between TPP countries.
Canada and Japan have also agreed that, in the event of non-compliance with TPP and bilateral obligations, Canada’s tariff on motor vehicles may be “snapped-back” to the original rate for a period of 100 days. The protection of this “snap-back” mechanism is available to Canada for a period of six years after our motor vehicle tariff is eliminated. Canada and Japan also bilaterally agreed to a robust special motor vehicle safeguard mechanism stronger than the regular TPP transitional safeguard mechanism, and which will be available to guard against harm from import surges for a period of 12 years after Canada’s motor vehicle tariff is eliminated. If a special motor vehicle safeguard is applied, it can remain in place for up to five years.
With respect to regulatory measures and non-tariff barrier protections on motor vehicle trade, through TPP Canada and Japan have agreed to provide each other with ‘Most Favoured Nation’ treatment. In the event of non-compliance with this outcome, the accelerated dispute settlement/snapback procedures described above provide an avenue for recourse.
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