Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – Backgrounder
What is the CPTPP?
Further to the January 30, 2017 notification from the United States of its intent to not ratify the Trans-Pacific Partnership (TPP), the 11 remaining countries of the Trans-Pacific Partnership (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) agreed to work together to assess options for a possible agreement without the United States. Several meetings between CPTPP parties took place over the course of 2017.
On November 10, 2017, during meetings in Da Nang, Vietnam, the 11 countries agreed on the core elements of a new agreement to be called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
On January 22 and 23, 2018, officials from CPTPP countries met again in Tokyo, Japan to consider remaining issues not resolved in Da Nang, including issues related to culture and autos for Canada. Canada’s chief and deputy chief negotiators attended the meetings. In addition, in recognition of the importance of a potential CPTPP for Canada and of the remaining outstanding issues for Canadians, the Prime Minister appointed a special envoy, Ian McKay, to seek the best possible outcomes for Canada..
On January 23, 2018, CPTPP Parties concluded discussions. Canada is proud to be part of the CPTPP, which is a trading bloc that represents 495 million people, with a combined gross domestic product (GDP) of Can $13.5 trillion, or 13.5% of global GDP. This Agreement is expected to benefit Canada by boosting Canada's GDP by $4.2 billion, thanks to preferential access to the other 10 CPTPP countries.
On March 8, 2018, ministers from all 11 CPTPP countries met in Santiago, Chile, and signed the historic trade agreement. Each of the CPTPP parties is now undertaking its own respective domestic procedures for implementation and ratification. For Canada, this requires introducing implementing legislation to Parliament and making necessary regulatory changes.
The CPTPP will enter into force 60 days after six of the signatories have notified the Depositary (New Zealand) of the completion of their respective ratification procedures. Once it enters into force, the CPTPP will reduce or eliminate almost all tariffs between CPTPP member countries, while establishing high-standard rules that will make the business environment more transparent and predictable for Canadian exporters and investors.
The CPTPP will provide Canadian exporters and investors from all regions of Canada and across a broad range of sectors with new preferential market access to important markets in the Asia-Pacific region, including Japan, and fast growing emerging markets such as Vietnam and Malaysia.
Going into the November 2017 Da Nang meetings and beyond, Canada has demonstrated that it will do the work necessary to set the terms of trade in the burgeoning Asia-Pacific region, in order for the Canadian middle class to compete and win on the world stage. The Government of Canada has worked very hard on the new CPTPP, from spearheading the first meeting of officials in May 2017 to proposing several suspensions and changes, and securing better terms of trade for Canadians in the region.
Since November 2015, the Government of Canada consulted Canadians extensively on the original TPP. Feedback received from Canadians informed Canada’s discussions with CPTPP members. The government addressed stakeholder concerns with the original TPP through securing several changes in the CPTPP, the key ones are highlighted below.
On culture, during the Tokyo meetings, Canada secured bilateral letters with all other CPTPP members. This significant achievement preserves Canada’s flexibility to adopt and maintain programs and policies that support the promotion, creation, distribution, and development of Canadian artistic expression or content, including in the digital environment.
To provide market access for Canadian auto exports to Japan, Canada reached an agreement on auto standards with Japan that brings into effect important commitments on automotive standards and regulations that Japan made to the United States and Canada in the original TPP, but which Canada lost when the United States withdrew from the TPP. Canada also secured a most favoured nation clause on auto standards in a side agreement with Japan to capture future liberalization that Japan would make in this area. Moreover, Canada concluded two autos rules-of-origin side letters with Australia and Malaysia to allow the Canadian auto sector to benefit from preferential tariff treatment without requiring changes to existing production or sourcing patterns.
In addition, Canada achieved suspensions of important provisions from the original TPP, including:
- Regarding intellectual property, parties agreed to suspend certain TPP obligations relating to patents and pharmaceuticals, including on patent term adjustment, which required parties to adjust the patent term to compensate for “unreasonable” patent office delays, as well as the TPP obligation on patent term restoration for marketing approval delays. Parties also suspended certain TPP obligations on copyright and related rights, including on term of protection. Under this suspension, Canada will have the flexibility to continue to provide a copyright term of “life of the author plus 50 years,” consistent with multilateral standards.
- Parties agreed to suspend provisions related to investment agreements and investment authorizations. This prevents foreign investors from bringing forward a case under investor-state dispute settlement when either the investment contract has been breached or when the authorization to invest is amended or revoked by government under the Investment Canada Act. Parties also agreed to suspend application of investor-state dispute settlement to minimum standards of treatment provisions in the financial services chapter.
- Canada was successful in opposing any suspension proposals that impacted Canadian interests or were counter to Canadian values.
Canada also secured a new preamble that includes important progressive elements. These include reaffirming our right to regulate in the public interest; promoting labour rights, environmental protection and conservation, preserving cultural identity and diversity, and promoting corporate social responsibility, gender equality and Indigenous rights.
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