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CPTPP explained

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Canada and 10 other countries in the Asia-Pacific. CPTPP covers virtually all sectors and aspects of trade between Canada and member countries to reduce trade barriers and facilitate trade.

The agreement is currently in force among 7 countries: Canada, Australia, Japan, Mexico, New Zealand, Singapore and Vietnam. For the remaining signatories—Brunei, Chile, Malaysia and Peru—the CPTPP will enter into force 60 days after they have ratified the agreement.

Why CPTPP matters

CPTPP is helping to create jobs, strengthen economic relations and boost Canada’s trade with important trading partners. Once fully implemented, CPTPP will form a trading bloc representing 500 million consumers and 13.5% of global GDP, providing Canada with preferential access to key markets in Asia and Latin America.

CPTPP is an ambitious and high-standard free trade agreement covering virtually all aspects of trade and investment. The agreement features ambitious market-access commitments in trade in goods, services, investment, labour mobility and government procurement. The agreement also establishes clear rules that help create a consistent, transparent and fair environment to do business in CPTPP markets, with dedicated chapters covering key issues like technical barriers to trade, sanitary and phytosanitary measures, customs administration, transparency and state-owned enterprises.

Additionally, CPTPP features chapters on the protection of the environment and labour rights, which are enforceable by dispute settlement, to ensure that CPTPP members do not derogate from their commitments in these areas to increase trade or investment. The agreement also includes a variety of chapters aimed at trade-related technical cooperation among CPTPP members, including with respect to small and medium-sized enterprises, regulatory coherence and economic development.

CPTPP also includes an accession process that provides for the further expansion of the agreement’s membership now that the agreement is in force. Any economy that is able to meet the high-standard rules and ambitious market access commitments of CPTPP can seek to join the agreement, subject to negotiations on terms and conditions with current CPTPP members. As a result, CPTPP may provide Canada with preferential access to additional markets in the Asia-Pacific region in the future.

What CPTPP covers

CPTPP covers virtually all sectors and aspects of trade in order to eliminate or reduce barriers. It establishes clear rules that help create a consistent, transparent and fair environment to do business in CPTPP markets. CPTPP also includes chapters on the protection of the environment and labour to ensure that CPTPP members do not derogate from their commitments in these areas to increase trade or investment. CPTPP also includes trade-related technical cooperation among CPTPP members, including with respect to small and medium-sized enterprises, regulatory coherence and economic development.

Trade in goods: CPTPP eliminates tariffs and reduces barriers for 98% of exports to CPTPP member countries.

Rules of origin and origin procedures: Canadian exporters and producers have clear and favourable rules that determine which goods are considered originating and procedures that establish obligations for importers, exporters and producers if the importer wants to make a claim for preferential tariff treatment. Companies can approach the customs administration in the market they are targeting to receive an advance ruling on the origin of their product.

Customs and trade facilitation: Canada and other CPTPP countries are working to keep customs procedures simple, effective, clear and predictable. This reduces processing times at the border and makes it easier to move goods between countries.

Regulatory cooperation and conformity assessment: CPTPP helps reduce unnecessary regulatory requirements. It also includes measures that make it easier for Canadians to do business in the Asia-Pacific.

Government procurement: Canadian companies will receive the same treatment as domestic suppliers when bidding on government procurement opportunities in CPTPP member countries.

Trade in services and labour mobility: CPTPP increases predictability and eliminates many barriers encountered at the border, such as quotas and labour market tests, making it easier for Canadian business persons to travel for business or to work temporarily in CPTPP member countries.

Investment: Investment provisions in CPTPP are designed to give investors greater certainty, stability and protection for their investments and to secure access to the Canadian and Asia-Pacific markets.

Intellectual property (IP): CPTPP establishes a regional standard for IP protection and enforcement in the Asia-Pacific, providing Canadian creators and innovators with a transparent and predictable framework for operating in CPTPP member countries.

Labour and the environment: CPTPP includes clear commitments to uphold CPTPP members’ respective standards on labour and environment and not to undermine them for commercial gain.

Inclusive trade: CPTPP advances Canada’s inclusive approach to trade with provisions to ensure the benefits of trade are more widely shared, including with under-represented groups such as women, SMEs and Indigenous peoples.

What it means for Canadian businesses

Here’s how CPTPP helps businesses across Canada:

Competitiveness: Reduced tariffs will make exporting less expensive, allowing Canadian businesses to compete on price in Asia-Pacific markets and, in some cases, give them first-mover advantage.

Access to new clients: Once fully implemented, Canadian businesses will have access to a trading bloc representing 500 million consumers and 13.5% of global GDP. This means new preferential access to key markets in Asia, including Japan, Vietnam and Malaysia (once it ratifies the agreement).

Market transparency and stability: CPTPP offers Canadian services suppliers improved protection, predictability and transparency for conducting business in partner markets. Canadian companies can bid on government contracts knowing they will be treated as equally as domestic bidders and have access to all of the information necessary to prepare and submit a bid on government procurement opportunities.

Reduced barriers to trade: Canada’s temporary entry commitments eliminate certain barriers, such as quotas and labour market tests, so you can temporarily send your personnel to work in partner countries or bring key talent to Canada more easily.

Learn more about CPTPP benefits for Canadian businesses.

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