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What does the CPTPP mean for services?


Trade snapshot

The services sector is by far the largest part of Canada’s economy, accounting for almost 70% of Canada’s GDP, and employing close to three out of four working Canadians (more than 13.6 million people).

Key facts and figures

Canada’s top five services exports to CPTPP countries (2015)

How the CPTPP benefits services suppliers

Free trade agreements (FTAs) facilitate more than the import and export of tangible goods. Ideas and expertise are also exchanged, in large part, through trade in services, such as architecture, engineering, information management, environmental protection and monitoring, mining and energy development, transportation and financial services. Services account for some of the highest-paying jobs in Canada.

The CPTPP cross-border trade in services (CBTS) and financial services chapters contain rules aimed at facilitating the exchange of services, building on commitments made under the 1995 WTO General Agreement on Trade in Services (GATS):

Under the CPTPP, Canada also maintains policy flexibility to regulate in the public interest through reservations known as “non-conforming measures.” Non-conforming measures allow governments to maintain exceptions to the CPTPP services and investment chapters by listing the specific measures activities or sectors where obligations under these chapters do not apply. This helps ensure that governments can continue to keep measures and policies on services and investment in place, based on domestic priorities. These non-conforming measures are identified in Annexes I and II of the Agreement.

Cross-border trade in services (CBTS)

The CPTPP’s CBTS chapter makes commitments that go beyond GATS and Canada’s existing FTAs with CPTPP partners (such as Chile, Mexico and Peru).

In the CPTPP, Canada gains access to new markets in sectors such as:

In addition, every CPTPP country has specific measures, activities or sectors that it may reserve, as listed under Annexes I and II of the Agreement.

In Annex I, each CPTPP country has a list of non-conforming measures affecting services and investment that existed in the country at the time the CPTPP was concluded and that the country intends to maintain. These measures do not need to be changed even if they are inconsistent with certain obligations in the Agreement. Countries also made the commitment that the non-conforming measures listed in Annex I would not become more restrictive in the future.

In Annex II, each CPTPP country has reservations for sectors or activities where it wishes to retain complete policy flexibility, now and in the future. This allows Canada to maintain policy flexibility in sensitive areas such as Indigenous and minority affairs, culture and social services (including health and public education), and certain transportation services. These reservations allow Canada to introduce new measures in these areas in the future based on domestic priorities, irrespective of Canada’s commitments in the CPTPP.

Financial services

The CPTPP Financial Services chapter applies to measures adopted or maintained by CPTPP countries relating to financial institutions, investors and their respective investments in financial institutions, and cross-border trade in financial services. Building upon the obligations on national treatment, MFN treatment and market access under GATS, the chapter:

Importantly, the chapter tailors the CPTPP’s dispute settlement provisions to the unique nature of financial services. For example, the chapter sets out special expertise requirements for arbitrators in the event that there is a dispute pertaining to financial services. The chapter also establishes a formal process for financial authorities to jointly determine if a CPTPP country’s use of the prudential exception is a valid defence of an investor’s claim (and not in contravention of the CPTPP).

Under Annex III of the Agreement, each CPTPP country lists non-conforming measures in the area of financial services, organized into two sections:


Footnote 1

Consistent with Canada’s approach to previous FTAs, the CPTPP includes reservations and exceptions allowing the Government of Canada to adopt or maintain measures conferring rights or privileges to Indigenous peoples in Canada. In the CPTPP, these reservations and exceptions are made under the area of “Aboriginal affairs,” with the term “Aboriginal peoples” bearing direct legal reference to Section 35 of the Constitution Act, 1982, and with all rights therein being “aboriginal and treaty rights.”.

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