The Government of Canada recently signed the CPTPP Trade Agreement. This acronym represents the Comprehensive and Progressive Trans-Pacific Partnership, a new free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It creates one of the largest trading blocs in the world, comprised of 11 countries, a market of 500 million people and a combined GDP of 13.5 trillion. Once it enters into force, CPTPP will give Canadian companies preferential access to these markets by reducing or eliminating almost all customs tariffs between CPTPP member countries, while removing non-tariff barriers to trade.
CPTPP also includes the first-ever chapter on small and medium-sized enterprises (SMEs), Chapter 24, which is intended to make it easier for first-time exporters to grow their company abroad. Two articles in the Chapter: Information sharing, and Committee on SMEs, intend to provide them with all related information considered relevant for SMEs to benefit from the opportunities provided by the Agreement through a variety of mechanism such as websites, seminars, workshops, etc.
What are the Benefits?
This agreement will give Canadian companies an advantage compared to other non-CPTPP countries entering these Asia-Pacific markets. According to Global Affairs Canada:
“CPTPP would generate long-term economic gains for Canada totalling $4.2 billion. The gains are driven by increases in goods and services exports and investment. The increases in exports are driven primarily by new preferential access for Canadian businesses to the markets in which Canada does not already have an FTA, such as Japan, Vietnam, Malaysia and Australia. The gains for Canada cover a broad range of sectors across the Canadian economy, including some agricultural products such as pork and beef, wood products, machinery and equipment, and transportation equipment. The impacts on the automotive sector are slight, with a small increase in output and exports.”
Chronology of the Agreement
- 2006 – Brunei, Chile, New Zealand and Singapore – signed the Trans-Pacific Strategic Economic Partnership Agreement (TPP) or P4. The P4 entered into force in 2006.
- 2010 – Australia, Peru, Vietnam and the United States joined the TPP discussions, Malaysia entered later
- 2012 – Canada and Mexico joined
- 2013 – Japan joined
- 2016 – 12 countries signed the TPP document
- 2017 – United States pulled out of TPP
- January 2018 – 11 countries finished negotiations and finalized the text of the reformed CPTPP agreement
- March 2018 – Representatives from all 11 CPTPP countries met in Santiago, Chile to sign the agreement
- Each of the CPTPP parties are now undertaking their own respective domestic procedures for ratification and implementation.
When Will it Enter into Force?
CPTPP will enter into force 60 days after at least six (or 50%) of the signatories have notified the Depositary (NZ) of the completion of ratification procedures. For subsequent parties that ratify the agreement, the CPTPP will enter into force for that party 60 days after the date of its ratification.
How Can Small Business BC Help?
Small Business BC has a lot of resources for companies interested in this market. Import and export advisory services, trade related seminars and the Export Navigator Program, a pilot program that offers businesses in BC access to community-based export specialists.