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 Indo-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 in force between: Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. On July 16, 2023, CPTPP Parties signed an Accession Protocol with the United Kingdom. The CPTPP will enter into force for the U.K. once all CPTPP members and the U.K. complete their respective ratification processes. If all members have not ratified by October 16, 2024, the Accession Protocol will enter into force after 6 CPTPP members and the U.K. ratify the Agreement.
Why CPTPP matters
CPTPP is helping to create jobs, strengthen economic relations and boost Canada’s trade with important trading partners. The CPTPP is a trading bloc of 580 million consumers and 15.6% 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.
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. Any economy that is able to meet the high-standard rules and ambitious market access commitments of CPTPP can seek to join. As a result, CPTPP may provide Canada with preferential access to additional markets 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: Eliminates tariffs and reduces barriers for 98% of exports to CPTPP members .
Rules of origin and origin procedures: Canadian businesses benefit from clear rules that determine which goods are considered originating and steamlined procedures that establish obligations for importers, exporters and producers. 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 members 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.
Regulatory cooperation and conformity assessment: Helps reduce unnecessary regulatory requirements. It also includes measures that make it easier for Canadians to do business in the Indo-Pacific.
Government procurement: Canadian companies will receive the same treatment as domestic suppliers when bidding on government procurement opportunities in CPTPP members.
Trade in services and labour mobility: 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 work temporarily in CPTPP member.
Investment: Provisions designed to increase certainty, stability and protection for investments and secure access to the Canadian and Indo-Pacific markets.
Intellectual property: Establishes a regional standard for intellectual property protection and enforcement in the Indo-Pacific, providing Canadian creators and innovators with a transparent and predictable framework for operating in CPTPP member.
Labour and the environment: Includes clear commitments to uphold CPTPP members’ respective standards on labour and environment and not to undermine them for commercial gain.
Inclusive trade: 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 reduce costs for Canadian business and consumers. For exporters to the Indo-Pacific, Canadian businesses are better placed to compete on price in Indo-Pacific markets.
Access to new clients: Canadian businesses have access to a trading bloc of over 500 million consumers and 13.5% of global GDP. This means new preferential access to key markets, including Japan, Vietnam and Malaysia.
Market transparency and stability: Improved protection, predictability and transparency for conducting business in CPTPP markets. Canadian companies can bid on government contracts treated as equals to domestic bidders and access to the information necessary to prepare and submit a bid on government procurement opportunities.
Reduced barriers to 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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