Canada: The Comprehensive And Progressive Agreement For Trans-Pacific Partnership (CPTPP)

Introduction

The full text of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been released, but the bilateral side-letters have not been released to date. CPTPP (which is only 9 pages) incorporates by reference the Trans-Pacific Partnership Agreement (done at Auckland on February 4, 2016)1 — but a number of provisions have been suspended.

Economic impact analysis

The CPTPP will be one of the largest trading blocs in the world, with 11 member countries, 495 million people and a gross domestic product of CAD $13.5 trillion – a full 13.5% of global GDP.  The CPTPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam (the United States of America is not a Party to the CPTPP).

The Office of the Chief Economist of Global Affairs Canada has prepared an analysis of the projected economic impacts of the CPTPP, with projected long-term economic gains for Canada totalling $4.2 billion. The Government has stated that CPTPP gains are greater than the $3.4 billion gain expected under the TPP, due to improved market access for Canadian business to other CPTPP countries in the absence of U.S. competition.

The economic impact analysis states that 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 economic impact analysis finds that under the CPTPP, Canadian exports to the United States are not expected to change significantly as the United States is not a Party to the CPTPP. However, "Total Canadian imports from the United States are projected to fall by $3.3 billion, led by a decline in automotive products imports". This impact on Canada's trade with the United States will no doubt be a topic of discussion during the NAFTA re-negotiations.

Scope and coverage

Upon the entry into force of the CPTPP, the Parties will suspend the application of a number of provisions set out in the Annex to the CPTPP, until the Parties agree to end suspension of one or more of those provisions.

The coverage of the CPTPP is comprehensive, comprising 30 Chapters, numerous Annexes and several hundreds of pages of text of the TPP that have not been suspended. The typical free trade Chapters include National Treatment and Market Access For Goods, Rules of Origin, Customs Administration, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Investment, Cross Border Trade in Services, Financial Services, Temporary Entry for Business Purposes, Government Procurement, State Owned Enterprises and Designated Monopolies, Textile and Apparel Goods, Intellectual Property and Dispute Settlement. The not so typical Chapters include Small and Medium Sized Enterprises, the Environment, Electronic Commerce, Cooperation and Capacity Building, Competitiveness and Business Facilitation, Development, and Transparency and Anti-Corruption.

The provisions of the TPP that will be suspended are listed in the CPTPP's Annex and are found in the following Chapters: Customs Administration (Express Shipments); Investment (e.g. Canada has stated that suspensions on ISDS will prevent foreign investors from using ISDS to enforce their contracts with the government, and will also prevent them from suing the Government of Canada for its withdrawal of approval of a foreign investment.); Cross Border Trade in Services (Express Delivery Services); Financial Services; Telecommunications; Government Procurement; Intellectual Property (e.g. patent term adjustment for unreasonable granting authority delays and unreasonable curtailment; term of protection for copyright); Environment; Transparency and Anti-Corruption.

The Government of Canada has stated that it achieved a "significant outcome on culture as well as improved arrangement on autos with Japan, along with the suspension of many intellectual property provisions of concern to Canadian stakeholders."

A more detailed explanation of significant outcomes by sector for agriculture, automotive, culture, environment, fish and seafood, forestry, intellectual property, and labour, along with a summary of tariff reductions, is available on the CPTPP website.

Entry into force

The CPTPP enters into force 60 days after the date on which at least six or at least 50% of the number of signatories to the CPTPP, whichever is smaller, have notified the Depository in writing of the completion of their legal procedures. New Zealand has been designated as the Depository of the Agreement.

Ministers of all 11 member countries are scheduled to officially sign the CPTPP on March 8th in Santiago, Chile. The text will then be translated into French and Spanish and undergo a "legal scrub" (which at times can lead to a continued negotiation of a particular provision of the Agreement). After the legal review of the text is completed, Canada will table the CPTPP in Parliament along with its implementing legislation.

Footnotes

1 With the exception of the Accession, Entry into Force, Withdrawal and Authentic Texts provisions of the TPP.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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