On October 31st, Australia became the sixth country to formally ratify the the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) by providing written notice to the CPTPP Depository in New Zealand that its internal legal procedures to implement the Agreement are complete (see “Canada Ratifies the CETA — Is Australia Next”).
Article 3 of the CPTPP provides that the Agreement shall enter into force 60 days after at least six of the eleven signatories have ratified it. With Australia’s threshold ratification, the countdown has commenced. Accordingly, the CPTPP is expected to enter into force for Australia, Canada, Japan, Mexico, New Zealand, and Singapore on December 30th. For each of the other members (Brunei, Chile, Malaysia, Peru, and Vietnam), the Agreement will enter into force 60 days after formal ratification is completed, on a country-by-country basis.
The Agreement will provide Canadian agricultural, fishing, and manufacturing industries with preferential market access to important consumer and industrial markets in the Asia-Pacific region. The progressive elimination of customs tariffs is expected to provide Canadian goods and materials with a competitive advantage over US exports. While trade between the United States and CPTPP countries will certainly continue, the new agreement may shift the competitive landscape in favour of Canadian producers, providing them with new export and supply chain opportunities. In Japan, the single largest CPTPP economy, Canadian enterprises will also be able to trade on even footing with their Mexican and Australian competitors (who have been enjoying the benefits of bilateral trade agreements prior to the CPTPP).
If you are a producer, exporter, or importer of products in either Canada or a CPTPP country, it’s time to start considering how the elimination of tariffs, subject to the rules of origin, and competitive market access through tariff rate quotas (TRQs) could provide new opportunities for your business. This applies not only to exporters looking to establish their products or increase their market share in CPTPP markets, but also to importers who are in a position to diversify their supply sources on competitive terms.