In the midst of the trade war between the United States and China there is an opening up of trade in Asia–the entry into force of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) on December 30, 2018, 60 days after the date of the 6th entrant’s ratification. The members who will begin receiving CPTPP benefits beginning on December 30 are the six ratifying members: Australia, Canada, Japan, Mexico, New Zealand and Singapore. As a result of the efforts of Japan and the other members, the landmark trade deal is taking shape and influencing the global trade landscape. As the trade war tariffs impact investment and push supply chains out of China, the CPTPP will attract trade and provide incentives for the consolidation of supply chains in the member states and the Asia Pacific region.
When preparing for the implementation and enforcement of the CPTPP, it is important to keep in mind that while some duty savings may take place immediately on December 30, many of the commitments and tariff reductions are phased in over time periods of up to several years. Additionally, the benefits and commitments are not enforceable in Brunei, Chile, Peru, Malaysia, and Vietnam until these parties have ratified the agreement. It is also important to keep in mind that the CPTPP suspends approximately 22 provisions from the original text of the Trans-Pacific Partnership (TPP).
There are several other countries, including Thailand, South Korea and the UK that are in the process of assessing the prospects of acceding to the CPTPP in its current state. In order to move quickly for new party accession, the CPTPP parties will be meeting in Tokyo in January, 2019 to discuss the entry of new parties to the deal. We will continue to monitor the CPTPP developments and provide insightful and practical updates in the coming days and weeks as this agreement comes to life.