On December 30, 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into effect for six of the eleven signatory countries. The CPTPP is the successor to the Trans-Pacific Partnership (TPP); although the United States had originally agreed to join the TPP, the Trump Administration withdrew from the agreement in 2017.
In 2008, the United States announced that it was launching negotiations with several Pacific Rim countries to join the TPP. After a number of other countries joined the negotiations, the TPP was signed in February 2016. In January 2017, however, before the agreement entered into force, President Trump withdrew from the agreement, stating that that his Administration intended to negotiate bilateral trade agreements with individual countries.
After the United States withdrew from the TPP, the remaining eleven countries continued negotiations, finalizing the CPTPP in February 2018. On December 30, 2018, the CPTPP entered into force for Australia, Canada, Japan, Mexico, New Zealand, and Singapore. The CPTPP will enter into force for Vietnam on January 14, 2019. It is expected that the CPTPP will enter into force in the near future for the four remaining countries, Brunei, Chile, Malaysia, and Peru.
In its final form, the CPTPP contains essentially the same provisions as the original TPP. Among other things, the CPTPP will significantly reduce tariffs among the eleven countries and increase market access among the signatories. Furthermore, the agreement addresses a number of sectoral trade issues, including issues affecting the automotive, pharmaceutical, information technology, and financial services, among others. It also contains commitments by the signatories on the environment and labor issues.
It is estimated that each CPTPP country’s GDP will increase by approximately 1 percent as a result of the agreement. The non-profit Peterson International Institute has estimated that the United States will lose out on billions of dollars of trade benefits because it did not join the TPP. According to one source, under the TPP, the United States would have improved its real income levels by as much as $131 billion on an annual basis.