Authors: Carlo Dade & Naomi Christensen
There are two critical facts for business to grasp about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal that Canada has signed with 10 countries that rim the Pacific Ocean in the Americas and Asia. First, with the United States no longer part of the agreement, there is even more money on the table for Canadian exporters and less competition to access it. In tariff savings alone, the CPTPP will make available $428 million of potential savings for Canadian exporters. Second, this agreement provides benefits that go well beyond tariffs to make trade easier for smaller businesses.
The 11 countries that currently make up the CPTPP are Canada, Japan, Mexico, Malaysia, Singapore, Vietnam, Australia, New Zealand, Chile, Peru, and Brunei. Together, they account for 13.5 per cent of global GDP. The CPTPP has better rules than the renegotiated North American trade agreement, now called the United States-Mexico-Canada Agreement (USMCA), to address the frustrations that many small- and medium-sized exporters (SMEs) face.
Throughout the agreement’s 30 chapters are benefits that ease major headaches for SMEs in doing business with the other 10 countries. The CPTPP:
> Lowers risk and uncertainty
> Eases the process of getting goods through customs
> Better protects business transactions, intellectual property and copyright
> Facilitates moving staff, technicians and salespeople to and from Canada without worrying about labour market opinions
> Chapter 24 outlines how to help SMEs engage in trade.
And, with U.S. President Donald Trump’s withdrawal of the U.S. from the deal, SMEs will not have to face their usual American competitors. Canadian firms now have a huge advantage over American competitors for as long as the U.S. stays out of the agreement. The deal is not just about new business or trying to introduce products to new consumers. There is essentially $1.2 billion in products that consumers in CPTPP markets are already buying, that Canadian firms can now supply rather than U.S. firms.
This guide uses fictional cases studies based on interviews with real companies to show how the CPTPP opens and accelerates the usual way of doing trade among participating nations, what that means for firms and how Canadian exporters and importers can take advantage of the new opportunities.