Calgary – Canada is set to become one of the first countries to benefit from an 11-member trade bloc around the Pacific Rim. The Comprehensive and Progressive Agreement for Trans-Pacific Partnerships (CPTPP) trade deal cleared the Senate Thursday, and Canada is in the final stages of adopting the agreement.
Canada West Foundation President and CEO Martha Hall Findlay and and Director of the Trade & Investment Centre Carlo Dade are available to comment on the CPTPP, the opportunities it creates for Canadian businesses (including small- and medium-sized businesses) in crucial new markets and what it means for Canada’s diversification agenda.
• The CPTPP gives exporters preferential access in 10 markets that rim the Pacific Ocean, six of them in Asia, including Japan, Vietnam and Malaysia. Given that Canada has only one trade agreement in Asia, gaining the equivalent of six new agreements at once is in itself a huge win. For Canadian businesses, this represents hundreds of millions in potential tariff savings alone. It also puts exporters on the same playing field as competitors in Australia – and ahead of the Americans, who are not part of the pact.
• This agreement is about much more than cattle, corn and canola; it is an also an agreement with huge benefits for smaller businesses. With one set of rules for 10 markets it allows companies to accumulate inputs from any member of the agreement to make products alone or with companies in other member countries to sell anywhere inside the agreement. This one set of rules is what made the original NAFTA so special. But, with more members, the CPTPP improves on what Canadian firms have had in North America by offering more sources of inputs and more markets into which to sell. And, unlike the USMCA, the CPTPP will grow even larger as new countries join, as early as next year.
• The new North American trade agreement, United States-Mexico-Canada Agreement (USMCA) was about barely being able to hold on to what we already had. The CPTPP is about growth and new opportunities with countries that want to trade. The CPTPP will not replace the U.S. as Canada’s most important market, but on several fronts, it moves Canada one very important and significant step away from overdependence on the U.S.
“The CPTPP represents a huge opportunity for firms across Canada and especially in the West in a wide range of sectors beyond commodities. But, ratification is the easy part. The hard part is getting firms to understand how special this agreement is and to do what has not happened in the past – actually take up what is on offer. Given our recent difficulties with the U.S. and how rich the offers are in the CPTPP, this might be our best chance to actually start diversifying our exports.” – Carlo Dade, trade director, Canada West Foundation.