CALGARY, November 2, 2018 – A massive, 11-member trade bloc around the Pacific Rim comes just in time for Canadian small- and medium-sized businesses to take advantage of key Asian markets, diversify trade and reduce reliance on a United States that has grown more difficult and unpredictable, according to a new guide released today by the Canada West Foundation.
Canada was the fifth country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is set to come into force on December 30. The 11 countries of the CPTPP account for 13.5 per cent of global gross domestic product (GDP).
According to The ‘Just in Time’ Plan: CPTPP guide for small businesses in Western Canada, there are two critical factors for businesses to grasp about the deal:
• With the U.S. no longer part of the pact, Canadian firms will not have to face their usual competitors; in tariffs alone, the deal makes available $428 million of potential savings and gives cost advantage to take market share from companies that are not part of the agreement, like U.S. competitors.
• The agreement provides benefits that go well beyond tariff cuts for cattle and canola to make trade easier for smaller businesses, including easing the process of getting goods through customs, making it easier to move staff to and from Canada and better protecting business transactions, intellectual property and copyright.
The CPTPP also gives Canadian businesses one set of rules to trade across the entire set of markets that make up the pact – operating like a larger, more dynamic version of the North American Free Trade Agreement (NAFTA, now United States-Mexico-Canada Agreement, or USMCA). This 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.
The Just in Time guide uses fictional case studies based on interviews with real companies to demonstrate these advantages. The case studies 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. Firms can see, for example, how a family business could expand from tourist customers at home to Asian consumers abroad, how a local business could take advantage of a multi-market supply chain and how a small firm could shift imports to a CPTPP market to benefit from tariff reductions.
“This agreement is about more than just moving cattle and canola. It has advantages, many that are not obvious or not what most small businesses would expect in a trade agreement. This will make trade beyond the U.S. easier for a wide range of firms – and the case studies in this guide will help them see the opportunities. Trade with the U.S. has gotten harder, but trade elsewhere has gotten easier. If a small business was ever thinking about looking beyond the U.S., the CPTPP comes just in time.”
– Carlo Dade, Director, Trade & Investment Centre