The CPTPP evolved from the Trans-Pacific Partnership (TPP), which was never ratified due to the withdrawal of the United States.[7]
The TPP had been signed on 4 February 2016 but never entered into force, as the U.S. withdrew from the agreement soon after the election of president Donald Trump.[8] All other TPP signatories agreed in May 2017 to revive the agreement,[9] with Shinzo Abe's administration in Japan widely reported as taking the leading role in place of the U.S.[10][11]
Establishment of the CPTPP
In January 2018, the CPTPP was created as a succeeding agreement, retaining two-thirds of its predecessor's provisions; 22 measures favored by the U.S. but contested by other signatories were suspended, while the threshold for enactment was lowered so as not to require U.S. accession.[12][13]
The agreement to establish the CPTPP was signed on 8 March 2018 by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, with the ceremony held in Santiago, Chile.[14][15] The agreement specifies that its provisions enter into effect 60 days after ratification by at least half the signatories (six of the eleven participating countries).[12] On 31 October 2018, Australia was the sixth nation to ratify the agreement; it subsequently came into force for the initial six ratifying countries on 30 December 2018.[16]
Negotiations
During the round of negotiations held concurrently with the Asia-Pacific Economic Cooperation forum in Vietnam in November 2017, the Canadian prime ministerJustin Trudeau refused to sign the agreement in principle, stating reservations about the provisions on culture and automotives. Media outlets in Australia, New Zealand, and Japan, which strongly supported quick movement on a deal, strongly criticized what they portrayed as Canadian sabotage.[17]
However, Canada's major reservation was a conflict between the percentage of a vehicle that must originate in a CPTPP member nation to enter tariff-free, which was 45% under the original TPP language and 62.5% under the NAFTA agreement. Japan, which is a major automobile part exporter, strongly supported lower requirements.[17] In January 2018, Canada announced that it would sign the CPTPP after obtaining binding side letters on culture with every other CPTPP member country, as well as bilateral agreements with Japan, Malaysia, and Australia related to non-tariff barriers. Canada's Auto Parts Manufacturers' Association sharply criticized increasing the percentages of automobile parts that may be imported tariff-free, noting that the United States was moving in the opposite direction by demanding stricter importation standards in the NAFTA renegotiation, later USMCA.[18]
In February 2019, Canada's Jim Carr, Minister of International Trade Diversification, delivered a keynote address at a seminar concerning CPTPP - Expanding Your Business Horizons, reaching out to businesses stating the utilisation of the agreement provides a bridge that will enable people, goods and services to be shared more easily.[19]
The final text of CPTPP was mostly identical to the original TPP, except for some provisions advanced by the United States under the TPP, but not supported by the other members. In the intellectual property chapter, copyright and patent terms were shortened relative to TPP, and standards for digital IP protections were eliminated. Provisions allowing use of investor–state dispute settlements for investment agreements and authorizations were also rescinded.[13] In summary, the CPTPP amends aspects of the following TPP chapters:
The chapter on state-owned enterprises (SOEs) requires signatories to share information about SOEs with each other, with the intent of engaging with the issue of state intervention in markets. It includes the most detailed standards for intellectual property of any trade agreement, as well as protections against Intellectual property infringement against corporations operating abroad.[22][23]
E-commerce
The e-commerce chapter of the CPTPP mandates that signatories adopt or at the very least maintain laws for consumer protection with the aim to fight fraud and deceptive commercial activities.[24]
Legislative process
Ratifications
On 28 June 2018, Mexico became the first country to finish its domestic ratification procedure of the CPTPP, with PresidentEnrique Peña Nieto stating, "With this new generation agreement, Mexico diversifies its economic relations with the world and demonstrates its commitment to openness and free trade".[25][26]
On 6 July 2018, Japan became the second country to ratify the agreement.[27][28]
On 19 July 2018, Singapore became the third country to ratify the agreement and deposit its instrument of ratification.[29][30]
On 17 October 2018, the Australian Federal Parliament passed relevant legislation through the Senate.[31] The official ratification was deposited on 31 October 2018. This two-week gap made Australia the sixth signatory to deposit its ratification of the agreement, and it came into force 60 days later.[32]
On 25 October 2018, New Zealand ratified the CPTPP, increasing the number of countries that had formally ratified the agreement to four.[33]
Also on 25 October 2018, Canada passed and was granted royal assent on the enabling legislation.[34] The official ratification was deposited on 29 October 2018.[35][36][37]
On 2 November 2018, the CPTPP and related documents were submitted to the National Assembly of Vietnam for ratification.[38] On 12 November 2018, the National Assembly passed a resolution unanimously ratifying the CPTPP.[39] The Vietnamese government officially notified New Zealand of its ratification on 15 November 2018.[40]
On 30 September 2022, Malaysia ratified the CPTPP and deposited its instrument of ratification.[42][43]
On 17 April 2019, the CPTPP was approved by the Chamber of Deputies of Chile. The final round of approval in the Senate was scheduled for November 2019, after being approved by its Commission of Constitution.[44] However, due to a series of massive protests against the government of Sebastián Piñera, the ratification process was paused. Only in 2022, the ratification process was resumed after a new Congress and a new President were elected. Despite the public opposition of Gabriel Boric to the treaty before his election as President, the new administration did not interfere in the voting. The CPTPP was approved in the Senate with 27 votes in favor (mainly from the right-wing opposition and some center-left politicians) and 10 against, mostly by members of the ruling coalition.[45] The treaty was deposited on 23 December, once several side letters were negotiated with the other signatories in specific topics considered harmful by the Chilean government.[46] On 23 February 2023, Boric ratified Chile's entry to TPP-11.[47]
On 13 May 2023, Brunei ratified the CPTPP and deposited its instrument of ratification.[48]
Entry into force
The agreement came into effect 60 days after ratification and deposit of accession documents by at least half the signatories (six of the eleven signatories).[12] Australia was the sixth country to ratify the agreement, which was deposited with New Zealand on 31 October 2018, and consequently the agreement came into force between Australia, Canada, Japan, Mexico, New Zealand, and Singapore on 30 December 2018.[49]
The CPTPP Commission is the decision-making body of the CPTPP, which was established when the CPTPP entered into force on 30 December 2018.[76]
The official languages of CPTPP are English, French, and Spanish; English is used prevailing in the case of conflict or divergence.[77] The CPTPP commission in 2024 is chaired by Canada.[78]
1st CPTPP Commission (2019)
Representatives from the eleven CPTPP signatories participated in the 1st CPTPP Commission meeting held in Tokyo on 19 January 2019,[79] which decided:
A decision about the chairing and administrative arrangements for the commission and special transitional arrangements for 2019;[80]
A decision to establish the accession process for interested economies to join the CPTPP;[80] Annex[81]
A decision to create rules of procedure and a code of conduct for disputes involving Parties to the;[82] Annex;[83] Annex I[84]
A decision to create a code of conduct for investor-State dispute settlement.;[85] Annex[86]* Members of the CPTPP Commission also issued a joint ministerial statement on 19 January 2019.[87]
2nd CPTPP Commission (2019)
The 2nd CPTPP Commission meeting was held on 9 October 2019 in Auckland, New Zealand. Alongside the commission, the following Committees met for the first time in Auckland: Trade in Goods; Rules of Origin; Agricultural Trade; Technical Barriers to Trade; Sanitary and Phytosanitary Measures; Small and Medium Sized Enterprises; State Owned Enterprises; Development; Cooperation and Capacity Building; Competitiveness and Business Facilitation; Environment; and the Labour Council. The Commission adopted two formal decisions, (i) on its Rules of Procedure under Article 27.4 and (ii) to establish a Roster of Panel Chairs as provided for under Article 28.11.[88][89]
3rd CPTPP Commission (2020)
The 3rd CPTPP Commission meeting was held virtually and hosted by Mexico on 5 August 2020.[90]
4th CPTPP Commission (2021)
The 4th CPTPP Commission meeting was held virtually and hosted by Japan on 2 June 2021. The Commission decided to move forward with the application of the United Kingdom as an aspirant economy.[91]
5th CPTPP Commission (2021)
The 5th CPTPP Commission meeting was held virtually and hosted by Japan on 1 September 2021.[92] The Commission decided to establish a Committee on Electronic Commerce composed of government representatives of each Party.
6th CPTPP Commission (2022)
The 6th CPTPP Commission meeting was held on 8 October 2022 and hosted by Singapore.[93]
7th CPTPP Commission (2023)
The 7th CPTPP Commission meeting was held on 16 July 2023 in Auckland, New Zealand. The commission decided to establish a Committee on Customs Administration and Trade Facilitation.[94] The meeting included the formal signing of the accession of the United Kingdom.[95]
8th CPTPP Commission (2024)
The 8th CPTPP Commission meeting was held on 28 November 2024 in Vancouver, Canada.[78] The Commission decided to move forward with the application of Costa Rica as an aspirant economy.[96]
In January 2018, the government of the United Kingdom stated that it was exploring membership of the CPTPP to stimulate exports after Brexit and had held informal discussions with several of the members.[97] In October 2018, Japanese Prime Minister Shinzo Abe said he would welcome the United Kingdom joining the partnership post-Brexit.[98]Liz Truss, the UK Secretary of State for Trade, expressed in a joint Daily Telegraph article with Simon Birmingham, David Parker, and Chan Chun Sing, the trade ministers of Australia, New Zealand, and Singapore, the intent of the United Kingdom to join the CPTPP.[99]
On 1 February 2021, the United Kingdom formally applied to join CPTPP.[100] The UK is the first non-founding country to apply to join the CPTPP. If successful, Britain would become the second-largest CPTPP economy, after Japan.[101] Japan had expressed support for the UK's potential entry into CPTPP in 2018,[102] and as 4th CPTPP Commission (2021) chair, Japan's minister in charge of negotiations on the trade pact, Yasutoshi Nishimura, expressed hope on Twitter that Britain will "demonstrate its strong determination to fully comply with high-standard obligations" of the free trade accord, and mentioned that "I believe that the UK's accession request will have a great potential to expand the high-standard rules beyond the Asia-Pacific."[103]
In June 2021, the CPTPP agreed to open accession talks. A working group was established to discuss tariffs and rules governing investment and trade, led by Japan.[104]
By March 2023, the United Kingdom was set to join the CPTPP, as the 11 members had reached an agreement to Britain's accession.[105][106][107] The UK government also announced it had secured an extension mechanism, which could extend the whole agreement to any Crown Dependency or British Overseas Territory.[108] On the same day, Guernsey and Jersey confirmed their intentions to participate in CPTPP.[109][110] In May 2023, a UK government spokesman confirmed that "the deal will cover goods trade between the Crown Dependencies and CPTPP countries, with a mechanism to include trade in services in future."[111]
The United Kingdom formally signed the CPTPP trade deal during the 7th CPTPP Commission - or members ministerial meeting - in New Zealand on 16 July 2023, becoming the first non-original signatory and European country to sign the agreement.[112][113]
Ratification Timeline
The agreement would enter into force if, within 15 months of signing the agreement, all or at least six (6) CPTPP members have ratified the accession protocol.[114][115]
On 29 August 2024, the UK announced it had secured the final ratification required to join the CPTPP. [116]
The agreement entered into force on 15 December 2024 for those countries which had ratified the agreement before 16 October 2024.[114][115][116]
Ratifiers by October 2024
For those countries who ratified the accession protocol before 16 October 2024, the agreement entered into force from 15 December 2024:
Japan: Fully ratified the UK's accession and notified New Zealand on 15 December 2023.[117]
Singapore: Fully ratified the UK's accession and notified New Zealand on 17 January 2024.[21]
Chile: Fully ratified the UK's accession and notified New Zealand on 3 April 2024.[21]
United Kingdom: Fully ratified its own accession and notified New Zealand on 16 May 2024.[21]
New Zealand: Fully ratified the UK's accession on 4 June 2024.[117]
Vietnam: Fully ratified the UK's accession and notified New Zealand on 1 August 2024.[21]
Peru: Fully ratified the accession of the UK and notified New Zealand on 28 August 2024.[118][119]
Malaysia: Fully ratified the accession of the UK and notified New Zealand on 17 September 2024.[120][121]
Brunei: Fully ratified the accession of the UK and notified New Zealand on 16 October 2024.[122][123]
Later Ratifiers
The accession protocol entered into force with the following country on 24 December 2024:
Australia: Fully ratified the accession of the UK and notified New Zealand on 25 October 2024.[122]
As of December 2024, the following countries are yet to ratify the UK's accession protocol. The agreement will apply to them 60 days after they ratify:[122]
On 15 December 2024, the United Kingdom formally acceded to the CPTPP, becoming its twelfth member, with nine parties (including the UK) to the protocol.[124] Australia became the 10th party to the protocol on 24 December 2024.
Further Enlargement
CPTPP rules require all eleven signatories to agree to the admission of additional members.[125] Article 34 of CPTPP states that "any State or separate customs territory that is a member of APEC, and any other State or separate customs territory as the Parties may agree" are eligible accede to the agreement.[126][127]
In December 2020, Japan Foreign Minister Toshimitsu Motegi has said that "TPP-11 sets high standards for regulations on e-commerce, intellectual property and state-owned enterprises", suggesting the amount of government intervention in the Chinese economy will not meet CPTPP requirements.[145]
China's application to CPTPP is unlikely to gain traction. Although not a member of CPTPP, the U.S. can exercise the "poison pill" within the United States–Mexico–Canada Agreement that prevents Canada and Mexico from voting in favour of the Chinese application.[146]
On 16 September 2021, China formally applied to join CPTPP.[132]
CPTPP Members' Reactions to China's Application
Japan Economy Minister Yasutoshi Nishimura was quoted by Reuters: "Japan believes that it's necessary to determine whether China, which submitted a request to join the TPP-11, is ready to meet its extremely high standards"; indicating that Japan would not support the Chinese application under the current circumstances.[147]
Former Australian Trade Minister Dan Tehan indicated that Australia would oppose China's application until China halts trade strikes against Australian exports and resumes minister-to-minister contacts with the Australian government. Also, Australia has lodged disputes against China in the WTO on restrictions imposed by China on exports of barley and wine.[148]
Costa Rica
Costa Rica filed its application to join the CPTPP trade pact on 11 August 2022.[129][149] Costa Rica was invited to begin accession talks by CPTPP, an Accession Working Group for Costa Rica to be chaired by Peru and vice-chaired by Canada and New Zealand.[130][150][96]
Ecuador
Ecuador filed its application to join the CPTPP trade pact on 29 December 2021 as the country moves to reduce its reliance on oil and diversify its economy through exports.[136][105]
Indonesia
Indonesia initially showed the least interest of three linked ASEAN members to apply to CPTPP, however continued to monitor the developments of the trade bloc, with Indonesian ambassador to the US Rosan Roeslani leaving the door open but clarifying that Indonesia was not in the process of applying to CPTPP at that time.[151] In October 2023, Jakarta Globe reported that the primary reason for Indonesia's lack of interest in CPTPP was due to the government's policy of reducing imported goods in its public procurement in order to develop its domestic industry, which is incompatible with CPTPP requirements for members to eliminate over 98 percent of tariffs in the free trade area.[152] In December 2023, Chief Economic Affairs MinisterAirlangga Hartarto heavily discussed CPTPP with British Trade Envoy to Indonesia, Richard Graham; this meeting occurred a few months after the UK signed the accession protocols to join CPTPP.[153] In April 2024, Hartarto conveyed Indonesia's interest in joining CPTPP to British Minister of State for Indo-PacificAnne-Marie Trevelyan during a meeting in London; Trevelyan emphasised that the UK supported Indonesia's bids to join the OECD and CPTPP.[154] On 3 June 2024, Hartarto announced that Indonesia would apply to join CPTPP in 2024, as it would be a faster method to gain access to new markets, highlighting the UK and Mexico, than negotiating individual bilateral agreements.[155]
Indonesia filed its application to join the CPTPP trade pact on 19 September 2024.[141]
Taiwan
Taiwan applied to join CPTPP on 22 September 2021.[156]
It had previously expressed interest to join TPP in 2016.[157] After TPP's evolution to CPTPP in 2018, Taiwan indicated its will to continue efforts to join CPTPP.[158] In December 2020, the Taiwanese government stated that it would submit an application to join CPTPP following the conclusion of informal consultations with existing members.[159]
In February 2021 again, Taiwan indicated its will to apply to join CPTPP at an appropriate time.[160] A few days after China submitted its request to join the CPTPP, Taiwan sent its own request to join the CPTPP, a move that has been one of the main policy objectives of Tsai Ing-wen's government.[161]
Uruguay filed its application to join the CPTPP trade pact on 1 December 2022.[137] Uruguay's application received backlash from Argentina, Brazil, and Paraguay, of which make up the Mercosur trade bloc, particularly following PresidentLacelle Pou opening negotiations for a free trade agreement with China and signalling his willingness to cut deals with other countries. Paraguay's Foreign Minister Julio Arriola responded by stating that "Mercosur member states should negotiate as a bloc and via consensus and we continue in that line,” citing the organization's founding treaties.[165]
The Philippines' interest in the CPTPP has remained, but the consultative process and legal analysis of the terms necessary for accession have been drawn out.[151] The Philippines previously wanted to join the TPP in 2016 under Benigno Aquino, who said that the country stood to gain from becoming a member of the trade pact.[167]Philippine Ambassador to the U.S.Jose Manuel Romualdez later clarified that the US withdrawal from TPP pushed the Philippines' application to CPTPP down the agenda, yet China's interest in acceding to CPTPP has made the trade bloc more attractive for the Philippines.[151] In July 2024, Trade Undersecretary Allan Gepty announced that the Philippines would apply for membership of CPTPP by the end of the year.[168]
South Korea
In January 2021, South Korea's Moon administration announced it would seek to join CPTPP.[169] The country will examine sanitary and phytosanitary measures, fisheries subsidies, digital trade and guidelines related to state-run enterprises to meet the requirements that CPTPP has suggested.[170] The South Korean government formally announced it will begin its application to join CPTPP in December 2021.[171]
Thailand
In November 2021, a Thai government official stated that Thailand aimed to join talks on membership of CPTPP, which had been viewed as a method to boost the Thai economy, additionally it would increase the competitivity of Thai goods against rivals, notably Malaysia and Vietnam, in sectors such as agricultural and electronic industries.[172] Foreign Minister Don Pramudwinai was expected to submit a letter of intent for the country to apply to join the pact to the cabinet for its approval.[173]
A campaign against joining the pact called "#NoCPTPP" which has gathered 400,000 signatures has demanded the prime minister to not consider joining the pact.[174] Thailand has remained interested in joining CPTPP as part of its free trade agreement strategy to expand its trade and investment opportunities with various partners around the world, however has not submitted a formal application.[175]
United States
On 25 January 2018, U.S. President Donald Trump in an interview announced his interest in possibly rejoining the TPP if it were a "substantially better deal" for the United States. He had withdrawn the U.S. from the original agreement in January 2017.[176] On 12 April 2018, he told the White House National Economic Council Director Larry Kudlow and U.S. Trade Representative Robert Lighthizer to look into joining CPTPP.[177] U.S. Wheat Associates President Vince Peterson had said in December 2018 that American wheat exporters could face an "imminent collapse" in their 53% market share in Japan due to exclusion from CPTPP. Peterson added, "Our competitors in Australia and Canada will now benefit from those [CPTPP] provisions, as U.S. farmers watch helplessly." The National Cattlemen's Beef Association stated that exports of beef to Japan, America's largest export market, would be at a serious disadvantage to Australian exporters, whose tariffs on exports to Japan would be cut by 27.5% during the first year of CPTPP.[178][179]
In December 2020, a bipartisan group of U.S. policy experts, Richard L. Armitage and Joseph S. Nye Jr., called for Washington to join the CPTPP,[180][181] but this call was rejected by Secretary of Commerce Gina Raimondo when meeting Japanese government leaders on 15 November 2021. Raimondo stated that the Biden administration would not be joining CPTPP but instead planned to create a new trade framework as an alternative to CPTPP in the Indo-Pacific region.[182]
Responses
Economist José Gabriel Palma [es] has criticized the treaty for severely restricting the sovereignty of the signatories.[183] Signatories are subject to international courts and have restrictions on what their state-owned enterprises can do.[184] According to Palma the treaty makes it difficult for countries to implement policies aimed to diversify exports thus becoming a so-called middle income trap.[183] Palma also accuses that the treaty is reinforcing unequal relations by being drafted to reflect the laws of the United States.[184]
In the case of Chile, Palma holds the treaty is redundant regarding the possibilities of trade as Chile already has trade treaties with ten of its members.[184] On the contrary, economist Klaus Schmidt–Hebbel consider that the CPTPP "deepening" of already existing trade relations of Chile is a point in favour of it.[185] In the view of Schmidt-Hebbel approving the treaty is important for the post-Covid economic recovery of Chile and wholly in line with the economic policies of Chile since the 1990s.[185]
In mid November 2021 the Waitangi Tribunal, a standing commission of inquiry established in 1975 to investigate the New Zealand Crown's breaches of the Treaty of Waitangi, found that the Crown had failed to meet its Treaty obligations to protect Māori interests as part of the CPTPP but acknowledged that several major changes occurred in the negotiation process.[186] While the Tribunal was satisfied that the Crown's engagement with Māori over the CPTPP and secrecy had been resolved through negotiation, it ruled there were significant risks to Māori in the e-commerce provisions of the CPTPP and data sovereignty.[187] Following an earlier 2016 Tribunal ruling, a Māori advisory committee called Te Taumata had been established while a second body known as Ngā Toki Whakarururanga was established as a result of the mediation agreement.[186]
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^ ab"Malaysia Ratifies The CPTPP"(PDF). Malaysia Ministry Of International Trade And Industry. 5 October 2022. Archived from the original(PDF) on 14 October 2022. Retrieved 12 October 2022.
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