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Canada’s Newest Trade Agreement – CPTPP
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force in Canada on December 30, 2018 after years of negotiations. The CPTPP rose from the ashes of the failed TPP negotiations that collapsed after the withdrawal of the United States of America. There are 11 countries that signed the agreement, and of those 11, 7 have ratified the agreement already. Once the remaining 4 countries ratify the agreement, the CPTPP will be the 3rd largest free trade area in the world (as measured by GDP). The 2 larger agreements are USMCA and the EU.
Who are the members?
11 countries signed the agreement at a formal ceremony in Santiago, Chile in March of 2018. Those countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. One condition of the deal was that it would come into force 60 days after at least 6 countries ratified the agreement. Once Australia became the 6th nation to ratify the deal on October 31st, the agreement came into force on December 30, 2018. Currently the 7 that have the deal in place are Mexico, Japan, Singapore, New Zealand, Canada, Australia and Vietnam. Once the remaining 4 countries complete their approval process, they will join the agreement.
The Canadian View
By joining CPTPP, Canada has become the only G7 nation to have trade agreements in place with all other members of the G7. Furthermore, in a statement to media, the Canadian Minister of International Trade Diversification stated that “The CPTPP is an excellent illustration of how 11 nations can come together against protectionism by liberalizing trade and strengthening the rules under which it is conducted. Global trade matters: it’s about improving peoples’ lives by offering more opportunities to turn their hard work into prosperity for their families and themselves. Agreements such as the CPTPP are about expanding opportunities for Canadians, from farmers and fishermen to small business, scientists and manufacturers.”
How to Benefit
Finally, the main benefit of CPTPP will be the reduction of tariffs on traded goods between the members of the agreement. In order for Canadian imports to benefit from the trade agreement, a certificate of origin will be required. A properly filled in certificate of origin includes items such as exporter/producer info, importer info, description and HS codes of goods in the shipment, period of validity and an authorized signature. This must be in hand at time of clearance. With a certificate of origin, this will allow for application of tariff treatment 33 in field 14 of the B3 which will allow for lower rates when calculating the duties on applicable goods.
So for more information on how your imports into Canada can benefit from CPTPP or for answers to any other questions related to importing into Canada, please contact Orbit Brokers.