What You Should Know: How CETA and the CPTPP Affect You
Over the past few years, the Canadian government has been exploring dramatic changes to the way the country conducts trade. These changes come in the form of CETA and the CPTPP (formerly known as the TPP), two international trade deals between Canada and its overseas allies. But if you’ve read about these deals in the news, you know that countless people work on them over a period of years, in order to create agreements that lead to fairness and prosperity for all. With so many Canadians affected, and both deals at pivotal stages in their development, it’s important to know how these deals work, and what you can expect in the months to come.
What are the Basics?
Each trade deal is at a different stage of development, with CETA much further along than the CPTPP. CETA stands for the Comprehensive Economic and Trade Agreement, and it’s between Canada, and the European Union’s 28 member countries. This trade deal has been in provisional effect since September 21st, 2017. This means that while certain aspects of the deal must still be established, the majority of the deal is currently in effect. However, the CPTPP has a long way to go before it even goes into provisional effect. CPTPP stands for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It’s between Canada and 10 other allies located in North and South America, but primarily in Eastern Asia. Since Donald Trump withdrew the USA from the CPTPP, the deal has had to be completely rethought, and renegotiated. Although the remaining countries are still interested, further negotiation is required for the deal to be completed.
What Do They Accomplish?
Both of these trade deals aim to reduce and eliminate the taxes paid on foreign imports. These taxes, also known as tariffs, are charged when foreign goods are imported into another country. As a result, businesses from outside the country must pay more to do business in Canada, and must charge higher prices to consumers. Both CETA and the CPTPP are being negotiated so that businesses can sell their products across the globe without being heavily taxed, and so consumers can see lower prices across the board. That’s why, typically, many expect for trade deals like these to create jobs and opportunities, as they give Canadians the chance to do business abroad at lower prices. With technology constantly improving and connecting people across the globe, many also feel that doing business internationally is an inevitable and necessary part of the modern world.
What Can You Expect in the Future?
With CETA now in effect, you can expect changes near you moving forward. You might see lower prices at your local grocery store, or new selections at your favourite clothing store. There might also be trends that develop over the next few years, including more projects and investments undertaken between Canada and European countries. However, the standstill that the CPTPP is currently in should also have an impact. Since so many goods come from Eastern Asia, a similar deal would mean further lower prices in local stores. It would also mean increased opportunities for Canadians to do business abroad. That’s why these countries are still interested in pursuing the CPTPP, regardless of whether or not the USA participates. But for now, no deal is in place, and the USA may look to reconsider its involvement in the future.
For Canada, its attempts to create prosperous free trade agreements around the world continue. In the future, you can likely expect similar agreements to be made, with unique benefits and changes in the way goods are shipped. If you need any help in making an international shipment, or making sense of current regulations and duties in place, contact Orbit Brokers today.