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UK joins expanding Trans-Pacific trade bloc

By Colin Laughlan

VANCOUVER – Delivering a highly-predicted communique in Vancouver, the Commission for the Comprehensive and Progressive Trans-Pacific Partnership closed its eighth assembly November 27 to 28, announcing the 11-member trade bloc will grow by one more member next month when the United Kingdom’s accession is formally completed December 15. The U.K. will be the first country not connected by the Pacific Ocean to join the largely Asian regional trade agreement.

Hosted by the Canadian government this year, the CPTPP Commission was chaired by Mary Ng, Minister of Export Promotion, International Trade and Economic Development. Flanked by ministers from the other 10 CPTPP member economies (Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam), Ms. Ng delivered the Commission’s announcements at a news conference Thursday afternoon at the Vancouver Convention Centre, overlooking the city’s scenic North Shore Mountains and Port of Vancouver in Burrard inlet. The event was covered by international media, many from Asian news outlets, following two days of in-camera meetings governed by a secretive consensus process among  members.

The Commission also announced it has green-lighted the accession process to begin for Costa Rica, the only other country approved from a list of applicants for CPTPP membership. Unsuccessful applicants in this year’s Commission decisions included China, Ecuador, Indonesia, Taiwan, Uruguay, and Ukraine.

“We will continue to engage with these countries on their accession requests, maintaining our commitment to welcoming new partners,“ said Ms. Ng.

Minister Ng said the Commission applies three criteria to membership applications. Prospective members must meet the CPTPP’s exacting standards, demonstrate a strong record of meeting trade obligations, and achieve unanimous agreement by all CPTPP partners.

While she did not provide any specifics on how Commission members may have voted on any of the remaining applicants, there has been wide speculation that Taiwan did not pass the unanimity test because of its regional political dispute with China. Taiwan had pressed its case prominently in public that it had good record in international trade and was able to meet CPTPP standards.

The CPTPP Agreement has  chapters on labour rights, environmental protection, trade rule compliance, and fair competition addressing non-market practices, and includes its own dispute resolution mechanisms. It is attracting more applicant nations at time when the world’s rules-based international trade system under the WTO seems to be breaking down. The faster-growing economies of the Asia Pacific are sending a message that they want to trade in a zero-tariff system.

More countries applying for membership

Expressions of interest in CPTPP membership have also come from South Korea and Thailand.

“The CPTPP family is expanding,” said Minister Ng.

It is the Canada’s third largest regional trade bloc membership, after the Canada-United States-Mexico Agreement (CUSMA) and the Canada-European Union Comprehensive and Economic Trade Agreement (CETA).

CPTPP economies account for approximately 15% of the global economy which is estimated to reach over $US100  trillion by the end of 2024.

A new report on the impact of the CPTPP on trade between Canada and the Asia Pacific, released  by the Asia Pacific Foundation of Canada at a side event with international trade experts during the Commission’s meetings noted the economic benefits to Canada owing to the trade pact:      

“Overall, the (CPTPP) has enhanced Canada’s merchandise and services trade with the agreement’s seven Asia Pacific economies (AP7), Australia, Brunei, Japan, Malaysia, New Zealand. Singapore and Vietnam. In the five years post-ratification (2019-2023), Canada’s merchandise trade with these economies grew by 38% (from around C$48B in 2018 to over C$66B in 2023), primarily driven by imports of consumer goods and industrial machinery. Canada-Vietnam trade has seen the most growth, with merchandise trade increasing by 117%, driven primarily by imports.”

The report also noted that for the same time period, Canada’s merchandise trade with the AP7 has outpaced its trade with other CPTPP countries – Chile, Mexico, and Peru – reversing the pre-CPTPP dynamic. AP7 grew by 38% from 2019 to 2023 while its merchandise trade with the other CPTPP members increased by 29% during the same period. Major gains can be attributed to Canada not having any Free Trade Agreements with any of the AP7 countries,  while it already had agreements with Chile, Mexico and Peru.

Mary Ng

(Photos of press conference and Mary Ng, Canada’s Minister of Export Promotion, International Trade and Economic Development)

 

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