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Comprehensive and Progressive Agreement for a Trans-Pacific Partnership presents opportunity for Saskatchewan

By Jayme Gramlich, Trade Policy Analyst, Trade and Value Added Branch

September 2018

In March 2018, a landmark trade agreement was signed connecting 11 Asian-Pacific countries.  Canada, Japan, Mexico, Malaysia, Singapore, Vietnam, Australia, New Zealand, Chile, Peru, and Brunei, the members of the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP), represent nearly 500 million people and a combined gross domestic product (GDP) of $13.5 trillion. It is one of the largest free trade agreements in the world.

The CPTPP comes into force 60 days after it is ratified by six of the 11 signatories.  Federal Minister of Infrastructure and Communities François-Philippe Champagne presented the text in the House of Commons May 23, 2018 and implementation legislation June 14, 2018. Canada is expected to be among the first six nations to ratify the agreement. Swift ratification will position Canadian industry to benefit from first mover advantage in CPTPP markets. It will be important for Canada to move quickly, as other countries are also racing to be among the first six. Once the agreement comes into force, those who have ratified can immediately take advantage of the agreement’s benefits, unlike those who have not. Saskatchewan expects significant gains for agriculture as a result of this agreement, stemming primarily from trade with Japan but also from other high growth markets in the Asian-Pacific region.

In Japan, tariffs for pork cuts will be reduced or eliminated within 10 years. Tariffs on beef products will be reduced within 15 years, putting Canada on an even playing field with competitors that already have trade agreements with Japan. Japan will implement a Canada-specific quota for food wheat and a shared CPTPP-wide quota for food barley. Saskatchewan’s canola sector will benefit from the elimination of tariffs on canola oil in Japan over five years.  These are just a few examples of the market access gains Canadian agriculture enjoy under this agreement.

Benefits of the CPTPP go beyond tariff reduction. It offers modern sanitary and phytosanitary and technical barriers to trade provisions that build on progress made at the World Trade Organization. The trade facilitation rules, rules of origin, and transparency provisions will also help reduce the cost of doing business with member countries. Given the current climate and the rising trend towards protectionist trade policies around the world, the ratification of the CPTPP will be a welcome opportunity for Saskatchewan’s agriculture sector and an important factor in reaching the targets in the Saskatchewan Plan for Growth.

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