In early November, with Australia becoming the sixth nation to ratify the CPTPP, the trade deal between Asia-Pacific nations was officially “revived”. As agreed by the member states, the CPTPP will officially come into effect by the end of the year if it is ratified by six countries. That the CPTPP has overcome many ups and downs to reach the “target” is sparking great belief in the regional trend of trade liberalisation, integration and connectivity, while promising to create a new impulse for economic growth in Asia-Pacific. A “happy ending” for the pact is more meaningful as more than two years ago, the precursor of the CPTPP, the Trans-Pacific Partnership (TPP) between 12 countries, was “put to death”. However, the remaining 11 members of the TPP were determined to pursue the agreement and have negotiated to agree on the maintenance of the TPP in the new “form” of the CPTPP. In March 2018, the CPTPP document was approved by 11 signatories, enclosed by regulations that the agreement will come into effect 60 days after it is ratified by six member countries.
Despite the absence of the United States – the largest and most important trading partner in the pact, the CPTPP still remains a highly attractive “playground” to the nations in the Asia-Pacific region. This trade deal covers countries across three continents with a market of up to 463 million and a gross domestic product (GDP) of more than US$10 trillion, accounting for 13% of the global GDP. In terms of content, the CPTPP is a progressive trade agreement which allows the removal of barriers to the free flow of goods, services and investment capital in the region. Given such advantages, the Asia-Pacific countries expect that, after coming into force later this year, the agreement will create a new momentum for the regional economy. Thanks to the CPTPP, the economies will accelerate reforms and innovation, create more jobs, reduce poverty and improve the quality of life for the people. The CPTPP is also hoped to be a “fulcrum” for the member countries to boost regional and global integration in a stronger and more effective manner.
As predicted by economic experts, the CPTPP will facilitate regional economic growth, helping the Southeast Asian economies, such as Malaysia, Singapore, Brunei and Vietnam, to increase their GDP growth by over 2% by 2030. New Zealand, Japan, Canada, Mexico, Chile and Australia will also earn an additional surge of 1% in their GDP growth. On the national scale, each CPTPP member has also foreseen the “sweet” fruit they can “reap” from the agreement. Canada said that the CPTPP arrived at the “right moment” so that its small and medium-sized enterprises (SMEs) could take advantage of key Asian markets, diversify their trade and reduce their dependence on the US - an increasingly “unpredictable” partner. Economic experts have pointed out that Canadian industries will have big advantages when the CPTPP is enforced, as 99% of Canada’s current exports to the markets of the CPTPP member countries will be exempt from tax. The New Zealand Government estimates that the CPTPP will add between NZD1.2 billion and NZD4 billion to the country’s annual GDP. Meanwhile, Australian officials stated that the CPTPP will help their businesses grow and contribute AUD15.6 billion annually to the national economy by 2030.
Not only creating a new growth engine for the economies, the CPTPP is also seen as a “weapon” against trade protectionism that has spread over the past two years. According to the Australian economic experts, the CPTPP has become a “wall” hindering the escalation of trade protectionism in the world. In the context that a series of bilateral and multilateral FTAs, with the US as a signatory, notably the North American Free Trade Agreement (NAFTA), had to be renegotiated, the CPTPP’s coming into force will become a bright spot in the gloomy picture of global trade.
With the aforementioned advantages and potential, the CPTPP has become the focus of attention and seems like a “magnet” that attracts many partners to join the “common roof” together with the existing 11 members. Recently, a number of economies inside and outside the region, including Indonesia, the Republic of Korea, the Philippines, Taiwan (China), Thailand and the UK, have considered the possibility of joining the CPTPP.
At the moment, the CPTPP is providing wide-range opportunities for the Asia-Pacific economies to integrate, connect and development, as well as to cope with the globally spreading trade protectionism. However, in order to take advantage of the great opportunities brought about by the agreement, each country needs to prepare the best “luggage” to join the common journey which is scheduled to begin in 2019.
