13 Things you should know about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Last Updated on April 12, 2018 by Lic. Octavio de la torre
What is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP)?
This Agreement was originally promoted by 12 Pacific Rim countries spread over 3 continents, which is why it was originally known as the Trans-Pacific Partnership Agreement (TPP).
- When did the TPP negotiation process begin?
The broad process of economic integration began in 2010, concluding the negotiations with the signatures of the ministers of the 12 countries on February 4, 2016 in Auckland, New Zealand.
- Which countries comprised the first initiative until 2017?
America: Canada, Chile, United States of America, Mexico, Peru.
Oceania: Australia, New Zealand.
Asia: Brunei, Japan, Malaysia, Singapore, Vietnam.
- How was the TPP integrated?
The TPP had 30 chapters which included, along with topics that are traditionally incorporated into free trade agreements, other disciplines to regulate the activities of state-owned companies, intellectual property, regulatory coherence, electronic commerce, the environment, SMEs , among others.
- Why was the first agreement not enforced?
The original text was supposed to enter into force in a period of 2 years, it had to be ratified by at least 6 member countries, which would represent 85% of GDP. However, on January 23, 2017, the United States withdrew the Agreement, making the concretion of the TPP practically unfeasible.
- What was the reaction of the 11 remaining countries?
On March 15, 2017, the ministers of the 11 remaining countries expressed their intent of reformulating the Agreement, in order to move forward, giving way to a series of technical meetings geared towards achieving a consensus among the parties to obtain a balanced result which would facilitate the enforcement of the Agreement.
- What is CP-TPP?
On November 23, 2017, the remaining 11 countries of the TPP formally announce the consensus reached on the elements that would lead to a new agreement: ” Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP)
- Who is part of this new agreement?
America: Canada, Chile, Mexico, Peru.
Oceania: Australia, New Zealand.
Asia: Brunei, Japan, Malaysia, Singapore, Vietnam.
- When was it signed by the ministers of the 11 countries?
It was signed on March 8, 2018, in Santiago, Chile, with the presence of the 11 ministers representing their countries.
- What are the interesting aspects and what decisions did the 11 countries make about the position that the USA took regarding TPP?
The remaining 11 countries agreed to maintain the level of market access achieved, suspending the application of certain provisions related to rules that were introduced by the United States. They were not eliminated pending a possible return from that country.
Annex II contains the list of the 22 suspended provisions, related to issues of patent protection, copyright and intellectual property.
- When will CP-TPP be enforced?
It will be enforced 60 days after at least 6 of the signing countries notify the ratification of the Agreement to New Zealand in writing.
- What is the relevance of CP-TPP in the world?
It represents 14% of the global GDP that integrates 6.8% of the world population with 495 million inhabitants.
Mexico is currently the fourth largest economy within the Agreement in terms of global GDP.
12. What is the legal structure of CP-TPP?
- It is formed by 7 main articles.
- Article 1: states that the provisions of the TPP, whose text was not changed, are incorporated by reference and are part of the Agreement.
- Article 2: contains a list of 22 provisions that will be suspended until the original TPP enters into force, that is, when the United States completes its bonding process.
- Article 3: establishes that in order to be enforced, the ratification of 6 countries or at least 50% of the signatories will be required.
- Article 4: provision on withdrawal, any State may withdraw form the Agreement by submitting a written notification of withdrawal to the Depositary (New Zealand).
- Article 5: clause regarding the possible accession of any State or customs territory, under the terms and conditions negotiated.
- Article 6: provision regarding the revision of the Agreement at the request of any of the members.
- Article 7: clause regarding the authentication of texts. Although the Spanish and French versions are valid in case of discrepancy, the English text will prevail.
- It has 4 parallel Agreements.
- Parallel Agreement by which the Agreement between the Government of Australia and Mexico for the Promotion and Reciprocal Protection of Investments and its Protocol is partially terminated. The Agreement will continue to be applied for a period of 3 years to any investment that was made before the CPTPP is enforced.
- Parallel Agreement between the Government of Malaysia and Mexico regarding Provisions Related to the Rule of Specific Origin by Products for certain Vehicles. It will allow the parties to bilaterally apply a flexible origin rule for light cars, through the establishment of two compliance alternatives: a rule of change of tariff classification that allows the supply of auto parts anywhere in the world, and the second of rule which requires satisfying the value of regional content lower than that required in Annex 3-D (Specific Rules of Origin for Product) of the CTPP.
- Parallel Agreement for the establishment of the Monitoring Program related to textiles and clothing companies registered in Vietnam to exchange information and support risk management in the identification and attention of customs offenses related to the textile sector, celebrated between the governments of Vietnam and Mexico. It will allow our country to determine if a customs violation is occurring in the imports of said sector and to apply the appropriate measures according to the Mexican legislation.
- Parallel Agreement Regarding Aspects of Trade on Certain Textile Goods and Clothing under the List of Limited Supply and Synthetic Clothing for Babies, concluded between the governments of Vietnam and Mexico. It foresees that our country may grant certain exceptions to the rules of origin that apply to Vietnamese textile products, specifying that Vietnam will limit its exports of acrylic products and synthetic fiber baby clothes through the establishment of quotas, outside of which these products must comply with the rule of strict origin.
|1. Initial Provisions and General Definitions
2. National Treatment and Access of Merchandise to the Market
3. Rules of Origin and Procedures Related to Origin
4. Textile and Clothing Merchandise
5. Customs Administration and Trade Facilitation
6. Commercial Defense
7. Sanitary and Phytosanitary Measures
8. Technical Barriers to Trade
|10. Cross-Border Trade in Services
11. Financial Services
12. Temporary Entry of Business Persons
14. Electronic Commerce
15. Public Contracting
16. Competition Policy
17. State Owned Enterprises and Designated Monopolies
18. Intellectual Property
|21. Cooperation and Capacity Development
22. Competitiveness and Business Facilitation
24. Peques and Medium Companies
25. Regulatory coherence
26. Transparency and Anticorruption
27. Administrative and Institutional Provisions
28. Settlement of Controversies
29. Exceptions and General Provisions
30. Final Provisions
- Some of the advantages of CP-TPP.
- Once enforced, an improvement in access to different markets is expected as countries will automatically eliminate around 95% of their tariffs on traded goods.
- For the services sector, the Agreement provides greater facilities to provide services in member countries in the following areas: banking, insurance, construction, logistics, accounting, travel and tourism, consulting, application development, among others.
- The Electronic Commerce chapter contemplates a broad protection for the data created through digital commerce, guaranteeing and protecting the free flow of information.
- Opens a window of opportunity to develop new value added services that can support the development of the production plant and a better insertion in global value chains.
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