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COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC
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Comprehensive and Progressive Agreement for Trans-Pacific Partnership
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
is a regional free trade agreement between Canada and ten countries in Asian-Pacific (Australia,
Chile, New Zealand, Brunei, Mexico, Japan, Peru, Vietnam, Malaysia, and Singapore).
According to Li and Whalley, these nations represent 13.5% of the global economy, positioning
CPTPP amongst the most significant FTAs globally.1 The CPTPP came into effect after former
US president Trump’ withdrew the US from the Trans-Pacific Partnership (TPP) in 2017. 2 The
remaining members formed a new trade agreement known as the CPTPP that came into force in
2018. Without the US, the global income gains were reduced by 70%. However, the deal still
generates income for the members estimated to add to the worldwide income of over $100.3
Besides, the FTA positively impacts significant economic indicators, including exports, imports,
and GDP of member countries.
Impact of CPTPP on Member States’ Economic Growth
CPTPP provides member states access to key markets in Canada, Asia, and Latin
American. The members makeup 13.5% of the global GDP and represent 500 million consumers
that the agreement opens up to the members. Per Li and Whalley, two-way merchandise
commerce between Canada and CPTPP members who had ratified the deal rose by 3.36%,
1
Chunding Li, and John Whalley, “Effects of the comprehensive and progressive agreement for trans‐
pacific partnership.” The World Economy 44, no. 5 (2021): 1312.

2
Cyn-Young Park, Peter A. Petri, and Michael G. Plummer, “The Economics of Conflict and Cooperation
in the Asia-Pacific: RCEP, CPTPP and the US-China Trade War.” East Asian Economic Review 25, no. 3 (2021):
234.
3
Li and Whalley, “Effects if the Comprehensive and Progressive agreement,” 1312.
3
totalling $45.67 billion.4 Equally, the other members have equal access to the vast economic bloc
and increase their opportunities to trade freely within the region and international markets.
With the contract’s provision, eliminating tariffs for 98% of export goods, members also
export goods and services at low prices. This advantage gives them a competitive price
advantage in Asia-Pacific and Canadian markets due to millions of dollars in tariff savings
compared to non-CPTPP traders. Correspondingly, the favourable trade tariff provisions give the
member states exporters, firms, SMEs, and other investors new opportunities in international
commerce. For example, Canada’s imports from member states increased by $1.5 billion from
2018.5 Similarly, analysts note significant expansions in Australia, Malaysia, and Vietnam's
exports and imports and investment entries within the region and internationally.6 Vietnam,
Brunei, Singapore, and Chile, specifically recorded gains in export growth despite the pandemic
trade disruptions regionally and globally. International trade is a crucial driver of a country's
economic growth.
CPTPP also increased foreign direct investment (FDI) in most member countries due to
favourable treatment and protections for investors. For instance, in 2019, Vietnam scored 7% and
Malaysia 3% growth in FDI entries.7 FDI is also positively correlated to developments in
productivity and service sectors. Both measures signify notable economic growth since most of
the members of CPTPP’s investments have registered growth. Notably, the direct investment
occurred between and amongst the CPTPP members and outside investors.
4
Li and Whalley, 1324.
5
Park, Petri, and Plummer, “The Economics of Conflict and Cooperation in the Asia-Pacific,” 249.
6
Kati Suominen. Two Years Into CPTPP. Center For Strategic & International Studies (CSIS).
https://www.csis.org/analysis/two-years-cptpp
7
Suominen, Two Years Into CPTPP, 6.
4
Domestic e-commerce also grew following CPTPP ratification in member countries.
According to Suominen, Malaysia, Mexico, Peru, and Vietnam, recorded over 25% growth in
online trade by 2020.8 On the other hand, cross-border trade declined. This difference can be
attributed to the Covid-19 pandemic, which affected most countries regardless of their non-
membership or membership to CPTPP or any other FDA. Nonetheless, significant trade gains
existed between the CPTPP members than before the agreement because of its liberating
provisions for trade.
In summation, the CPTPP free trade agreement between Canada and 1I Asian countries
brought various economic gains for the member states. Studies on most member countries
register economic benefits, including increased export and import trades, international trade, e-
commerce, and foreign direct investments that are positively associated with economic growth.
8
Suominen, 9.
5
Bibliography
Li, Chunding, and John Whalley. “Effects of the comprehensive and progressive agreement for
trans‐pacific partnership.” The World Economy 44, no. 5 (2021): 1312-1337.
Park, Cyn-Young, Peter A. Petri, and Michael G. Plummer. “The Economics of Conflict and
Cooperation in the Asia-Pacific: RCEP, CPTPP and the US-China Trade War.” East Asian
Economic Review 25, no. 3 (2021): 233-272.
Suominen, Kati. Two Years Into CPTPP. Center For Strategic & International Studies (CSIS).
https://www.csis.org/analysis/two-years-cptpp

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COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC

Comprehensive and Progressive Agreement for Trans-Pacific Partnership

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

and GDP of member countries.

Impact of CPTPP on Member States’ Economic Growth

pacific partnership.” The World Economy 44, no. 5 (2021): 1312.

Malaysia 3% growth in FDI entries.7 FDI is also positively correlated to developments in

Domestic e-commerce also grew following CPTPP ratification in member countries.

provisions for trade.

trans‐pacific partnership.” The World Economy 44, no. 5 (2021): 1312-1337.

Economic Review 25, no. 3 (2021): 233-272.

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