ACCCIM’s Webinar on Coping with Turbulent Times

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Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Trade in Goods - “An update on current progress"

• This chapter contains four sections: a) Definition and Scope; b) National Treatment and Market Access for Goods; c) Agriculture and d) Tariff-Rate Quota Administration. The ultimate outcome is to achieve a high level of trade liberalisation and market access among the CPTPP parties. 

Key salient points

• Each CPTPP parties shall commit to reduce or eliminate its customs duties on originating goods of other Parties according to Schedule in Annex 2-D (Tariff Commitments).

• For agriculture, Section C covers agricultural export subsidies, export credits, export credit guarantees or insurance programmes, agricultural export state trading enterprises, export restrictions or restriction, committee on agricultural trade, agricultural safeguards and trade of products of modern biotechnology.

• For tariff rate quota administration, Section D indicates that the parties shall publish all information such as size of quotas, eligibility requirements, or application procedures to the public.

• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a new multilateral free trade agreement (FTA) between 11 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.

• The CPTPP was concluded on 23 January 2018 in Tokyo, Japan and signed on 8 March 2018 in Santiago, Chile. In 2020, CPTPP countries accounted around 6.6% of the worlds population (0.5 billion persons), 12.7% of global GDP (US$10.7 trillion), 14.9% of global trade (US$5.3 trillion), and 20.8% of global FDI flows (US$207.3 billion).

• It was an abridged version of the Trans-Pacific Partnership (TPP) Agreement (signed but not yet in force) which included the United States. The elected President Trump has withdrawn the US from the TPP Agreement while the remaining 11 countries remained in the trade block, which renamed as CPTPP.

• Currently, Malaysia is still on track to ratify the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). After ratifying and implementing CPTPP, it would expect to boost Malaysia’s GDP (additional 1% as indicated by World bank) and have positive effects on trade and income. As trade barriers reduce, trade is expected to increase leading to a greater specialisation of firms within participating countries. As firms specialise, capital and labour will be reallocated to the most competitive and productive activities in the economy leading to an overall change in the composition of economic output.

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