Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Definition

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement between several Pacific Rim countries aimed at promoting economic integration, reducing tariffs, and fostering trade among its member nations. It emerged from the original Trans-Pacific Partnership (TPP) after the United States withdrew in 2017, focusing on high-standard provisions for trade, labor, and environmental practices while still facilitating market access.

5 Must Know Facts For Your Next Test

1. The CPTPP includes 11 member countries: Canada, Australia, Japan, Mexico, New Zealand, Singapore, Vietnam, Brunei, Chile, Peru, and Malaysia.
2. One key feature of the CPTPP is its commitment to high labor standards and environmental protections, which are intended to ensure fair competition and sustainable practices.
3. The agreement covers various sectors, including goods, services, investment, intellectual property, and digital trade, promoting a broad scope of economic cooperation.
4. Despite the U.S. withdrawal from the TPP, the CPTPP has been successful in attracting new members interested in benefiting from its provisions.
5. The CPTPP aims to create a free trade area that encompasses nearly 13.4% of the global economy, highlighting its significance in international trade dynamics.

Review Questions

• How does the CPTPP differ from its predecessor, the TPP, in terms of membership and key objectives?
  • The CPTPP differs from the TPP primarily due to the United States' withdrawal from the original agreement. As a result, the CPTPP has 11 remaining member countries focused on maintaining high standards for trade while promoting economic integration. The CPTPP emphasizes labor rights and environmental protections more strongly than the TPP did, ensuring that trade liberalization does not come at the expense of social or ecological responsibilities.
• Discuss the implications of the CPTPP on global trade relations in the Asia-Pacific region.
  • The CPTPP plays a crucial role in shaping global trade relations within the Asia-Pacific region by fostering economic cooperation among member countries and serving as a counterbalance to other trade agreements like RCEP. By reducing tariffs and promoting trade across diverse sectors, it strengthens intra-regional ties and can influence non-member countries to align their trade policies with CPTPP standards. This interconnectedness can lead to increased competition and innovation while enhancing market access for businesses in member nations.
• Evaluate the potential long-term effects of the CPTPP on both member countries' economies and global supply chains.
  • The long-term effects of the CPTPP on member countries' economies could include enhanced economic growth through increased trade flows and investment opportunities. By creating a more interconnected supply chain network across the Pacific Rim, businesses may benefit from lower production costs and improved efficiency. Additionally, as standards set by the CPTPP influence global trading practices, non-member countries may feel pressure to adopt similar regulations to remain competitive. This could lead to a broader shift in international trade norms that prioritize high labor and environmental standards.

Related terms

Trans-Pacific Partnership (TPP): A proposed trade agreement among 12 Pacific Rim countries aimed at deepening economic ties and reducing tariffs, which was ultimately not ratified after the U.S. withdrawal.

Free Trade Agreement (FTA): A treaty between two or more countries to facilitate trade and eliminate trade barriers such as tariffs and quotas.

Tariff Reduction: The process of lowering or eliminating taxes imposed on imported goods, aimed at making trade more affordable and competitive.