It’s a trade bloc between Canada and 10 other countries (Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) that together represent 15.6% of global gross domestic product (GDP) and more than 580 million consumers. But for many small- to medium-sized enterprises (SMEs) in Canada, little is known, or understood, about the benefits of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
“Free trade agreements (FTAs) provide Canadian companies with preferential access to key foreign markets. They eliminate tariffs, improve transparency and provide greater legal certainty, making it easier for Canadian companies to pursue their international business opportunities. But studies show that Canadian firms aren’t taking full advantage of the opportunities afforded by Canada’s FTAs,” says Aaron Fowler, Canada’s senior official for the CPTPP and associate assistant deputy minister of trade policy at Global Affairs Canada.
“Through greater awareness of these benefits, there’s the potential to increase the use of these FTAs and, in turn, more fully realize Canada’s export potential,” says Fowler, adding SMEs and other underrepresented groups, including women-owned companies and Indigenous businesses, have plenty to gain by leveraging the CPTPP, in particular, to expand into markets in the rapidly growing Indo-Pacific region.
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Canada is chairing the CPTPP Commission in 2024 with a focus on:
- increasing the use of the CPTPP by more businesses of all sizes and sectors;
- reviewing the agreement to find ways to update and enhance it; and
- exploring the development of an effective process to admit new members.
In late November, the CPTPP ministers are meeting in Vancouver, BC, to assess the progress on these priorities and share ideas going forward in 2025.
In this CPTPP 101 primer, we highlight 10 things SMEs should know about the FTA to help increase their international business success and accelerate their export growth in the Indo-Pacific and Latin America:
1. Big savings: With lower tariffs—or no tariffs at all—it costs less to take Canadian products to the Indo-Pacific region, especially in markets, like Japan and Vietnam, where our exports previously faced high tariffs. Once fully implemented, 99% of tariff lines among CPTPP member countries will be duty-free.
2. Increased competitiveness: The agreement promotes fair business practices and offers Canadian businesses better predictability, protection and transparency in the Indo-Pacific. It also includes enforceable rules in the areas of international labour and environmental standards and helps level the playing field for Canadian businesses by encouraging competition with large, commercial state-owned enterprises based on quality and price—not discriminatory regulation or favouritism.
3. Droves of new customers: Did I mention that more than 580 million consumers are at your disposal with the CPTPP? That’s a lot of potential sales and business opportunities, including procurement contracts with foreign governments—a first for Vietnam and Malaysia. With the United Kingdom soon to become the 12th CPTPP member country, Canadian businesses will benefit from even greater opportunities—building on our strong trade ties from the existing post-Brexit bilateral trade deal.
4. Ease of business: The CPTPP helps get your product to member markets more quickly by simplifying and harmonizing customs procedures that reduce paperwork, red tape and processing times at the border.
5. Breaking down barriers: The CPTPP addresses key challenges and barriers to doing business in the global marketplace, which can be especially costly for SMEs. To reduce costs for exporters and increase efficiency, the agreement brings transparency and encourages the use of internationally accepted standards.
6. Trade in the digital age: While shielded from customs duties, or other charges on online digital products, Canadian companies can capitalize on data and digital opportunities—both at home and abroad—through CPTP’s protection of the free flow of information across borders and minimized data localization requirements. To help build trust and confidence to engage in digital trade, users are also protected from unauthorized disclosure of their personal information, online fraudulent and deceptive commercial practices.
7. Reduced restrictions to temporary entry: CPTPP’s temporary entry commitments make it easier for professionals from Canada to work temporarily in partner countries, or bring skilled talent to Canada. They also eliminate common barriers such as quotas and labour market tests, helping businesses get the right person, to the right place, at the right time.
8. Investments secured: Canadian investors benefit from comprehensive investment protection, including provisions against expropriation and denial of justice, providing certainty, stability and protection for Canadian investments and secured access to the Indo-Pacific market.
9. Support for SMEs: “The CPTPP was Canada’s first FTA to include a dedicated chapter with specific measures to help SMEs take full advantage of the opportunities this agreement creates,” says Fowler. “This reflects the Government of Canada’s commitment to significantly increasing the number of Canadian SMEs exporting to key markets in Asia and Latin America.”
10. First-hand success stories: Global Affairs Canada is hosting a hybrid event on Nov. 26, entitled CPTPP unlocked: Empowering SMEs for Global Success in the Pacific, to provide insights into CPTPP market opportunities, the FTA’s key provisions and benefits for SMEs, and first-hand experiences from SME leaders who’ve successfully navigated the CPTPP markets. Registration is free.
Other resources
- Reading a free trade agreement can be daunting. To help you wade through the technical terms and better understand the rules, read How to read the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
- Discover the benefits of doing business in the Indo-Pacific with CPTPP
- Access CPTPP tools and resources to help your business succeed in the Indo-Pacific
- Learn about Canada’s FTAs and what they can do for you
- The Canada Tariff Finder lets you quickly and easily find tariff information about your exports.
