CPTPP Secretariat

CPTPP: Moving to Entry Into Force for the UK

CPTPP: Moving to Entry Into Force for the UK

While the UK signature on the concluded accession protocol is to be welcomed, it does not mean that firms should expect to receive benefits from CPTPP expansion just yet.  First, the agreement has pass domestic UK approval procedures, which includes Parliamentary votes.  The protocol will also need to be approved by existing CPTPP members, using whatever domestic procedures are in place for managing this process.  In some members, domestic approvals might also require Parliamentary approval. The UK accession protocol will only enter into force (EIF) once the UK and at least 6 existing members have completed their internal processes and 60 days pass.  Members appear to be targeting approval within 15 months. Of course, these procedures could be shorter or longer than anticipated.  When the original CPTPP was moving towards ratification and approval, members were targeting a start date of January 1, 2019.  However, timing can be difficult to get quite right.  Several members wanted to be among the first 6 members to ratify the deal.  The Vietnamese were working hard to hit the January 1 deadline.  Several existing members moved slightly faster than anticipated and the 6th instrument of ratification was deposited in time to launch entry into force on December 30, 2018, instead of January 1.  This meant that the whole agreement came into force sooner than expected, with the first round of tariff cuts taking place on December 30 and the second “year” of tariff cuts starting just three days later on January 1.[1] The Vietnamese had an unexpected delay, which meant CPTPP did not come into force for Vietnam until January 14, 2019, when it joined Australia, Canada, Japan, Mexico, New Zealand, and Singapore.  Peru was not a full member until September 19, 2021, Malaysia on November 29, 2022, Chile on February 20, 2023, and Brunei finally joined just last week, on July 12, 2023.[2] [Photo courtesy Photo: RNZ / Giles Dexter]

CPTPP: Back to a Dozen Members!

CPTPP: Back to a Dozen Members!

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement is gaining its first new member with the announcement this morning of substantial conclusion of accession talks for the United Kingdom. While the Ministerial statement containing the good news amounted to just four paragraphs, regular Talking Trade readers will know that getting this far in accession talks is an important milestone.  The process has taken nearly two years, driven partly by Covid-19 pandemic travel disruptions which meant early talks were held online.  This was not the only challenge.  During the Working Party discussions, the CPTPP’s own active membership increased by three, with the ratification of Peru, Chile, and Malaysia.   (Just Brunei remains an original signatory, but not yet an active member of the group.)  Covid was not the only disruption during the past two years either.  The UK itself went through substantial domestic upheavals.  The country was also wrapped up in complex talks to help sort out its own trade strategy and engagements across the globe.  As trade experts are keenly aware, there can be a lag between the announcement of “substantial conclusion” and the actual closure of a trade deal.  Often this gap is described as allowing sufficient time for “legal scrubbing” to take place.  However, international trade lawyers will argue that a good legal eagle should be able to review any final changes that arise from a last marathon sprint in negotiations very quickly and, certainly, good lawyers should not need weeks or months to get their jobs done. 

Missing in Action: Trade Secretariats

Missing in Action: Trade Secretariats

Secretariats, or a permanent management structure, play a critical role in the delivery and implementation of international agreements including trade deals. They provide the backbone to administer the day-to-day functions of keeping such pacts alive and ensuring that parties stick to their obligations. Secretariats come in all shapes, sizes and levels of formality. Running an institution by informal committees alone can be a recipe for allowing members to shirk their implementation commitments. It is highly likely that many of the benefits of trade agreements will go unrealized. Countries in the region are signing on to a host of often overlapping free trade agreements (FTAs), creating a so-called “noodle bowl” effect in trade parlance; but a number of them have no permanent structures in place to monitor the agreements. Almost a year after entering into force, the Regional Comprehensive Economic Partnership (RCEP), despite having provisions requiring the creation of a Secretariat as the very first order of business, has yet to set up one.

Time to Upgrade the CPTPP

Time to Upgrade the CPTPP

Since all CPTPP member countries will gather together various working groups to discuss UK accession, it makes sense for these working parties to also reflect on what aspects of the agreement may need a bit of a refresh. There are lots of new ideas that have been built into other agreements that might be usefully imported in the CPTPP. One area, in particular, that is due for an upgrade is the e-commerce chapter. For example, it currently carves out in the opening chapter paragraphs, via the definitions of “covered persons,” the cross-border transfer of financial services data. This exception has not been replicated in other trade arrangements by the current CPTPP members. The existence of this definition is problematic because it seems to conflict with pledges elsewhere in the agreement, including the financial services chapter, to provide such services. It could be time to remove this exception or, at a minimum, relook at the language to determine whether it needs to remain exactly as it was originally written. The rest of the chapter was pathbreaking for its time. But the digital economy, in particular, does not stand still and many innovations in technology, the extent to which digital increasingly underpins nearly every other aspect of the economy, and changes in rules outside the CPTPP suggest that it is due for a closer look and review. Many members will balk or hesitate at the idea of adjusting the agreement now, and especially as part of an accession process. Thus far, every new member joining the deal has had to commit to taking the rule book “as it stands.” Bringing changes or a review into the accession proceedings sets a new precedent to allow future members to expect similar treatment. While a legitimate and valid concern, it raises the issue of when such reviews might take place. If not now, then when? Preparing teams to handle the CPTPP is not simple. Absent a Secretariat with full-time officials that have made CPTPP a daily priority, every government manages the CPTPP on the side or as part of their overall job addressing a range of trade commitments and new negotiations elsewhere. Staffing up at the level of detail and knowledge necessary to carefully review provisions is likely to be a major undertaking. It won’t happen again easily.

The CPTPP Enters Into Force on December 30, 2018

The CPTPP Enters Into Force on December 30, 2018

After a long and arduous path, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement is ready to enter into force on December 30, 2018! Six member states have completed ratification procedures to allow the entire agreement to begin before the end of this year: Australia, Canada, Japan, Mexico, New Zealand and Singapore. This means that for these six members, every provision in the CPTPP will enter into force on December 30.  Every tariff line will be reduced or eliminated, every service and investment sector that was pledged will be opened for CPTPP companies, all new rules on intellectual property rights start, all new customs procedures begin, new provisions for competition and state-owned enterprises kick in, labor and environment rules come into force, and so forth.