Posts Tagged ‘cptpp’


 

What Does CPTPP Stand For? | CPTPP FAQ

CPTPP

What Does CPTPP Stand For?

The CPTPP stands for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As of February 2018, CPTPP is a new free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Who Has Ratified CPTPP?

The countries that have ratified the CPTPP includes:

  • Mexico | June 28, 2018
  • Japan | July 6, 2018
  • Singapore | July 19, 2018
  • New Zealand | Oct 25, 2018
  • Canada | Oct 29, 2018
  • Australia | Oct 31, 2018
  • Vietnam | November

Who Has Not Ratified?

  • Peru | Expected before 2019
  • Brunei
  • Chile
  • Malaysia

When Does It Start?

Since 6 of the countries have ratified, CPTPP will start on Dec 30th, 2018. For all of the countries that have ratified, they will be able to start using the agreement on Dec 30th. For the rest of the countries who have yet to ratify, the agreement will come into force for them 60 days after that country ratifies and deposits as well.

When Was It Signed?

The CPTPP was signed on March 8th, 2018, in Santiago, Chile.

When Will CPTPP Come Into Force?

The CPTPP will come into force on Dec 30th, 2018, which would mean 2018 is year 1 and 2019 is year 2. Which means faster duty reductions. The “years” for the agreement run from Jan 1 – Dec 31.

Who Can Use The CPTPP Agreement?

The agreement can only be used by the countries that have ratified the agreement.

For example, since Canada is ratified but Malaysia is not, Canada and Malaysia are not able to use the agreement with each other until Malaysia ratifies and the 60 days has passed.

What Are The Benefits?

Approximately 98% of the customs duties will be removed at the time of final implementation. Once CPTPP comes into force, many commodities will be duty free upon entry. The elimination of tariffs will depend on the staging category. Some items will have the duty reduced faster than others. A few commodities will not be reduced at all.

Are You Prepared For The Agreement?

The CPTPP agreement will affect the world of trade. Are you prepared for the new CPTPP agreement? You can learn about the rules of origin, regional value content, de minimis, and more from an expert trade advisor from Pacific Customs Brokers. Contact one of our experienced trade advisors today for your trade edge.

 

 

 

 

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Will CPTPP Impact NAFTA Negotiations?

North America

Prior to the latest NAFTA negotiations, Canada entered into the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In this blog, we look at how this may impact the next round of NAFTA negotiations in late February, early March.

Before the January NAFTA Negotiations

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Canada and Mexico has agreed to the new CPTPP. An international trade agreement between 11 countries the U.S. previously withdrew from on January 23rd, 2017.

With the U.S. adopting a bilateral trade agreement philosophy, while Canada and Mexico have joined the multilateral CPTPP agreement. How will this impact the NAFTA negotiations going forward?

 

New U.S. Duties on Solar-Panels and Washing Machines

Also, the U.S. recently introduced new import duties on solar-panels and washing machines. Solar-panel duties have increased by 30%, while washing machines duties have increased by 50%. The new duty on solar-panels will have a minor impact on Canada and Mexico. The new washing machine duty will only impact Mexico.

 

January’s NAFTA Negotiations: Round Six

Tuesday, January 23rd, Canadian, American and Mexican representatives met in Montreal for the sixth round of NAFTA negotiations. Let us focus on the four main focal points surrounding the latest NAFTA negotiations. Chapter 19, the auto parts industry, the dairy industry and the sunset clause.

Chapter 19: Trade Disputes

The U.S. is looking to eliminate Chapter 19 in the NAFTA negotiations. Currently, Chapter 19 allows for trade disputes between two NAFTA countries to go through an independent third party arbitrator. This prevents Canada and Mexico from having to enter into the U.S. legal review process for anti-dumping and countervailing duties imposed by the U.S. government.

Previous Chapter 19 rulings have favored Canada. Most recently Boeing made a bid to increase import duties by 300% on Bombardier’s CSeries. An independent third party arbitrator, the U.S. International Trade Commission (USITC), voted 4-0 to reject the 300% duty because it did not have a negative impact on the U.S. aircraft industry.

The Auto Parts Industry

With the new CPTPP in place, the NAFTA negotiations are going to feel some extra pressure in the auto parts industry. At the moment, NAFTA allows for 37.5% of a cars parts to come from outside of Canada, the U.S. and Mexico. However, in the new CPTPP agreement, the percentage of allowable foreign composition is 55%. This difference will create a more competitive market for auto parts in Canada and Mexico, while at the same time acting as a disadvantage for Canadian and Mexican companies creating auto parts.

The U.S. is aiming to decrease the percentage of car parts that come from outside of North America to 15%. Translating to more job opportunities for Americans in the auto industry.

Canadians are trying to introduce a line of thinking that auto industry software and other high-tech equipment should be taken into consideration when talking about the net cost of auto parts since a higher percentage of software and high-tech equipment is created and produced in Canada, the U.S. and Mexico. Thus adding to the auto parts percentages.

The Dairy Industry

The CPTPP agreement has also opened up the dairy debate as well. Since there has been a small opening to Canada’s originally closed market, the U.S. wants greater access to Canadian consumers. Currently, if a U.S. dairy farmer was to export milk to Canada, they would face a 270% duty. Eliminating dairy trade barriers would be beneficial to Canadian consumers, but would deal a great blow to Canadian dairy farmers who presently enjoy the benefits of the ongoing trade barrier.

The Sunset Clause

The U.S. also wants to implement a sunset clause. A sunset clause would allow any of the three NAFTA countries to walk away from the proposed agreement after five years. If the sunset clause was to be implemented it would almost certainly mean the end of the current NAFTA agreement in five years, since it would be unlikely for all three countries to be happy with the state of the agreement in five years.

 

NAFTA Negotiations and Trade

Despite all of the uncertainty with NAFTA, trade between the three countries has remained steady and consistent. Everyday airplanes, trains, cargo ships, and trucks transport essentially everything you use daily. If you would like to explore international trade opportunities, give us a call. We can provide you assistance with customs clearance, freight forwarding, trade education and trade advisory services.

 

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