Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

Definition

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement between 11 countries that aims to promote economic integration, trade liberalization, and sustainable development in the Asia-Pacific region. The CPTPP builds upon the original Trans-Pacific Partnership (TPP) but suspends certain provisions to address concerns raised during negotiations, making it a more adaptable framework for participating nations.

5 Must Know Facts For Your Next Test

1. The CPTPP includes member countries such as Canada, Japan, Australia, and Mexico, covering approximately 13.4% of the global economy.
2. One significant aspect of the CPTPP is its commitment to high labor and environmental standards, promoting sustainable practices among member nations.
3. The agreement addresses digital trade issues by including provisions that facilitate cross-border data flows and limit data localization requirements.
4. The CPTPP enhances market access for goods and services while also addressing non-tariff barriers that may hinder trade between member countries.
5. Since its implementation in December 2018, the CPTPP has been viewed as a strategic counterbalance to China's influence in the Asia-Pacific region.

Review Questions

• How does the CPTPP promote sustainable development among its member countries?
  • The CPTPP promotes sustainable development by incorporating commitments to high labor standards and environmental protections within its framework. These commitments ensure that economic growth does not come at the expense of workers' rights or ecological integrity. By encouraging member countries to adopt sustainable practices, the CPTPP aims to balance economic benefits with social and environmental responsibilities.
• Discuss the impact of the CPTPP on digital trade and how it facilitates international commerce.
  • The CPTPP has a strong focus on digital trade by including provisions that facilitate cross-border data flows, which are crucial for modern international commerce. It also limits restrictions on data localization, allowing companies to operate more efficiently across borders. This approach not only enhances market access for digital services but also encourages innovation and competition among member countries, ultimately contributing to economic growth.
• Evaluate the strategic significance of the CPTPP in counterbalancing China's economic influence in the Asia-Pacific region.
  • The strategic significance of the CPTPP lies in its potential to create a collective economic front against China's growing influence in the Asia-Pacific region. By establishing high standards for trade and investment among member countries, the CPTPP seeks to set a benchmark that encourages adherence to transparent practices and fair competition. As a result, it offers an alternative framework for economic cooperation that contrasts with China's more state-driven approach, potentially reshaping regional dynamics and alliances in global trade.

Related terms

Trade Liberalization: The reduction or elimination of trade barriers, such as tariffs and quotas, to encourage free trade between countries.

Investor-State Dispute Settlement (ISDS): A mechanism that allows foreign investors to sue host countries for discriminatory practices that affect their investments.

Regional Economic Integration: The process by which neighboring countries enter into an agreement to enhance economic cooperation by reducing trade barriers and increasing trade flows.