(VOVWORLD) - The Comprehensive and Progressive Trans-Pacific Partnership, a new version of the Trans-Pacific Partnership will be signed by 11 member countries Thursday in Chile. The agreement is expected to bring new opportunities for a free trade area stretching from the North America to Asia and a new leverage for global trade.
The Comprehensive and Progressive Trans-Pacific Partnership, CPTPP, also known as TPP-11, was agreed by 11 countries on the sidelines of the APEC Summit in Da Nang last November. At a meeting in Tokyo in January, the 11 countries discussed pending issues, reviewed legal matters, and finalized procedures to move toward the official signing which will take place on Thursday.
The CPTPP marks a turning point in global trade, reflecting a great effort led by Japan following the US’s withdrawal.
New-generation trade agreement advantages
The new agreement will eliminate more than 98% of tariffs in a region with a GDP of 13 trillion USD, accounting for 13.5% of the global economy. Last year, trade between the 11 CPTPP member countries totaled nearly 360 billion USD.
The CPTPP retains principal elements of the TPP - investment liberalization, investor protection, government procurement, and intellectual property rights. Under the deal, countries are required to open their doors to companies and investors of other members and provide them equal treatment and preferences to create fair competition between foreign and domestic enterprises. The deal includes provisions that create job opportunities for workers, farmers, traders, and consumers.
For developing countries like Malaysia, Vietnam, Singapore, Peru, and Chile, the CPTPP brings about opportunities to expand export markets. In return, provisions concerning government procurement and intellectual property will attract developed countries. The CPTPP is open to new membership, even by non-Asia-Pacific countries, and would even welcome the return of the US.
Multilateral trade inevitable
The trade pact is set to take effect in the beginning of 2019 after it is ratified by at least six member countries. The signing of the deal represents a spectacular recovery from the collapse of the TPP, showing that Asian Pacific countries are determined to boost cooperation and integration. The deal proves that multilateral trade freedom is an irreversible trend. It defies US President Donald Trump’s motto “America first”.
The CPTPP with its high standards is likely to become a model for other multilateral trade deals like the Regional Comprehensive Economic Partnership led by ASEAN. The CPTPP is expected to expand its membership. The Republic of Korea, Taiwan (China), Thailand, Indonesia, and the Philippines have already expressed an interest in joining.