CPTPP (The Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
We end 2018 and start 2019 with a new Free Trade Agreement, the CPTPP which came into force on 30th Dec 2018, The origins on the CPTPP, include many items negotiated as part of the Trans Pacific Partnership with some points of difference, The Participants agreed to suspend 22 items from the original TPP agreement which means that areas of concern for New Zealanders under TPP will not apply.
The 11 Asia Pacific Countries in the CPTPP are New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, and Vietnam. Of which Japan, Canada, Mexico and Peru we have not previously had a Free trade agreement with, before CPTPP.
Currently NZ exports NZ$ 5.5 billion of goods and services to these four countries. Other notable facts are;
- 30% of both NZ’s goods exports (NZ$ 16.7 Billion) and service exports (NZ$ 7.3 Billion) are destined for CPTPP countries
- Three of NZ”S top 10 trading partners ( Australia Japan and Singapore) are members of CPTPP
- 65% of total foreign direct investment in NZ as at 31/03/18 was sourced from CPTPP members.
- Overall the agreement potentially could deliver NZ$ 222 million of tariff savings annually with approx.
NZ$ 104 million in 2019 for New Zealand Exporters
- The economies involved in CPTPP account for 13.3% of world GDP worth US$10.6 Trillion.
- Opens up markets with a combined population of 480 million people
As well as the above expected fiscal benefits the agreement is called progressive because it goes beyond reducing costs to businesses by;
- Including commitments to safeguard high labour and environmental standards across Asia Pacific
- Preserving NZ’s right to make laws to protect our people and environment
- Upholding the Treaty of Waitangi and provide tangible benefits to Maori
- Creating jobs to help generate a better standard of living for New Zealanders
- Create a uniform set of to provide certainty for all business
New Zealand Exporters received an immediate Tariff Cut 30th December 2018 from 5 countries including Japan Canada and Mexico with whom this is NZ’S first FTA. Mexico and Canada implemented a second tariff cut on 1st January 2019 with the second tariff cut from Japan to be implemented on 1st April 2019. Tariff cuts will then be annually. Chile, Peru, Brunei and Malaysia are expected to catch up with the tariff phasing once they become parties to the agreement.
Claiming CPTPP preference
Parties to the CPTPP agreement are to accept a declaration (or certificate of origin) from the producer, exporter or importer which may be in an electronic form. This is to be in lieu of independently verified Certificates of Origins. While there is no prescribed form for this declaration certification there are minimum data elements to be provided and provision for blanket declarations of identical goods within a 12 month period.
We have links below for exporters who wish to investigate CPTPP and the opportunities this will provide them. Alternatively if you need any further information please do not hesitate to contact your Mondiale representative