This will be one of the three largest agreements in the world, and the largest one for Chile. In addition to Minister Heraldo Muñoz, it was signed by the Ministers of Trade of Australia, Brunei Darussalam, Canada, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and Vietnam.
Santiago, 8 March, 2018.– Over 400 attendees including official delegations, invited guests and press from around the world were present for the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, also known as the TPP11) in Chile’s capital this afternoon. The ceremony was led by President of Chile Michelle Bachelet and Minister of Foreign Affairs Heraldo Muñoz, and was attended by the Ministers of Trade of Australia, Brunei Darussalam, Canada, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore and Vietnam.
“Today, we can proudly conclude this process, sending a strong message to the international community that open markets, economic integration and international cooperation are the best tools for creating economic opportunities and prosperity”, said the chilean president, Michelle Bachelet.
Minister Muñoz, for his part, noted that it was in the context of the High-Level Dialogue with the Asia-Pacific Region organized by Chile in March of last year when the need to revisit the work conducted in the negotiation of the TPP was proposed following the decision of the US to leave the process in January 2017.
“This ambitious trade agreement involves 11 countries. It is designed to contribute to economic growth and create new opportunities for businesses, workers, farmers and consumers. Through this agreement, the 11 countries oppose protectionism because we believe that trade opening is beneficial and generates greater economic growth and employment, reduces poverty and increases wellbeing for everyone,” the Chilean minister stated.
How the CPTPP Was Developed
Following the US’s decision to leave the agreement and the renewal of the process announced at the Dialogue in Viña del Mar, the technical teams of the 11 countries met in April and December 2017 to analyse options for introducing the contents of the original TPP. In January this year, the CPTPP agreement was reached at a meeting in Tokyo.
The agreement retains the contents of the original TPP in its essence but includes 20 suspensions that were agreed to in order to protect the balances between the 11 countries, mainly in the area of intellectual property. According to information from Direcon ProChile, the 11 countries that form part of this agreement represent a market of 498 million people with average per capita income of US$28,090. They also represent 13% of the global economy.
Following processes such as the Comprehensive Economic and Trade Agreement (CETA, between Canada and the EU) and the North American Free Trade Agreement (NAFTA, between the US, Canada and Mexico), the CPTPP will be the third largest agreement in the world.
For Chile, the countries involved account for 17% of its exports, are the source of 12% of its imports and represent 18% of Chilean foreign investment. In addition, 32% of direct foreign investment in Chile comes from the bloc.
Chile and Its Close Links with the Asia-Pacific Region
Chile has increasingly positioned itself in the Asia-Pacific Region through its participation in APEC in general and by signing free trade agreements with Australia, Brunei, China, the Republic of Korea, Hong Kong, Japan, Malaysia, New Zealand, Singapore, Vietnam and Thailand. Indonesia joined this list in December 2017.
“Chile’s trade openness, which currently includes 26 trade agreements with 64 economies, has favoured economic growth, made trade more dynamic and increased direct investment flows to and from our country. This has had a key strategic objective: to improve our citizens’ quality of life. The signing of the CPTPP in Santiago is undoubtedly a major achievement for our trade openness policy, as it shows Chile’s leadership in the process, and is a great step forward for our insertion strategy in the Asia-Pacific Region,” explained Chilean Vice Minister of Trade Paulina Nazal.
Benefits for Chile and the Bloc
The benefits of this agreement are related to greater access to markets, advantages in areas such as services and investments, environmental and employment benefits, electronic trade and public procurement.
In addition, it incorporates new topics, such as small- and medium-sized companies, gender, anti-corruption, competitiveness, state agencies, development and regulatory alignment.
“The concrete benefits in terms of access to markets include improved conditions for a large number of Chilean products with Japan, Malaysia and Vietnam. In addition, the CPTPP will a new standard for other regional economic integration agreements, and even for future negotiations with the WTO and APEC. >From this perspective, it is interesting for Chile to participate in an entity that will be a point of reference for international trade standards over the next few years,” Nazal stated.