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Trans-Pacific Regional Trade Agreement (CPTPP)

This paper will present a discussion of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) Agreement. The agreement was signed by eleven member states on March 8, 2018, to enhance trading activities between the countries. According to Suomimen (2021), eleven member states formed the regional trade agreement. The first set of countries included Australia, Brunei Darussalam, Canada, Chile, and Japan. Singapore, Mexico, Malaysia, Peru, New Zealand, and Vietnam also participated in the formation of CPTPP (Suomimen, 2021). The components of CPTPP were informed by the Trans-Pacific Partnership, with the members eliminating twenty-two items. During its establishment, CPTPP was aimed at helping to promote trade in digital goods, eliminating server localization, making cross-border data flow free, and enhancing consumer data privacy. CPTPP has enabled local firms to expand to overseas platforms hence a boom in sales. The agreement made to develop CPTPP has played a significant role in enhancing the economic growth of its member states.

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CPTPP has promoted economic growth by enabling member states to enhance their trading activities to raise more revenue. Trading activities between member states have increased significantly since the establishment of the regional trade agreement. According to Lesh and Caporal (2019), Australia has seen its trading activities with Japan increase by nineteen points one percent and a growth of sixteen points five percent in Malaysia. Other than an increase in trading activities, Australia has also seen a huge growth in its exports, with twenty-five point two percent in Japan and twenty-five point six percent in Malaysia. An increase in export and imports gives the member states access to necessary raw materials to enhance the production of goods, thus improving trading activities. However, Japan recorded a reduction in its exports in 2019 by four point seven percent. This shows that CPTPP did not have a uniform impact on trading activities carried out by each of the member states.

CPTPP member states have also experienced economic growth due to leveraging the e-commerce market, especially during the Covid-19 pandemic. CPTPP offers strict digital regulations and enhances deep market access by promoting sales in overseas countries through online platforms. Exporters can transfer data about foreign consumers and affiliates across borders. This has enabled firms in each member state to record an increase in the number of new customers and sales. Firms in CPTPP have enhanced their use of e-commerce platforms to grow their trading activities.

CPTPP has also significantly promoted foreign direct investment (FDI) in its member states since it offers protection and national treatment for overseas investors. Vietnam recorded a seven percent growth of FDI in 2019, which was the highest in ten years (Suomimen, 2021). This shows that CPTPP helped to boost the number of foreign investors in the country. Malaysia also saw a growth in its FDI inflows by three percent in 2019. However, foreign direct investment inflows were affected greatly by the pandemic, especially in Mexico and Vietnam.

In conclusion, CPTPP regional trade agreement has played a significant role in enhancing the economic growth of its member states. Member states of the agreement have seen a growth in trading activities through imports and exports. These activities help to ensure that firms have the necessary resources to support the production of goods. CPTPP has also enabled firms in each member state to leverage e-commerce to grow their customers and sales by providing regulations on how to operate in the digital space. The regional trade agreement has also played a role in influencing the growth of foreign direct investment in each of the member states.

References

Lesh, J., & Caporal, J. (2019). The CPTPP: (almost) one year later. Csis.org. Web.

Suominem, K. (2021). What do CPTPP member country businesses think about the CPTPP? Csis.org. Web.

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StudyCorgi. (2022, December 6). Trans-Pacific Regional Trade Agreement (CPTPP). Retrieved from https://studycorgi.com/trans-pacific-regional-trade-agreement-cptpp/

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StudyCorgi. (2022, December 6). Trans-Pacific Regional Trade Agreement (CPTPP). https://studycorgi.com/trans-pacific-regional-trade-agreement-cptpp/

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StudyCorgi. "Trans-Pacific Regional Trade Agreement (CPTPP)." December 6, 2022. https://studycorgi.com/trans-pacific-regional-trade-agreement-cptpp/.

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StudyCorgi. 2022. "Trans-Pacific Regional Trade Agreement (CPTPP)." December 6, 2022. https://studycorgi.com/trans-pacific-regional-trade-agreement-cptpp/.

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StudyCorgi. (2022) 'Trans-Pacific Regional Trade Agreement (CPTPP)'. 6 December.

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