Thank you, Mr. Chair.
I do have a prepared statement to give to today to kick off our discussion.
I'd like to start by thanking you for inviting me and my colleagues to join you today to update this committee on the recently signed trade agreement, the comprehensive and progressive agreement for trans-Pacific partnership, otherwise known as the CPTPP.
My role is the Associate Assistant Deputy Minister for Trade Policy and Negotiations at Global Affairs Canada. I also served as the chief negotiator for Canada through the CPTPP negotiations, but not in the original TPP negotiations. As you may recall, I met with you earlier this year when Minister Champagne appeared before this committee to discuss the agreement. I'm certainly pleased to be here again with you today.
Before I go any further, let me start by introducing my colleagues who are joining me today. My colleagues are negotiating leads in some the key areas of the CPTPP. Kendal Hembroff is Director of Trade Policy and Negotiations for Asia in Global Affairs Canada. Next is Pierre Bouchard, Director of Bilateral and Regional Labour Affairs at Employment and Social Development Canada. We also have Garth Ehrhardt, who is Deputy Director responsible for goods and market access negotiations at Global Affairs; Julie Boisvert, who is Deputy Director responsible for investment at Global Affairs Canada; and David Norris, who is one of our Senior Trade Policy Officers in the Intellectual Property Division at Global Affairs Canada.
By way of background, let me start by providing you with a brief overview of the CPTPP as well as the key differences between this agreement and the original TPP. The CPTPP is a new international treaty separate from the TPP. Discussions regarding the possibility of this new agreement began shortly after President Trump announced that the United States would not ratify the agreement. That announcement was made back in January 2017.
As a next step, Chile hosted a high-level meeting in March of that year to begin discussions on possible future plans for the TPP subsequent to the U.S. withdrawal. Then Canada hosted the first meeting of senior officials in May of that year in Toronto, where we brought together the senior officials from all countries to discuss whether it was possible to move forward.
Then later that month, in May, on the margins of an APEC trade ministerial meeting, ministers tasked us officials to explore options to move ahead with an agreement without the United States being part of it. Following a number of senior officials' negotiating sessions, including reaching agreement of the core elements of the CPTPP in November 2017, a new agreement was concluded on January 23 of this year in Tokyo.
The new agreement covers virtually all aspects of trade among the parties. It addresses a range of issues with the ultimate goal of facilitating trade in the region. This CPTPP comprises a market of 495 million people. It represents 13.5% of global GDP.
Since November 4, 2015, the Government of Canada has undertaken extensive consultations on the TPP.
And in the fall of last year, the government renewed these consultations by seeking the views of Canadians on a potential new agreement with the remaining TPP members.
Through these consultations, we have heard that the Canadian business community generally views the TPP, and now the CPTPP, as an important opportunity to diversify Canada's trade and expand access for Canadian exporters and investors in Asia-Pacific markets.
At the same time, some concerns were expressed by Canadians regarding certain provisions pertaining to intellectual property, investor-state dispute settlement, culture, the auto industry and supply management.
The feedback that the government received from our consultations formed the basis of Canada's approach in negotiating the CPTPP, where we achieved excellent results for Canadians in response to many of their concerns.
The CPTPP incorporates by reference the provisions of the TPP, except for a limited number of operational provisions. The CPTPP also suspends a total of 22 provisions contained in the TPP that CPTPP parties have agreed not to bring into force with this agreement. This means that the CPTPP, outside of the suspensions, contains the full market access commitments and rules from the original TPP.
As you will have seen from the list of the 22 provisions suspended, they are mostly focused on intellectual property and investor-state dispute settlement issues; these address many of the concerns of Canadians related to the TPP that we obtained through our consultative process. The 22 provisions will be suspended indefinitely and will only be brought into force by a consensus among the parties.
The CPTPP also includes a number of side instruments, some carried over from the original agreement and some new. For example, there are binding side letters on culture that Canada secured with each of the other CPTPP countries. The side letters preserve Canada's flexibility to adopt and maintain programs and policies that support the creation, distribution, and development of Canadian artistic expression or content, including in the digital environment. This addressed one of the main concerns addressed by Canadian stakeholders about the TPP.
Canada also secured binding side letters on autos with Australia and Malaysia, to ensure that Canada's vehicle producers can export under preferential tariffs of the CPTPP. As well, Canada secured a binding agreement with Japan that includes important commitments on automobile standards and regulations. This side arrangement with Japan will be enforceable through dispute settlement under international law.
Mr. Chair, given the absence of the United States from the CPTPP, a key difference between the two agreements has to do with the agreement's expected benefits. According to the economic modelling conducted by Global Affairs Canada's office of the chief economist, the CPTPP is projected to increase Canada's GDP by $4.2 billion by 2040. This amount is greater than the $3.4 billion in GDP gains that were projected under the original TPP agreement that included the United States, in part because of improved market access for Canadian businesses and producers to such key CPTPP countries as Japan in the absence of U.S. competition.
In terms of next steps, the CPTPP parties are now in the process of carrying out their domestic implementation and ratification procedures. The agreement will enter into force 60 days after six countries have notified the CPTPP depository, which is New Zealand, of the completion of the domestic ratification procedures. Canada is working expeditiously to complete its own domestic implementation and ratification procedures, including the drafting of the implementation legislation, which will be tabled once this bill is completed.
In conclusion, Mr. Chair and committee members, as Minister Champagne has often said, trade is done over decades, so it's important to get these deals right. The CPTPP is an important agreement for Canada that will bring significant benefits for Canada over the longer term.
Thank you very much. That concludes my opening statement.
My colleagues and I would be very pleased to take any of your questions and comments.
