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1 1 (June 16, 2023)

handle is hein.crs/govelyy0001 and id is 1 raw text is: Congressional Research Service Informing Ih legisIative debame since 1914 CPTPP: Overview and Issues for Congress The Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) is a free trade agreement (FTA) formed by the 11 remaining members of the proposed Trans-Pacific Partnership (TPP) after the Trump Administration withdrew the U.S. signature in 2017. CPTPP-which retains most of TPP's provisions-reduces and eliminates tariff and non-tariff barriers, and establishes enforceable trade rules. CPTPP is in effect for all parties- entering into force for Australia, Canada, Japan, Mexico, New Zealand, and Singapore in 2018; Vietnam in 2019; Peru in 2021; Malaysia and Chile in 2022; and Brunei in 2023. To date, China, Costa Rica, Ecuador, Taiwan, and the United Kingdom (UK) have applied to join CPTPP. Others such as South Korea, Thailand, and Ukraine are considering applying. The UK is to become the first new member, after reaching an agreement in March 2023 on accession terms. Members of Congress may have interest in monitoring and shaping the Administration's views on CPTPP, regarding U.S. leadership in regional trade rules. U.S. leadership, including through trade negotiating objectives mandated by Congress, was largely reflected in CPTPP commitments. TPP was originally signed under 2015 Trade Promotion Authority (TPA) legislation (P.L. 114- 26, now expired) that set negotiating objectives and congressional consultation and notification requirements for U.S. trade agreements. The Obama Administration viewed TPP as a tool to extend U.S. economic influence and to shape or update regional, and potentially global, trade rules to reflect U.S. priorities, especially on issues that existing multilateral agreements do not address substantively. Such issues include digital trade, state- owned enterprises (SOEs), labor, and the environment. * U.S. commercial competitiveness. CPTPP involves three of the top four U.S. trade partners and may expand to other major economies, potentially leading to greater economic integration and trade liberalization among the parties. CPTPP and other regional deals not involving the United States, such as the Regional Comprehensive Economic Partnership (RCEP), may disadvantage U.S. trade with members, as participants lower their trade barriers to other members but not the United States, and possibly set rules that may not align with U.S. interests. * China's potential accession. China's economic heft and contrasting approach to certain U.S. priority trade issues (e.g., SOEs and digital trade disciplines) suggest its potential membership would have implications for U.S. interests in the region. The Biden Administration has stated it is not currently interested in joining CPTPP, but recognizes the region's economic importance, and in May 2022, launched the Indo- Pacific Economic Framework for Prosperity (IPEF, see below). Some Members of Congress, industry, and other Updated June 16, 2023 stakeholders have urged the Administration to consider participation in CPTPP or other trade agreements that seek to open markets further in the region. Others supported U.S. TPP withdrawal and are wary of initiatives like IPEF as a potential stepping-stone to joining CPTPP. Previously, the Trump Administration cited preference for bilateral trade talks and concerns over certain TPP provisions, such as on rules of origin, in its decision to withdraw from TPP. U.S. Trade with C PT PP Members The United States has significant trade and investment with the 11 CPTPP members, which, combined, accounted for 42% of U.S. goods trade (2022), 23% of U.S. services trade (2022) and 22% of foreign direct investment (FDI) stock (2021). Including all 16 CPTPP signatories and current applicants, these shares rise to 60%, 39%, and 37%, respectively-with China accounting for 13% of U.S. goods trade, and the UK accounting for 9% of services trade and 13% of FDI. As noted, CPTPP may disadvantage competition of U.S. firms in the region, especially in markets without existing U.S. FTAs, such as Japan and Vietnam (Figure 1); a limited U.S.-Japan trade agreement, in effect since 2020, has reduced some bilateral tariffs. Figure I. Current and Potential CPTPP Members without an Existing U.S. FTA 2022 Goods Trade Et Avg. MFN _ ($bn) Tariff CPTPP Japan 8 2 4$ 4.2% MEMBERS Vietnam 4 27S 9,6% Malaysia 54 56% NewZealand 2 1.9% Brunei 03% AGREEMENT IN PRINCIPLE UK 3.% ACCESSON China 7.5% REQUESTED Taiwan 66% Ecuador 11.2% Source: Trade data from U.S. Census Bureau, tariffs from WTO. Note: MFN = most-favored nation tariff rates applicable on imports from WTO members (i.e., tariffs generally faced by U.S. exporters). CPTPP Commitments CPTPP incorporates the 30 original chapters of the TPP text, including its dispute settlement (DS) mechanism. However, it suspends indefinitely 22 specific TPP commitments (see below), which had been U.S. priorities and which CPTPP parties may reinstate through consensus. CPTPP also establishes new administrative procedures (e.g., accession) that replace those in TPP. Side letters to CPTPP clarify how specific commitments apply to certain parties (e.g., a five-year exemption from DS for data flow commitments and three-year exemption regarding certain labor obligations applying to Vietnam). Key provisions (with suspensions from TPP noted) include:

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