On July 16, 2023, the United Kingdom formally signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Auckland, New Zealand. It becomes the first European signatory and the first non-founding member to join the CPTPP since the CPTPP came into force in 2018. This follows the conclusion, in March 2023, of negotiations for its accession to the CPTPP. The U.K. will now begin its internal ratification process to bring its membership in the agreement into force.
The CPTPP is a multilateral free trade agreement that is currently in force in Canada, Australia, Japan, Mexico, New Zealand, Singapore, Vietnam, Peru, Malaysia and, as of late February of this year, Chile. Brunei is also a signatory but has not yet ratified the agreement.
The CPTPP includes market-access commitments in trade in goods, services, labour mobility and government procurement. Importantly for investors, it also includes investment protection provisions, and allows for Canadian investors into CPTPP member states and investors from CPTPP member states into Canada to submit a claim to arbitration in the event of a dispute.
The U.K. is Canada’s third largest trading partner. Since the U.K.’s exit from the European Union, the Canada-U.K. Trade Continuity Agreement (TCA) has largely governed bilateral trade between Canada and the U.K., and has been in force since April 1, 2021. It largely incorporates the provisions of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Canada’s trade agreement with the EU.
The investor-state dispute resolution provisions of CETA as incorporated into the TCA, however, are still under a period of comprehensive review under the terms of the TCA and are not yet in force. This comprehensive review is to be completed within three years of the TCA’s entry into force, unless the review period is extended by a Canada-U.K. Joint Committee established under that agreement. If the U.K. ratifies the CPTPP in the meantime, that will provide U.K. investors into Canada and Canadian investors into the U.K. with a direct dispute resolution procedure outside of local courts, in the form of investor-state arbitration.
For more information, visit the Blakes Investment Treaty Arbitration Resources page or contact:
Iris Antonios +1-416-863-3349
Brady Gordon +1-604-631-5255
or any member of our Investment Treaty Arbitration, Arbitration or International Trade groups.
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