- The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will enter into force on Dec. 30, 2018, as six of the 11 parties of the deal have officially ratified the trade agreement.
- Australia, which signed the deal Wednesday, was the last country to sign the trade deal before a 60-day clock could start on its implementation. Canada, Mexico, Japan, Singapore and New Zealand had already signed the deal.
- Brunei, Chile, Malaysia, Peru and Vietnam are also parties to the deal, but have yet to ratify it. Together, the 11 countries account for 13% of the world's gross domestic product (GDP).
The deal's entry into force in 60 days gives supply chain managers a chance to evaluate whether they can benefit from new sourcing rules — at a time when sourcing networks are already being redesigned.
Worldwide, the rules of trade are changing. On the surface, big impact events like Brexit and tit-for-tat tariffs between China and the U.S. are dominating supply chain risk conversations. But beneath the fold lies a whole other set of trade shifts that have been silently brewing in 2018, yet may inspire major network shifts in 2019.
In the U.S. alone:
- The U.S.-Korea Free Trade Agreement was amended in March of this year.
- The U.S.-Mexico-Canada Agreement (USMCA) was signed in October of this year, as a renegotiation of NAFTA, and will be debated by Congress next year.
- The U.S. announced an intent to negotiate bilateral agreements with Japan, the European Union, and the United Kingdom.
Canada has also seen a flurry of activity on trade in the past two years. In August and September of 2017, the country signed deals with Ukraine and the European Union, respectively. Mexico, meanwhile, often boasts of its large number of free trade agreements — it has 12 deals with 46 countries. (The U.S. has 14 deals with 21 countries, by comparison.)
Many of the countries in the CPTPP will be free trade partners for the first time. In other words, businesses will have the opportunity to explore markets previously out of economic reach.