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The CPTPP will provide investor-State protection between Mexico and Canada

The Comprehensive and Progressive Treaty of Trans-Pacific Partnership (CPTPP) will provide investor-State protection between Mexico and Canada, a mechanism that in those terms was excluded from the Treaty between Mexico, the United States and Canada (USMCA).

The T-MEC eliminated Investor-State Dispute Resolution (ISDS) for Canada, following the termination of the North American Free Trade Agreement (NAFTA).

However, the USMCA maintains the ISDS only between the United States and Mexico for claimants with respect to government contracts in the oil, natural gas, power generation, infrastructure and telecommunications sectors; and retains ISDS between the United States and Mexico in other sectors, provided the claimant first exhausts domestic remedies.

According to the government of Canada, Canada has continued to work to implement its trade objectives of freer and open markets based on internationally agreed rules and practices at the multilateral, regional and bilateral levels, and is the only G7 country that has entered into trade agreements with all other G7 countries.

At the multilateral level, Canada remains an active member of the World Trade Organization (WTO) and continues to participate fully in multilateral trade negotiations, as well as in ongoing discussions related to possible WTO reform initiatives, including through the Ottawa Group.

USMCA

At the regional level, the USMCA entered into force on July 1, 2020 and preserves the essential benefits of NAFTA, including existing tariff commitments, and incorporates new and updated provisions that seek to address the trade problems of the 21st century.

Additionally, it preserves the use of binational panels to resolve countervailing and anti-dumping disputes.

However, under the USMCA, the ISDS (a mechanism that allows a foreign investor of one of the parties to file a claim against the host party when their investment has been affected in a way that violates the protections under the agreement) it does not apply between Canada and the United States, and the current ISDS mechanism will be phased out after a three-year transition period.

CPTPP

This is a free trade agreement between Canada and Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, which came into effect on December 30, 2018.

Canada was one of the first six countries to ratify the CPTPP, along with Australia, Japan, Mexico, New Zealand and Singapore.

On January 14, 2019, the CPTPP also came into effect with respect to Vietnam.

As a result, Canada now benefits from greater preferential market access for the CPTPP countries that have ratified the agreement.

 

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