Canada: Free Trade Deal Reached After 11 Countries Sign CPTPP

The 11 countries part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) signed the deal on March 8 in Santiago, Chile. Canada's involvement in CPTPP, North American Free Trade Agreement (NAFTA), Comprehensive Economic and Trade Agreement (CETA) and its free trade agreement with South Korea, will make it the only G7 nation with free trade access to the Americas, Europe and the Asia-Pacific region. Once implemented, the CPTPP will significantly impact how Canadian companies do business domestically and abroad.

What You Need To Know

  • The CPTPP reduces trade barriers between its parties and provides for common standards related to a wide range of areas including financial services, electronic commerce, intellectual property, labour, the environment and foreign investment.
  • Investors from countries that are a party to the CPTPP will have a set of protections available to them through an investor-state dispute settlement (ISDS) mechanism when they invest in other countries party to the Agreement. This represents a significant reaffirmation of ISDS at a time when its status in other trade agreements, including the NAFTA, is uncertain.
  • For patent applicants, a 12-month grace period will prevent public disclosures made by the applicant from being considered when assessing novelty and obviousness. This means other parties will match existing Canadian law.
  • The CPTPP still needs to be ratified by at least six parties to come into force. Each party will now undertake its own domestic ratification process, which in Canada includes legislation to implement the Agreement.

Further Information Regarding the CPTPP

The final text of the CPTPP largely mirrors the text of the now-defunct Trans-Pacific Partnership (TPP). While certain provisions relating to investment that were part of the TPP have been suspended, the CPTPP is broad in scope and has the potential to redefine the commercial relationships amongst its parties. The parties to the CPTPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The CPTPP significantly reduces tariffs and other trade barriers between the parties. It also provides for rules that will govern Canadian businesses in a number of ways.


The Investment Chapter of the CPTPP contains many of the standard protections provided to investors under comparable agreements. To have these protections, the investor must be based in one country that is a party to the CPTPP, and be making an investment in a different country that is also a party (host state). The protections in the CPTPP require that, in the host state's jurisdiction, investors and investments,

  • receive fair and equitable treatment;
  • are provided with full protection and security, which provides for the physical protection of the investment;
  • receive treatment by the host state in a manner no less favourable than the treatment the host party accords to its own investors and investments, or those of any other party or non-party to the Agreement; and
  • cannot be expropriated except under certain circumstances, and not without timely and adequate compensation.

If the host state fails to provide these protections, an investor can submit an investment dispute for arbitration by an independent panel instead of the host state's domestic judicial system. In this way, the CPTPP mechanism for ISDS closely resembles traditional ISDS mechanisms such as those contained in the existing version of NAFTA, which is currently subject to renegotiation.

One significant difference between the TPP and CPTPP is the suspension of provisions that allow for the submission of an investment dispute where that dispute is based on the breach of an investment authorization or agreement made by the host state. Investment disputes can still be submitted on the basis of a breach of the protections discussed above. Investors should therefore consider making investments in a way that takes full advantage of the remaining protections.

The parties have also agreed, among other things, on the importance of encouraging entities operating within the party's jurisdiction to adopt corporate social responsibility (CSR) policies and standards. This provision has been included by Canada in several international agreements including previous free trade agreements with Peru, Colombia and Panama. Investors with robust CSR regimes may stand to benefit from state actions encouraging CSR adoption, depending on how such encouragement manifests. Notably, Canada recently announced new initiatives related to its CSR strategy for companies operating abroad including the creation of an independent Canadian Ombudsperson for Responsible Enterprise.

Intellectual Property and Privacy

Some of the more notable provisions of the Intellectual Property Chapter of the CPTPP are listed below:

  • With respect to patent law, a 12-month grace period will prevent public disclosures made by the applicant from being considered when assessing novelty and obviousness. While Canadian law already provides for a 12-month grace period, many of the other party states do not have such rules in place.
  • With respect to trademark law, the CPTPP includes a requirement that sound marks be registrable and that each member country make best efforts to register scent marks. Additionally, each party is required to adopt or maintain a trademark classification system that is consistent with the Nice Classification system. Bill C-31, which is expected to come into force next year, will amend the Canadian Trade-marks Act to make non-traditional trademarks, such as a sound or a scent, registrable, and to require classification according to the Nice Classification system.

A number of intellectual property provisions from the TPP are suspended in the CPTPP. These include provisions related to patent law, data protection, and copyright law. More detail is provided below:

  • The suspended patent law provisions include those relating to patentable subject matter, and those providing patent term adjustments to compensate for unreasonable delays in patent issuance and unreasonable curtailment of the effective term of a pharmaceutical patent as a result of the marketing approval process. With the implementation of the CETA, as of September 21, 2017, Canadian law now provides for certificates of supplementary protection that extend the term of certain pharmaceutical patents for up to two years.
  • The suspended data protection provisions relate to providing a data protection period for new pharmaceutical products, including biologics. Canada's current data protection regime already provides eight years of data protection for new drugs.
  • Suspended provisions related to copyright include those extending the copyright term to 70 years after the author's death, providing criminal procedures and penalties related to circumvention of effective technological protection measures, and provisions requiring internet service providers to take down materials upon receiving a notice of alleged infringement.

The Electronic Commerce chapter retains a provision that prevents parties from blocking the transfer of personal information to other jurisdictions unless there is a legitimate policy objective to restrict such transfers. Certain Canadian provincial laws have been enacted to keep government-controlled personal information (such as health data) within the country; it remains to be seen how the requirement under the CPTPP to prevent blocking the transfer of personal information is reconciled with these provincial laws.

Foreign Investment Review

Once implemented, the CPTPP will also affect foreign investment reviews under the Investment Canada Act. Australia, Brunei, Japan, New Zealand, Malaysia, Singapore and Vietnam will qualify as trade agreement investors, meaning acquisitions by investors from those countries of Canadian businesses with enterprise values of less than $1.5 billion will not be subject to net benefit reviews. The remaining CPTPP countries—Chile, Mexico and Peru—already qualify as trade agreement investors by virtue of their existing trade agreements with Canada.

Transparency and Anticorruption

Parties to the CPTPP are required to make the bribery of a foreign or domestic public official, in matters that affect international trade or investment, a criminal offence. Further, each party must not fail to enforce these laws through action or inaction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions