Explainer | The Comprehensive and Progressive Agreement for Trans-Pacific Partnership: Past, present, future

Last month, Australia held the ninth annual Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) meeting in Melbourne. This meeting provided an opportunity for CPTPP members to come together and take stock of the progress that has been made since its inception. As this year’s chair, Australia reflected on the CPTPP’s overarching priorities for 2025: increasing trade through deeper integration; facilitating trade by improving implementation and streamlining processes; and spreading the benefits of trade.

The overarching theme of the meeting was a reaffirmation of the commitment to the rules-based order and upholding economic integration, particularly in the face of the growing use of economic coercion and market distortions. With this goal in mind, members committed to upholding and reforming the World Trade Organisation (WTO) to sustain the multilateral trading system. The CPTPP also expanded its global engagement with the initiation of inaugural Trade and Investment Dialogues with the Association of Southeast Asian Nations (ASEAN) and the European Union. 

The CPTPP evaluated the delivery of its commitments set out for this year’s meeting, including the accession of new members and the conclusion of the first General Review. CPTPP members actively advanced accession efforts by progressing Costa Rica’s membership process, initiating accession negotiations with Uruguay, and considering the United Arab Emirates, the Philippines and Indonesia as candidates for accession in 2026. In addition, the Commission endorsed the outcomes of the General Review, supporting negotiations to upgrade critical areas, including e-commerce, trade in services, customs administration and women's economic empowerment, to ensure the Agreement remains modern and responsive to evolving trade dynamics.

This explainer will outline the CPTPP’s evolution: its founding and expansion, its current operation, including the dispute settlement mechanism and Australia’s experience, and its future outlook.

What is the CPTPP?

The CPTPP is a free trade agreement (FTA) among Australia, Canada, the United Kingdom, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Representing 14.4% of world GDP and 7.7% of the world’s population with potential for expansion, the CPTPP is a grouping to pay attention to. 

Considered the ‘gold standard’ of FTAs, the CPTPP sets out to hold its members to high economic liberalisation and social standards. The agreement grants signatory countries increased market access within the group and aims to ambitiously reduce tariff barriers except for select, highly sensitive areas, where governments face high domestic pressure to protect. For example, because supporting the domestic beef industry is a priority for the Japanese Government, Japan maintained tariffs on New Zealand’s beef exports into Japan, although at a considerably lower rate. The CPTPP lays out a series of commitments for its members, listed below, that are designed to reinforce high trade standards. 

As countries move away from the traditional multilateral order in favour of minilateral and bilateral groupings, the role of economic groupings such as the CPTPP will become increasingly consequential in shaping the global economic order. For middle powers like Australia, the CPTPP offers an opportunity to reinforce and shape the rules-based order and presents an economic counterweight to the growing prevalence of economic coercion and non-market practices. Alone, Australia does not have the economic weight to significantly impact the architecture of the trading system; however, combined with a group of other ‘like-minded’ states, the potential for impact grows. Free trade and a global economic order are inextricably linked with the Australian economy, as Prime Minister Albanese explained in April 2024, “27 per cent of our economic output depends on trade. And so do 1 in 4 Australian jobs.” Therefore, at a time when larger powers are retreating to more protectionist policies, the CPTPP’s role will be more important in upholding a fair and open trade order through norms-building and trade liberalisation principles.

Origins of the CPTPP: From P4 to TPP to CPTPP

The origins of the CPTPP can be traced back to the 2006 Trans-Pacific Strategic Economic Partnership (commonly known as the P4 or TSEP) between Brunei Darussalam, Chile, New Zealand and Singapore. At its inception, the TPSEP became the first free trade agreement that linked nations from Asia, the Pacific and the Americas. Critically, the P4 included a clause that permits “any APEC economy or other state” to seek accession to the group, establishing a pathway for an expanded grouping.

In September 2008, under President George W Bush, the United States announced its intention to join the P4 Agreement, explaining its objective to join an agreement that includes “other nations that share [the US] vision of free and fair trade.” Following the US announcement, Australia, Peru, and Vietnam joined negotiations to expand the P4, laying the foundation for the Trans-Pacific Partnership (TPP). 

TPP negotiations began at large in March 2010 under the Obama administration, with the TPP framed as part of the administration’s broader ‘Pivot to Asia’ strategy. As negotiations took place, the TPP grew to include Malaysia in October 2010, Canada and Mexico in late 2012, and Japan in July 2013, ultimately comprising 12 countries. Following 19 rounds of official negotiations, the TPP countries came together to sign the pact in early 2016. At the time of signing, the TPP countries represented approximately 38% of global GDP. 

President Trump’s withdrawal from the TPP echoed sentiments in the United States that attributed the loss of US jobs, decline in manufacturing and lower wages to the expansion of free trade.

Despite years of negotiation and the close alignment of the agreement with existing US trade law and practice, President Obama was unable to obtain Congressional ratification of the TPP before leaving office due to scepticism from both sides over manufacturing jobs being pushed overseas, wage erosion, and decreased environmental and labour standards. In January 2017, President Trump entered office and formally withdrew the United States from the TPP, calling the agreement the “greatest danger yet” to American jobs. President Trump’s withdrawal from the TPP echoed sentiments in the United States that attributed the loss of US jobs, decline in manufacturing and lower wages to the expansion of free trade. In addition, the US withdrawal foreshadowed a larger shift in US trade policy towards bilateral deals in place of multilateral engagement.

Following the US departure from the TPP, the existing 11 signatories elected to move forward with the deal, leading to the creation of the CPTPP. While the substance of the CPTPP and TPP remained largely the same, there were slight revisions including the suspension of US-proposed provisions that were unpopular with the other participants, such as intellectual property provisions. Notably, these provisions were suspended, not removed altogether, leaving the door open for the United States to potentially rejoin. 

In 2018, the CPTPP was officially signed into existence, with all original signatory countries completing the ratification process by July 2023. 

Room for more? The expansion of the CPTPP

At its inception, the CPTPP was designed to allow for further expansion; if countries can meet the key provisions, they are eligible to apply for accession. Notably, there is no geographic or regional requirement for members; therefore, any country prepared to meet the high-standards and market access commitments can apply to join. 

To apply, countries must submit a formal notification to New Zealand. The Commission members then decide by consensus whether to open accession talks for the country. If approved, then an Accession Working Group of government representatives from each country is formed. The applicant must demonstrate that it can meet all CPTPP standards and commitments. Ultimately, all existing members must approve the accession of the new member. Once approved, the new member can then ratify the agreement.

In December 2024, the United Kingdom became the first non-founding country to join the CPTPP and the first European country to join. Rationale behind the United Kingdom’s decision to join the CPTPP reflects a desire to engage economically with the region.

In December 2024, the United Kingdom became the first non-founding country to join the CPTPP and the first European country to join. Rationale behind the United Kingdom’s decision to join the CPTPP reflects a desire to engage economically with the region. As summarised by UK Business and Trade Secretary at the time, Kemi Badenoch, joining the CPTPP will give “British businesses improved access to the countries that will be gateway to the wider Indo-Pacific region which is projected to make up the majority of global growth in the future.” In addition, the move reflected a more strategic tilt towards the Indo-Pacific through enhancing engagement with the region. 

Other than the United Kingdom, there have been nine additional economies that have applied, in order of application submission: China, Taiwan, Ecuador, Costa Rica, Uruguay, Ukraine, Indonesia, the Philippines and the United Arab Emirates. In addition to formal applications for accession, other countries have expressed interest in joining but have not submitted official applications, including South Korea and Thailand. 

Costa Rica is currently in the process of accession, with CPTPP members recognising that it meets the criteria to commence negotiations by demonstrating both readiness to uphold the agreement’s high standards and a consistent record of honouring trade commitments. In November 2024, an Accession Working Group was established for Costa Rica, through which active negotiations are underway to ensure that Costa Rica meets CPTPP standards and to determine the terms and conditions of its accession. A progress update on Costa Rica’s expansion is expected in December of this year. The decision to begin with Costa Rica’s application is notable as it signals that applications will not be reviewed on a first-come, first-served basis; this is likely due to CPTPP countries seeking to avoid the political challenge that is navigating both Chinese and Taiwanese applications, with neither country likely to be able to obtain consensus from members in 2025.

The expansion of the CPTPP is important for two reasons. First, the larger the grouping, the more power it has in shaping the actions of larger trading nations to persuade them to comply with CPTPP standards, thus enhancing member countries’ ability to play a role in shaping the norms of the global economic order. Second, economically, the expansion of the CPTPP comes with increased market access and export growth, as well as the potential for increased foreign investment and capital flows. The Peterson Institute for International Economics estimated that the addition of South Korea, Thailand, Indonesia, and the Philippines to the CPTPP would result in an additional $302 billion per year in income gains globally.

The dispute settlement mechanism

The CPTPP was created with a dispute settlement mechanism for resolving disagreements and ensuring that countries comply with their commitments under the agreement. This functionality allows the CPTPP to enforce its standards and gives countries a platform to resolve complaints fairly and transparently. With the WTO dispute mechanism currently facing significant challenges due to a currently non-functional Appellate Body and lengthy review timelines, governments may shift to leveraging trade agreements more frequently for the enforcement of their standards. Therefore, it will be necessary to observe the CPTPP’s success in navigating internal disputes. 

So far, there has only been one case that has gone through the dispute settlement mechanism. In 2022, New Zealand initiated proceedings against Canada over Canada’s administration of the CPTPP dairy tariff quotas in a way that undermined the value of promised market access. The CPTPP panel met in 2023 to review the case and found that Canada was not administering its dairy tariff quotas in a manner that complied with CPTPP standards. Under this ruling, Canada was given a reasonable period to implement changes. In July 2025, Canada and New Zealand notified the panel that they had achieved a mutually satisfactory solution to their dispute. This decision is notable as it demonstrates the enforceability of the CPTPP and the ability of the dispute settlement mechanism to work effectively to uphold the standards of the grouping. 

Separate from the state-to-state dispute settlement mechanism, the CPTPP also contains the Investor-state dispute settlement (ISDS) mechanism, which gives foreign investors the right to access an international tribunal to resolve investment disputes with a host country. Under ISDS, investors can seek compensation from countries for breaches of investment obligations. Critics of ISDS argue that it potentially undermines state sovereignty by giving multinationals the ability to bypass domestic courts and limits the ability of countries to decide how the treat foreign investors in their country. In fact, to circumnavigate this provision, New Zealand signed side letters with Australia, Peru, Brunei, Malaysia and Vietnam to exclude the application of ISDS provisions. On the other hand, proponents argue that the ISDS offers a rules-based framework for foreign investors to ensure greater predictability and stability. To date, there has not been a publicly reported use of ISDS under the CPTPP.

What’s the alternative?

As international interest in the CPTPP grows, so does interest in other economic groupings. One of the most prominent economic groupings currently is the Regional Comprehensive Economic Partnership Agreement (RCEP), which entered into force on 1 January 2022. RCEP is the world’s largest free trade agreement, made up of Australia, Brunei​, China, Cambodia, Indonesia, Korea, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Seven CPTPP members are also members of RCEP, including Australia. India also participated in negotiations but ultimately elected not to join. While both groupings offer benefits of increased market access and greater economic integration, RCEP falls short on holding its members to the same high standards as the CPTPP, particularly lacking in the environmental, labour and anti-corruption standards. Conversely, RCEP offers the benefit of scale — with more countries comes increased market access. Membership is not mutually exclusive; therefore, countries can obtain benefits from both, which Australia actively does.

Australia and the CPTPP

As a founding member of the CPTPP, Australia sees clear value in the grouping, particularly as a vehicle to boost regional integration and trade interconnectivity. As Australian Minister for Trade and Tourism Don Farrel explained in July 2025, “Free trade is critical to [Australia’s] national security and prosperity, and Australia remains committed to [the CPTPP].”

In January 2025, the Department of Foreign Affairs and Trade released a post-implementation review of the CPTPP that evaluates the impact of the CPTPP on Australia since it entered into effect. The review concluded that the CPTPP has been successful in expanding economic opportunities for Australia with CPTPP members. One benefit has been through the liberalisation of trade through tariff reductions, which has allowed Australia to expand trade with member countries. For example, tariff reductions have allowed Australia to more easily export barley to Mexico, dairy to Canada, and beef to Japan — all sectors that previously held prohibitively high tariff barriers due to efforts to protect domestic industry. In addition, the review surmised that investment stocks into Australia from CPTPP member countries have increased and, in some cases, almost doubled. Ultimately, the post-implementation review signals that Australia’s accession into the CPTPP has been a net positive economic decision for the country and will likely continue to provide benefits to Australia in the future.

Ultimately, the post-implementation review signals that Australia’s accession into the CPTPP has been a net positive economic decision for the country and will likely continue to provide benefits to Australia in the future.

Although Australia’s accession to the CPTPP has brought positive benefits, several criticisms remain. Some argue that the CPTPP’s economic impact is limited, with other agreements delivering greater market access and commercial benefits for Australian exporters. There is also significant concern about the ISDS mechanism’s potential to undermine Australia’s sovereignty, especially regarding the government’s capacity to regulate foreign investment. Additionally, some stakeholders denounce the lack of progress on considering Taiwan’s membership in the CPTPP, highlighting ongoing debate over accession criteria and geopolitical sensitivities.

Beyond economic rationale, the CPTPP has also presented Australia with an opportunity to institutionalise key relationships with countries in the Indo-Pacific, through standards harmonisation and closer engagement with new and existing partners, and reinforce its leadership in shaping trade norms and values in the region.

Looking forward

As a relatively nascent grouping, it is important to track the progress of the CPTPP, particularly in assessing how it adapts to major shifts in the global economic landscape. The agreement includes a mandatory general review every five years to evaluate the effectiveness of existing provisions and consider recommendations for modernisation, ensuring the grouping maintains its high standards, which was finalised in time for the ninth Commission meeting in Melbourne. The results of the review called for the upgrade and renegotiation of the majority of the CPTPP chapters. While it is not immediately evident what changes will be made, it is expected that the standards will be strengthened further. These developments could have significant implications for candidate countries seeking accession, affecting their ability to meet the agreement’s already high requirements. The CPTPP thus faces the challenge of balancing the maintenance of high standards with the expansion of its membership. In addition, its ability to achieve consensus on modernising standards will serve as an important litmus test of the grouping’s ability to adapt to evolving global conditions and preserve its status as the ‘gold standard’ of trade agreements.