A new report has shown that even a trade bloc as large as that created by the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is not immune to the ongoing pressure caused by the trade wars between China and the US.
The latest CPTPP Tracker from the Asia Pacific Foundation of Canada states that Canadian exports to the other ten member nations decreased by three per cent during the first three quarters of this year when compared to last. This is despite the CPTPP coming into effect in December 2018.
Researchers who worked on the data told Business in Vancouver the results "must be analysed within the context of the unrelenting trade war between China and the United States".
They pointed out that a slowdown in China is hampering exports in the rest of the Asia-Pacific region while the US is not replacing the lost demand.
As a result, the report said trade deceleration recorded in markets such as Japan and Mexico can also be linked to American protectionism and a downturn in the Chinese economy.
Study author Grace Jaramillo told the news provider: "The report really exposes the fact that CPTPP countries are heavily influenced now by the US-China trade war. And that is causing sluggish economies across the Asia-Pacific. It is slowing market demand across the board, and that's why Canada's performance has been sluggish within this new enterprise."
The document also showed that 82 per cent of Canadian exports within the trade zone go to Japan, Mexico or Australia. Mexico had already been linked to Canada through NAFTA, while Japan has consistently been one of the North American nation's top three trade partners.
However, Canadian exports are growing in other CPTPP markets such as Malaysia, Vietnam and New Zealand, suggesting trade distribution may shift going forward if opportunities for markets in these countries can be capitalised on.
The CPTPP eliminated 95 per cent of tariffs on goods trade between its 11 member nations around the Pacific rim.
Its members currently account for 13 per cent of global GDP and the UK has previously said it would be interested in joining in some way after it leaves the European Union.