Table 1

Overview of major contemporary free trade agreements (FTAs)

FTAKey notes
United States-Mexico-Canada Agreement (USMCA)An FTA between Canada, Mexico and the USA, agreed in October 2018 and ratified by each country, with the final ratification (Canada) occurring in March 2020. The USMCA represents a renegotiation of NAFTA and incorporates many of the provisions in the CPTPP from which the USA withdrew. In December 2019, a ‘Protocol of Amendment’ to the Agreement was made, involving four key and contentious areas: pharmaceuticals, labour, environment and dispute resolution. The USMCA eliminates ISDS between the USA and Canada, and significantly narrows its scope between the USA and Mexico.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)An FTA between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The CPTPP evolved from the Trans-Pacific Partnership (TPP). The TPP was the first ‘mega-regional’ FTA, originally accounting for over 40% of the global economy, before the USA withdrew in 2017. The CPTPP then suspended several controversial USA-driven rules governing pharmaceuticals, and has been signed and ratified by seven countries at the time of writing. It came into force for the first group of ratifying countries in December 2018. The Trump administration has indicated a potential for the USA to rejoin the Agreement, if it is amended to reflect ‘America First’ interests. Several other Pacific Rim nations have also indicated a desire to join.
Comprehensive Economic and Trade Agreement (CETA)An FTA between Canada and the European Union (EU), signed on 30 October 2016 and approved by the European Parliament on 15 February 2017. The Agreement is still subject to ratification by the EU and national legislatures, but most provisions are provisionally in force, including rules on intellectual property rights (IPR) that exceed the requirements of the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS), referred to as TRIPS-plus rules. It is widely regarded as the template for an eventual USA/EU Transatlantic Trade and Investment Partnership agreement, negotiations on which have been on hold since 2017.
Regional Comprehensive Economic Partnership (RCEP)Under negotiation since 2012 and signed in November 2020, this FTA in the Asia-Pacific Region first involved 16 countries, including the Association of Southeast Asian Nations (ASEAN) members and the 6 countries that have existing trade agreements with ASEAN (Australia, China, India, Japan, Republic of Korea and New Zealand). India opted out of RCEP in November 2019. This FTA is often portrayed as competition to the more American-centric original TPP, and was intended to reflect the diverse needs of its member states, which include a significant number of lower-income and middle-income countries. More recently, the RCEP has reportedly grown to more closely resemble the CPTPP.
Pacific Agreement on Closer Economic Relations (PACER) PlusThis FTA was finalised in 2017 by Australia, New Zealand and 12 Pacific Island countries after almost 8 years of negotiations. Papua New Guinea and Fiji, the two largest Pacific Island economies, were initially involved but withdrew from negotiations prior to their conclusion. The economic position of the small island states, which have little to export and are heavily reliant on tariffs and development assistance as sources of government revenue, stands in contrast to the two high-income countries involved in the agreement (Australia and New Zealand), which provide aid to these smaller states and also host the headquarters of businesses seeking access to their markets. Australia, New Zealand and Samoa have so far ratified the agreement. Five more countries are needed to meet the required minimum of eight signatory countries for the agreement to come into force.
Trade in Services Agreement (TiSA)A proposed FTA covering trade in services (such as banking, healthcare and transport), currently involving 50 mostly high-income or middle-income countries. Negotiations were initiated in 2013 by a handful of countries responsible for over half of all global services trade (primarily the USA, the EU and Australia), which were unhappy with lack of progress under WTO GATS. Leaked drafts show that the now-stalled TiSA is a complex agreement that applies to all sectors except those which governments explicitly exclude, and multiple annexes, all intended to create an ambitious treaty that could pose risks to public services, especially if governments decide to rescind privatisation experiments that prove to be too costly or inequitable.
  • Adapted from Gleeson and Labonte.20

  • CPTPP, Comprehensive and Progressive Agreement for Trans-Pacific Partnership; GATS, General Agreement on Trade in Services; ISDS, investor-state dispute settlement; NAFTA, North American Free Trade Agreement; WTO, World Trade Organization.