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CPTPP benefits for Canadian beverage exporters

Overview of the CPTPP

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) offers Canadian beef and pork exporters preferential access and tariff reductions to key global markets.

Through this free trade agreement, Canada forms a trading bloc with 10 other countries that represent almost 500 million consumers and 13.5% of global GDP. So far, seven CPTPP signatories have ratified the Agreement:

On December 30, 2018, the CPTPP entered into force between Canada and the first five countries to ratify the agreement (Australia, Japan, Mexico, New Zealand and Singapore). On January 14, 2019, the CPTPP entered into force between Canada and Vietnam.

The remaining signatories are Brunei Darussalam, Chile, Malaysia and Peru. The CPTPP will enter into force 60 days after a signatory notifies the CPTPP Depository that it has completed its ratification procedures.

Snapshot of key markets and CPTPP outcomes by product

Sources for all: CPTPP Agreement; Statistics Canada - CATSNET Analytics.

Beer

Note: Additional data for Canadian beer trade sourced from Global Trade Tracker (GTT).

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
Australia 1.2 million Previously duty-free before the CPTPP.
Japan 342,184
Mexico 327,898
Singapore 69,452 Duty free immediately. Tariffs were $16 Singaporean dollars per litre of alcohol before the CPTPP.
Rest of CPTPP 18,388 Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Vietnam: CPTPP tariff reductions and outcomes will vary by market and product.

Coffee

Note: This includes roasted and unroasted coffee as well as decaffeinated and regular/non-decaffeinated.

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
Australia 3.6 million Previously duty-free before the CPTPP.
Japan 2.8 million Decaffeinated coffee that is roasted or unroasted: Duty-free immediately. Tariffs were up to 12% before the CPTPP.
New Zealand 912,266 Roasted, decaffeinated coffee: Duty-free immediately. Tariffs were up to 5% before the CPTPP. Unroasted, decaffeinated coffee: Previously duty-free before the CPTPP.
Vietnam 325,677 Unroasted, decaffeinated coffee: Tariffs will gradually be reduced from 20% to zero by January 1, 2021. Roasted coffee that is caffeinated or decaffeinated: Tariffs will gradually be reduced from 30% to zero by January 1, 2021.
Rest of CPTPP 369,109 Brunei Darussalam, Chile, Malaysia, Mexico, Peru, Singapore: CPTPP tariff reductions and outcomes will vary by market and product.

Cranberry juice

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
New Zealand 113,499 Duty-free immediately. Tariffs were 5% before the CPTPP.
Rest of CPTPP 56,238 Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, Peru, Singapore, Vietnam: CPTPP tariff reductions and outcomes will vary by market and product.

Grape wines, including icewine

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
Japan 1.1 million Sparkling wine: Tariffs will gradually be reduced from 182 yen per litre to zero by April 1, 2025. Sherry, port and other fortified wines in containers of two litres or less: Tariffs will gradually be reduced from 112 yen per litre to zero by April 1, 2023. Other wines in containers of two litres or less: Tariffs will gradually be reduced from up to 15% or 125 yen per litre to zero by April 1, 2025.
Singapore 443,639 Previously duty-free before the CPTPP.
Malaysia 98,278 Sparkling wine: Tariffs will gradually be reduced from up to 23 Malaysian ringgit per litre to zero by January 1, 2033. Other wines: Tariffs will gradually be reduced from up to 7 Malaysian ringgit per litre to zero by Jan 1, 2033.
Rest of CPTPP 35,195 Australia, Brunei Darussalam, Chile, Mexico, New Zealand, Peru, Vietnam: CPTPP tariff reductions and outcomes will vary by market and product.

Spirits, including whiskies, vodka, and liqueur

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
Japan 10.4 million Whiskies: Previously duty-free before the CPTPP.
Australia 6.7 million Whiskies, vodka, liqueurs and cordials: Tariff of 5% has been eliminated.
Mexico 1.2 million Previously duty-free before the CPTPP.
New Zealand 708,694 Whiskies: Previously duty-free before the CPTPP. Vodka: Duty-free immediately or previously duty-free. Tariffs on certain vodka products were as high as 5% or $0.50 per litre. Liqueurs and cordials: Duty-free immediately or previously duty-free. Tariffs were as high as 5% on certain products.
Rest of CPTPP 247,021 Brunei Darussalam, Chile, Malaysia, Peru, Singapore, Vietnam: CPTPP tariff reductions and outcomes will vary by market and product.

Water without sugar, sweetening or flavouring

Note: This includes mineral and aerated waters, as well as other water beverages.

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
Japan 570,412 Mineral water: Duty-free immediately. Tariffs were 3% before the CPTPP. Other water: Previously duty-free before the CPTPP.
Rest of CPTPP 118,718 Australia, Brunei Darussalam, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam: CPTPP tariff reductions and outcomes will vary by market and product.

Water and non-alcoholic beverages containing sugar, sweetening or flavouring (Excluding fruit and vegetable juices)

Note: This includes sports/energy drinks, non-alcoholic beer, and flavoured and sweetened waters.

Market Canada's exports in 2019 (C$) CPTPP tariff reductions and outcomes)
Mexico 4.1 million Non-alcoholic beer: Duty-free immediately. Tariffs were 20% before the CPTPP.
Japan 1.3 million Non-alcoholic beverages with added sugar, such as sports/energy drinks, but not water, beer or fruit and vegetable juices: Tariffs will gradually be reduced from 13.4% to zero by April 1, 2023. Non-alcoholic beverages without added sugar, such as sports/energy drinks, but not water, beer or fruit and vegetable juices: Duty-free immediately. Tariffs were 9.6% before the CPTPP.
Chile 444,716 Non-alcoholic beverages, such as energy drinks, but not water, beer or fruit and vegetable juices: Previously duty-free before the CPTPP.
Rest of CPTPP 680,637 Australia, Brunei Darussalam, Malaysia, New Zealand, Peru, Singapore, Vietnam: CPTPP tariff reductions and outcomes will vary by market and product.

Additional information

Exporters looking for detailed information on all CPTPP outcomes and tariff reductions across all products and markets are encouraged to consult the Consolidated TPP Text, and the tariff schedules of Chapter 2 – National Treatment and Market Access for Goods, in particular.

Rules of origin, origin procedures and tariff rate quotas

Rules of origin

Rules of origin specify the amount of production that must be undertaken on a product in Canada, or a CPTPP market, for it to be considered “originating” and eligible for CPTPP’s preferential tariff treatment.

The rules of origin applicable to beverage products vary on a by-product and by-preparation basis. Exporters are strongly encouraged to research the specific rules applicable to their products and chosen export destination.

At a high-level, products that have undergone significant transformation in Canada, such as wine being produced in Canada from non-CPTPP grapes or grape juice, or non-CPTPP coffee beans being roasted and processed in Canada, would typically be considered originating.

However, there are exceptions, such for certain spirits, which require that the total alcoholic volume of non-CPTPP materials to not exceed 10 per cent of the alcoholic volume of the total alcoholic strength of that good.

Origin procedures

Origin procedures are used to administer the rules of origin and enable the trade community to take advantage of the preferential tariff treatment afforded under CPTPP.

Importers may seek preferential treatment under the agreement, based on a certification of origin completed by the exporter, producer or importer. The certification of origin does not follow a prescribed format, but is required to contain a minimum set of data. This data can be placed on any commercial document, including the invoice.

Customs officials may require an importer to provide supporting documents or other information to support the certification of origin. Upon written request by an importer, exporter or producer, CPTPP countries will issue an advance written binding ruling with respect to the tariff classification and originating status of a product prior to import.

Tariff rate quotas (TRQs)

Canadian exporters of certain products might benefit from preferential tariff treatment through tariff rate quotas. TRQs allow for duty-free entry or entry at reduced tariff rates for certain products up to a quantity specified by the destination government.

Japan has a range of TRQs applicable to food and beverage products, including for coffee and tea. Exporters are encouraged to consult Consolidated TPP Text – Appendix A: Tariff Rate Quotas of Japan for detailed information.

Additional information

Details can be found in the text of the CPTPP agreement:

Requirements and considerations when exporting to certain CPTPP markets

While the CPTPP expands global opportunities for Canadian companies through tariff elimination and preferential tariff treatment, exporters should note that the CPTPP does not change the import requirements set by each individual market. These may include, but are not limited to, labelling, packaging needs, the level of additives allowed, and others.

Before exporting to a CPTPP market, exporters are encouraged to work with their importer to understand the regulatory and market access requirements that may apply to their products.

Exporters should also consult the following resources should they have questions or require information on other potential impediments to trade that may be applicable to their products in one or more CPTPP countries:

Support for exporters interested in CPTPP markets

Canadian exporters are also encouraged to take advantage of the following resources when they consider CPTPP opportunities:

CPTPP for Agri-Food Exporters
Find out what the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is and how it can benefit your exports to its markets.
Single window for market access services
Contact AAFC's Market Access Secretariat at aafc.mas-sam.aac@canada.ca for questions about CPTPP or accessing one of its markets.
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