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TAGS: ECON ETRD EIND EINV ELAB SENV CA CO
SUBJ: CANADA AND COLOMBIA CONCLUDE FTA TALKS
SUMMARY/INTRODUCTION
--------------------
1. Canada announced on June 7 that it had concluded free trade
negotiations with Colombia, including agreements on labor and
environmental issues. While the anticipated FTA has been subjected
to hearings in Canada's Parliament, and specific industries (notably
sugar refiners) and unions have expressed opposition, the agreement
has not received widespread attention in Canada and it appears
likely to be implemented.
2. Canada signed similar agreements with Peru on May 29. From 1994
to 2002 Canada implemented free trade agreements with a number of
Western Hemisphere countries including the United States, Mexico,
Chile and Costa Rica. FTA discussions with a number of smaller
economies (Dominican Republic, Honduras, Guatemala, El Salvador,
Nicaragua, CARICOM, Panama) are in various stages of progress. In
pursuing FTAs, Canada pays close attention to U.S. trade
negotiations to ensure that Canadian exporters are not put at a
comparative disadvantage relative to their U.S.-based competitors.
END SUMMARY/INTRODUCTION.
3. Canada's news release and backgrounder are available at
http://www.international.gc.ca .
4. ORIGINS: Canada's FTAs with Peru and Colombia had their
beginnings in preliminary talks in 2002 with members of the Andean
community (Peru, Colombia, Venezuela, Ecuador and Bolivia). As was
also true of Canada's discussions with Central American and
Caribbean countries, some trading partners were more prepared than
others to pursue an FTA. In July 2007, during a tour of Latin
America, Prime Minister Stephen Harper announced free trade
negotiations with Colombia and Peru. Negotiations with Peru
concluded in January and a bilateral FTA (with environmental and
labor agreements) was signed on May 29 on the margins of the APEC
ministerial. Negotiations with Colombia took somewhat longer; the
successful conclusion was announced on June 7 at the end of a fifth
negotiating round in Bogota.
5. SENSITIVITIES AND CRITICS: Private sector contacts say that
Canada's main sensitivities in the Colombia FTA talks involved
refined sugar (sugar refiners in western Canada were said to be
angling for trade adjustment assistance) and cut flowers. Some
interest groups in Canada, notably labor unions, raised concerns
about labor and environment standards. In addition, some argued
that the FTA should be linked to (or abandoned because of) the
Colombian government's human rights record. A number of trade and
industry groups, however, argued that conditions are improving in
Colombia and that an FTA can contribute to the reform process.
Foreign Affairs Minister Emerson said that the agreements "will help
solidify ongoing efforts by the Government of Colombia to create a
more prosperous, equitable and secure democracy."
6. TRADE IMPACT: Canada already has considerable trade and
investment links with Colombia and Peru. Last year two-way
Canada-Colombia merchandise trade amounted to C$1.14 billion; in the
case of Peru, it totaled C$2.45 billion. Canada's direct investment
stock in Colombia totaled C$739 million in 2007. In Peru, it was
estimated at almost C$1.8 billion.
7. REFERENCE TO U.S.-COLOMBIA FTA: While Canada's economic
relations with most Latin American countries are proportionally much
smaller than those of the United States, Canada attempts to match
Qsmaller than those of the United States, Canada attempts to match
the U.S. in terms of market access. Despite the small trade
relationships, Canadian trade officials and businesses believe trade
talks foster new diplomatic/commercial relationships and help
countries build their capacity for anticipated negotiations with the
United States.
8. Groups both for and against the Canada-Colombia FTA often
referred to the status of the U.S.-Colombia FTA. Business groups
downplayed its opposition in Congress and argued that strengthening
relations with Colombia encourages reforms; that the U.S.-Colombia
FTA is "only a matter of time;" and that Canada should conclude a
deal quickly to "gain first-mover advantage." FTA opponents, on the
other hand, suggested that the U.S. Congress has well-justified
reservations about Colombia's human rights record, labor and
environmental standards, and readiness to engage as a trade
partner.
OTTAWA 00000778 002 OF 002
9. NEXT STEPS: According to the Canadian government, the next step
is a legal review of the FTA negotiated texts. (Canada concludes
international agreements in both English and French, with both
versions being equally valid. In the case of Colombia and Peru, the
agreements are also in Spanish). Following the legal review, the
agreements will be signed by Canada and Colombia (perhaps in
mid-summer), released to the public, and "proceed to each country's
respective legislative bodies for ratification."
10. Strictly speaking, Canada does not have a ratification process.
The present Canadian government has recently introduced a step
whereby international agreements are tabled in the House of Commons
for a period of 21 sitting days. During that time, members of
parliament will be able to review, debate, vote on a motion, or send
the agreements to committee for further review. Given that
Parliament is due to rise for the summer in the second half of June,
this requirement will have the effect of delaying the introduction
of implementing legislation in Parliament until the fall session.
In the case of the trade, labor, and environment agreements with
Peru, the government hopes to introduce legislation to allow them to
enter into force by January 1, 2009.
WILKINS