CANADA AND COLOMBIA CONCLUDE FTA TALKS

Show metadata

UNCLAS SECTION 01 OF 02 OTTAWA 000778

SIPDIS

STATE FOR WHA/CAN, EEB/IFD/OIA, EEB/DCT, OES, DRL

STATE PASS USTR FOR MELLE AND SULLIVAN

USDOC FOR 4320/OFFICE OF NAFTA/GWORD/TFOX;

3134/OIO/WESTERN HEMISPHERE

E.O. 12958: N/A

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

CANADA AND COLOMBIA CONCLUDE FTA TALKS

Share this cable