THE CANADA – COLOMBIA FREE TRADE AGREEMENT
Enhancing Opportunities in the Canadian Market for Innovative High-Value Colombian Agricultural Products January 15-17, 2013 Centro Internacional de Agricultura Tropical (CIAT), Cali, Colombia
Craig M. Johnston Berkeley Counsel Berkeley Corporate Advisors Toronto, Canada Tel +1 416 364 7772 Email craig @berkeleycounsel.com
Introduction • Canada-Colombia Trade
• International Context for Canada-Colombia FTA
• Objectives of the Agreement
• Tariffs
• Non-Tariff Issues
• Co-operation and Dispute Resolution
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Canada Colombia Free Trade Agreement
• Signed in November 2008 • Came into force August 15, 2011
• Intended to: • Create immediate and future trade advantages • Establish a framework for ongoing relationship
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Canada • Canada is one of the world’s most economically strong
and stable countries:
• GDP per person - US$ 45,000 • Economy growing at 2%/year • Inflation < 2% per year and stable • Unemployment 7% • Low public deficit and strong $CDN vs. $USD • Politically stable • Safe • Stable regulatory environment
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Trade Activity and Investment Levels Canadian • exports to Colombia: COP 1,361 billion • imports from Colombia: COP 1,436 billion • direct invest in Colombia: COP 3,052 billion
Colombian • direct invest in Canada: COP 1.8 billion
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Trade Activity and Investment Levels Canadian • exports to Colombia: COP 1,361 billion • imports from Colombia: COP 1,436 billion • direct invest in Colombia: COP 3,052 billion
Colombian • direct invest in Canada: COP 1.8 billion
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Canadian Exports and Investment • Canada’s merchandise exports totalled COP 1,361 billion in
2011 • Included machinery, cereals, motor vehicles, vegetables, paper
and paperboard; • Canadian direct investment in Colombia was COP 3,052 billion
at the end of 2011; • Canadians have invested in the Colombian extractive sectors
such as mining and oil and gas exploration and production, and the financial sector as well as in agri-food, pulp and paper, printing, shoe manufacturing, plastics, education and forestry;
• Talisman Energy, Pacific Rubiales, Petrominerales, Nexen, Scotiabank, Continental Gold, Bata Footwear, Kruger Paper, McCain Foods, LaSalle College, Brookfield Asset Management, SNC-Lavalin and Norton Rose.
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Colombian Exports and Investment • Exports from Colombia to Canada reached COP 1,436
billion in 2011; • 50% agricultural products, 42% energy; • Agricultural imports include coffee, bananas, fresh
flowers, and sugar, representing 85% of total agricultural imports from Colombia;
• There has not been significant investment by Colombians in Canada.
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Trade in Services • Canada’s services exports to Colombia were COP 181
billion in 2009; • Colombia’s services exports to Canada were COP 95
billion in 2009; • Canadian service exports to Colombia have been growing
while Colombian service exports to Canada have remained steady.
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International and Regional Context • GATT and WTO – International Trade Agreements • Andean Community (1969) • Andean Trade Promotion and Drug Eradication Act (1991) • North American FTA (U.S. Canada Mexico) (1994) • Canada-Chile FTA (1997) • Canada-Peru FTA (2009) • Canada-Colombia FTA (2011) • Colombia-U.S. FTA (2012) • Canada-MERCOSUR Exploratory Trade Discussions
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Main Objectives of the Agreement • National Treatment • Elimination of Tariffs • Elimination of Non-Tariff Barriers • Facilitate Investment • Facilitate Trade in Services • Forum and Mechanisms for Co-Operation and Dispute
Resolution
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National Treatment • Imported products to be given treatment no less
favourable than domestic products; • General prohibition on the use of internal taxes and other
internal regulatory measures so as to afford protection to domestic production;
• Exceptions: prohibited goods, wine and distilled spirits
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Elimination of Tariffs • 3 levels of Canadian tariffs:
• General / Default -- 35% • Most Favoured Nation -- WTO Members • Specific:
• NAFTA, Chile, Peru, Israel, Costa Rica, Colombia • European Free Trade Association (Iceland, Lichtenstein, Norway and
Switzerland) • General Preferential Tariff, Least Developed Country Tariff • Commonwealth
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Staged Tariff Elimination • Canada Staged Tariff Reductions:
• A : Immediate • B : 3 years (now effective) – some boots • C : 7 years – some textiles, some ships, • D17 : 17 years – some refined sugar • E : no elimination – dairy products, eggs, turkey, poultry, some
invert sugars
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Specific Tariff Reductions • Flowers:
• Roses • Carnation • Cymbidium
• Vegetables • Cherry tomatoes • Asparagus • Onions • Cauliflower • Carrots
• Processed foods: • Tomato juice • Ketchup • Jams
• Textiles
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Rules of Origin • To be eligible for lower tariffs, goods must originate in
Colombia; • Agricultural goods grown in Colombia generally are
“Colombian”; • Rules for goods processed or manufactured in Colombia
from imported goods
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Non-Tariff Barriers • Import and Export Restrictions; • Import Licensing; • Administrative fees and Formalities; • Export Taxes; • Sanitary and Phytosanitary Measures; • Export subsidies.
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Investment • investors and investments to be given “national
treatment”, with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments ;
• investments to be treated in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security;
• Compensation for expropriation or breach
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Other Aspects • Trade in Services • Temporary Entry for Business Persons • Competition Policies • State Enterprises • Government Procurement • Labour • Environment
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Co-Operation and Dispute Resolution • Committee on Trade in Goods • Committee on Sanitary and Phytosanitary Measures • Dispute Resolution
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Thank you!
Berkeley Counsel 59 Berkeley Street Toronto, Ontario Canada M5A 2W5