CANADA CONCLUDES FTA NEGOTIATIONS WITH PERU, EFTA
Along the sidelines of the World Economic Forum in Davos last weekend, Canada announced the successful conclusion of free trade negotiations with Peru and signed a free trade agreement with the European Free Trade Association (EFTA) countries of Iceland, Liechtenstein, Norway, and Switzerland.
The agreement with Peru calls for the elimination of all trade barriers between the two countries within 10 years. It also includes provisions on services trade and protections for foreign investors. Both countries, looking to expand and diversify their global competitiveness, hailed the agreement as a great step forward towards their goal of international economic integration. Negotiations started in July 2007.
At present, Peru exports mostly gold and copper to Canada, but hopes to increase exports of wood, gas, and both agricultural and manufactured products. Concurrently, Canadian corporations are looking to ramp up investment in the Peruvian mining industry.
The newly announced FTA includes an environmental agreement, with stipulations on biodiversity and corporate social responsibility, and a labour agreement, which includes provisions on enforcement and penalties.
The formal signing of the agreement with the EFTA, on which talks began in 1998 and concluded in June 2007 after a multi-year hiatus due to differences on shipbuilding, marks the first such deal between Canada and a European country. The EFTA states and Canada are already significant trade partners, with two-way merchandise trade valued in 2006 at C$10.7Bn and two-way investment valued at more than C$22Bn.
Exporters in each of the five countries stand to benefit from the boost in trade. The agreement calls for the elimination of all tariffs on non-agricultural products. Additionally, the EFTA states each arrived at bilateral agreements with Canada to reduce tariffs on agricultural products. Anti-dumping measures and subsidies were also discussed in sub-clauses.
Canada hopes to use this agreement as a basis for expanding further into European value chains. Canada currently has free trade agreements in place with the US, Mexico, Chile, Israel, and Costa Rica.
The EFTA calculates that this agreement will increase the share of traded goods covered by free trade agreements to 5.3 percent of the member countries’ total volume.
ICTSD Reporting; "Peru, Canada Reach Agreement on Free-Trade Deal, Garcia Says" Bloomberg, 26 January 2008; "Canada Marks Free Trade Agreements with Peru and The European Free Trade Association" Foreign Affairs and International Trade Canada, 26 January 2008; "PRESS RELEASE - The EFTA States and Canada sign Free Trade Agreement" EFTA, 26 January 2008; "Canada signs free trade deal with EFTA" AFP, 26 January 2008.