Canada Signs Free Trade Agreement With Jordan

by Mike Godfrey, Tax-News.com, Washington

30 June 2009

Stockwell Day, Canadian Minister of International Trade, has signed four new agreements to increase trade and investment between Canada and Jordan.

In Amman, Day signed the legal texts of a free trade agreement (FTA), related agreements on labour cooperation and the environment, and a foreign investment promotion and protection agreement (FIPA) at a ceremony with his counterpart, Jordan’s Minister of Industry and Trade, Amer Hadidi, on June 28.

Upon implementation, the FTA will eliminate tariffs on the majority of Canadian exports to Jordan. Key Canadian sectors that will benefit from this immediate duty-free access include forestry, manufacturing, and agriculture and agri-food.

Jordan fully reopened its market to Canadian beef and cattle in February 2009, and the newly-signed FTA will give Canadian beef producers competitive advantages in a market the Canadian Beef Export Federation estimates to be worth CAD1m (USD865,000).

Under the FTA, Jordan will eliminate all non-agricultural tariffs and the vast majority of agricultural tariffs. Jordan's average tariff is currently 11%. Upon entry into force of the FTA, Jordan will immediately eliminate tariffs in the 10 to 30% range on many key Canadian exports, including pulse crops, frozen french fries, animal feed, various prepared foods, and certain forest products and machinery.

Canada will eliminate all tariffs on Jordanian goods immediately upon entry into force of the FTA, with the exception of over-quota tariffs on dairy, poultry and eggs, which are excluded from tariff reductions.

“Following the visit by King Abdullah II to Canada in July 2007, our countries have made significant progress in strengthening trade and investment,” said Day. “Our efforts have led to the signature of four agreements that will help open doors for Canadian and Jordanian business.”

The parallel labour and environment agreements seek to ensure progress on labour rights and environmental protection. The labour cooperation agreement commits both countries to respect the core labour standards set out by the International Labour Organization, such as the elimination of child labour, forced labour and workplace discrimination, as well as respect for freedom of association and the right to bargain collectively.

The agreement on the environment commits both countries to pursuing high levels of environmental protection, to enforcing their domestic environmental laws effectively, and to ensuring trade and investment are not encouraged at the expense of these laws.

The FIPA is designed to provide investors with the clarity and certainty. Such agreements set out a range of obligations that governments guarantee, such as non-discriminatory treatment, protection against expropriation without prompt and adequate compensation, the free transfer of funds, transparency and dispute settlement.

The Canadian government sees opportunities for businesses in Jordan’s resource extraction, nuclear energy, telecommunications, transportation and infrastructure, with Jordan emerging as an increasingly important regional commercial, shipping and transportation hub.

Following formal signature, the treaties will be tabled in the House of Commons for a period of 21 sitting days for members of Parliament to review and debate them. After the 21-day period, the Canadian government will table legislation to implement the agreements, as necessary.

Two-way merchandise trade between Canada and Jordan totalled CAD92.2m in 2008. The FTA with Jordan will improve market access for both agricultural and industrial goods.

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