Canada To Implement FTAs With Colombia And Peru

by Mike Godfrey, Tax-News.com, Washington

08 April 2009

The government of Canada has introduced legislation in the House of Commons to implement recently signed free trade agreements with Colombia and Peru.

The legislation was introduced on March 26 by Minister of International Trade Stockwell Day, who says that the two agreements will open the door for Canadian companies doing business in Colombia and Peru by expanding market access in key sectors such as extractive industries, manufacturing, agriculture and financial services.

“Canada is taking action during these difficult economic times by reaching out to our trading partners and reducing the barriers that undermine our mutual prosperity,” Day said. “These agreements provide our companies with a competitive edge in many sectors, including wheat, paper products, mining, oil and gas, engineering and information technology. This is another example of the government’s efforts to deepen Canada’s presence in Latin America.”

As a result of the agreement with Canada, Colombia will immediately in some cases, or over a five- to-10-year period in others, eliminate tariffs on virtually all Canadian exports. Once the agreement is implemented, Canadian products that will enjoy immediate duty-free access to Colombia include wheat, barley, lentils, peas, beef, as well as paper products, machinery and equipment. Colombia will also eliminate the use of its price band mechanism on selected products, including wheat, barley and pork.

Peru has given a similar commitment under its agreement with Canada to eliminate most tariffs on Canadian exports over 5 to 10 years. Canadian products that will enjoy immediate duty-free access to Peru include wheat, barley, lentils, peas and selected boneless beef cuts, as well as a variety of paper products, machinery and equipment. Canada will immediately eliminate its tariffs on almost all Peruvian imports. The rest will be eliminated over three- or seven-year periods. Over-quota tariffs on dairy, poultry, eggs and refined sugar are excluded from tariff reductions.

The agreements contain provisions providing enhanced access for Canadian firms to the services sectors of the South American countries, including mining, energy, financial and professional services. In addition, each FTA includes a Foreign Investment Promotion and Protection Agreement to provide investors with greater stability, transparency and protection for their investments. There are also clauses in both agreements strengthening labour rights for workers in Colombia and Peru.

In 2008, two-way merchandise trade between Canada and Colombia totaled more than CAD1.3bn (1.06bn), while two-way merchandise trade between Canada and Peru reached CAD2.8bn.

Recommended