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September 15, 2009 (10:45 EDT)
No. 251

Minister Day Tables Agreements on Canada-Jordan Trade and Investment

The Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, today tabled in Parliament the texts of the recent trade and investment agreements signed between Canada and Jordan. These comprise a free trade agreement (FTA), an agreement on labour cooperation, an agreement on the environment and a foreign investment promotion and protection agreement.

“In less than four years, this government has concluded five free trade agreements with strategic trading partners,” said Minister Day. “These agreements with Jordan are another example of how our government is opening new doors for Canadian business, creating jobs for Canadians and stimulating new investment during this global economic downturn.”

Upon implementation, the FTA will eliminate tariffs on over 99 percent (by value) of recent Canadian exports to Jordan, directly benefiting Canadian exporters. Key sectors in Canada that will benefit from this immediate duty-free access include forestry, manufacturing, and agriculture and agri-food. Canadian companies are global leaders in these sectors.

The parallel labour and environment agreements will help to ensure progress on labour rights and environmental protection. The agreement on labour cooperation commits both countries to respect the core labour standards of 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 the parties to pursue high levels of environmental protection, enforce their domestic environmental laws effectively and ensure that they do not relax these laws to encourage trade or investment.

The foreign investment promotion and protection agreement (FIPA) will help create a predictable investment environment in Jordan, allowing Canadians to invest with confidence.

The agreements have been tabled in the House of Commons for 21 sitting days for review under the Treaties in Parliament policy. Following this period, the government plans to introduce legislation necessary to implement the FTA and the related agreements on labour cooperation and the environment. The government will also take steps to ratify the FIPA, which does not require implementing legislation.

Two-way merchandise trade between Canada and Jordan totalled $92 million in 2008.

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A backgrounder follows.

For further information, media representatives may contact:

Mélisa Leclerc
Director of Communications
Office of the Minister of International Trade and Minister for the Asia-Pacific Gateway

Trade Media Relations Office
Foreign Affairs and International Trade Canada


Canada-Jordan Free Trade Agreement, Agreements on Labour Cooperation and the Environment, and Investment Agreement

On September 15, 2009, the Government of Canada tabled in Parliament the text of a free trade agreement with Jordan, as well as the texts of parallel agreements on labour cooperation and the environment, and a foreign investment promotion and protection agreement.

Canada-Jordan Free Trade Agreement

Upon implementation of the free trade agreement, the immediate elimination of tariffs on over 99 percent of recent Canadian exports (by value) to Jordan will directly benefit Canadian exporters.

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

The FTA will also contribute to Jordan’s economic development by creating new market opportunities for the export of Jordanian goods to Canada. Imports from Jordan totalled $15 million in 2008, and were led by apparel, fertilizer and agricultural products. 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.

Labour Cooperation Agreement

Canada and Jordan will commit to ensuring that their laws respect the International Labour Organization (ILO) 1998 Declaration on Fundamental Principles and Rights at Work, which covers the right to freedom of association and to collective bargaining, the abolition of child labour, the elimination of compulsory labour and the elimination of workplace discrimination.

Canada and Jordan will also commit to providing protections for occupational health and safety, acceptable minimum employment standards and compensation for occupational injuries and illnesses. Migrant workers will have the same legal protections as nationals in respect of working conditions.

While the focus of the agreement is on labour cooperation, it will also include effective enforcement mechanisms. Failure to respect ILO principles and enforce domestic laws could result in an independent review panel assessing a monetary penalty, as a last resort. Any such assessment would accrue to a special cooperation fund and be used to strengthen labour rights and address the violation.

Agreement on the Environment

The agreement on the environment commits Canada and Jordan to pursuing high levels of environmental protection and to striving to develop and improve their environmental laws and policies. The agreement will also oblige the two countries to enforce their domestic environmental laws effectively, and ensure trade and investment are not encouraged at the expense of these laws.

Canada and Jordan also commit to ensuring that environmental assessment processes are in place, and to providing remedies for violations of environmental laws. The two countries also agree to encourage enterprises to adopt best practices of corporate social responsibility and to promote public awareness and engagement. The focus of the agreement is on consultation and cooperation to address any matter arising under the agreement, with access to an independent review panel as a last resort.

Canada-Jordan Foreign Investment Promotion and Protection Agreement

The foreign investment promotion and protection agreement (FIPA) stems from a mutual interest in promoting bilateral investment between Canada and Jordan. Once entered into force, the Canada-Jordan FIPA will provide investors with greater predictability, certainty and protection for their investments.

A FIPA is an international treaty providing binding obligations on governments regarding their treatment of foreign investors and investments. By establishing clear rules and an effective enforcement mechanism, a FIPA provides a stable legal framework to promote and protect foreign investment. It sets 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.