Archived Document
Free Trade Area of the Americas (FTAA)
Key Questions & Answers on the FTAA Process
What is the Free Trade Area of the Americas (FTAA) and how did it start?
The idea of the FTAA was conceived in 1994 at the inaugural Summit of the Americas meeting in Miami. Negotiations towards a hemisphere-wide free trade agreement were launched in 1998 at the Second Summit of the Americas. The 34 democratic countries of the hemisphere are participating in the negotiations.
The proposed FTAA is an integral part of the broader Summit of the Americas process, complementing such Summit objectives as strengthening democracy, promoting human rights and finding ways to address a range of social and economic issues through hemispheric co-operation.
The FTAA is perhaps the most visible element of the Summit process, but its principal objectives of growth and development through enhanced economic integration are ultimately intended to reinforce the Summit’s broader objectives.
Canada hosted the Third Summit of the Americas in Quebec City in April 2001, and continues to play a significant role in the broader Summit process.
What are the benefits of the FTAA to Canada?
The Americas region is an important market for Canada, and strengthening our economic ties with the region through the FTAA is a trade policy priority.
The FTAA would create the world’s largest free trade area. With a combined gross domestic product (GDP) of more than $19.2 trillion, the FTAA would constitute about 36 percent of the world’s economic activity.
With international trade accounting for nearly 40 percent of Canada’s economy, we must grasp this opportunity to seek improved access to the growing markets of the region, to the benefit of Canadian consumers and businesses, both small and large.
The FTAA would provide rules that create a stable and predictable environment, which will encourage investment throughout the hemisphere.
What is the status of the FTAA negotiations?
Considerable progress has been made to date. Nevertheless, much work remains.
The current focus of participating countries is on the implementation of the new negotiating framework agreed to by Ministers as the November 2004 Ministerial meeting in Miami.
The new negotiating framework consists of two tiers: a common set of rights and obligations for all countries and a plurilateral tier for those countries willing to undertake additional commitments.
Consensus on how to implement the new framework has not yet been reached. The negotiations have been paused to provide delegations with added time for countries to find ways to bridge outstanding differences.
What is the two-tier approach?
All 34 countries are to negotiate an integrated set of common rights and obligations in each of the existing nine subject areas (first tier). In addition, interested countries may negotiate more ambitious liberalization on a plurilateral basis (second tier).
Ministers tasked negotiators to develop the scope and modalities for the common set, as well as the procedures for plurilateral negotiations
What must occur for the negotiations to resume?
Before formal negotiations can resume, participating countries must reach a consensus on how to implement the new negotiating framework agreed to at the Miami Ministerial meeting in November 2003.
Canada agreed to this compromise two-tier structure so that the FTAA process could continue moving forward. In our view, a comprehensive, high-quality agreement can still be reached.
What is Canada’s position with regard to the status of the FTAA negotiations?
Canada is hopeful that the added time provided for consultations will help countries overcome key obstacles and that formal negotiations will resume shortly.
Canada remains strongly committed to the FTAA process and to negotiating, multilaterally, a comprehensive and high quality agreement, which is compatible with the WTO.
A comprehensive agreement refers to coverage of all nine subject areas originally mandated by Ministers, including the elimination of tariffs and trade barriers for agricultural and non-agricultural goods, and broad market access provisions for services, investment and government procurement.
We are also seeking parallel agreements on labour and environment, and to include appropriate environmental and labour provisions in the FTAA itself.
The January 2005 deadline for the conclusion of the FTAA negotiations was missed. What will be the new deadline for the FTAA negotiations?
It would be premature to speculate on a new deadline for the FTAA negotiations.
We expect that participating countries will address this issue after the negotiations resume.
Outside of the FTAA, will Canada pursue bilateral free trade
agreements to enhance our trade & investment opportunities in the region?
Canada remains strongly committed to the FTAA process and to negotiating, multilaterally, a comprehensive and high-quality agreement that is compatible with the WTO.
Canada will continue to use multilateral, regional, and bilateral mechanisms to enhance our trade and investment opportunities in the Americas.
Canada has an active bilateral agenda in the region. In addition to the NAFTA, we have bilateral trade agreements with Chile & Costa Rica. Negotiations continue with four Central American countries.
Does Canada support a particular candidate city to become the permanent host for the FTAA Secretariat?
Canada has been pleased with the efforts of each of the cities that have so far hosted the FTAA Administrative Secretariat: Miami, Panama City, and Puebla.
It is nevertheless premature to commit Canada's support to any particular country's or city's candidacy this early in the process.
There remain many institutional questions, including the structure of a permanent secretariat, that need to be addressed before FTAA negotiations conclude.
Canada was pleased to receive the bid proposals submitted by candidate cities in accordance with the March 1, 2004 deadline established by Trade Ministers.
Canada will remain engaged in a constructive dialogue with our partners in the hemisphere on the best permanent site for an FTAA Secretariat.
What benefits will the FTAA bring to smaller economies?
For small and emerging economies, the FTAA holds the promise of achieving sustainable economic growth and reinforcing their comparative advantage.
We recognize the particular challenges of smaller economies and support the provision of technical assistance, and, on a case-by-case basis, the inclusion of measures in the FTAA to ease the transition of smaller economies, provided these are specific and time-limited.
In June 2003, Canada announced that it will contribute $24 million to the Hemispheric Cooperation Program (HCP) to respond to trade-related technical assistance and capacity building needs as identified by participating countries themselves.
Is the Government negotiating away our health care system (medicare)?
Canada will not negotiate on health care in any of our trade initiatives.
Canada's trade obligations do not require us to privatize our health care system.
Whether and to what extent Canadian governments reform their health care systems is for Canadians themselves to decide.
We have preserved full policy flexibility for health care in all of our trade agreements. Canadian governments are free to maintain the programs, or make the reforms, that Canadians deem appropriate.
Will the FTAA negotiations affect the WTO TRIPS and access to medicines agreement?
Canada is very pleased with the August 30, 2003 decision of all World Trade Organization (WTO) Member countries regarding the Agreement on Trade related Aspects of Intellectual Property Rights (TRIPS) and public health.
This historic decision will allow poor, developing countries to better access the medicines they need to treat serious public health epidemics like HIV/AIDS. At the same time, it will assure intellectual property protection essential for the ongoing development of new and better drugs.
Canada will ensure that the FTAA Agreement does not create an impediment to the implementation of the August 30, 2003 WTO decision in the Hemisphere.
Does Canada support the inclusion of health, public education and social services in the FTAA negotiations?
No. Canada's position on these issues is very clear: health, public education and social services are not negotiable.
As is the case in the NAFTA, Canada will preserve its right in the FTAA to adopt or maintain any measure for health, public education and social services that has a public purpose.
Will the FTAA services negotiations threaten Canada's ability to pursue cultural policy objectives?
Canada is committed to maintaining flexibility to pursue its domestic cultural policy objectives in the FTAA negotiations.
Pending the development of a new legal instrument on cultural diversity, Canada's position is to continue its traditional approach to bilateral and regional agreements and seek a general exemption for culture as in its free trade agreements with Chile, Israel and Costa Rica.
This new international instrument on cultural diversity would set out clear ground rules allowing states to maintain policies that promote their cultures while also respecting the rules of the international trading system and ensuring markets for cultural exports.
The FTAA is one of many important fora in which Canada can promote a coherent approach to multilateral efforts undertaken to ensure cultural diversity.
Canada has proposed language for the FTAA preamble that recognizes the importance of cultural diversity and has encouraged FTAA countries to involve themselves in the process of developing a new Convention on cultural diversity that is now underway in the United Nations Educational, Scientific and Cultural Organization (UNESCO).
Do investment rules give special rights to foreign companies?
No. Investment rules do not exempt foreign investors from domestic laws of the host country.
Foreign investors are required to obey all Canadian laws and regulations (e.g., labour and environmental standards).
What is Canada’s position on investor-state dispute settlement in the FTAA negotiations?
Canada supports effective investment protection provisions, and transparent and efficient dispute settlement procedures in the FTAA.
Based on our experience with the NAFTA, Canada has incorporated improvements to its investment agreements in order to promote clarity and transparency in the investor-state dispute settlement procedures.
Canada will work to ensure that the FTAA investment chapter also incorporates these improvements (e.g., public access to documents and hearings, amicus participation).
Free trade agreements and investment-protection agreements generally provide for a mechanism for the settlement of investment disputes. Such a dispute settlement mechanism is essential and ensures that disputes are settled on the basis of mutually agreed rules, rather than through size or political might.
Will the FTAA result in lower environmental standards?
Canada is undertaking a national environmental assessment of the FTAA negotiations. The assessment takes into account Canada’s framework of policies and legislation for the protection of the environment.
Canada will retain the right to maintain strong environmental policies and regulations in the FTAA. Based on the Initial environmental assessment, the FTAA's environmental impacts are expected to be minimal.
Canada has negotiated environmental co-operation agreements alongside the NAFTA and its free trade agreements with Chile and with Costa Rica. These agreements promote mutually supportive trade and environment policies and sound environmental management through a combination of national obligations and commitments to environmental cooperation and capacity building.
Canada is seeking a parallel agreement on environment, and to include appropriate environmental provisions in the FTAA itself.
Will Canada’s FTAA obligations cover bulk water?
Nothing in any of Canada’s international trade obligations affects Canada’s ability to regulate water as a natural resource.
Water in its natural state is a natural resource and is not a good for the purposes of trade agreements. Only when water becomes a good is it subject to trade disciplines dealing with trade in goods.
As is the case in the NAFTA, Canada will preserve its right in the FTAA to enact measures to protect the integrity and safety of water resources.
How will the FTAA promote labour conditions, democracy and human rights?
The FTAA is an integral component of the Summit of the Americas process. The FTAA process directly reinforces and complements the objectives of the Summit, including by helping to raise living standards and improve working conditions in the Hemisphere.
Canada has been at the forefront of addressing social issues in tandem with trade liberalization, for example through our positive experience with agreements on labour and environment alongside free trade agreements such as the NAFTA and Canada Chile. These models are relevant to the FTAA process.
Canada is of the view that there is a relationship between the FTAA and the Inter-American Democratic Charter, and is considering ways to give this relationship effect.
Are Canadians being kept in the dark on the FTAA negotiations?
No. Openness and transparency are fundamental to the way in which Canada approaches trade negotiations.
Canada’s position for all trade negotiations is developed by the Government of Canada in partnership with provincial and territorial governments, and reflects the results of extensive consultations with Canadian stakeholders, including Parliamentarians and citizens.
These consultations are an important part of the Government’s overall commitment to ensure that Canada’s position continues to reflect the interests of all Canadians.
Canada’s position and proposals in each negotiating area can be found on International Trade Canada’s FTAA web site.
How is Canada promoting openness in the FTAA negotiations?
Canada championed the creation of the FTAA Committee of Government Representatives on the Participation of Civil Society, which plays an important role at the hemispheric level in bringing the views of civil society directly to the attention of negotiators and trade ministers.
Canada successfully pushed for the public release of the first, second and third versions of the draft consolidated text of the FTAA Agreement.
Canada’s long-standing efforts to instil a new culture of transparency in trade negotiations are taking hold in the region.
