Canada – Andean Community Free Trade Negotiations

Initial Environmental Assessment Report - January 2008

Table 1: Results of Initial EA Analysis

Issue area

Anticipated outcome

Potential environmental implications and provisions


The preamble will provide guidance on the general intentions of the two parties to the agreement, but is not binding.

The preamble is expected to reference the parties’ ongoing commitment to sustainable development and cooperation on environmental matters.

Initial Provisions

This chapter will establish the free trade area between Canada and the Andean Community countries, lay out the overall objectives for the agreements, define the relation to other agreements, and the extent of obligations.

A proposed provision will make reference to the mutual commitments to multilateral environmental and conservation agreements and the relationship between the FTA and MEA obligations.

Rules of origin

This chapter will provide rules of origin that are clear, as simple as possible, and leave little room for administrative discretion.

The rules are intended to be sufficiently stringent to ensure that the benefits of the FTAs flow only to goods qualifying as originating in the territory of either or all countries.

Production and consumption changes resulting from product-specific rules of origin will be captured in the Trade in Goods section below, along with their corresponding environmental impacts.

Customs procedures

This chapter seeks to administer and enforce the rules of origin in a fair and transparent manner.

There are no foreseen environmental impacts as a result of this chapter.

Trade facilitation

This chapter will seek to streamline customs processes and facilitate the movement of goods more efficiently.

It is expected that any measures agreed to between the parties would have minimal impact on the environment.

Outcomes related to trade facilitation would not impact the Government of Canada’s ability to implement measures or regulations to protect the environment.

Sanitary and phytosanitary measures (SPS)

This chapter will reaffirm commitments made under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and agree to continued use of the WTO dispute settlement procedures for any formal disputes regarding SPS measures. In addition, it will seek to establish a bilateral SPS mechanism to provide direction on identification, management, and resolution of SPS issues to avoid disputes.

As provided in the WTO Sanitary and Phytosanitary Measures Agreement, all countries maintain the right to take measures necessary for the protection of human, animal or plant life or health. All countries are required to ensure that any SPS measures are applied only to the extent necessary to protect human, animal or plant life or health, and are based on scientific principles.

Non-tariff measures and regulatory cooperation (Technical Barriers to Trade – TBT)

This chapter will affirm commitments made under the WTO Technical Barriers to Trade Agreement (TBT Agreement), promote greater cooperation in the field of standards, technical regulations and conformity assessment procedures; address horizontal transparency issues, including notifications and participation in consultation processes; and establish a mechanism to provide direction on the identification, management, and resolution of TBT-related issues in order to avoid disputes.

The chapter will reaffirm WTO TBT rights and obligations, including the right of all countries to take measures necessary to ensure the protection of animal or plant life or the environment. Measures shall not be more trade-restrictive than necessary to fulfil such legitimate objectives.

Emergency action

This chapter seeks to protect domestic producers from difficulties associated with bilateral trade liberalization (e.g. sudden surge in imports). The measures are intended to be applied only on a temporary basis.

No significant changes to production or consumption are expected as a result of this chapter.

This chapter is not expected to have any significant impact on the environment.


This chapter seeks to ensure that the terms and conditions for access to and use of public telecommunications transport networks and services do not impede the parties’ market access commitments under the FTAs, and to an open and competitive market for telecommunications services.

In the context of the Canada-Andean FTAs, Canada will maintain its limitations on foreign investment in Canadian telecommunications carriers, such that these companies must be owned and controlled by Canadians.

It is not anticipated that the FTA will have any adverse affect on the environment.

Financial services

This chapter of the agreement is expected to promote high quality, forward looking market access commitments and improve regulatory transparency in the financial services sector.

Financial services activities could increase and/or become more efficient as a result of these negotiations. There would be minimal positive or negative environmental impacts from the office operations associated with this change.

Temporary entry

This chapter seeks to facilitate the temporary movement of business persons in support of bilateral trade in goods, services and investment by negotiating more liberal access by waiving regulatory requirements for labour market tests, etc.

Any outcome in these negotiations is not expected to significantly change production and consumption patterns in Canada.

There will be minimal environmental effects resulting from the normal operation of an office or service facility and travel and temporary stay of professionals from the Andean Community to Canada to carry out their work. These would include consumption of energy for heating, lighting, and use of vehicles or equipment, and production of waste, including paper, refuse and others.

To the extent that temporary entry and stay of individuals from the Andean Community is facilitated, this will not affect how Canadian environmental regulations are developed or implemented or how environmental objectives are set.

Competition policy

This chapter will have provisions against anti-competitive business practices, as well as enhanced cooperation between Canadian and Andean countries’ competition agencies.


It is expected that any measures agreed to between the parties would have minimal impact on the environment.

Outcomes related to this chapter would not impact the Government of Canada’s ability to implement measures or regulations to protect the environment.

Monopolies and state enterprises

This chapter will have provisionsthat permit the designation of monopolies and state enterprises but place disciplines on a party with respect to such entities. These include disciplines to ensure that a party does not circumvent obligations under the agreement, monopolies or state enterprises provide non-discriminatory treatment to investors of the other party, and act in accordance with commercial considerations and do not act anti-competitively outside of their monopoly designation.

No environmental impacts are expected as a result of these provisions.

Canada will safeguard its ability to delegate governmental authority to monopolies and state enterprises.



Government procurement

This chapter of the agreement is expected tocontain government procurement market access and transparency commitments.



The Canada-Andean Community government procurement chapter will not have a negative effect on Canada’s ability to develop and implement environmental policies and regulations, including with respect to green procurement.

Canada will safeguard its ability to maintain and expand the current framework of policies, regulations, and legislation for the protection of the environment in a manner consistent with its domestic and international obligations.

Electronic commerce

This chapter will seek to include rules guaranteeing a predictable environment for the conduct of electronic commerce, while preserving the government’s flexibility to pursue cultural and other social policy objectives, including the environment.

The amount of e-commerce conducted between the parties is not expected to increase substantially as a direct result of the FTAs.

The only environmental impacts from these discussions would be indirect. If the expected cooperation activities increase the amount of e-services there could be positive and/or negative environmental impacts.

Positive environmental impacts could include reduced demand for transportation.

Negative environmental impacts could result from increased waste and energy usage. These impacts could be partially mitigated via effective environmental management practices.


This chapter facilitates the administration and smooth operation of the agreements by reiterating the parties’ commitment to transparency and due process regarding matters covered by the FTAs.

This chapter will allow all parties to review and comment in a transparent manner on any new laws or regulations that may have negative environmental implications.

Dispute settlement

This chapter includes state-to-state dispute resolution procedures with the Andean countries based on the dispute settlement provisions of the NAFTA, but simplified and improved where possible.

No environmental impacts are expected as a result of this chapter.


This chapter will include exceptions for measures such as those necessary to protect, inter alia, human, animal or plant life or health, as well as the environment.

A GATT (Article XX) type exception will allow for adoption or enforcement of measures to protect animal or plant life or health, and measures relating to the conservation of exhaustible natural resources.