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Free Trade Area of the Americas
(FTAA) |
Current FTAA Negotiations
Background Information on the FTAA
An Integral Part of the Summit of the Americas Process
The Free Trade Area of the Americas (FTAA) was conceived in principle
in December 1994 at the inaugural Summit of the Americas held in
Miami. At the second Summit, held in Santiago, Chile, in April 1998,
the Leaders of the 34 democratic countries in the Americas launched
the negotiations toward a hemisphere-wide free trade area.
The proposed FTAA is an integral part of the larger Summit of the
Americas process. The FTAA complements Summit objectives of strengthening
democracy, promoting human rights and finding ways to address a
range of social and economic issues through hemispheric cooperation.
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, most notably by forging consensus
among the 34 members of the Organization of American States on the
holding of a Special Summit of the Americas, which will take place
in January 2004 in Mexico.
Benefits of the FTAA
The FTAA negotiations hold the potential to create the world’s
largest free trade area, with over 830 million people and a combined
gross domestic product of more than $20.1 trillion. In addition
to liberalizing trade in goods, the FTAA holds the potential to
secure improved market access commitments in the services sector
and to establish stronger investment protection measures throughout
the hemisphere.
Canada has long advocated the benefits of trade and investment
liberalization. While the cornerstone of Canadian trade policy remains
the World Trade Organization, Canada also favours the pursuit of
reductions in barriers to trade and investment at the regional and
bilateral levels. Initiatives such as the FTAA can complement and
reinforce multilateral liberalization by allowing faster, deeper
and broader rules and disciplines than those that have been, or
may be, negotiated at the multilateral level. Regional agreements
also benefit countries on a purely economic basis by opening new
markets and providing competitive stimuli for both goods and services
industries, fuelling a search for innovation and improvement.
The FTAA will build on Canada's existing free trade ties with the
United States, Mexico, Chile and Costa Rica, and its expanding links
elsewhere in the hemisphere, allowing Canada to take full advantage
of emerging hemispheric markets. The FTAA will moreover co-exist
with pre-existing agreements, such as the North American Free Trade
Agreement (NAFTA). This means that Canada's trade with the United
States and Mexico will continue to be governed by the NAFTA, and
the FTAA would substitute in these relations only if all three parties
agreed. Excluding our NAFTA partners, ‘the Americas’
is now a destination for $3.68 billion of our goods exports per
year. In addition, the stock of Canadian direct investment in the
region is $66.4 billion, representing 15.4 percent of Canada’s
total outward investment.
Status of the Negotiations
The FTAA negotiations, which are scheduled to conclude by January
2005, are proceeding on two simultaneous tracks. The first is a
general negotiation focussing on rules and commitments, including
issues of an institutional nature. The second track deals specifically
with market access for agricultural and non-agricultural goods,
investments, services, and government procurements.
Nine FTAA negotiating groups were established in 1998, with mandates
from Ministers to negotiate in specific substantive areas: market
access; investment; services; government procurement; dispute settlement;
agriculture; intellectual property rights; subsidies, anti-dumping
and countervailing duties; and competition policy. In addition,
a consultative group and two committees were created to address
horizontal issues related to the negotiations: smaller economies;
civil society and electronic commerce; and, later, a committee to
address general and institutional issues. The negotiating groups
and these other FTAA entities meet regularly throughout the year
except for the electronic commerce group. Annual meetings of FTAA
trade Ministers are held to review progress, and take decisions,
including on detailed guidance to negotiators. The eighth such meeting
will be held in Miami, November 20-21, 2003.
Despite the significant progress already achieved, the FTAA negotiations
are facing some challenges. These include how best to accommodate
the needs of smaller economies in the hemisphere, the ongoing financial
crisis in the region, and the political instability of certain countries.
Another is how to reconcile the modest vision of the FTAA promoted
by Mercosur, principally Brazil, since the summer of 2003, with
the desire of the vast majority of other FTAA participants to achieve
a high-quality, ambitious agreement by the January 2005 deadline.
During the Miami Ministerial, Canada will be seeking guidance and
instructions from Ministers in support of a comprehensive, high-quality
agreement that reaffirms the January 2005 deadline for the completion
of the negotiations. In addition, we will continue to promote transparency
and civil society participation in the FTAA. Canada will seek the
agreement of the 34 Ministers ? for the third time ? to make public
the latest version of the draft negotiating text. We will also continue
to pursue connections between the FTAA process and elements of the
broader Summit agenda, including democracy, labour and the environment.
Additional Information
For more information on the FTAA, including the latest information
on the negotiations and Canada’s position and proposals, visit
the FTAA section of the Department of Foreign Affairs and International
Trade’s Web
site on Trade Negotiations and Agreements.
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