Regional and Bilateral Initiatives
Canada - Chile Free Trade Agreement
Initial Environmental Assessment of the Canada-Chile Government
Procurement Chapter to be added to the Canada-Chile Free Trade Agreement
I. Executive
Summary
This report outlines the results of the Initial Environmental Assessment
(EA) of the negotiations between Canada and Chile towards a government
procurement chapter to be added to the existing Canada-Chile Free
Trade Agreement (CCFTA).
This EA follows the process outlined in the 2001 Framework
for the Environmental Assessment of Trade Negotiations (Framework).
The process focuses on the environmental impacts in Canada and normally
involves three phases – the Initial, Draft and Final assessments.
The middle, or Draft phase, is not undertaken if the agreement is
not expected to generate significant economic effects in Canada.
Public and stakeholder consultations are an integral part of the
EA and are undertaken throughout the process.
The Initial EA of the Canada-Chile government procurement negotiations
identifies the likely economic effects of the chapter and, on this
basis, draws conclusions about the potential environmental impacts
in Canada. The report also considers the impact of the chapter on
the ability of Canada to regulate in the interest of environmental
protection.
The results of the Initial EA indicate that there will be no significant
changes to the level of existing government procurement activity
by the Canadian federal government as a result of these negotiations.
This agreement may result in an increase in the number of Chilean
government procurement contracts awarded to Canadian suppliers.
While these contracts will be economically significant to the successful
Canadian bidder the economic activity that will be generated by
these contracts, relative to the overall output of the Canadian
economy, will be small in scale. In addition, the Chilean government
procurement contracts for which Canadian suppliers would most likely
be successful bidders will be in areas such as architectural, engineering
and other consulting services and large scale public works projects.
As any construction activity will be undertaken in Chile the environmental
impact within Canada is expected to be minimal.
The Canada-Chile government procurement chapter will not have a
negative effect on Canada’s ability to develop and implement
environmental policies and regulations. 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.
The Government of Canada welcomes comments on this Initial EA.
A Draft EA will not be carried out as the economic effects in Canada
of the Canada-Chile government procurement chapter are expected
to be relatively small. The Final EA will coincide with the conclusion
of the negotiations. Please submit comments to: consultations@international.gc.ca.
II. Introduction
Both governments and suppliers benefit from efforts to open government
procurement markets to free trade. Government procurement agreements
open up new opportunities for Canadian suppliers to bid on procurement
contracts issued by governments outside of Canada. These agreements
also help to ensure that Canadian suppliers are treated in an open,
transparent and non-discriminatory manner when they bid on these
procurement contracts.
There is a government procurement chapter in the North American
Free Trade Agreement. Canada is also a Party to the World Trade
Organisation Agreement on Government Procurement.
A chapter on government procurement was not included in the original
CCFTA. Upon the conclusion of the U.S.-Chile Free Trade Agreement,
which includes a chapter on government procurement, Chile agreed
to negotiate a chapter on government procurement to be added to
the CCFTA. Canada is seeking this addition to the CCFTA so that
Canadian suppliers of goods and services will enjoy similar treatment
by the Government of Chile as U.S. suppliers of goods and services
enjoy. Canada and Chile engaged in negotiations of the government
procurement chapter in May, 2004.
III. Background on the
EA Process
The Framework provides a methodology for conducting an EA of a
trade negotiation. It is intentionally flexible so that it can be
applied to different types of negotiations (e.g., multilateral,
regional, bilateral) while ensuring a systematic and consistent
approach to meet two key objectives.
The first objective is to assist Canadian negotiators to integrate
environmental considerations into the negotiating process by providing
information on the possible environmental impacts of the proposed
trade agreement. As such, trade negotiators and environmental experts
are involved in the EA and work proceeds in tandem with the negotiations.
The second objective is to respond to the environmental concerns
expressed by the public. The Framework contains a strong commitment
to communications and consultations throughout each EA of trade
negotiations.
Three phases of assessment are generally undertaken: the Initial,
Draft, and Final EA. These phases correspond to progress within
the negotiations. The Initial EA is a preliminary examination to
identify key issues. It occurs early on in the negotiations. The
Draft EA builds on the findings of the Initial EA and requires detailed
analysis. A Draft EA is not undertaken if the negotiation is not
expected to yield large economic changes. The Final EA takes place
at the end of the negotiations. At the conclusion of each phase,
a public report is issued with a request for feedback.
A consistent analytical methodology is applied during each phase.
The Framework recognizes that economic and environmental effects
can relate to changes in the level and pattern of economic activity,
the type of products traded, technology changes, as well as regulatory
and policy implications.
The Government of Canada has completed Initial EAs of the WTO,
FTAA, Singapore, and CA4 trade negotiations, and is currently undertaking
the Draft EA for the WTO negotiations. The original CCFTA was never
subject to an EA as its negotiation predated the development of
the EA process. The Government of Canada will continue to apply
the Framework to future trade and investment negotiations.
Given the small change in economic activity that is expected to
result from this chapter, we will proceed directly to the Final
EA stage. The findings of this Initial EA have been communicated
to Canada’s lead negotiator and to an interdepartmental committee.
Any comments the public has on this report will inform the Final
EA.
IV. Invitation to Submit
Comments
In keeping with the Framework, an Environmental Assessment Committee
(EAC) has been formed to undertake the analysis of this negotiation.
Coordinated by Foreign Affairs Canada and International Trade Canada,
the Canada-Chile Government Procurement Chapter EAC includes representatives
from other federal government departments. An important responsibility
of the EAC is to gather input from Provincial and Territorial Governments,
stakeholders representing business, academia, and non-governmental
organizations, as well as the general public.
As part of its commitment to an open and transparent process, the
Government has opened this Initial EA for public comment from October
24, 2005 to November 24, 2005. Feedback on the likely economic effects
and the likelihood and significance of resultant environmental impacts
are especially welcome. Keep in mind that the assessment is focused
on the possible environmental impacts in Canada.
Comments on this document may be sent by email, mail or fax to:
Initial Environmental Assessment of the Government Procurement
Chapter of the Canada-Chile Free Trade Agreement.
Consultations and Liaison Division (EBC)
International Trade Canada
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario
K1A 0G2
Fax: (613) 944-7981
Email: consultations@international.gc.ca
V. Analysis of the Canada-Chile
Government Procurement Chapter
Canada engaged with Chile in negotiations of a government procurement
chapter to be added to the CCFTA in May, 2004. The Canada-Chile
negotiations are anticipated to conclude before the end of 2005.
a) Identification of Likely Economic Effects
Once negotiated, the government procurement chapter will ensure
Canadian suppliers of goods and services will receive the same treatment
by the Government of Chile as that received by Chilean suppliers.
The same will be true for Chilean suppliers seeking to bid on government
procurement contracts awarded by the Government of Canada. The chapter
will oblige the Parties to make notices of upcoming contracts available
to suppliers from the other Party and to evaluate their bids fairly
and in the same manner as domestic bidders.
The Chilean government procurement contracts that Canadian suppliers
would most likely pursue will be in areas such as architectural,
engineering and other consulting services and large scale public
works projects. It is in these sectors that Canadian suppliers enjoy
a competitive advantage. Suppliers of professional services may
see an increase in their business activities as a result of this
agreement.
In terms of scale of activity, it is not expected that this chapter
will lead to a significant increases in domestic production or consumption.
It is difficult to predict the number or types of contracts that
Canadian suppliers may win. It is likely, however, that the number
each year will be modest. While winning a Chilean government procurement
contract may be economically significant to the successful Canadian
bidder, the economic activity that will be generated by these contracts,
relative to the overall output of the Canadian economy, will be
small in scale.
b) Identification and Assessment of Likely Environmental
Impacts in Canada and the Context for these Impacts
The contracts of most interest to Canadian suppliers will likely
consist of consulting and building projects. Any activity involving
the use of physical resources will be undertaken in Chile. It is
conceivable that if Canadian suppliers are successful in bidding
on large scale public works contracts in Chile there may be a transfer
of environmentally-responsible technologies in areas such as sewage
and water management and electricity generation.
Changes to consumption and production in Canada are not expected
as a result of this chapter. Therefore the environmental impact
within Canada is expected to be minimal.
c) Policy and Regulatory Context
This chapter will be entirely consistent with Canada’s obligations
under multilateral environmental agreements, such as the Montreal
Protocol, the Bio-diversity Convention and the Kyoto
Protocol.
The Canada-Chile 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.
VI. Stakeholder Feedback
A Notice of Intent to conduct an EA of the Canada-Chile government
procurement chapter was posted on the Trade Negotiations and Agreements
website of International Trade Canada on August 19, 2005. The Notice
included an invitation to interested parties to submit their views
on the likely environmental impacts of the Canada-Chile government
procurement chapter in Canada. No comments were received.
VII. Conclusion
and Next Steps
The Initial EA concludes that significant increases in the level
of economic activity in Canada are not expected as a result of the
Canada-Chile government procurement chapter negotiations. The Chilean
government procurement contracts for which Canadian suppliers would
most likely be successful bidders will be in areas such as architectural,
engineering and other consulting services and large scale public
works projects where most of the activity involving the use of physical
resources will be undertaken in Chile. As such, the environmental
impacts within Canada are expected to be minimal.
The Initial EA will be circulated to decision makers to inform
the conclusion of the negotiations as well as other policy development
activities. Following the receipt of public and stakeholder comments
on the Initial EA, the Final EA will be completed taking into account
the consultative findings. In the light of the Initial EA’s
conclusions that there will be no significant environmental impacts
in Canada, preparation of a Draft EA is deemed to be unnecessary.
The Final EA will coincide with the conclusion of the negotiations
with Chile.
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