Free Trade Area of the Americas (FTAA)
Explanatory Note:
Initial Canadian Offer for Cross-Border Services and Investment
Table of Contents
Non-Official Spanish version of Initial Offer (pdf): Introduction, Annex 1, Annex 2, Annex 3
Context of the Negotiations
The Free Trade Area of the Americas (FTAA) negotiations are proceeding on two
simultaneous tracks: the first focussing on the development of a
general framework of rules including issues of an institutional
nature; and the second dealing specifically with market access.
The Government of Canada and the 33 other countries participating
in the FTAA negotiations have begun the process of exchanging initial
market access offers in goods, services, investment and government
procurement.
In the services negotiations, Canada's general objective is to
seek improved market access for Canadian service providers under
a transparent and predictable rules-based regime. Similarly, in
the investment negotiations, Canada is pursuing the development
of substantive obligations that will serve Canadian interests by
providing for stability, transparency, non-discrimination and protection
for Canadian companies and individuals that invest abroad. In both
the services and investment negotiations, Canada will ensure that
it preserves its ability to adopt or maintain regulations, administrative
practices or other measures in sectors of key policy interest.
For more information on Canada's position and proposals on cross
border services please see: Canada's Position
and Proposals (Services). To view the draft services text: 2003
Draft services text. For more information on Canada's position
and proposals on investment please see: Canada's
Position and Proposals (Investment). To view the draft investment
text: 2003
Draft investment text.
Canada as a Leader for Transparency in Trade Negotiations
The Government of Canada today continues to ensure that its citizens are the
world's most informed on trade negotiations by making public the
market access it is offering to FTAA partners in cross-border services
and investment.
At the FTAA Ministerial in Buenos Aires in 2001, Ministers agreed
to Canada's initiative to release the draft text of the Agreement
to the public and to strengthen the mandate of the Civil Society
Committee. These decisions were endorsed by Hemispheric Leaders
at the 2001 Quebec City Summit of the Americas. At the time, the
Minister for International Trade called that decision a noble experiment
in citizen involvement, which applied new norms and expectations
to trade agreements.
A second version of the draft text of the Agreement was made public
in November 2002 at the FTAA Ministerial in Quito. In November 2003,
Ministers released the third version of the draft Agreement at the
Miami FTAA Ministerial Meeting.
These decisions demonstrate the commitment of FTAA countries to
transparency and to making the FTAA process more open and accessible.
Canada has continued to push hard on this topic because we believe
open and transparent institutions are central to ensuring trust
in the democratic system.
In February 2003, Canada made its initial services and investment
offer public as part of its commitment to transparency.
What is the Canadian Initial Offer in Cross-Border Services
and Investment?
Canada's initial offer with in cross border services and investment is a preliminary
list of reservations that Canada will require subject to final agreement
on the provisions of any chapter of the Agreement and a satisfactory
balance of rights and obligations.
As is the case with other trade agreements, the FTAA services and
investment chapters allow countries to file reservations for those
measures they wish to maintain irrespective of some of the FTAA's
fundamental obligations. A negative list approach has been used
for Canada's joint offer for services and investment. This means
that all service and investment sectors are a priori covered
and are open, except those sectors and measures designated in the
reservations. Canada has consistently adopted this approach in all
its regional and bilateral investment and services negotiations,
including NAFTA and the Canada-Chile Free Trade Agreement.
The Government's position on issues such as health, social services
and public education has always been very clear: they are not negotiable.
Canada’s offer preserves its right in the FTAA to adopt or
maintain any measure for health, public education and social services
that have a public purpose.
Additional exceptions that would apply to the entire Agreement
and to every signatory can also be negotiated during the course
of the negotiations. For example, as is the case in Canada's existing
bilateral agreements, Canada's objective is to ensure a general
cultural exemption that maintains maximum flexibility to pursue
cultural policy objectives. Canada is also using the occasion of
the FTAA negotiations to promote recognition of the importance of
preserving cultural diversity and to build support for a binding
international instrument in this regard. Canada has, therefore,
tabled language to this effect for inclusion in the Preamble to
the Agreement. For more information on Canada's position and proposals
on cultural diversity in the context of the FTAA please see: Technical
Committee on Institutional Issues Culture: Canada's
Position.
At this time, Canada's position is premised on the Agreement being
made applicable only to measures at the federal level.
Canada has reserved the right to review and amend its initial list
of reservations for investment and cross-border services, depending
on obligations contained in the final text of the Agreement and
Canada's ongoing assessment of Canadian legislation and measures.
To view the current draft texts, please see 2003
Draft services text and the Description
of the Chapter, 2003
Draft investment text and the Description
of the Chapter
How to read the Offer
Reservations are organized in Annex I, II and III categories.
Annex I
Annex I reservations are for existing federal measures that do not conform to specified obligations of the Agreement.
Annex I reservations are subject to a standstill, meaning they cannot be made
more restrictive, and to a "ratchet", meaning that if
a measure is liberalized, then this becomes the new level of the
standstill.
Annex II
Annex II reservations set out the sectors or activities where both future and existing non-conforming measures may be adopted or maintained in the face of these same obligations.
The possibility of adopting future non-conforming measures guarantees "policy flexibility" in certain key areas.
Annex III
Annex III sets out the Most Favoured Nation exceptions for existing bilateral and multilateral agreements, as well as future agreements involving aviation, fisheries, telecommunications and maritime matters.
Internal Structure of Annexes I and II
Annex I
Sector: general sector in which the reservation is taken (e.g. all sectors, energy).
Sub-Sector: specific sector in which the reservation is taken (e.g. Uranium)
Industry Classification: refers, where applicable, to the
activity covered by the reservation according to domestic industry
classification codes. Two codes are used in our reservations: Central
Product Classification (CPC) and Standard Industrial Classification
(SIC) (e.g. SIC 0616 Uranium Mines).
Type of Reservation: specifies the obligation of the investment
and/or cross-border trade in services for which a reservation is
taken (e.g. National Treatment, Most Favoured Nation Treatment).
Level of Government: indicates the level of government maintaining
the measure for which a reservation is taken. In the case of Canada's
initial offer, it only applies to the federal level.
Measures: identifies the laws, regulations or
other measures, often qualified in the description element, for
which the reservation is taken (e.g. Investment Canada Act).
Description: sets out commitments for liberalization, if any,
on the date of entry into force of the FTAA Agreement and the remaining
non-conforming aspects of the existing measures for which the reservation
is taken.
Phase-Out: sets out commitments, if any, for liberalization after the date of entry into force of the FTAA Agreement.
Annex II
Sector: same as Annex I.
Sub-Sector: same as Annex I.
Industry Classification: same as Annex I.
Type of Reservation: same as Annex I.
Description: sets out the scope of the sector, sub-sector or activities covered by the reservation.
Existing Measures: identifies, for transparency purposes, existing measures that apply to the sector, sub-sector or activities covered by the reservation.
To view Canada's complete initial investment and cross border services offer please see:
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