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Free Trade Area of the Americas (FTAA)
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Negotiating Groups on Market Access and Agriculture
Summary of the Initial Canadian Offer for Agriculture and Industrial Goods
Context of the negotiations
The Free Trade Area of the Americas (FTAA) negotiations are proceeding on two simultaneous tracks. The first is a general negotiation focussing on general rules and commitments, including issues of an institutional nature. In the context of the Negotiating Group on Market Access and the Negotiating Group on Agriculture, Canada's general objectives are to develop consistent, predictable and transparent rules related to trade in goods that will reduce unnecessary costs to the trading community, and eliminate disguised trade barriers, resulting in improved market access for Canadian goods. Moreover, Canada's position in the Negotiating Group on Agriculture is to work to achieve access for Canadian agri food products to markets of the other FTAA participants on terms more favourable than may be possible in the WTO. For more information on Canada's position and proposals on the Negotiating Group on Market Access and the Negotiating Group on Agriculture please refer to: Canada's Position and Proposals.
The second track deals with negotiation on specific market access commitments for goods. The Government of Canada and the 33 other democratic countries participating in the FTAA negotiations have begun the process of exchanging initial market access offers in five areas of negotiation: goods (agricultural and non-agricultural), services, investment and government procurement.
The deadline for the exchange of initial offers was February 15, 2003. Countries have until June 15, 2003 to present initial requests for improvements to the offers. Countries have been requested to initiate the process for the presentation of revised offers on July 15, 2003.
FTAA countries have agreed to general procedural guidelines for the exchange of initial offers. However, each Negotiating Group has flexibility in this area, which means that the offer process will differ, to a degree, among the five affected negotiating groups. A number of modalities have been negotiated to assist in the construction of Canada's initial offer on goods which covers both agricultural and non-agricultural products. Countries can group their agricultural and non-agricultural goods into the following tariff elimination phases or baskets: A - immediate, B - no more than 5 years, C - no more than 10 years, and for certain sensitive products D - more than 10 years. Canada's objective is to see the elimination of tariffs for substantially all goods within 10 years.
Further, all Parties have agreed that as opposed to using our Most Favoured Nation bound rates, tariff reductions shall be based on applied tariffs, to facilitate meaningful market access improvements.
Frequently Asked Questions
Will this process provide improved access to FTAA markets for our agricultural and industrial goods?
- Right now, access terms for trade between Canada and most of our non-FTA markets in the Americas are asymmetrical.
- Some 93 percent of imports from these countries enter Canada duty-free, while many Canadian industrial exports still face significant tariffs, such as:
- Paper products: 5 to 19 percent;
- Electrical machinery including information and communications technologies: 4-18%;
- Automotive products: 8 to 23 percent;
- Fish products: 10 to 54 percent;
- Potash: up to 10percent; and
- Plastics: 4 to 16 percent.
- Outside of NAFTA partners and Chile and Costa Rica (there are Canada-Chile and Canada-Costa Rica free trade agreements), agricultural exports from Canada also face stiff tariffs. Conversely, imports from many countries in the region enter Canada fairly easily because of special tariff levels for developing countries and the Caribbean.
- Some of our agricultural exports that face significant tariffs are:
- French fries: up to 30 percent ;
- Pork and pork products: up to 40 percent;
- Pulses: up to 25 percent; and
- Wheat: up to 25 percent.
- In these negotiations, we are seeking to obtain market access results favourable to our Canadian exports interests.
What does Canada's offer look like?
- Canada submitted a single initial tariff offer to our FTAA partners which represents progressive liberalization in both agricultural and non-agricultural goods.
- Our initial offer can be revised and will reflect the balance of concessions as the negotiations proceed.
- Our offer is made in accordance with the San Jose and Quito Ministerial Declarations stating that the FTAA can coexist with other Agreements. This offer will not affect our current preferential arrangements with our hemispheric trading partners under the Canada-U.S. FTA, the NAFTA, the Canada-Chile FTA, the Canada-Costa Rica FTA, the General Preferential Tariff treatment, the Commonwealth Caribbean Countries Tariff and the Least-Developed Country Tariff treatment.
- As per Canada's position in the WTO, Canada remains committed to maintaining the ability to choose how to market agricultural products, including through orderly marketing systems such as supply management and the Canadian Wheat Board. In this regard, over-quota supply-managed products have been excluded from tariff elimination.
Why are we not able to see the Canadian tariff offer?
- All Parties agreed that the process for negotiating tariff concessions would be conducted in confidence.
- Publicizing our offer would hinder our negotiating position and our ability to secure additional market access improvements for Canadian exports.
- However our offer takes into account the feedback we have received from consultations.
- We are currently seeking input from stakeholders in developing Canada's request list, which will be used to pursue improved access for Canada's key export interests.
How is Canada addressing the concerns of smaller economies through this process?
- In order to ensure all Parties participate fully in the negotiation of, and benefit from the FTAA, the initial offer takes into account the differences in levels of development and size of economies in the Hemisphere.
- Canada recognizes the particular challenges of smaller economies and has indicated its willingness to negotiate time-limited "privileges", such as longer tariff phase-out periods on an ad hoc basis with individual countries for certain products.
March 2003
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