September 12, 1996 No. 161

CANADA STRENGTHENS LINKS TO CENTRAL AMERICA WITH INVESTMENT AGREEMENT AND AIR NEGOTIATIONS

Foreign Affairs Minister Lloyd Axworthy today signed a Foreign Investment Promotion and Protection Agreement (FIPA) with Panama and offered a date for the beginning of negotiations to establish air links with Central America. The Minister is in Guatemala, along with Secretary of State (Latin America and Africa) Christine Stewart, meeting with the foreign and trade ministers of the seven Central American countries.

"The Foreign Investment Promotion and Protection Agreement with Panama is a concrete example of Canada's efforts to encourage closer economic links with Central America," said Mr. Axworthy. "Once the FIPA is in force, the Canadian business community can pursue, with greater confidence, opportunities to strengthen the investment relationship in Panama."

FIPAs are bilateral, reciprocal agreements to promote and protect foreign investment through legally binding rights and obligations concerning national treatment, most-favoured-nation treatment, expropriation, transfers of funds, trade-related investment measures, transparency, and investor-to-state and state-to-state dispute settlements.

The agreement with Panama is based on Canada's model agreement, which incorporates key provisions from the North American Free Trade Agreement investment chapter. Under the new agreement, Panama has made significant commitments on investment protection. Agreements under this model have also been signed with Ukraine, Latvia, Trinidad and Tobago, the Philippines, South Africa, Romania, Ecuador, Barbados and Venezuela. Negotiations are already under way with Costa Rica, El Salvador, Guatemala and Nicaragua.

Minister Axworthy also announced that a Canadian delegation expects to travel to Central America during the week of November 18, 1996, to begin talks with representatives of all interested Central American governments on establishing bilateral air transport negotiations with Canada. "We look forward to the establishment of increased air links and to the impetus such links will give to greater trade and economic activity between Canada and Central America," said Mr. Axworthy. To date, Costa Rica, El Salvador and Guatemala have each asked to negotiate a bilateral air agreement with Canada.

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For further information, media representatives may contact:

Catherine Lappe

Director of Communications

Office of the Minister of Foreign Affairs

(613) 995-1851

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca