Free Trade Area of the Americas
18 June 1998
The Free Trade Area of the Americas
The following is excerpted from the Department of Foreign Affairs and International Trade news release No. 160. The news release is available in its entirety at http://www.dfait-maeci.gc.ca.
The 1994 Miami Summit of the Americas created a broad blueprint for greater economic, political and social co-operation among the nations of the Western Hemisphere. An integral part of this blueprint was the Free Trade Area of the Americas (FTAA). In April 1998, Prime Minister Chrétien and leaders from 33 other countries launched negotiations on the FTAA at the second Summit of the Americas in Santiago, Chile. Canada was chosen to chair negotiations for the first 18 months. Leaders also endorsed several important decisions reached by their trade ministers the month before the Summit. Negotiating groups should begin their work by the end of September 1998.
Nine negotiating groups were established on: market access; agriculture; investment; services; government procurement; intellectual property rights; subsidies, antidumping and countervailing duties; competition policy; and dispute settlement. Negotiations would proceed simultaneously in all areas, and Miami was chosen as the initial venue for the negotiations.
From 1991 through 1997, Canadian exports to Latin America and the Caribbean more than doubled from $2.8 billion to $6.4 billion. Canada now exports more to Latin America and the Caribbean than to Germany and France combined. The economies of Latin America and the Caribbean have come of age, and the Americas is now a market of more than 700 million people.
The FTAA would result in common rules across the hemisphere, making it easier and less bureaucratic to do business as well as discouraging corruption. It would also protect substantial Canadian investments and open new markets to Canadian goods by lowering or eliminating high tariffs or other barriers now applied to them. The FTAA would further open up the dynamic, fast-growing economies of the Americas to small-and medium-sized Canadian firms ù the source of most new jobs in Canada.
The FTAA would also help countries of the region to reap the social benefits of free trade. Unlocking the potential of the region will generate more prosperity, and can help governments fund their social agendas. Negotiations on the FTAA are slated to begin in the fall of 1998, and are expected to last seven years.
Canada will safeguard its vital interests in such areas as culture, health care, education, social programs, the environment, labour standards, our supply management regime and management of natural resources. The FTAA will co-exist with the North American Free Trade Agreement (NAFTA), the Canada-Chile Free Trade Agreement and other regional or bilateral arrangements.
Mercosur
The Southern Cone Common Market (Mercosur) was created in Paraguay in March 1991 with the signing of the Treaty of Asunci n by Argentina, Brazil, Paraguay and Uruguay.
Mercosur is an integrated market of some 240 million people. Its gross domestic product (GDP) is about $1.4 trillion, approximately one-eighth of the GDP of the NAFTA countries. Its nations' per capita income is 30 per cent higher than that of Latin America as a whole. Mercosur has reached free trade agreements with Chile and Bolivia, as well as a co-operation agreement with the European Union. Discussions are underway with the Andean Pact countries and Mexico.
Mercosur is Canada's largest trading partner in Latin America. From 1994 through 1996, two-way trade with Mercosur nations increased by just over 30 per cent, reaching $3 billion. By the end of 1997, two-way trade had reached $3.5 billion, a further increase of 17 per cent. Major Canadian exports to Mercosur countries are paper, wheat, potash, petroleum products, coal, aircraft parts, machinery, telecommunications equipment, chemicals and heavy machinery.
A variety of Canadian business sectors would benefit from an enhanced trade and investment relationship with Mercosur, such as agriculture/agr