The Free Trade Agreement between Colombia and Canada will enter into force on August 15, 2011. The FTA will reduce and remove tariff and non-tariff benefits to trade and investment, which will generate new opportunities and benefits for both Canadian and Colombian businesses.
The Colombian Ministry of Foreign Affairs and the Canadian Department of Foreign Affairs and International Trade engaged in the “exchange of notes,” where each government indicated its readiness to move forward with implementation of the agreement. The exchange of notes took place this week, paving the way for implementation of the Colombia-Canada FTA on August 15.
The Colombia-Canada FTA was signed on November 21, 2008. The governments of Colombia and Canada also signed three parallel agreements on the Environment, Labor and Human Rights. In Canada, the approval process was completed following the Royal Assent obtained on June 29, 2010. In Colombia, the approval process reached its final stage when each of the parallel agreements were approved by Congress and reviewed by the Constitutional Court.
Background on the FTA
Between 2009 and 2010, without a FTA, exports from Colombia to Canada increased 38 percent. In 2010, bilateral trade accounted for more than $1.3 billion.
With the implementation of the FTA, Colombia will eliminate tariffs on 98 percent of Canadian goods, in some cases immediately and in others over a five- to 10-year period. Canadian products that will enjoy immediate duty-free access to the Colombian market include wheat, barley, lentils, peas, beef, paper products and machinery and equipment. Colombia will also eliminate the use of its price band system on selected products, including wheat, barley and pork.
Colombian manufacturers, exporters and producers will have opportunities to increase their exports to the Canadian market. Colombia’s top imports to Canada include coal, coffee, crude oil and bananas. Other Colombian products with high export potential are cocoa and chocolate goods, oils and derivatives, shrimp and meat. Auto parts and apparel also have the potential to increase through the FTA.
The agreement will provide enhanced market access for Canadian service sectors, including infrastructure, mining, energy and professional services. The FTA commits Canada and Colombia to comprehensive disciplines for the financial services sector, including banking, insurance and securities.
Canada is one of the top 10 sources of Foreign Direct Investment (FDI) worldwide. The agreement will guarantee market access for Canadian investors in Colombia, and provide them with greater stability, transparency and protection for their investments. The two-way investment flows between Canada and Colombia will be promoted through reciprocal commitments in sectors such as mining, energy, telecommunications and paper products.
Canada is a country that is recognized for its leadership in protecting human rights and has decided to back the FTA with Colombia. Both countries have committed to ensuring their laws respect the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work through the Labor Cooperation Agreement. Canada is also offering its resources and expertise to help Colombia fully implement this agreement.
Colombia has some of the most diverse biological resources in the world, and Canada is committed to working with Colombia to protect and preserve these resources through the Environment Agreement. Pursuing high levels of environmental protection and effectively enforcing domestic laws and policies in order to increase trade and investment are part of the aims of this agreement. In addition, Colombia and Canada will strengthen cooperation on mutually important hemispheric environmental issues.
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