Canada started signing free trade deals as far back as 1988 when it signed the Canada-U.S. Free Trade Agreement, which eventually grew into the North American Free Trade Agreement. Since then, this country has signed deals with 10 other countries and one principality and has agreements pending with Ukraine, Morocco and Korea, to name a few. Find the details below.
North American Free Trade Agreement
Population: Mexico, 111.2 million; United States, 306.6 million; Canada, 33.3 million.
GDP: Mexico, $1.4 trillion; United States, $14.1 trillion; Canada, $1.3 trillion.
GDP per capita: Mexico, $13,940; United States, $49,000; Canada, $40,300.
In 1987, Canada and the United States agreed to the Canada-United States Free Trade Agreement. Negotiations toward an FTA with the U.S. began in 1985. Sixteen months later, the two nations brought in an agreement that placed Canada and the United States at the forefront of trade liberalization.
Key elements of the agreement included the elimination of tariffs and the reduction of many non-tariff barriers. It was among the first trade agreements to address trade in services. It also included a dispute settlement mechanism for the fair and expeditious resolution of trade conflicts.
The historic expansion of the FTA to include Mexico (NAFTA) came into force in 1994. The NAFTA region is now home to more than 450 million people. Trilateral trade has soared since then. Merchandise trade has nearly tripled since NAFTA came into force in 1994, exceeding $1 trillion in 2008.
One in five jobs in Canada is linked to international trade. As such, the North American continental partnership is an important competitive advantage for Canada. The United States, which has largest and most diversified economy in the world, is a world leader in computers, medical equipment and aerospace, and in services including financial services and telecommunications, and agriculture. Mexico’s exports have diversified from primarily oil to include a wide array of manufactured products.
Canada-Israel Free Trade Agreement
Population of Israel: $7.3 billion
GDP: $222.5 billion
GDP per capita: $30,600
On July 31, 1996, Canada and Israel signed the Canada-Israel Free Trade Agreement, which became effective Jan. 1, 1997. It was Canada’s first free trade agreement outside the western hemisphere.
Israel is Canada’s fourth largest merchandise export market in the Middle East and North Africa. Bilateral merchandise trade in this goods-only agreement has more than tripled since its implementation in 1997 (from $507.3 million in 1996, to a record high of $1.8 billion in 2008).
In 2009, Canada’s exports totalled $353.2 billion, notably in machinery, electrical equipment, recorders, chemicals, paper and newsprint, plastics, wood and aluminium, iron, steel and associated products. Agricultural exports included vegetables, oil seeds, oil-producing fruits, grains, industrial or medicinal plants, straw and fodder.
Canada’s imports totalled $946.3 billion; top categories include chemicals, plastics, textiles, precision instruments, precious stones, metals, machinery, optical equipment, electrical, recording and television equipment.
The Canada-Israel Industrial Research and Development Foundation (CIIRDF) was established in 1994 to promote collaborative R&D between the countries.
Among CIIRDF’s projects are: 1) development of techniques to predict large earthquakes and minimize their damage, 2) creation of cars that provide better fuel economy while minimizing greenhouse gas emissions, 3) transformation of sea water into fresh water to address the global shortage of drinking water.
Canada-Chile Free Trade Agreement
Population of Chile: 7.1 million
GDP: $187.2 billion
GDP per capita: $11,020
Canadian-Chilean relations reached a milestone in 2007 with the 10th anniversary of the Canada-Chile Free Trade Agreement (CCFTA). Signed on Dec. 5, 1996, and implemented on July 5, 1997, the CCFTA is a comprehensive agreement that covers trade in goods and services, as well as a bilateral investment relationship. The CCFTA was Canada’s first Free Trade Agreement (FTA) with a South American country, while for Chile, it was the first comprehensive FTA concluded with any country.
Since the agreement entered into force, bilateral trade in goods has increased by 226 percent, growing from $718 million in 1997 to $2.34 billion in 2006. Bilateral trade in services reached $164 million in 2005 (the latest year for which statistics are available).
Canada’s exports to Chile fell in 2009, down from $644.4 million, a decrease of 11 percent from 2008, Canada’s imports from Chile also fell — to $1.7 billion — but not as drastically: a year-over-year decline of 3.5 percent. Canada’s Foreign Direct Investment in Chile retreated as well: a 13.6 percent decline, year-over-year, to $8.3 billion.
Since the implementation of the agreement, Canada’s bilateral merchandise trade with Chile has flourished and diversified. Two-way merchandise trade has more than tripled. The main Canadian exports to Chile include machinery, mineral fuels and oils, and cereals. Merchandise imports from Chile to Canada include precious stones and metals, copper, edible fruits and nuts (fresh grapes), and fish and seafood.
Canada-European Free Trade Association Agreement
Population: Iceland, 4.2 million, Norway, 4.6 million; Liechtenstein, 34,761; Switzerland, 7.6 million.
GDP: Iceland, $182.1 billion, Norway, $282.4 billion; Liechtenstein, $4.3 billion; Switzerland, $332.3 billion.
GDP per capita: Iceland, $43,300; Norway, : $60,630; Liechtenstein, $128,960; Switzerland, $44.040
On July 2, 2009, the free trade agreement (FTA) signed by Canada and the European Free Trade Association (EFTA) countries of Iceland, Liechtenstein, Norway and Switzerland, entered into force. Also entering into force at the same time were three associated bilateral agreements on agriculture with Iceland, Norway and Switzerland and a separate Canada-Switzerland bilateral agreement covering Liechtenstein.
The Canada-EFTA FTA was a “first-generation” agreement with an emphasis on tariff elimination. It did not include substantial new obligations in areas such as services, investment, and intellectual property.
The EFTA countries are significant economic partners for Canada. In 2008, two-way merchandise trade was valued at $13.2 billion, including Canadian exports of $4.2 billion. In addition, two-way investment trade with Norway and Switzerland reached $28.4 billion in 2008.
Together, the EFTA countries are the world’s 16th-largest merchandise trader and Canada’s seventh-largest merchandise export destination.
Canadian merchandise exports to the EFTA countries include nickel, precious stones and metals, pharmaceuticals, base metals and mechanical machinery. Canadian merchandise imports include mineral fuels and oils, pharmaceuticals, organic chemicals, mechanical machinery, and scientific and precision instruments.
In 2008, direct investment in Canada from Norway and Switzerland reached $18.4 billion. Canadian direct investment in those two countries reached $10.0 billion.
Canada-Colombia Free Trade Agreement
Population of Columbia: 44 million
GDP: $424 billion
GDP per capita: $9,700
The Canada-Colombia Free Trade Agreement (along with companion labour and environment agreements) has received royal assent. Canada has now completed its domestic approval process for these agreements. Once Colombia has completed its processes, the two countries can decide when they will come into force.
On Nov. 21, 2008, Stockwell Day, then-minister of International Trade, signed the Canada-Colombia Free Trade Agreement (FTA). This was the third FTA signed by Canada in 2008 and Canada’s sixth FTA with a country in the Americas.
Colombia is a dynamic emerging market with an economy with high-growth potential. Canadian investors and exporters are entering the Colombian market in greater numbers. In 2008, two-way merchandise trade between Canada and Colombia totalled more than $1.3 billion, with hundreds of Canadian companies doing business with Colombia. Colombia is also a strategic destination for Canadian direct investment (mining, oil exploration, printing and education).
Once implemented, the FTA with Colombia will stimulate the growth of Canada’s commercial relationship and help level the playing field for Canadian business vis-à-vis competitors who have or are seeking preferential market access in Colombia.
Canada’s merchandise exports to Colombia (worth $708.3 million in 2008) include wheat, off-road dump trucks, newsprint, copper wire, potassium chloride, lentils and barley. Canada’s service exports add another $130 million. This includes services related to mining, oil and gas, engineering, environmental, information and communication sectors.
Canada’s imports from Colombia (worth $643.7 million in 2008) include coffee, bananas, coal, oil, sugar and flowers.
Canada announced in 2002 that it would seek a FTA with Colombia. The government launched extensive consultations with business, citizen-based organizations as well as with provincial and territorial governments — which indicated broad support for a FTA with Colombia.
Canada-Jordan Free Trade Agreement
Population of Jordan: 5.9 million
GDP: $24.1 billion
GDP per capita: $45,480
On June 28, 2009, Stockwell Day, then-minister of International Trade, signed the Canada-Jordan Free Trade Agreement with his counterpart, Jordan’s minister of Trade Amer Hadidi. On March 24, 2010, the government tabled legislation to implement the agreement. Once this legislation is passed, the government will work with Jordan to implement it.
Canada’s two-way merchandise trade with Jordan is now $82.5 million. Canada’s exports in 2009 ($65.8 million) included vehicles, forest products, machinery, pulse crops (mainly lentils and chickpeas), ships and boats and plastics.
Canada’s merchandise imports from Jordan ($16.6 million) included knit and woven apparel, precious stones and metals (mainly jewelry, vegetables and inorganic chemicals.
Once implemented, the FTA will expand Canada-Jordan trade and help further strengthen the bilateral relationship. This agreement demonstrates the importance that Canada places on further developing relations with Jordan, especially given its role as a moderate Arab state that promotes peace and security in the Middle East.
An FTA with Jordan was undertaken as part of the government’s broader strategy to strengthen the competitiveness of Canadian companies in global markets. Canada and Jordan already enjoy good economic and trade relations. In addition to the FTA, Canada has a bilateral air services agreement and a nuclear cooperation agreement, as well as a FIPA agreement (Foreign Investment Promotion and Protection Agreement), which was signed at the same time as the FTA.
Canada-Peru Free Trade Agreement
Population of Peru: 28 million
GFD: $133.9 billion
GDP per capita: $8,980
On May 29, 2008, Helena Guergis, then secretary of state for Foreign Affairs and International Trade, signed the Canada-Peru Free Trade Agreement (FTA).
On March 26, 2009, the government introduced legislation in the Commons to implement the Canada-Peru Free Trade Agreement (and its companion labour and environment agreements) which formally went into effect in August 2009.
In 2008, two-way merchandise trade between Canada and Peru totalled more than $2.8 billion, with hundreds of Canadian companies doing business with Peru. Peru is also a strategic destination for Canadian direct investment (mining and financial services).
The FTA with Peru will stimulate the growth of Canada’s commercial relationship and help level the playing field for Canadian business vis-à-vis their competitors who may be benefiting from preferential market access terms in these markets.
In 2008, Canada’s exports to Peru were worth $390.8 million, mostly cereals, pulses, paper, technical instruments and machinery. Canada’s imports from Peru — gold, zinc and copper ores, oil, animal feed and vegetables — were worth $2.5 billion. Canadians already invest heavily in Peru, $2.35 billion in 2008.
The removal of barriers that limit Canadian participation in a growing market should increase Canadian exports to Peru. Tariffs have been eliminated on a range of sectors including mining, agriculture and agri-food products.
Canada-Panama Free Trade Agreement
Population of Panama: 3.5 million
GDP: $26.2 billion
GDP per capita: $12,800
On May 14, 2010, Canada and Panama signed the Canada-Panama Free Trade Agreement (FTA). The agreement must still be approved by the parliaments of both countries before it can go into effect.
Panama is an established market for Canada, and the bilateral trade and investment relationship has strong potential for long-term growth. In 2009, bilateral merchandise trade between Canada and Panama totalled $132.1 million, with Canadian exports accounting for $91.4 million and imports totalling $40.7 million.
Once implemented, the FTA will benefit Canadian exporters in numerous sectors through the elimination of Panamanian tariffs. Those sectors include agriculture and agri-food products; pharmaceuticals; wood, pulp and paper products, electrical and industrial machinery, vehicles and auto parts, information and communication technology, aerospace, plastic products, fish and seafood, and iron and steel products.
In 2008, Panama had one of the highest real gross domestic product (GDP) growth rates in the Americas at 10.7 percent. Despite the global economic downturn, Panama posted positive growth in 2009 at 2.4 percent, and real GDP is expected to rise further in 2010.
As home to the Panama Canal, Panama plays a pivotal role in the flow of goods around the world. Expansion of the canal is underway and is slated to be completed by 2014 at a projected cost of US$5.3 billion.
Canada-Costa Rica Free Trade Agreement
Population of Costa Rica: 4.5 million
GDP: $51.2 billion
GDP per capita: $11,500
The Canada-Costa Rica Free Trade Agreement (CCRFTA) and two parallel accords on environmental and labour cooperation entered into force on Nov. 1, 2002. The negotiations took only nine months. The agreement itself was signed by both trade ministers April 23, 2001. It was approved in the Commons Sept. 20, 2001 and received royal assent Dec. 18, 2001.
The agreement eliminated tariffs on most industrial products. This includes some key Canadian export interests such as automotive goods, environmental goods, pre-fabricated buildings and some construction products, such as steel structures.
Canadian companies realized significant competitive gains immediately with such products as French fries, pulses, grains and oilseeds products, fresh fruit and vegetables and processed food products. About 94 percent of Canada’s current agriculture and agri-food exports to Costa Rica gained superior market access. Tariffs have been eliminated gradually in a process that could take another few years to complete.
As usual in Canada’s trade agreements, beef and supply-managed dairy, poultry and egg products were exempt from tariff reductions — as were cultural industries.
Strategically, Canadian exporters have gained an important advantage over their principal competitors in the Costa Rican market, including U.S., European and Asian suppliers, as well as, ultimately, a level playing field with Costa Rica’s other preferential trade partners, such as Mexico and Chile.
