What Does the Pacific Alliance Mean for Canadian Trade and Investment?
Canada in the Hemisphere Perspective Paper
May, 2015
What Does the Pacific
Alliance Mean for
Canadian Trade and
Investment?
By Barbara Kotschwar
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Canada in the Hemisphere Perspective Paper
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
Table of Contents
Executive Summary................................................................................................................................................... 3
1. Introduction.......................................................................................................................................................... 3
2. Basics of the Alliance............................................................................................................................................ 4
3. What makes the Alliance different from other Latin American trade and integration initiatives?............................. 5
4. How does the Alliance fit into international trade trends?...................................................................................... 8
5. Canada’s economic relationship with Alliance countries ....................................................................................... 9
6. How does the Alliance agreement compare to Canada’s FTAs with Alliance members?........................................ 10
7. What are the benefits of the Alliance to Canada and Canadian business?............................................................ 12
8. Should Canada join the Alliance?........................................................................................................................ 13
9. What should Canada do?.................................................................................................................................... 14
References................................................................................................................................................................ 15
List of Tables
1. Table 1. Alliance countries: economic indicators.................................................................................................... 4
2. Table 2. Common external FTA partners of Alliance members (and date of implementation).................................. 5
3. Table 3. Participation in plurilateral agreements.................................................................................................... 8
4. Table 4. Canada’s top exports to Alliance members............................................................................................. 10
List of Figures
1. Figure 1. Alliance Members and observers............................................................................................................ 7
2. Figure 2. Canada’s FDI in Latin America as a percent of total FDI........................................................................... 9
3. Figure 3. Canada’s exports to Latin America 2000-13 (in billions of $US)............................................................... 9
4. Figure 4. Comparison of coverage in bilateral FTAs versus Alliance..................................................................... 11
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
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Canada in the Hemisphere Perspective Paper
2
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
Executive Summary
The Pacific Alliance (Alliance), a trade pact between Chile, Colombia, Mexico and Peru, aims to liberalize
and harmonize the movement of labour and capital. The Alliance does not aim to invent the next
generation of trade rules. Its main impact will be the creation of a more harmonized and simplified set of
rules of origin, administrative procedures and rules on procurement and trade in services.
The Alliance presents several benefits for Canadian business. Softening borders and lowering costs of
doing business in the region can help Canadian firms capture a larger market and make more efficient
use of their resources. Eliminating the barriers to the movement of labour, particularly educated young
professionals, can enhance the pool of qualified talent available to Canadian companies. Combining
capital markets into the Integrated Latin American Market (MILA) will bring efficiencies to the listed firms.
It is unclear that joining the Alliance should be a priority for Canada. Even if Canada were disposed to
join the Alliance, its current visa policies would cripple its entry.
There are a number of measures other than joining the Alliance that Canada can take to advance the
goals of the Alliance and Canadian interests. It should review its visa policies with Alliance countries.
The current policies not only increase the cost to Canadian business and inhibit commerce but have
also become a major irritant in the political relationship between Canada and the Alliance countries,
particularly Mexico. Lifting the visa requirement for Chileans was a positive step. Canada can also
negotiate to harmonize Canadian bilateral Free Trade Agreements (FTA) with the Alliance countries,
provide technical assistance in trade policy, regulatory harmonization and legal structuring.
1. Introduction
The Alliance has reignited the hope of free trade
and economic integration advocates across the
hemisphere. It is lauded for its innovations as well
as the potential model it provides for the entire
hemisphere. This paper presents the Canadian
perspective on the Alliance with particular emphasis
on implications for Canadian trade and investment
in the Alliance region and the hemisphere.
Trade policy among the countries of the hemisphere
has generally been split following the unofficial death
in 2005 of the Free Trade Area of the Americas
(FTAA) initiative. Two policy camps then emerged.
The “open regionalist” countries, clustered along
the Pacific coast of the Americas, favour liberalizing
regional trade policies. The “restricted-regionalist”
countries have shown little interest in integrating
into the global economy. The largest members of
the Common Market of the South (MERCOSUR),
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2
3
4
5
3
Argentina, Brazil, and Venezuela, and soon-to-be
member Bolivia, have all applied a greater degree
of state intervention in their economies, exhibiting
varying shades of “twenty-first century socialism.”
Smaller members Paraguay and Uruguay have
pursued less protective economic policies but their
aspirations to pursue bilateral trade agreements
are hamstrung by the customs-union doctrine of
MERCOSUR, which forces them to follow Brazil
and Argentina’s lead on trade policy.2
With the FTAA’s demise, the restricted regionalist
countries have increasingly focused on internal
markets. The open regionalist countries, on
the other hand, have responded by negotiating
additional FTAs, both bilateral and multilateral. The
most intriguing trade initiative that has emerged from
this response is the Alliance, a group comprising
the four founders – Chile, Colombia, Mexico and
Peru. Costa Rica3 and Panama4 are classified as
candidates to join and Guatemala5 has expressed
an interest in becoming a member.
Barbara Kotschwar, a native of Yukon, is a Research Fellow at the Peterson Institute for International Economics in Washington, D.C., and Adjunct Professor at Georgetown University. The
paper was edited by Kenneth Frankel and Marta Blackwell. The author and editors thank Laura Dawson, Ricardo Duarte Duarte, Eric Miller, John Price and Arturo Sarukhán for their insightful
comments on an earlier version of the manuscript.
A customs union is a higher level of integration than a free trade area. In addition to liberalizing trade with each other, members also adopt a common external tariff (CET) and harmonize
trade policies. This means that, strictly speaking, members are unable to pursue an independent trade policy or negotiate trade agreements with third parties without agreement of the group.
NAFTA, on the other hand, is a free trade agreement, in which all parties are free to set their own tariffs vis-à-vis non-FTA members and to formulate their trade policy.
Although Costa Rica signed the Declaración sobre el Proceso de Adhesión de la República de Costa Rica a la Alianza del Pacífico, declaring its intention to join in February 2014
under then-President Chinchilla, President Solís is reviewing whether Cost Rica will join. This document can be found at www.comex.go.cr. In addition, the FTA between Costa Rica
and Colombia still requires legislative and judicial review in Colombia.
Panama has FTAs with Chile, Peru and Mexico. The Panama-Colombia FTA awaits final legislative approval in Panama and legislative approval and judicial review in Colombia.
At the Alliance’s Summit in Cali in 2013, Guatemala eliminated visa requirements for citizens of Colombia and Peru as part of its efforts to become a candidate observer country,
which would take it one step closer to becoming a member. In addition, the coming into force of the FTA between Guatemala and Peru is being held in abeyance because of a
current trade dispute at the WTO. See WTO website at: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds457_e.htm.
Canada in the Hemisphere Perspective Paper
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
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What Does the Pacific Alliance Mean for Canadian Trade and Investment?
2. Basics of the Alliance
The Alliance was formally launched in June 2012,
when the four founders signed an agreement
establishing a framework for a new trade and
economic integration block.6 The Alliance’s
objectives are to:
1. Build, in a participatory and consensual manner,
an area of deep economic integration and to
move gradually toward the free circulation of
goods, services, capital and persons;
2. Promote the larger growth, development and
competitiveness of the Parties’ economies,
aiming at achieving greater welfare, overcoming
socio-economic inequality and achieving greater
social inclusion of their inhabitants;
3. Become a platform for political articulation and
economic and trade integration, and to project
these strengths to the rest of the world, with a
special emphasis on the Asia-Pacific region.7
The Alliance’s legal framework consists of two
documents: (1) the 2012 Framework Agreement,
which sets out the principles and objectives of
the Alliance; and (2) the Additional Protocol to
the Framework Agreement, which sets out the
conditions of the trade agreement. The Additional
Protocol was signed by all four founders on February
10, 2014. The agreements are expected to come
into force in mid-2015, once all of the countries have
fulfilled their domestic legal requirements.8
If the Alliance were a country, it would be the eighth
largest economy in the world. As Table 1 illustrates
the Alliance encompasses over 200 million
consumers, just under 40 percent of Latin America’s
population and total GDP. The Alliance countries
account for over half of Latin America’s exports and
imports and a third of its 2013 FDI inflows. Average
GDP growth over the past five years has been close
to 5 percent per year.
The Alliance will have some but not an
overwhelming impact on trade among its
members. A condition for Alliance membership is
that each country must already have in force a free
trade agreement with each of the other members,
so most trade barriers among them have already
been liberalized.9 The Alliance eliminates tariffs
Table 1. Alliance countries: economic indicators
GDP, 2014
(billions $US)
Average GDP
growth 2010-14
Per capita GDP
2014 ($US)
Population
2014 (millions)
Exports, 2013
(in billions $US)
Imports, 2013
(in billions $US)
FDI stock, 2013
(billions $US)
FDI inflows, 2013
(billions $US)
Chile
258
4.9
14911
18
77
79
215
20
Colombia
384
4.7
8394
48
59
58
128
17
Member
Mexico
1282
3.4
10837
120
380
381
389
38
Peru
203
6.5
6625
31
42
43
74
10
Alliance
2127
4.9
10192
217
557
562
806
85
Costa Rica*
48
4.4
10568
5
11
18
22
3
Panama*
40
8.9
10490
4
1
11
31
5
Argentina
Brazil
540
4.9
12873
42
77
74
112
9
2353
3.1
11604
202
242
240
725
64
Paraguay
30
6.8
4304
7
9
12
5
0
Uruguay
55
5.3
16198
3
9
12
20
3
Venezuela
205
1.8
6756
30
88
45
56
7
MERCOSUR
2643
5.1
9715.5
243
349
308
806
74
LAC
5800
3.1
9618
603
1052
1043
2569
292
36
53
54
31
29
Alliance as % of LAC
37
Source: Source: International Monetary Fund, World Economic Outlook Database, April 2015; COMTRADE data through WITS; UNCTAD World Investment Report
*Alliance candidate member and not included in economic indicators of the Alliance or MERCOSUR.
6
7
8
9
For more on the origins and history of the Alliance, see Dade and Meacham.
See the Alliance website at: http://alianzapacifico.net/en/home-eng/the-pacific-alliance-and-its-objectives/.
Mexico ratified the agreement in November 2012. Chile and Peru ratified it in July 2013. The agreement was first passed by the Colombian Congress through Law 1628 of
2013 but the Constitutional Court declared it unconstitutional because it was approved without two articles of the Framework Agreement. The Framework was again passed by
Congress through Law 1721 of June 24, 2014, updating Law 1628 of 2013. The Additional Protocol was passed by Congress through Law 1746 of December 26, 2014. Final
constitutional revision of both laws is still pending in Colombia’s Constitutional Court in order to complete internal approval procedures. The agreement will go into force 60 days
from the day Colombia deposits the ratification instrument.
Colombia and Peru have a free trade agreement through their membership in the Andean Community customs union; the Chile -Mexico FTA has been in force since 1999; the
Chile-Colombia and Chile-Peru FTAs have been in force since 2009; Colombia and Mexico signed the G-3 agreement with Venezuela, which came into force in 1995. (Venezuela
subsequently left the agreement in 2006); the Mexico-Peru FTA has been in force since 2012.
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
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Canada in the Hemisphere Perspective Paper
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What Does the Pacific Alliance Mean for Canadian Trade and Investment?
on 92 per cent of goods and sets a schedule for
getting rid of the remaining 8 per cent. This latter
tranche consists mainly of agricultural goods
(mainly rice, corn and beans) that were excluded
or subject to long phase-out periods in the original
bilateral FTAs, and which are now subject to a
common phase-out schedule ranging from five
to 17 years.10 Sugar is the only product excluded
from the agreement.
The Alliance’s main impact will be in the creation
of a more harmonized and simplified set of rules
of origin, administrative procedures and rules on
procurement and trade in services.
Alliance countries agree on the fundamental principles
of liberal trade policy and are committed to forging
trade links with their major trading partners. As
Table 2 illustrates, they already enjoy a common
set of external trade agreements. All member
countries have a free trade agreement with the
US, Canada, the EU and European Free Trade
Association (EFTA) countries and a framework
tariff elimination agreement with MERCOSUR.
Additionally, Chile and Peru each boast a network
of FTAs with important Asian trading partners,
including China, Japan, Korea and Singapore.
Colombia is negotiating an FTA with Japan.
Table 2. Common external FTA partners of Alliance members (and date of implementation)
Chile
Colombia
Mexico
Peru
Chile
Colombia
Mexico
Peru
US
Partner
A
A
A
A
EU
A
A
A
A
Canada
A
A
A
A
EFTA
A
A
A
A
Costa Rica
A
B***
A
A
Turkey
A
C
C
C
El Salvador
A
A
A
C
Israel
C##
B***
A
A
Guatemala
A
A
A
B*
Honduras
A
A
A
C
China
A
Nicaragua
A
Japan
A
C
A
A
Korea
A
B***
D
A
Singapore
A
C
A
Malaysia
A
C
C
A
Thailand
B***
Vietnam
A
C
C
Australia
A
C
C
New Zealand
A
C
C
Brunei
A
C
C
Panama
A
A
B***
A
MERCOSUR
A
A
Venezuela
A
A
B**
Ecuador
A
A
A
Bolivia
A
A#
A
A
A
Partner
A
A
Source: SICE
Note: A=in force; B=signed, but not yet in force; C=under negotiation; D=exploratory talks. (See also footnotes 3 to 5 infra for more detail on approval process of FTAs
between Alliance members and Costa Rica, Guatemala and Panama.)
Italics denote framework agreement
• * signed in 2011; ** signed in 2012; *** signed in 2013; **** signed in 2014
• # Mexico has a partial-scope agreement covering the auto sector with Brazil, implemented in 2003, and one with Argentina that was suspended in 2012 for three
years; ## suspended in 2014.
3. What makes the Alliance different from other
Latin American trade and integration initiatives?
Latin America has long been a laboratory for
regional trade arrangements.11 Latin American
countries were among the earliest and the most
intensive users of regional trade agreements
10
11
5
(RTAs). From the customs unions of the 1960s
and 1970s, which tried to bring together countries
pursuing import substitution policies and protect
them from competition with high regional tariff
walls, to the “spaghetti bowl” of bilateral and
plurilateral FTAs in the 1990s, the region has
actively pursued both small- and large-scale
regionalism.
See Perry (2014), Table 2, for an analysis of the phase-out periods in the additional protocol. http://www.cgdev.org/sites/default/files/pacific-alliance-way-forward-latin-americanintegration.pdf
The Andean Pact, the Central American Common Market (CACM) and Caribbean Community and Common Market (CARICOM) of the 1960s and 1970s yielded to the open
regionalism of the 1990s. Open regionalism brought NAFTA, MERCOSUR, the Andean Community and the numerous bilateral FTAs signed by Chile and Mexico that utilized
NAFTA concepts throughout the region.
Canada in the Hemisphere Perspective Paper
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What Does the Pacific Alliance Mean for Canadian Trade and Investment?
The Alliance differs from these previous trade
initiatives in several key ways:
1. It advances liberalization by using a pragmatic
approach. The Alliance is market-oriented
but not tied to traditional approaches. For
example, its trade negotiators abandoned the
“single undertaking” principle that constrained
the FTAA’s progress by insisting that
negotiators agree on an entire comprehensive
package of disciplines.12 Instead of waiting for
the entire agreement to be completed and
undertaken, the Alliance has moved forward
where possible, harmonizing existing trade
and investment commitments and common
disciplines. It defers further liberalization
in, for example, services and government
procurement. Unlike MERCOSUR or the
Andean Community, the Alliance does not
aspire to harmonize trade policy or adopt a
common external tariff – an approach that
has made these other integration initiatives
complicated and inflexible.13 Unlike the TransPacific Partnership (TPP) mega-regional trade
pact, the Alliance does not aim to invent the
next generation of trade rules, but instead
focuses on undertaking all steps currently
possible to open markets.
2. Unlike the Andean Community, whose
supranational institutions promulgate decisions
that become part of members’ trade policy,
or MERCOSUR, whose institutions include
a Secretariat, trade-related decision-making
bodies and a Parliament, the Alliance has – at
least for now – kept its institutional structure
light and focused on trade and investment.
3. The Alliance aims to liberalize and harmonize
the movement of labour and capital in several
ways by merging members’ stock exchanges,
allowing freer movement of people, and
sharing trade promotion resources. This far
exceeds the level of liberalization that was
envisioned by the FTAA. It goes further in
some respects than trade agreements such
as North American Free Trade Agreement
(NAFTA) or even the recent US-Korea FTA,
whose provisions are the basis of several of
the negotiating positions of the US in the TPP
process.
12
13
14
a. The Alliance’s members have eliminated
visa requirements for nationals from
other member countries to spur crossborder trade and investment and the
development of commercial networks.
One analyst estimates that requiring
visas from nationals of a country’s
trading partner lowers bilateral trade
and foreign direct investment by up
to 19 and 25 per cent, respectively.14
Even if this estimate is high, such
findings suggest that eliminating
visas is more than just a signal to
investors of the region’s commitment
to open markets. And Alliance
leaders are going beyond eliminating
travel visas for an important portion
of the workforce. At their June 2014
meeting, in Punta de Mita, Mexico,
the member countries developed
a “working holiday” visa program
for young people, allowing citizens
aged 18 to 30 to live and work within
other member countries for up to a
year. The program, scheduled to take
effect in August 2015, could help the
countries address the problem of
youth unemployment, create a larger
pool of trained talent and promote
integration by creating a network of
trained professionals attuned to the
regional labour market.
b. The Alliance has emerged in parallel
with the MILA, a private sector initiative
that combines into one regional
stock exchange the exchanges
of Chile, Colombia, Peru and, as of
December 2014, Mexico. MILA boasts
a market capitalization of about $1
trillion, representing 798 companies.
This represents approximately 50
per cent of the domestic market
capitalization of Latin America,
slightly greater than Brazil’s exchange
(BOVESPA). The MILA includes over
half of the companies listed on Latin
American stock exchanges, including
more than 85 per cent of the foreign
The single-undertaking approach is employed in the WTO and was used in the FTAA negotiations. Under this approach, countries agree on the set of disciplines that will be
negotiated as part of an indivisible package, acceptance of which is contingent upon all participants accepting all of the parts of the package; countries cannot pick and choose to
sign on to some parts of the agreement but opt out of others.
MERCOSUR members, for example, are not able to negotiate free trade agreements with third countries. They must wait until all members agree to do so, which helps explain
MERCOSUR’s thin record of trade agreements.
Eric Neumayer, “On the detrimental impact of visa restrictions on bilateral trade and foreign direct investment,” Applied Geography 31: 901–7.
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What Does the Pacific Alliance Mean for Canadian Trade and Investment?
companies. While the MILA is a
private-sector initiative, the Alliance
countries are studying ways that they
can harmonize factors around it, such
as tax treatment.
c. Member countries are sharing embassies
and trade-promotion agencies.15
4. Alliance members must have an existing
free trade agreement with all of the current
members and must accept all current and
future Alliance obligations.
5. The Alliance includes a democracy clause
(Article 2) that requires member countries to
maintain democratic rule with the separation
of powers and the protection, promotion and
guarantee of human rights and fundamental
liberties.16
6. The Alliance is flexible in its membership,
admitting new members if they meet its criteria.
Unlike the TPP, which restricts participation to
current Asia-Pacific Economic Cooperation
(APEC) members, the Alliance has not set any
additional geographic or other membership
requirements.17
7. For these reasons, the Alliance has attracted
considerable international attention. Thirty-two
countries have signed up thus far as observers.
As Figure 1 demonstrates, the observer
countries are drawn from all continents and
include Canada, the US, China, India, most
European countries and many Latin American
neighbours.18 The role of the observers has
not yet been fully defined. At their summit in
Mexico in June 2014, members began to
define a cooperation agenda for the observer
countries, prioritizing projects in education,
trade, small- and medium-size businesses,
innovation, science and technology, and
infrastructure.
8. It promotes ongoing dialogue with the
business community through the Pacific
Alliance Business Council (CEAP), which
provides input and promotes the implementation
of Alliance goals The Council has thirteen
priority areas, including financial integration, tax
rules, standards, production chains, logistics,
competitiveness and innovation.
9. It further distinguishes itself from non-Alliance
members in the region by sending a strong signal
Figure 1. Alliance Members and observers
Alliance Member
15
16
17
18
7
Observer Country
Candidate Member
So far, joint embassies have been established among the four countries in Ghana, by Chile and Colombia in Algeria and Morocco, and joint diplomatic representation to the OECD,
by Chile, Colombia and Mexico in Azerbaijan and Singapore, and by Colombia and Peru in Vietnam. Colombia will share embassy space with Spain in countries in which neither
country has diplomatic representation. (Spain, an Alliance observer country, has also offered to share diplomatic space with other Alliance countries in those countries where
Alliance signatories do not have diplomatic representation. Kazakhstan and Ethiopia have been mentioned as examples.)
MERCOSUR contains a democracy clause, but its application has come under criticism in light of its suspension of Paraguay in 2012 following the impeachment of Paraguayan
President Fernando Lugo. Unlike MERCOSUR, the Alliance emphasizes the importance of separation of powers.
See Kotschwar and Schott on the implications of APEC membership on the TPP and the Alliance.
Observer countries, as of May 7, 2015, are Australia, Belgium, Canada, China, Costa Rica (in the process of becoming a full member), Dominican Republic, Ecuador, El Salvador,
Finland, France, Germany, Guatemala, Honduras, India, Israel, Italy, Japan, Morocco, Netherlands, New Zealand, Panama (in the process of becoming a full member), Paraguay,
Portugal, Singapore, South Korea, Spain, Switzerland, Trinidad and Tobago, Turkey, United Kingdom, US, Uruguay; the Alliance has also initiated a dialogue with the Association
of Southeast Asian Nations (ASEAN). The first meeting of ministers of the Alliance and ASEAN was held in New York in September 2014 to explore ways to promote trade,
investment and cooperation between the two.
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What Does the Pacific Alliance Mean for Canadian Trade and Investment?
to foreign investors that Alliance countries are
open-trade regimes and attractive investment
destinations. It reinforces the fact that these
countries consistently rank more favourably
on “doing business” and competitiveness
indicators.
4. How does the Alliance fit into international
trade trends?
The Alliance has emerged during a time of slow
movement in the multilateral trading system and
in which two mega-regional trade pacts are being
negotiated: the TPP, which aims to unite twelve
countries in the Asia-Pacific region, and the
Transatlantic Trade and Investment Partnership
(TTIP), a trade agreement between the US and
the European Union.19 The TPP and the TTIP
aim to deepen trade and investment ties with
partner countries, to set a precedent for broader
multilateral negotiations and to create new trade
rules in areas not yet covered by WTO obligations.
Three Alliance members (Chile, Mexico and Peru)
are negotiating in the TPP. Neither Colombia nor
soon-to-be member Costa Rica is involved in the
TPP negotiations because the process is limited to
current APEC members. Colombia’s 1995 request
to join has been held up by APEC’s decadeslong moratorium on new membership. Malaysia
was the last country to join, in 1998. The Alliance
therefore groups TPP members together with
non-TPP members, creating a hybrid composition
that will be extended further if Panama (a nonTPP member) is admitted. The APEC (hence
TPP) members have gained improved access
to external markets, while those that have been
left out of APEC have pursued priorities that are
somewhat different. To consolidate the Alliance’s
identity and purpose, the three nations that are
members of both institutions will likely push to
have Colombia and Costa Rica – assuming it fully
joins the Alliance – invited into the TPP as its first
non-APEC members.
Even if all Alliance members were to join the
TPP, the Alliance’s reason for being would not
be diminished. Unlike the Alliance, the TPP
does not envision, for example, free movement
of labour, visa elimination, sharing of diplomatic
resources, or stock-market harmonization.
No Alliance members are included in the TTIP,
the FTA being negotiated between the US and
Europe, nor were they part of the Comprehensive
Economic and Trade Agreement (CETA),
Canada’s agreement with the EU, which has been
completed and signed but is not yet in force. Once
enacted, both of these agreements will have an
impact on the Alliance. As Table 2 indicates, all
members have existing agreements with Canada,
the US and the EU. A US or Canadian deal with
the EU, particularly with respect to harmonizing
standards in key areas, could either provide
opportunities for non-party goods or serve as
trade barriers to non-complying goods. It is also
likely that for some goods these new EU FTAs will
erode existing preferences.
Alliance countries are also the most active Latin
American countries at the multilateral level, taking
part in the new plurilateral talks, particularly the
Trade in Services and Information Technology
Agreement (See Table 3).20 These multilateral rules
will set the standard for twenty-first century trade
and could widen the gap even further between
the Alliance and the rest of Latin America.
Table 3. Participation in plurilateral agreements
Alliance
Information Technology Agreement (ITA)
Trade in Services Agreement (TISA)
Agreement on Environmental Goods
19
20
Colombia, Peru
Chile, Colombia, Mexico, Peru
Other Western Hemisphere
Canada, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Honduras, Nicaragua, Panama, US
Canada, Chile, Costa Rica, Panama, Paraguay, Peru, US
Canada, Costa Rica, US
The terms of this agreement could present issues for Canadian investors in the Alliance countries if (1) the US and the EU harmonize standards and the new standards are different
from those used in Canada or the Alliance; and (2) Canadian investors in companies that export to the EU see some trade diversion to US companies.
The plurilateral agreements are negotiated by WTO members within the context of WTO negotiations, but without the participation of the full WTO membership. They are thus not part of the
single undertaking of the WTO negotiations as set out in paragraph 47 of the Doha Declaration. The Information Technology Agreement (ITA), which provides for elimination of duties on IT
products covered by the Agreement, was originally signed by 29 participants at the WTO Singapore Ministerial Conference in December 1996. As of March 2015 80 participants h ave
signed on, covering 97 per cent of world trade in information technology products. Two new plurilateral negotiations have been launched by WTO members, but not yet as part of an official
WTO negotiating process. Negotiations towards an Environmental Goods Agreement (EGA) was launched by a group of 14 WTO Members. The EGA, which builds upon the APEC List of
Environmental Goods, aims at maximum global free trade in a wide range of environmental goods; it will become operational once a critical mass of WTO members join. The Trade in Services
Agreement, which aims to liberalize trade in services, was launched in April 2013. The initial membership of 16 has grown to 23.
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
Canada in the Hemisphere Perspective Paper
8
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
5. Canada’s economic relationship with Alliance
countries
Canadian investment in the Alliance countries
reached almost US$40 billion by the end of 2013.
This represented five per cent of Canada’s total
investment in foreign countries. It has grown
by more than 30 per cent per annum since
2006 and is especially dynamic compared to
Canadian investment in the rest of Latin America.
Over the same period, Canadian investment in
MERCOSUR, which had a similar level of US$12.5
billion (2.7 per cent of Canadian FDI) in 2006, rose
by only US$2.5 billion and, as a result, dropped to
less than two per cent of the total Canadian FDI
(see Figure 3). Canadian FDI in Brazil, the largest
of the MERCOSUR markets, was US$11 billion in
2013. By comparison, Canadian FDI in China and
India that year stood at just under US$5 billion
and US$1 billion, respectively.
The Alliance region represents a significant
destination for FDI by some of Canada’s most
critical sectors – mining, utilities (especially water
and energy), chemicals, infrastructure, financial
services, engineering and agri-food.
Figure 2. Canada’s FDI in Latin America as a percent of total FDI
45
6.0
40
5.5
35
5.0
4.5
4.0
25
3.5
20
3.0
15
percent
2.5
Alliance
Alliance share of FDI
MERCOSUR
2013
2012
2011
2010
2009
2008
2007
2006
2005
1.0
2004
0
2003
1.5
2002
2.0
5
2001
10
2000
billions $US
30
MERCOSUR share of FDI
Source: Statistics Canada, Table 376-0051
As Figure 4 illustrates, Canada’s trade with
the member countries is relatively small but
also growing. Canada’s exports to the Alliance
represent about 1.6 per cent of total exports
while those to MERCOSUR are less than 1 per
cent.
MERCOSUR
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
8
7
6
5
4
3
2
1
0
2000
billions $US
Figure 3. Canada’s exports to Latin America 2000-13 (in billions of $US)
Alliance
Source: COMTRADE through WITS
9
Canada in the Hemisphere Perspective Paper
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
Canada’s top exports to the Alliance include
agricultural and manufactured goods such as
machinery, mineral ores, mineral fuels and oil,
electrical and electronic machinery and equipment
and fats and oils. Table 4 sets out the top 15
goods exported to the Alliance members, along
with an indication of the percentage and value in
total Canadian exports of the goods and weight
of each of the member countries. These countries
are an important market for a number of goods,
including metal products, chemicals, machinery
and auto parts. Canada’s main trading partner in
this grouping by far is Mexico, and disaggregated
trade data demonstrates that Canada is tied
to Mexico through the highly integrated North
American auto supply chain.
Table 4. Canada’s top exports to Alliance members
Alliance partner participation (% of Alliance
market)
HS Code
Commodity
Alliance (millions
$US)
Alliance as % of total
exports
Chile
Colombia
Mexico
Peru
120500
Rape or colza seeds, whether or not broken
961.7
18
0
0
100
0
100190
Durum wheat, other
663.3
14
0
31
43
20
870323
Other vehicles, with spark-ignition internal
combustion reciprocating piston engine
307.9
2
1
0
99
0
760120
Aluminum alloys
180.5
35
0
0
100
0
843143
Of machinery of heading No. 84.26, 84.29
or 84.30
106.8
10
0
26
27
16
722830
Other bars and rods, not further worked than
hot-rolled, hot-drawn or extruded
106.2
35
10
0
90
0
381710
Mixed alkylbenzenes
102.6
52
0
0
100
0
071340
Lentils
89.3
13
0
40
23
24
260300
Copper ores and concentrates
86.5
3
50
0
0
47
870899
Other parts and accessories
83.7
3
1
0
97
1
880330
Other parts of airplanes or helicopters
82.3
5
0
0
99
0
270112
Coal, whether or not pulverized, but not agglomerated: Bituminous coal
78.8
1
68
0
32
0
390120
Polyethylene having a specific gravity of 0.94
or more
78.6
6
0
0
100
0
020130
Boneless beef, processed and other
74.2
10
0
0
100
0
390190
Polyethylene, other
71.6
4
37
2
61
0
Source: author’s calculations based on COMTRADE data accessed through WITS
6. How does the Alliance agreement compare
to Canada’s FTAs with Alliance members?
Canada has existing FTAs with all Alliance
members, as well as with some other common
trade partners: the US, EFTA and, once the CETA
enters into force, the EU. This leads to a network
of common and, in some cases, overlapping
trade disciplines.
Canada’s trade relationship with each of the Alliance
members is already liberalized. NAFTA has been in
force since 1994, giving rise to significant growth
in trade, and the development of a strong North
American supply chain. The Canada-Chile Free
Trade Agreement (CCFTA) has been an evolving
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
agreement: a government procurement agreement
came into force in 2008, 11 years after the entry
into force of the agreement; in 2013 a financial
services chapter was added, and the chapters on
government procurement, customs procedures,
and dispute settlement were updated. The CanadaPeru FTA (2009) includes provisions to enhance
market access for goods, services and investment
as well as cooperation in increasing labour and
environmental standards. The most recent
agreement is with Colombia, which entered into
force in 2011.
Figure 5 shows how the coverage of the main
issues in Canada’s current bilateral FTAs with
Alliance members compare to the coverage
contained in the Alliance FTA.
Canada in the Hemisphere Perspective Paper
10
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
Figure 4. . Comparison of coverage in bilateral FTAs versus Alliance
12
Financial markets
10
Cooperation
8
Labour mobility
6
Environment and Labour
4
Competition policies, monopolies,
SOEs
Dispute Settlement
2
Electronic Commerce
Alliance
Canada-Peru
Canada-Mexico (NAFTA)
Canada-Colombia
NAFTA/Canada-Chile
0
Maritime Services
Services & Investment
Government Procurement
Market Access for Goods
Source: Author’s calculations, based on SICE data
Note: Cooperation in Canada’s bilateral FTAs refers to trade-related cooperation. This can include bilateral efforts to share information on technology and innovation, support activities of small and medium enterprises, and other activities to increase countries’ competitiveness. Cooperation in the Alliance includes customs cooperation as
well as extra-FTA cooperation activities such as sharing of trade promotion resources within embassies.
Figure 5 compares the obligations set out in the
four FTAs, based on a coding exercise where
similar commitments receive an index score
of 1.0 and additional commitments receive
additional weights. As Figure 5 demonstrates,
the core measures on market access to goods,
services and investment are alike in scope.
Canada already benefits from access to the
markets of all of the Alliance partners. Tariffs on
virtually all goods traded between Canada and
Mexico have been eliminated through NAFTA,
with the exception of Canadian dairy, poultry, egg
and sugar sectors, which were exempt under
NAFTA. Tariffs with Chile have been phased out
under the Canada-Chile FTA. The Canada-Peru
FTA phased out 97 per cent of the tariffs. The
Canada-Colombia FTA eliminated over 96 per
cent of tariffs upon entering into force in 2012.
This market access has facilitated greater trade
growth between Canada and its FTA partners.
The more recent FTAs (with Colombia, for
example) have allowed significant openings
for Canadian companies, for example in the
information and communications technology
(ICT) sector, where all tariffs on ICT equipment
will be phased out as of 2015.
All of Canada’s bilateral FTAs, as well as the
11
Alliance, include chapters providing protections
for investors and investments and liberalization
in trade in services. These are important for
Canadian mining, engineering and financial
firms, which benefit from more predictable and
equitable treatment in the markets of Colombia
and Peru. These firms benefit from growing
energy and service sectors and, particularly
in Colombia, from the growing infrastructure
investment that the region needs acutely. It is
unclear whether Canada’s joining the Alliance
trade agreement would provide any additional
protection to Canadian investors.
The one area in which the Alliance provides a
far greater amount of liberalization than Canada
enjoys under any of its FTAs is labour mobility.
Whereas all of the FTAs contain provisions
for temporary entry of businesspersons, as
noted above, the Alliance has made significant
strides in facilitating the movement of people
among its member countries. In addition to
the provisions discussed above, the Alliance
includes a Committee on the Movement of
Business Persons and Facilitation of Migration.
The Committee facilitates the free flow of
businesspeople, consular cooperation, workstudy programs for students, and increased
cooperation and information exchange on migration
Canada in the Hemisphere Perspective Paper
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
flows. 21 This will prove useful to Canadian
mining firms who often find themselves having
to import technicians from other countries.
Canadian businesspersons are currently subject
to more limited provisions in the bilateral FTAs
that grant them temporary preferential entry at
their trade partners’ borders:
1. Mexico – NAFTA facilitates temporary
entry 22 for businesspersons who are citizens
of the US, Mexico and Canada and who are
involved in the trade of goods or services,
or are investors in each other’s countries,
and for business visitors, professionals,
intra-company transferees, and traders and
investors.23
2. Chile – Like NAFTA, CCFTA does not provide
an exhaustive list but illustrates the types
of activities usually carried out by business
visitors. No new activities additional to those
covered in NAFTA were added and a few
categories were removed.24 A professional
may seek entry as a salaried employee
under a personal contract with a Canadian
employer or through a contract with the
professional’s employer in his or her home
country.25 The CCFTA list of professionals
is similar to NAFTA’s.26 No new profession
was added to the Appendix of CCFTA.
The requirements applicable to NAFTA
professionals were retained and continue to
apply for Chilean professionals.27
3. Peru – The Canada-Peru Free Trade
Agreement (CPFTA) provisions on temporary
entry of businesspersons goes beyond
NAFTA by including permanent residents
(not only citizens) of each. Proof of
permanent resident status is listed as an
accepted document for presentation in
support of an application. The CPFTA
also expands coverage for intra-company
transferees to individuals who have been
employed continuously by the sponsoring
enterprise for six months within the threeyear period immediately preceding the date
of application for admission (NAFTA requires
one year).
4. Colombia – The Canada-Colombia Free
Trade Agreement (CCOFTA) extends a bit
further than CPFTA by allowing the issuance
of open work permits to spouses of traders
and investors, intra-company transferees or
professionals and technicians. NAFTA does
not cover spouses.
None of these bilateral trade provisions provide
the free access to each other’s labour markets
offered to members in the Alliance. To join the
Alliance, Canada would have to eliminate the
visa requirements for nationals of all Alliance
members. Canada currently requires visas
for visitors from Colombia, Peru and Mexico.
Chilean visitors have note required visas since
November 2014.
7. What are the benefits of the Alliance to
Canada and Canadian business?
The Alliance provides important strategic and
financial opportunities for Canadian companies
investing and trading with Latin America, by:
1. Softening borders and lowering costs
of doing business in the region can help
Canadian companies already working in
more than one of the Alliance countries to
capture a larger market and make more
efficient use of their resources.
2. Eliminating the barriers to the movement of
labour, particularly among educated youth,
can enhance the pool of qualified talent
available to Canadian companies. Foreign
businesses in Latin America often cite
shortages of qualified labour, particularly
professional and technical, as impediments
to doing business. Firms aiming to locate
their back-office operations in Latin
America, for example, may find it difficult
to find an adequate number of bilingual ITtrained employees and managers. Pooling
together the workforces of all of the
member companies can help to overcome
SELA Permanent Secretariat, The Pacific Alliance in Latin American and Caribbean Integration, Table 1.
“Temporary” is defined as “entry without the intent to establish permanent residence.”
23
Chapter 16 of NAFTA. NAFTA also waives the requirement for a Labour Market Impact Assessment (LMIA) for all covered businesspersons as well as the work-permit requirement for
business visitors.
24
Appendix K-03.I.1 of CCFTA. These include harvester owners, under Growth, Manufacture and Production; transportation operators, under Distribution; Canadian and American brokers
performing brokerage duties, under Distribution; and tour-bus operators, under General Service (see Work in Canada: Business people, www.cic.gc.ca for more information).
25
Professionals are listed in Appendix K-03.IV.1 of CCFTA.
26
Appendix G (over 60 professional categories listed).
27
However, for a number of these (accountant, lawyer, librarian, social worker, dietitian, nutritionist, occupational therapist, physician, physiotherapist, registered nurse, veterinarian and geologist),
Chilean minimum education requirements and alternative credentials are stipulated as alternative requirements, in order to reflect the Chilean educational system.
21
22
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
Canada in the Hemisphere Perspective Paper
12
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
this barrier.
3. Combining capital markets into the MILA
will bring efficiencies to the listed firms.
The MILA will now serve as a “one-stop
shop” for investors interested in securities
of the four members. Canadian firms that
may have been reluctant to undertake
investment projects in the region due to the
difficulties or cost of raising local currency
will be able to increase and diversify their
portfolios. Now that Mexico has fully joined,
MILA matches the BOVESPA in size and
outranks it in international participation,
with about 90 per cent of the foreign stocks
listed in Latin America.
4. Helping trading partners enhance ties to
East Asia, particularly China, would help
Canadian companies invested in Alliance
countries access the Asian market. While
growth has slowed in the past few years,
East Asia continues to be the single largest
external driver of growth, and enhancing
trade and investment with the region has
great potential to boost the economies of
the Alliance countries. Creating a stronger,
more competitive region should lead to a
richer consumer base for Canadian exports
of goods and services. Increasing trade ties
with each other and with Asia can also help
the region’s economies weather economic
volatility that has set the region back in
the past. This will provide more stability for
Canadian investors.
5. Spurring
infrastructure
development
will not only make Alliance countries
more competitive, but will also provide
opportunities for Canadian infrastructure
development firms.
From a regional perspective, the Alliance
offers significant potential. It is currently the
most credible vehicle for integration, even
if this integration does not take the form of a
large multi-country negotiation. The member
countries have already begun to harmonize
overlapping and contradictory rules. Mexico
has harmonized its FTAs with Central American
28
29
30
13
counterparts, thereby eliminating the barriers
posed by overlapping rules of origin requirements
and administrative procedures. This increases
the potential of deeper integration between the
Alliance and Central America.
A logical next step would be for the Alliance
countries to approach their major common
trading partners: Canada, the EU and the US
– and propose a consistent approach to their
common agreements, likely beginning with
the cumulation of rules of origin.28 Canadian
businesses could proactively evaluate the
benefits of doing so.
The Alliance has taken the initiative to engage
MERCOSUR, a market that continues to resist
negotiations with the north. The Alliance and
MERCOSUR met in November 2014 to set a
“road map” towards greater convergence.
Greater links between the two could spell
greater business opportunities for Canadian
firms, particularly if this initiative leads Brazil and
Argentina to reduce the cost of doing business
in their economies.
Chile is the prime mover in seeking to bridge the
chasm between the two distinct approaches to
integration. Some observers are concerned that
engaging MERCOSUR could retard the pace of
the Alliance’s progress. Nonetheless, Chile’s
Economy Minister emphasizes the potential
synergy: “The two blocks are not contradictory
or competing, they are consistent and that is
why we are promoting a joint undertaking with
the objective of an integration convergence.”29
It is too early to tell whether MERCOSUR has
a serious interest in changing its divergent
views on trade and investment treaties to
accommodate the main pillars of the Alliance.
8. Should Canada join the Alliance?
Consistent with its open regionalist approach to
trade, Canada has taken observer status at the
Alliance. Canada was an early and enthusiastic
supporter of the FTAA and was often seen
as playing a constructive moderating role.30
Following the collapse of the FTAA talks,
Cumulation (or accumulation) of rules of origin allows countries to jointly comply with a set of rules of origin. A producer in one Alliance country would be able to use inputs from
another Alliance country without losing the originating status under its FTA with Canada. Canada has been a proponent of this type of cross-cumulation as a solution to overlapping
requirements in FTAs in international fora and already includes cross-cumulation in its FTAs with Colombia and Peru.
Minister Luis Felipe Céspedes, quoted in the article, “Mercosur and Pacific Alliance are not contradictory competing blocks,” MercoPress, March 31, 2015.
During the FTAA negotiations, Canada was seen as an important leader in hemispheric trade. Canada chaired the first phase of the FTAA negotiations, culminating in the 1999
Toronto Trade Ministerial, whose theme was business facilitation measures. It hosted the third Summit of the Americas meeting in Québec in 20001 and chaired the negotiating
group on government procurement, on dispute settlement, and the joint private sector committee of experts on electronic commerce.
Canada in the Hemisphere Perspective Paper
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
Canada focused on bilateral free trade pacts,
complementing its earlier agreements with Chile
(1997) and Costa Rica (2002) with agreements
with Peru (2009), Colombia (2011) and Panama
(2013). Canada also has an FTA with another
potential Alliance member, Honduras. (See
Table 2.)
Early rumours that Canada would join the Alliance
have, however, been unfounded. Canada is not
disposed to accepting the Alliance requirements
regarding the free movement of persons among
member countries. Canada currently requires
visas for all Alliance members except Chile.
Even in the unlikely case that the Alliance
would bend one of its fundamental pillars and
accommodate Canadian visa concerns, it is
unclear that joining the Alliance should be a
Canadian priority. Canada is currently engaged
in the TPP negotiations which include 12 countries,
including three Alliance countries.
The TPP is widely seen as a vehicle to bring NAFTA
up to twenty-first century standards in areas
where this is seen as desirable, such as updating
digital economy provisions, re-evaluating the
energy provisions in the wake of Mexico’s reforms
and modernizing the list of professions eligible
for the NAFTA visa. Joining the Alliance, to which
the third NAFTA partner – the US – is not a party,
would likely complicate more than clarify the rules
for business, particularly those that treat North
America as a unitary platform.
9. What should Canada do?
Assuming that Canada does not become an
Alliance member at this moment, there are still
a number of measures that Canada can take to
advance the goals of the Alliance and Canadian
interests in one of the world’s dynamic markets:
1. Review Canadian visa policies with Alliance
countries. Each country presents unique
circumstances requiring a separate analysis.
With respect to Mexico, Canada’s most
important trading partner in Latin America,
maintaining visa requirements (stricter than
those used by the US for Mexico) increases
the cost to Canadian business and inhibits
commerce. It has also become a major
irritant in the political relationship between
the countries.
31
The Canadian government has recognized
that lifting the visa requirement for Chileans
will lead to an increase in bilateral trade,
investment and tourism.31 Doing the same
with the other Alliance countries, or at least
working diligently with Alliance members
to find greater flexibility and streamlining
procedures while satisfying bona fide
concerns, would have even greater affect.
The flows of tourists, goods, services and
investment with those countries, both
inbound and outbound, are even larger than
with Chile.
Numerous proposals have been circulated to
address the Mexican visa stalemate. One
solution would have Canada recognize US
visa holders from Mexico or holders of a
trusted-traveler card as eligible for visa-free
entry into Canada. The key is to understand
the identity of the individual and to establish
that she or he does not constitute a threat.
Holding a US visa would not guarantee
admissibility into Canada or the US, but
the visa or trusted-traveller status would,
however, be a good indicator of risk.
A second potential solution would be to pick
certain categories of people to start with.
The first category could be elected officials,
senior bureaucrats, and top executives from
leading companies. An assessment could
be conducted after a period of time, and if
few problems are evident, then the program
could be extended to another category of
people.
2. Negotiate to harmonize Canadian bilateral
FTAs with the Alliance members. This
would be done ideally using NAFTA as a
platform. Given that Canada and the US
both have FTAs with all of the Alliance
countries, a first step could be the adoption
of cross-cumulation of rules of origin
across the NAFTA-Alliance platform as well
as enhanced trade-related cooperation,
particularly in those areas – such as energy,
transport and IT infrastructure – in which
Canadian companies are heavily engaged.
3. Provide technical assistance in trade
policy, regulatory harmonization and legal
structuring by coordinating the formation
of a formal network of trade policy experts
and other stakeholders throughout Alliance
Citizenship and Immigration Canada, “Notice - Canada lifts the visa requirement for visitors from Chile.” Retrieved on November 22, 2014 from http://www.cic.gc.ca/english/department/media/notices/2014-11-21a.asp.
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
Canada in the Hemisphere Perspective Paper
14
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
countries to collaborate in the development
of pragmatic solutions to help the Alliance
realize its goals.
4. Explore, along with the US, the possibility
of knitting together existing bilateral trade
agreements that each country has with Alliance
members. A NAFTA approach to convergence
with Alliance partners could save costs,
particularly for small businesses that may be
kept out of export markets by the costs of
meeting multiple rules of origin or administrative
requirements. It could also be an important step
32
towards constructing a partial FTAA, with the
hope of eventually incorporating more or even
all of the hemisphere.
The Alliance’s promise to create a twenty-first
century trade and integration agreement within a
rule-based and democratic system offers important
opportunities for Canadian trade and investment in
the hemisphere. It also provides concrete and feasible
avenues for constructive Canadian engagement
consistent with the three goals of Canadian foreign
policy in the region.32
Canada’s Strategy for Engagement in the Americas outlines three goals: increasing Canadian and hemispheric economic opportunity; addressing insecurity and advancing freedom, democracy, human rights and the rule of law; fostering lasting relationships. For more information go to http://www.international.gc.ca/americas-ameriques/stategy-stratege.
aspx?lang=eng.
References
15
•
Citizenship and Immigration Canada, Work in Canada: Business people. www.cic.gc.ca.
•
Dade, Carlo & Meacham, Carl. (2013, July 11). The Pacific Alliance: An Example of Lessons Learned.
Center for Strategic and International Studies. http://csis.org/files/publication/130711_CDadeCMeacham_
PacificAlliance.pdf.
•
Devadason, Evelyn Shyamala and Subramaniam, Thirunaukarasu. (2013, September 17). Trade Interactions
between Asia and Latin America: ASEAN, ‘Game Changer’ and ‘Platform’ for Interregional Engagement?
•
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Canada in the Hemisphere Perspective Paper
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
What Does the Pacific Alliance Mean for Canadian Trade and Investment?
The Canadian Council for the Americas (CCA) is Canada’s premier forum for
discussion of the political and economic issues in the hemisphere that are critical
to Canada, and particularly Canadian trade and investment. We promote Canadian
thinking and engagement with political and business leaders in Latin America
and the Caribbean through our public and private symposia, written content, and
advocacy for our stakeholders’ collective interests in multilateral, bilateral and
national fora. We are non-partisan and member-based.
For more information please contact us
Kenneth N. Frankel, President
president@ccacanada.com
Marta C. Blackwell, Program Director
marta.blackwell@ccacanada.com
Canadian Council for the Americas
PO Box 1175, TD Centre, 77 King St. West,
Toronto, ON M5K 1P2
www.ccacanada.com
With thanks to our Leadership Forum Members
ȚȲȿȲȵȺȲȿȚɀɆȿȴȺȽȷɀɃɅȹȶȘȾȶɃȺȴȲɄ
ȚɀȿɄȶȺȽȚȲȿȲȵȺȶȿɁɀɆɃȽȶɄȘȾʠɃȺɂɆȶɄ
Canada in the Hemisphere Perspective Paper
16