Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada and Jordan Sign Free Trade Agreement, Environmental Agreement, Labour Agreement and FIPPA

On June 28, 2009, Canada's International Trade Minister, Stockwell Day, announced that Canada and Jordan have signed a free trade agreement. In addition, Canada and Jordan signed Labour and Environmental Cooperation Agreements and a Foreign Investment Protection and Promotion Agreement (FIPA or FIPPA) (Canada's version of a bilateral investment treaty). These agreements represent four (4) "firsts" for Canada - the first of such agreements with an Arab Middle Eastern country. On August 25, 2008, Canada and Jordan concluded the FTA, Environmental Cooperation Agreement and Labour Cooperation Agreement negotiations. Copies of the agreements are not yet available. However, backgrounders published at the time of the conclusion of the negotiations are available at the following link - http://w01.international.gc.ca/MinPub/Publication.aspx?lang=eng&publication_id=386466&docnum=183

I have been writing articles on Trade Lawyers Blog indicating my view that Canada and Jordan should engage in FTA and FIPPA discussions and negotiations. It is now time to praise the Canadian Government is pursing the initiatives and signing the four agreements with Jordan.

After the summer recess of Parliament, the Minister of International Trade will introduce implementing legislation in the House of Commons. Upon implementation, this FTA will eliminate tariffs on the majority of Canadian exports to Jordan, directly benefiting Canadian exporters. Tariff reductions on most remaining goods will be take place over a 4 year elimination period. According to the Canadian Embassy in Amman, Jordan, bilateral trade was approximately $80 million in 2008. Some of the Canadian sectors that will benefit from the immediate duty-free access include forestry, manufacturing, and agriculture and agri-food. Jordan fully reopened its market to Canadian beef and cattle in February 2009.

The parallel labour and environment cooperation agreements will help to ensure progress on labour rights and environmental protection. The labour cooperation agreement commits both countries to respect the core labour standards set out by the International Labour Organization, such as the elimination of child labour, forced labour and workplace discrimination, as well as respect for freedom of association and the right to bargain collectively. The agreement on the environment commits both countries to pursuing high levels of environmental protection, to enforcing their domestic environmental laws effectively, and to ensuring trade and investment are not encouraged at the expense of these laws.

The FIPPA should provide Canadian businesses with greater investment protections. Some of the sectors that should benefit include resource extraction, nuclear energy, telecommunications, transportation and infrastructure, with the latter arising from Jordan’s growing importance as a regional commercial, shipping and transportation hub.

Prior to 2008, Canada had signed free trade agreements with the United States, Mexico, Chile, Israel and Costa Rica. Since 2008, Canada signed free trade agreements with the European Free Trade Association (Iceland, Norway, Switzerland and Lichtenstein), Peru and Columbia. Canada is negotiating free trade agreements with Panama, the Central America 4, the Dominican Republic, the Caribbean countries, South Korea, the European Union, and Singapore.

Jordan has entered into free trade agreements with the United States and the European Union, European Free Trade Association (Iceland, Norway, Switzerland and Lichtenstein), Egypt, and the Palestinian Authority.

It is important to note that the United States - Jordan Free Trade Agreement is the first U.S. agreement that incorporated labour and environmental provisions in the body the a free trade agreement. If a review and comparison is made between the United States - Jordan Free Trade Agreement and the Canada-Jordan Labour and Environmental Cooperation Agreements, it will be clear that the Canadian versions provide for significantly more labour and environmental protections.

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