MOCK NEGOTIATIONS POSITION PAPER

3

Table of Contents

1. Purpose

2. Background

3. NegotiationContext

4. DesiredOutcomes

4.1 VocationalTraining

4.2 TransferofTechnology

4.3 RulesofOrigin

4.4 OtherAreas

5. Summary

Bibliography

4

5

1. Purpose

This paper presents the Government of Canadas position on the CanadaCaribbean trade

negotiations with respect to the Market Access for Goods (Bridgetown Round). Ultimately

Canadas objective is to produce a moderate trade agreement with CARICOM that will take into

account the differing levels of development within the region, vulnerabilities associated with

islandstates,andtraderelatedcapacitychallenges. 1

2. Background

The CaribbeanCanada trade relations can be dated back to 1912 with formation of the

CanadaBritish West Indies Trade Treaty 1925 CanadaWest Indies Trade Agreement the 1979

CanadaCARICOM Trade and Economic Cooperation Agreement and in 1986 Canada moved to

have a similar trade program to that of the Caribbean Basin Initiative, CARIBCAN for the

Commonwealth Caribbean. CARICOM members include: Antigua and Barbuda, The Bahamas,

Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Lucia, St. Kits and Nevis, St.

Vincent and the Grenadines, Suriname, Trinidad and Tobago, and Montserrat. CARIBCAN

facilitates CARICOM goods to be exported to Canada duty free or with a favourable tariff under

a Generalised System of Preferences with no reciprocity. Major beneficiaries are rum due mainly

1 DFADT."Canada-Caribbean Community (CARICOM) Trade Agreement Negotiations." Foreign Affairs Trade and Development Canada. 1 June 2014. Web. 8 Oct. 2014.

6

to the 1998 Canada Protocol on Rum, ground provisions, fruits and vegetables. The 2

CARICBCANAgreementendedonDecember31st,2013. 3

3. NegotiationContext

Twoway trade between Canada and the region has more than doubled from $936.2 million in

2000 to $2.4 billion in 2010, the highest being $3 billion in 2006. In a period of 5 years, from

2005 to 2010, Canadian exports to the region have grown mainly in the fields of ores, energy and

related products, cereals, also with smaller increases in fish, seafood and meat products. This

growth has taken place without the prospect of a Free Trade Area. Canada is the only nation in

whichCARICOMenjoyssurplustrade. 4

2 CARICOM Secretariat. CARICOM: Our Caribbean Community: an introduction. Kingston, Jamaica: Ian Randle, 2005. 316-317. 3 WTO Trade Policy Review WT/TPR/G/299 4 Rourke, Phil. A Canada-CARICOM "trade-not-aid" Strategy: Important and Achievable. Toronto, ON: C.D. Howe Institute, 2013.

7

On average 96% of CARICOM goods, by Harmonised System tariff codes, exported to Canada

benefit from duty free access or with a favourable tariff. Oppositely, Canadian products 5

currently face high tariffs by the CARICOM States, namely in the areas of Fish, Meats, Ores and

Cereals. Our meat exports currently face average ad valorem tariffs of 30.3% in Guyana, 24.9%

in Jamaica, 24.5% in Trinidad and Tobago and 13.8% in Barbados. Fish average ad valorem

tariffs are 33.8% in Guyana, 31.9% in Jamaica, 32.3% in Trinidad and Tobago, 32.3% in

Barbados. Cereals face average ad valorem tariffs with 9.8% in Guyana and 8.0% in Jamaica,

Trinidad and Tobago and Barbados. Ores average ad valorem tariffs being 5.4% in all four major

markets. 6

CanadaCARICOM negotiations for a reciprocal agreement started in 2009. Since then there has

been a total of six rounds. However, negotiations between the two sides have stalled due to

concerns from the smaller island states concerning any possible benefits they may achieve from

the agreement. Hearing their concerns, Prime Minister Stephen Harper had instructed the

Minister of Foreign Affairs to lead the negotiations at the Bridgetown, Barbados. Canada has

shown leniency in its negotiation and provided for the development and competitiveness of

CARICOMgoods,servicesandhumancapitalontheglobalmarket.

5 Jessen, Anneke, and Christopher Vignoles.Trinidad and Tobago: Trade Performance and Policy Issues in an Era of Growing Liberalization. Buenos Aires: Institute for the Integration of Latin America and the Caribbean ;, 2004. 6 Tariff information taken from WTO Tariff Download Facility

8

4. DesiredOutcomes

Canada ultimately seeks the removal of most tariffs applied to Canadian goods, in any new trade

agreementwithCARICOM,especiallyinthosekeytradinggoodsidentifiedinsection3.In order for a mutually beneficial agreement between Canada and CARICOM, we must now take into

consideration old and new developmental projects of the Canadian International Development Agency

(CIDA) and aim to streamline it with a new CARICOMCanada trade agreement. Canada therefore

proposes that our trade relations be implemented through an agenda of phased or progressive economic

liberalisationwithdevelopmentalunderpinnings.

4.1VocationalTraining

Over the years we have embarked upon a movement which, with proper implementation, could

extensively improve the wellbeing and lifestyles of our Caribbean counterparts. Our avenue to

achieve such was and will continue to be vocational training. In the case of the Caribbean, the

Skills for Employment programme has been engaged. Beginning in March 2009 and continuing

throughout our plan we deem this one of the best options to facilitate economic development, not

only that, but also garner strength in the economy to allow a greater market access for goods. A 7

skilled workforce will strengthen the foundation of businesses and industries as well as improve

the community's social stability. Canadian institutions have the tools to provide the necessary

knowhowandhelptodevelopaqualifiedworkforceindevelopingcountriesaroundtheworld.

7 "Canada Launches Major Vocational Training Initiative for the Caribbean." -Foreign Affairs, Trade and Development Canada. 20 Mar. 2009. Web. 23 Oct. 2014.

9

Prime Minister Harper in 2007, stressing the importance of our involvement in the hemisphere,

has invested some $600 million an average of $40 million per year to create a better avenue for

goods to travel unimpeded from the Caribbean to Canada and Canada to the Caribbean. These 8

projects will provide Caribbean nationals with the necessary skills needed to build industries and

companies that are strong and highly competitive in the world markets. Also it will allow

existing firms to strengthen its internal frameworks so that it can withstand the new pressures

associatedwithtradingwithlargercountries,withouttheneedfornonreciprocaltreatment.

4.2TransferofTechnology

United Nations Industrial Development Organisations trade import rejection statistics, based on

Trade Standards Compliance Footprints, show that developing countries struggle to benefit from

lower or zero tariffs because they fail to meet food and quality standards set out by markets

targeted for their exports. Additionally, CARICOM, due to the lack of updated technology, is 9

struggling to attain 21st century technological levels. As tariffs are removed against Canadian

technological exports, CARICOM seeks to benefit vastly through the availability of cheaper,

reliable technology mainly for the agriculture industry. Canada believes that market access for

goods will facilitate private to private business partnerships which will have support at a federal

level to engage in the transfer of knowledge and technology between related sectors. Of

particularrelevancetoCARICOMsagricultureindustryarethe:

8 Canadian Support for Economic Growth in the Caribbean." Prime Minister of Canada. 22 Oct. 2012. Web. 20 Oct. 2014. 9 "Trade Standards Compliance Footprints."United Nations Industrial Development Organisation. Web. 25 Oct. 2014.

10

Transferofmachinerytoassistwithcropsprayingandploughing

Transferoftechnologyandknowledgeforoptimalharvests

Transferoftechnologyandknowledgeonstorageandpackagingoffoodandfruits

Transferoftechnologyandknowledgeonenhancedfoodpreservationmethodology

4.3RulesofOrigin

Canada proposes the renegotiation of the current Rules of Origin. This comes from an

understanding that with a more globalised world, production of merchandise requires raw

materials not competitively produced domestically. We recommend the Rules of Origin include

certain negotiated merchandise that are unavoidably produced with higher levels of imported raw

materials. 10

4.4OtherAreas

Canada also has a vested interest in negotiating other areas that will impact the effectiveness of the new

free trade agreement namely public administration, as it relates to the transparency and accountability

ofimplementationandintellectualpropertyrights.

10Chaitoo, Ramesh, and Ann Weston. "Canada and the Caribbean Community: Prospects for an Enhanced Trade Arrangement." Canadian Foreign Policy Journal 14.3 (2008): 47-64. Web.

11

5. Summary

The Government of Canada will continue to negotiate on an interestbased/principled approach

with respect to the new CanadaCaribbean trade negotiations. The current negotiations for a

reciprocal trading arrangement between Canada and CARICOM, if successful, will be the first of

its kind to be negotiated with a regional group of developing states. However, Canada

understands that certain measures must be taken for CARICOM to benefit from said market

access to goods, i.e., the levelling of the playing field. Bearing this in mind Canada will make the

necessary concessions aimed at development for the CARICOM Member States through

vocational training, facilitation of technological transfers and developmental assistance for this

unique agreement. Our aim is to incorporate previously independent CIDA projects and

development aid within the framework of a programme of work for realisation of a highly

liberalised trading agreement. Taking an aid for trade approach, the possibility of increased

fundingisdependentuponinteralia,CARICOMseffectiveimplementationoftheagreement.

12

Bibliography"CanadianSupportforEconomicGrowthintheCaribbean."PrimeMinisterofCanada.N.p.,22Oct.

2012.Web.20Oct.2014.CARICOMSecretariat.CARICOM:OurCaribbeanCommunity:AnIntroduction.Kingston,Jamaica:

IanRandle,2005.Print.Chaitoo,Ramesh,andAnnWeston."CanadaandtheCaribbeanCommunity:Prospectsforan

EnhancedTradeArrangement."CanadianForeignPolicyJournal14.3(2008):4764.Web.DFATD."CanadaLaunchesMajorVocationalTrainingInitiativefortheCaribbean."ForeignAffairs,

TradeandDevelopmentCanada.N.p.,20Mar.2009.Web.23Oct.2014.ForeignAffairsTradeandDevelopmentCanada."CanadaCaribbeanCommunity(CARICOM)Trade

AgreementNegotiations."GovernmentofCanada.ForeignAffairsTradeandDevelopmentCanada,n.d.Web.08Oct.2014..

Jessen,Anneke,andChristopherVignoles.TrinidadandTobago:TradePerformanceandPolicyIssuesinanEraofGrowingLiberalization.BuenosAires:InstitutefortheIntegrationofLatinAmericaandtheCaribbean,2004.Print.

Rourke,Phil.ACanadaCARICOM"tradenotaid"Strategy:ImportantandAchievable.Toronto,ON:C.D.HoweInstitute,2013.

UNIDO."TradeStandardsComplianceFootprints."ImportRejectionAnalysis.Web.25Oct.2014.WorldTradeOrganization.TradePolicyReviewReportBy:OECSWTOMembers.Rep.no.

WT/TPR/G/299.13.May.2014.Print.WorldTradeOrganization."WTOTariffDataBase."TariffDownloadFacility.Web.Oct.Nov.2014.

13