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RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #0778/01 1621216
ZNR UUUUU ZZH
R 101216Z JUN 08
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 8003
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHBO/AMEMBASSY BOGOTA 1321
RUEHME/AMEMBASSY MEXICO 1842
RUEHPE/AMEMBASSY LIMA 0627
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 OTTAWA 000778 
 
SIPDIS 
 
STATE FOR WHA/CAN, EEB/IFD/OIA, EEB/DCT, OES, DRL 
 
STATE PASS USTR FOR MELLE AND SULLIVAN 
 
USDOC FOR 4320/OFFICE OF NAFTA/GWORD/TFOX; 
3134/OIO/WESTERN HEMISPHERE 
 
E.O. 12958:  N/A 
TAGS: ECON ETRD EIND EINV ELAB SENV CA CO
SUBJ:  CANADA AND COLOMBIA CONCLUDE FTA TALKS 
 
SUMMARY/INTRODUCTION 
-------------------- 
 
¶1. Canada announced on June 7 that it had concluded free trade 
negotiations with Colombia, including agreements on labor and 
environmental issues.  While the anticipated FTA has been subjected 
to hearings in Canada's Parliament, and specific industries (notably 
sugar refiners) and unions have expressed opposition, the agreement 
has not received widespread attention in Canada and it appears 
likely to be implemented. 
 
 
¶2. Canada signed similar agreements with Peru on May 29.  From 1994 
to 2002 Canada implemented free trade agreements with a number of 
Western Hemisphere countries including the United States, Mexico, 
Chile and Costa Rica.  FTA discussions with a number of smaller 
economies (Dominican Republic, Honduras, Guatemala, El Salvador, 
Nicaragua, CARICOM, Panama) are in various stages of progress.  In 
pursuing FTAs, Canada pays close attention to U.S. trade 
negotiations to ensure that Canadian exporters are not put at a 
comparative disadvantage relative to their U.S.-based competitors. 
END SUMMARY/INTRODUCTION. 
 
¶3. Canada's news release and backgrounder are available at 
http://www.international.gc.ca . 
 
¶4. ORIGINS:  Canada's FTAs with Peru and Colombia had their 
beginnings in preliminary talks in 2002 with members of the Andean 
community (Peru, Colombia, Venezuela, Ecuador and Bolivia).  As was 
also true of Canada's discussions with Central American and 
Caribbean countries, some trading partners were more prepared than 
others to pursue an FTA.  In July 2007, during a tour of Latin 
America, Prime Minister Stephen Harper announced free trade 
negotiations with Colombia and Peru.  Negotiations with Peru 
concluded in January and a bilateral FTA (with environmental and 
labor agreements) was signed on May 29 on the margins of the APEC 
ministerial.  Negotiations with Colombia took somewhat longer; the 
successful conclusion was announced on June 7 at the end of a fifth 
negotiating round in Bogota. 
 
¶5. SENSITIVITIES AND CRITICS:  Private sector contacts say that 
Canada's main sensitivities in the Colombia FTA talks involved 
refined sugar (sugar refiners in western Canada were said to be 
angling for trade adjustment assistance) and cut flowers.  Some 
interest groups in Canada, notably labor unions, raised concerns 
about labor and environment standards.  In addition, some argued 
that the FTA should be linked to (or abandoned because of) the 
Colombian government's human rights record.  A number of trade and 
industry groups, however, argued that conditions are improving in 
Colombia and that an FTA can contribute to the reform process. 
Foreign Affairs Minister Emerson said that the agreements "will help 
solidify ongoing efforts by the Government of Colombia to create a 
more prosperous, equitable and secure democracy." 
 
¶6.  TRADE IMPACT:  Canada already has considerable trade and 
investment links with Colombia and Peru.  Last year two-way 
Canada-Colombia merchandise trade amounted to C$1.14 billion; in the 
case of Peru, it totaled C$2.45 billion.  Canada's direct investment 
stock in Colombia totaled C$739 million in 2007.  In Peru, it was 
estimated at almost C$1.8 billion. 
 
¶7.  REFERENCE TO U.S.-COLOMBIA FTA:  While Canada's economic 
relations with most Latin American countries are proportionally much 
smaller than those of the United States, Canada attempts to match 
Qsmaller than those of the United States, Canada attempts to match 
the U.S. in terms of market access.  Despite the small trade 
relationships, Canadian trade officials and businesses believe trade 
talks foster new diplomatic/commercial relationships and help 
countries build their capacity for anticipated negotiations with the 
United States. 
 
¶8. Groups both for and against the Canada-Colombia FTA often 
referred to the status of the U.S.-Colombia FTA.  Business groups 
downplayed its opposition in Congress and argued that strengthening 
relations with Colombia encourages reforms; that the U.S.-Colombia 
FTA is "only a matter of time;" and that Canada should conclude a 
deal quickly to "gain first-mover advantage."  FTA opponents, on the 
other hand, suggested that the U.S. Congress has well-justified 
reservations about Colombia's human rights record, labor and 
environmental standards, and readiness to engage as a trade 
partner. 
 
 
OTTAWA 00000778  002 OF 002 
 
 
¶9. NEXT STEPS:  According to the Canadian government, the next step 
is a legal review of the FTA negotiated texts. (Canada concludes 
international agreements in both English and French, with both 
versions being equally valid.  In the case of Colombia and Peru, the 
agreements are also in Spanish).  Following the legal review, the 
agreements will be signed by Canada and Colombia (perhaps in 
mid-summer), released to the public, and "proceed to each country's 
respective legislative bodies for ratification." 
 
¶10. Strictly speaking, Canada does not have a ratification process. 
The present Canadian government has recently introduced a step 
whereby international agreements are tabled in the House of Commons 
for a period of 21 sitting days.  During that time, members of 
parliament will be able to review, debate, vote on a motion, or send 
the agreements to committee for further review.  Given that 
Parliament is due to rise for the summer in the second half of June, 
this requirement will have the effect of delaying the introduction 
of implementing legislation in Parliament until the fall session. 
In the case of the trade, labor, and environment agreements with 
Peru, the government hopes to introduce legislation to allow them to 
enter into force by January 1, 2009. 
 
WILKINS