LexSage

Canada Commences Consultations
Regarding A Canada-China Free
Trade Agreement

March 14, 2017

On March 4, 2017, Global Affairs Canada announced consultations concerning a possible free trade agreement between Canada and China.   Consultations means that Global Affairs Canada is consulting with Canadian interested stakeholders (the free trade agreement negotiations have not started yet – Canada is in a preliminary exploratory stage). Global Affairs Canada has posted information on the consultations. The Canadian public and interested Canadian stakeholders may make submissions until June 2, 2017.  There is an online consultation form. It is also helpful to read the Canada Gazette Notice concerning the consultations.

Canadian stakeholders would include Canadian businesses and Canadian subsidiaries of U.S. companies (and other foreign companies), business associations, experts/academics, civil society and NGOs, labour unions, provincial/territorial and local governments, individuals (including, indigenous peoples, youths, students) and others who are interested.  What U.S. companies cannot do directly from the United States, may be accomplished indirectly through Canadian legal entities.

Canadian entities interested in a free trade agreement with China and those who have concerns have an opportunity to communicate with the people who will comprise a Canadian negotiating team. The focus of consultations is to determine how Canada should best proceed regarding a possible FTA with China.  The negotiators need the assistance of Canadian businesses to know (1) what rates of duty they pay on goods that they export to China (e.g., what goods should be in Canada’s market access ask), (2) whether Canadian goods exported to China are subject to quantitative restrictions or quotas or other restrictions that prevent access to China’s market, (3) what technical barriers to trade they experience when exporting to China (e.g.,  what inspection processes delay market access, what fees must be paid in China, which standards/certification requirements impede market access, etc.), (4) which categories of service providers are active in China (what should be Canada’s market access ask for services), (5) what approval processes/certification requirements impede access to Canadian service providers,  (6) which categories of Canadian service providers would like greater labour mobility, (7) whether China’s intellectual property rules impede market access and/or negatively affect Canadian businesses in China (the Canadian Government has significant knowledge about China’s intellectual property issues, but may not know all the problems experienced by Canadian businesses in China), (8) what Chinese government departments (at the federal, province and local levels) Canadian businesses sell goods and services which should be included in government procurement schedules, (9) whether Canadian companies doing business in China and/or Canadian individuals have experienced a lack of transparency or certainty in outcome in legal proceedings and what areas of China’s legal process need improvement, and (10) any other issues Canadian stakeholders would like addressed in the free trade agreement negotiations, etc.

The Canada Gazette Notice goes further than my list to include the following:

• Trade and investment interests:
  • Canadian goods of export or import interest (identified by HS/Tariff codes) that would benefit from expedited or phased-in removal of tariffs and other barriers by China or Canada;
  • Trade in services (identification of sectors, activities of export interest for Canadian service providers, market access barriers and domestic regulatory measures that either restrict or affect their ability to conduct business or deliver their service in China);
  • Temporary entry of business people from Canada into China and from China into Canada (e.g. any impediments when entering China, or Canada, to work on a temporary basis);
  • Electronic commerce (e.g. restrictive measures faced by Canadian suppliers of digital products and services in China);
  • Non-tariff barriers (such as import licensing, administration of tariff-rate quotas, taxes, lack of transparency), technical barriers to trade (including technical regulations, standards or conformity assessment procedures), and sanitary and phytosanitary measures;
  • Rules of origin, including the appropriate rules of origin for specific products or sectors;
  • Border and customs issues that have an impact on the movement of commercial goods into and out of China;
  • Investment barriers faced by Canadian investors in China, including restrictions imposed on foreign ownership or entry to market, questions of transparency of regulation and performance requirements;
  • Priority government procurement markets for Canadian suppliers in China at the central, provincial and local levels, the goods and services that Canadian suppliers are interested in selling to those government organizations, and barriers faced when selling or attempting to sell to governments in China;
  • Any incident affecting business practices when interacting with Chinese state-owned enterprises (in Canada or in China);
  • China’s application and enforcement of intellectual property (IP) laws, regulations, policies or procedures that may result in discrimination against foreign intellectual property, and any requirements for the sharing or transfer of IP or confidential business information;
  • Competition policy matters, including competition law enforcement or other measures affecting competition in China;
  • Preferred approach to trade remedies taken on trade between China and Canada; and
  • Any incidents of unfair business practices.

• Reflection of the interests and values of Canadians:
  • Sustainable development;
  • Corporate social responsibility;
  • Transparency;
  • Equality;
  • Good governance;
  • Rule of law;
  • Non-discrimination;
  • Respect for the environment;
  • Culture;
  • Labour rights; and
  • Human rights.

• Enhancement of the bilateral economic relationship:
  • Co-operation on science and technology;
  • Climate change; Cultural and creative industries; and
  • Health and the environment.

• Other topics:
  • Risks to Canadian consumers and to Canada’s plant and animal resource base resulting from the import of goods from China; and
  • Any other topics of interest or potential concern to Canadians related to a potential free trade agreement.

A number of areas of the economy will have an interest in the Canada-China Free Trade Agreement, including, without limitation, academia/education, agriculture and agri-food, autos and auto parts, energy, financial services, ICT, infrastructure, mining, legal services, accounting services, engineering services, telecommunications, steel, and water.

For more information about Canada-China trade, please contact Cyndee Todgham Cherniak at 416-3407-4168 or at Cyndee@LexSage.com. Cyndee was a director of the Canada China Business Counsel for over 7 years.  The Canada China Business Council prepared a report concerning a possible free trade agreement with China.