Thank you, Mr. Chair and members of this committee, for the opportunity to speak to you today.
As Mr. Stephenson said, I am the Director General of the Trade Negotiations Bureau at the Department of Foreign Affairs and International Trade.
In my presentation today, I will provide some general information on the Canada-Panama FTA and the Canada-Jordan FTA.
I will also touch on the parallel agreements on labour cooperation and the environment that were negotiated at the same time as these agreements.
First, let me turn to Panama.
Panama has had one of the fastest-growing economies in the Americas. Its real gross domestic product growth in 2010 was 7.5%, and its real GDP is expected to show further growth in 2011. Two-way merchandise trade between Canada and Panama reached $213.7 million in 2010.
Panama is also a strategic hub for the region. It processes approximately 5% of the total global trade and is recognized as an important platform for commercial activity throughout Latin America. Against that backdrop, Canada sought and obtained a high-quality, comprehensive FTA with Panama.
Once in force, this agreement will provide important commercial gains for the Canadian economy by offering Canadian workers and businesses preferential access to this dynamic and growing market. Specifically, upon implementation of the FTA, Panama will eliminate tariffs on 99.9% of recent non-agricultural imports from Canada. Panamanian tariffs on 88% of agricultural imports from Canada will also be immediately eliminated. This significant reduction in trade barriers will directly benefit a number of sectors that are already established in Panama, including agriculture and agrifood products, pulp and paper, machinery, and others.
In the area of investment, the FTA will lock in market access for Canadian investors and provide them with greater stability and protection for their investments.
The FTA will provide enhanced access for services sectors of interest to Canada, including professional services, engineering, mining, construction, and environmental services.
Government procurement is an area in which Canadian workers and companies stand to benefit the most. The government procurement provisions in the Canada-Panama free trade agreement guarantee that Canadian suppliers will have non-discriminatory access to a broad range of procurement opportunities, including the ongoing $5.3-billion Panama Canal expansion and its associated projects.
But Canada is not the only country with which Panama has negotiated a free trade agreement. It is expanding its global reach through the negotiation of trade agreements with countries such as the United States and markets such as the European Union. So it's important that we implement this agreement to ensure that Canadian companies remain competitive in the Panamanian market and do not compete against their competitors on an uneven playing field.
I'd now like to turn to the Canada-Jordan free trade agreement. Jordan is a growing market for Canada. In 2010, two-way merchandise trade between Canada and Jordan reached $85.9 million. Our exports to Jordan have more than doubled in the past seven years, and it's clear that Jordan's economy provides promising opportunities for Canadian workers and businesses.
Jordan is also a key partner in the Middle East. As Canada's second free trade agreement with a Middle East country, the Canada-Jordan free trade agreement will help improve market access, but it will also provide a platform for expanding commercial ties and raising Canada's profile in the broader Middle East.
The Canada-Jordan free trade agreement was signed in June 2009. Negotiations were concluded after just three rounds.
Upon entry into force of this agreement, Jordan will eliminate tariffs on over 99% of recent Canadian exports. This is very significant, because Jordan's current average applied tariff is 11%, with peaks of up to 30% in their applied tariffs.
Key Canadian sectors will benefit from duty-free access, including forest products, machinery, and agricultural exports such as pulses, frozen potato products, and beef.
Once implemented, this agreement will level the playing field for Canadian exporters vis-à-vis competitors in the global marketplace. In fact, the U.S. and the EU currently have free trade agreements with Jordan.
Now I would like to turn to the labour cooperation and environment agreements that were negotiated in conjunction with these two free trade agreements.
We have signed labour cooperation and environment agreements in parallel with the free trade agreements with Panama and Jordan. The parties to the labour cooperation agreements have committed to ensure that their laws respect the 1998 International Labour Organization's ILO Declaration on Fundamental Principles and Rights at Work, which covers the right to freedom of association, collective bargaining, the abolition of child labour, elimination of compulsory labour, and the elimination of discrimination.
The agreements on the environment commit parties to maintain high levels of environmental protection, to effectively enforce domestic environmental laws, and to not relax or derogate from such laws in order to attract trade and investment.
In conclusion, the Canada-Panama FTA and the Canada-Jordan FTA will create jobs and economic growth for Canada, and will also contribute to greater prosperity for all three nations.
These FTAs also have the support of key exporters and investors across Canada, and will directly support the government's ambitious pro-trade plan and policy to help Canadian companies access new markets in this competitive global economy.
I would like to thank the committee for the opportunity to speak to you today about these important agreements, and I would be pleased to answer any questions you have on these initiatives.