Canada: Canada Jumps On The Bilateral Bandwagon

Following in the footsteps of the United States and other major trading partners, the Canadian government has been actively pursuing a number of bilateral and regional free trade and investment protection treaties over the past several months. While the majority of Canadian business and investment activity remains with the United States, Canadian business has been increasingly looking abroad to developing and newly industrialized economies in Latin America, Asia, and the Middle East.

These deals hold out the promise of increased market access and strengthened investment protection in these regions, while WTO Doha round negotiations continue to wallow.

Regional and Bilateral Free Trade Agreements

Latin America has become a recent hotspot for Canadian trade deals – no surprise as Canadian trade with the region jumped 20 percent in 2006 to hit $19 billion. In the same year, Canadian investment in Latin America reached almost $100 billion.

On a well-publicized visit to Bogota on July 17, 2007, Prime Minister Stephen Harper announced that free trade negotiations had been initiated between Colombia and Canada. This follows closely on the heels of U.S. bilateral agreements in the region. The United States has negotiated deals with Peru and Colombia that will grant U.S. exporters immediate duty-free access to the vast majority of those consumer and industrial products markets, including in many sectors of interest to Canada (e.g., wheat, high-quality beef, and processed food products).

Despite calls from Canadian human-rights organizations, labour groups and politicians to postpone trade talks until Colombia’s human-rights and democratic development issues have been addressed, Harper made it clear that he has no intention of linking trade policies solely with humanitarian and human-rights issues, arguing that a country such as Colombia cannot hope to advance and move toward peace and security without economic development.

Recent developments in Canada’s negotiation of bilateral and regional free trade agreements in Latin America and elsewhere include the following:

June 7 - conclusion of free trade agreement with the countries of the European Free Trade Association, Iceland, Norway, Switzerland and Liechtenstein.

June 7 – launch of negotiations towards a free trade agreement with the Dominican Republic

June 7 – launch of free trade negotiations with the Andean Community countries of Columbia and Peru

July 19 – launch of negotiations towards a free trade deal with the Caribbean Community ("CARICOM") whose members are Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago.

Canada continues to negotiate free trade deals with South Korea, Singapore, and the Central American Four countries of El Salvador, Guatemala, Honduras and Nicaragua.

New Bilateral Investment Treaties

With 23 Foreign Investment Promotion and Protection Agreements (FIPAs), known internationally as Bilateral Investment Treaties (BITs), already in force and more on the way, Canada is seeking to participate in the expanding network of BITs that exists worldwide. By the end of 2006, there were about 2,500 BITs, up from just 400 in 1989. In 2006 alone, approximately 75 BITs were concluded. While there is a general global trend in favour of greater openness to foreign investment, significant risks still exist for Canadians investing abroad. As foreign direct investment continues to grow, disputes between investors and States proliferate, with investors turning to these treaties as a means of pursuing claims arising from harmful government measures.

A BIT is an international treaty providing binding obligations on host governments regarding their treatment of foreign investors and investments. By setting out a range of obligations respecting non-discriminatory treatment, expropriation, transfer of funds, transparency, due process and dispute settlement, BITs aim to provide a more transparent and predictable climate for Canadian investors abroad.

On November 14, 2006, Peru became the first country to sign a bilateral investment treaty based on Canada’s newly-developed 2004 Model BIT. Canada is Peru’s most important foreign direct investor in the mining sector and among the largest overall foreign investors with an estimated $2.9 billion of investment stock in Peru in 2006.

More recently, Canada and Jordan concluded a BIT. On July 13, 2007, following a meeting in Ottawa with Jordan’s King Abdullah, Prime Minister Harper announced the Jordan-Canada BIT and indicated that Canada is also commencing a study into the feasibility of a free trade agreement between the countries, with a view to beginning negotiations in 2008.

Canada also recently concluded a BIT with India and is currently in the midst of negotiations with China. Exploratory discussions towards investment protection treaties are also being held with Vietnam, Indonesia and Kuwait.

Canadians trading and investing abroad

An overview of the status of Canada’s international trade and investment agreements in force and in the process of negotiation is set out in the tables below.

Canadian exporters and investors in markets abroad should be following these developments closely. There are significant opportunities available to stakeholders to make their views known and ensure that their interests are addressed during the negotiation of these free trade and investment protection treaties.

Members of McCarthy Tétrault’s International Trade and Investment Law Group are available to assist on any matters concerning the negotiation of these agreements, as well as other international trade and investment issues.

Overview of Canada’s International Trade and Investment Agreements
and Ongoing Negotiations

Free Trade Agreements – In Force


Date in Force

Canada-Costa Rica Free Trade Agreement

November 1, 2002

Canada-Israel Free Trade Agreement

January 1, 1997

Canada-Chile Free Trade Agreement

July 7, 1997

Agreements of the World Trade Organization (WTO)

January 1, 1995

North American Free Trade Agreement (NAFTA)

January 1, 1994

Canada-United States Free Trade Agreement

January 1, 1989

Free Trade Agreements – Discussions and Negotiations


Start of Discussions or Consultations

Status of Negotiations

Andean Countries (Bolivia, Columbia, Ecuador, Peru, Venezuela)

August 2002

Exploratory discussions held in May 2003; on June 7, 2007, Canada, Peru and Colombia announced the launch of free trade negotiations; on July 20, 2007, held first round of free trade negotiations.

Caribbean Community and Common Market (CARICOM)

January 19, 2001

Domestic consultation in 2001; on July 19, 2007, CARICOM and Canada launched free trade negotiations.

Central America Four (CA4) – El Salvador, Guatemala, Honduras and Nicaragua.

September 28, 2000

Informal meetings in May 2006, after ten rounds of negotiations could not yield an agreement; another informal meeting took place in July 2006. At this point, there is no date set for future negotiations.

Dominican Republic

November 2002

Domestic consultation in 2002; Negotiations were launched June 7, 2007. First negotiating meeting between Canada and the Dominican Republic was held on July 9, 2007; first full round of negotiations will be held in October 2007 in Santo Domingo.

European Free Trade Association (Iceland, Norway, Switzerland and Liechtenstein)

October 9, 1998

On June 7, 2007, Canada and the EFTA countries announced the conclusion of a free trade agreement.

Free Trade Area of the Americas (FTAA)

December 1994

Negotiations in stalemate since late 2005; Brazil and other Latin American countries at odds with United States over domestic farm subsidies; no date set for resumption of talks.

Republic of Korea (South Korea)

November 19, 2004

Tenth round of negotiations took place on April 23-26, 2007.


June 5, 2000

Multiple rounds of negotiations in 2002-2003; Canada continues to negotiate a free trade agreement with Singapore during 2007.

Canada’s Bilateral Investment Treaties





April 29, 1993

In force (OECD-based).


March 29, 1999

In force (NAFTA-based).


January 17, 1997

In force (NAFTA-based).


Under negotiation.

Most recent negotiation round held in February 2007.

Costa Rica

September 29, 1999

In force (NAFTA-based).


January 30, 2001

In force (NAFTA-based).

Czech & Slovak Federal Republic (currently binds both the Czech Republic and the Slovak Republic)

March 9, 1992

In force (OECD-based).


June 6, 1997

In force (NAFTA-based).


November 3, 1997

In force (NAFTA-based).

El Salvador

May 31, 1999

Signed but not yet in force.


November 21,1993

In force (OECD-based).



On June 16, 2007, it was announced that Canada had concluded a BIT with India.



As of 2007, exploratory discussions are being held.



On July 13, 2007, following a meeting in Ottawa with Jordan’s King Abdullah, Prime Minister Harper announced that Canada had concluded a BIT with Jordan and indicated that Canada is also commencing a study into the feasibility of a free trade agreement between the countries, with a view to beginning negotiations in 2008.



As of 2007, exploratory discussions are being held.


July 27, 1995

In force (NAFTA-based).


June 19, 1999

In force (NAFTA-based).


February 13, 1998

In force (NAFTA-based).


June 20, 2007

In force (based on Canada’s 2004 Model BIT).


November 13, 1996

In force (NAFTA-based).


November 22, 1990

In force (OECD-based).


February 11, 1997

In force (NAFTA-based).

South Africa

November 27, 1995

Signed but not yet in force.


September 24, 1998

In force (NAFTA-based).

Trinidad and Tobago

July 8, 1996

In force (NAFTA-based).


July 24, 1995

In force (NAFTA-based).


June 2, 1999

In force (NAFTA-based).

USSR (Russia is continuing state)

June 27, 1991

In force (OECD-based).


January 28, 1998

In force (NAFTA-based).



As of 2007, exploratory discussions are being held.

Trade and Investment Cooperation Agreements (TICA)

TICA Partner

Date Signed

Southern Cone Common Market (MERCOSUR) – Brazil, Argentina, Paraguay and Uruguay.

June 16, 1998

Republic of South Africa

September 24, 1998

Andean Community (Bolivia, Colombia, Ecuador, Peru and Venezuela)

May 31, 1999

Trade and Economic Cooperation Agreements (TECA)

TECA Partner

Date Signed

The Kingdom of Norway

December 3, 1997

Confederation of Switzerland

December 9, 1997


November 15, 1995

Republic of Iceland

March 24, 1998

Memorandum of Understanding on Trade and Investment (MOUTI)

MOUTI Partner

Date Signed

Central America (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua)

March 18, 1998

Other Key Initiatives


Date Initiated



January 19, 2005

A Canada-Japan Economic Framework for the promotion and liberalization of bilateral trade and investment; Japan and Canada are currently working towards completion of joint study.

European Union

May 17, 2005

Negotiations for a trade and investment enhancing agreement (TIEA) were launched in 2005; in May 2006, Canada and the EU jointly decided, given linkages to the WTO talks, to pause the TIEA negotiations until the results of the WTO Doha Round of negotiations are known.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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