"Canada has Progressed Substantially Towards Free Trade Goals"

Canada has been described as "one of the most trade-oriented economies in the world" in a report assessing the actions Canada has taken to liberalize and open its economy.

The findings were presented in the 'Individual Action Plan (IAP) Study Report' on Canada's progress towards APEC's 'Bogor Goals' of free and open trade and investment by the year 2020.

Presented to a 'peer review session' of representatives of APEC member economies in Chiang Rai, Thailand, the report is an assessment of how well individual APEC member economies have progressed towards the Bogor Goals.

Agreed by APEC Leaders in Bogor, Indonesia, in 1994, the Bogor Goals set the target of free and open trade and investment in the APEC region to be achieved by 2010 for industrialized economies and 2020 for developing economies.

Prepared by independent expert, Mr Greg McGuire, Senior Economist from Economic Insights in Australia, the report stated: "Canada should be commended for its liberal and transparent trade and investment regime brought about through reforms issued in recent years."

Mr McGuire also noted that from the time when APEC economies began the peer review process, Canada already had a liberal and transparent regime. Despite this strong starting position the report noted that Canada has continued to implement liberalization reforms.

"Canada has low and few MFN tariffs but about 90 per cent of imports enter duty free," Mr McGuire stated in the report.

"Most goods enter Canada under preferential rates set out in regional trading agreements and preferences are granted to developing countries.

"Canada's simple average MFN tariff is 4 per cent.

"Canada also has a policy that reduces any tariff to zero once it falls below 2 per cent.

"From 1996 to 2002, Canada has implemented major liberalization reforms that included reductions in tariffs, simplifying the tariff regime and removing many of the restrictions for trade between the provinces under the Agreement on Internal Trade.

"International telecommunications services were open to competition in 1998 and foreign bank branches were permitted to enter the Canadian financial market in 1999."

Mr McGuire also cited Canada's efforts in assisting developing economies in the APEC region.

"Canada has also been very active in providing technical assistance and cooperation to other APEC member economies and this contribution should not be underestimated.

"It has provided technical assistance in many areas including intellectual property rights, customs and e-commerce.

"Approximately 82 per cent of tariff lines offer preferential rates to developing economies and 16 APEC member economies are eligible for these tariff rates."

Mr McGuire did make a note of caution in that like many other APEC member economies, Canada maintained higher protection in some sensitive areas.

"While Canada is relatively liberal and transparent, there continues to be higher protection in some areas which include agriculture, textiles and clothing, some service sectors and foreign direct investment in some sectors."

Higher protection has been maintained in these sectors for reasons of health, safety, security or environment.

However McGuire stated in the report that considering its past performance, Canada appears on track to achieve the Bogor Goals and has made progress in sensitive areas.

"The Government of Canada has reduced many of its tariffs, including in sensitive sectors, since 1996.

"Canada has a creditable history of implementing ongoing reforms which stands it in good stead to implement further reforms by 2010."

Every APEC member economy submits an annual Individual Action Plan (IAP) that provides details of how that economy expects to reach the Bogor Goals.

Other economies being reviewed in 2003 are Thailand and Australia. These reports are also being presented to representatives of APEC member economies on the eve of the first 2003 APEC Senior Officials meeting in Chiang Rai, Thailand, this week.

The reviews are conducted by a team comprised of an independent expert, a moderator and a discussant who are usually senior officials from an APEC economy, and a representative of the APEC Secretariat.

The full text of the 'Individual Action Plan (IAP) Study Report - Canada 2002' is available on the APEC Secretariat's Website: www.apecsec.org.sg

Report of Canada's Individual Action Plan (IAP) Peer Review
Annex 1 - Summary
Annex 2 - IAP Study Report-Canada 2002
Annex 3 - Discussant's Remarks
Annex 4 - Presentation by Canada
Annex 5 - Written Questions Received During the Session
Report of Canda's Individual Action Plan (IAP) Peer Review + All Annexes