Canada’s Bilateral Free Trade Agreement Strategy in Latin America: A Strategic Analysis

Title: Canada’s Bilateral Free Trade Agreement Strategy in Latin America: A Strategic Analysis
Authors: Bennett, Kirk
Date: 2011
Abstract: This paper will attempt to identify the quantifiable benefits of Canada‟s strategy of signing bilateral free trade agreements (FTAs) with Latin American countries in order to bolster its trade and investment in the region. First, a brief history of Canada‟s trade strategy in the Americas and an overview of Canada‟s current policy will be presented. This paper will then consider the differing viewpoints found in the literature on whether FTAs are valid avenues for increasing trade and investment in the region. Next, it will conduct a quantitative analysis of Canada‟s oldest bilateral FTAs with Latin American nations, namely; Chile (1997) and Costa Rica (2002). It is found that the Canada-Chile FTA has enabled increased Chilean exports to Canada and increased Canadian foreign direct investment (FDI) to Chile with only a limited expansion of Canadian exports to Chile. Meanwhile, it is concluded that the Canada-Costa Rica FTA has slightly enhanced the Canada-Costa Rica trade relationship while doing little to spur Canadian FDI to Costa Rica. Subsequently, this paper will investigate Canada‟s bilateral FTAs with Latin American countries which were signed or came into force recently, including the FTAs with Colombia (signed in 2008), Peru (in force in 2009), and Panama (signed in 2010). Canadian FDI is expected to increasingly flow to the three countries – mostly resulting from investment in their oil, gas and mining sectors. In the cases of Peru and Panama, imports should see a substantial increase due to surging gold exports. Imports from Colombia should rise as a result of the removal of tariffs on specific products like cut flowers as well as increased extractive resource sector exports. Finally, Canadian agricultural exports should benefit most from the agreements with Peru and Colombia while Canadian exporters will gain considerably better access to Panama‟s small market.
CollectionAffaires publiques et internationales - Mémoires // Public and International Affairs - Research Papers