The Power of Perspectives

The Canadian Bar Association

Kim Covert

Mercosur trade talks: An opportunity for Canada to review its model free-trade agreement

June 26 2017 26 June 2017

A cigar may sometimes be just a cigar, as they say, but a trade deal is rarely a simple matter of exchanges of goods or services for money.

Several CBA groups have weighed in on the positions the federal government should take if it decides to formally reopen trade talks with the Mercosur bloc, including International Law, Immigration Law, Competition Law, the CCCA and the Anti-Corruption Team. Mercosur, also known as the Southern Cone Common Market, is a customs union established by Argentina, Brazil, Paraguay and Uruguay.

The CBA groups start by noting that the trade and international investment landscape is in a state of flux, due to factors such as the stalled WTO Doha Round, the Asian Infrastructure Investment Bank, CETA, the uncertain fate of the Trans-Pacific Partnership, and U.S. protectionism.

Still, the CBA groups agree that reopening Mercosur talks is a good idea, for several reasons: Canada is a member of the Organization of American States (OAS) and already has trade agreements in the region; an agreement with Brazil, which is part of Mercosur, could open doors to other BRIC countries. Plus, Canada could be a “stable anchor” in North America for Mercosur and benefit from trade and investment opportunities in the region. Canada could also use this opportunity to review its model free-trade agreement, particularly with respect to investment provisions and dispute settlement mechanisms.

That said, the groups believe Canada should hold firm in some areas:

  • There has to be an acceptable level of transparency to allow close scrutiny of business practices of Mercosur partners;
  • Any agreement must respect equality, non-discrimination and human rights and result in an  equitable and fair distribution of economic prosperity;
  • The agreement should foster pay equity, equal access to education and training, and proportional gender representation across professions, all of which drive economic prosperity;
  • Good governance and respect of the rule of law must be assured in all Mercosur partners;
  • The agreement must provide for sustainable development and environmental protection;
  • Cultural practices of indigenous people, rural ways of life, intellectual and other property rights should be protected;
  • The agreement should include robust anti-corruption measures;
  • It should address anti-competitive business conduct;
  • It should ensure limitations on the ability of the state to distort trade or hinder investment;
  • It should protect consumers;
  • It would be nice if it contains a chapter promoting universal primary education
  • It should remove barriers to global workforce mobility.

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