WORLD TRADE  
ORGANIZATION   
WT/REG301/2 
10 September 2012 
 (12-4825) 
Committee on Regional Trade Agreements Original:   English/ 
 Spanish 
 
 
 
FREE TRADE AGREEMENT BETWEEN CANADA AND COLOMBIA  
(GOODS & SERVICES) 
 
Questions and Replies 
   The following communication, dated 5 September 2012, is being circulated at the request of the delegations of Canada and Colombia.  
_______________ 
 
 This document reproduces the questions addressed to the Parties and the responses submitted.  
Questions from the Delegation of Australia 
 
1. Paragraph 123-124, Australia notes that new commitments in financial services and 
banking services by Colombia will apply by 2014, or when the n ecessary modifications to the 
relevant legislation are implemented.   
 Could Colombia please provide further info rmation on the legislative changes and the 
proposed timeframe for implementation? 
 Response from Colombia 
 
 Paragraph 123 refers to insurance services the provision of which is restricted to Mode 2 
(except for mandatory insurance, which is not part  of the commitment), and the commitment has been 
made to remove that restriction four years after th e entry in force of the Agreement (2014).  Colombia 
has already made the legislative changes required to  eliminate this restriction, and these are embodied 
in Law 1328 of 2009  "Issuing rules relating to financial, insu rance and securities market matters, and 
other provisions".   Paragraph 124 refers to the commitment to elim inate the reservation regarding the provision 
of banking services by branches within the four years following the entry into force of the 
Agreement (2014), and likewise establishes the possi bility of regulating branches providing banking 
services.  Colombia has already made the legislativ e changes required to eliminate the reservation, 
and these too are embodied in the above-mentioned Law 1328 of 2009.  2. Paragraph 128, Could the FTA Parties advise which professional services the Working 
Party on Cross Border Trade in Services will cover? 
Response from Canada 
 
 Engineers and architects have been determin ed as priority candidates by both Parties. 
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  Response from Colombia 
 
 Colombia is currently evaluating its system of  certification of qualifications for the regulated 
professions, for which reason it has not yet fulf illed the commitment established in Article 908.4 
"Recognition".  The Working Party has not yet met to draw up the list of professional services that 
will be affected by the commitments of Article 908.4. 
 
3. Australia notes that paragraph 121 of the Fa ctual Presentation report by the Secretariat 
indicates that Colombia's commitments on commercial fishing arrangements and mining 
services are more restrictive than GATS. 
 Could Colombia please provide further info rmation on its commitments on commercial 
fishing arrangements and mining services?  
Response from Colombia 
  The commitments in the chapter on services a pply in general to fishing and mining-related 
services, with the exceptions set out in Annexes I a nd II.  Generally speaking this means that services 
directly related to mining explor ation and exploitation are accord ed non-discriminatory treatment 
(national treatment and most-favoured-nation), ma rket access restrictions are eliminated, and 
commitments are established regarding transparency  and domestic regulation;  the only exception is 
that as regards local presence (no local presence is required in order to provide the service), the 
exception takes effect when the services concerne d will be provided for longer than one year.  
If the services are to be provided for less than one year, it is not necessary to set up a company for the 
purpose.   Fishing services fall into two categories, the first of which covers services incidental to 
small-scale fishing, and the second, services related to commercial fishing.  The transparency and 
domestic regulation commitments apply without exception to fishing in general.  Only 
Colombian nationals may engage in small-scale fi shing and it is therefore exempt from national 
treatment for services and investment, as well as from most-favoured-nation treatment and market access in the chapter on Services.  
 Commercial fishing services may be provided by foreigners but only in  partnership with a 
Colombian fishing company (exceptio n to market access and national treatment), and the cost of their 
permit will be higher than that paid by Colombian nationals (exception to national treatment).  These 
exceptions can nevertheless be eliminated when  the country from which the foreign company 
originates offers to accord preferential treatment to Colombian vessels (exception to most-favoured-
nation treatment), in other words, this is subject to reciprocal treatment. 
  The reason for requesting establishment in Colombia or partnership with a Colombian company is the Government's concern a bout the liability that arises from these sensitive 
activities and the fact that they may cause environmen tal damage that is detrimental to animal, plant 
or human life.  Questions from the Delegation of the European Union 
Services 
 
Other investment-related provisions 
 4. Section B of Chapter Eight of the Agreemen t establishes a mechanism for the settlement 
of investment disputes between an Investor a nd the Host Party, without prejudging the rights 
and obligations of the Parties under Chapter Twenty-One (Dispute Settlement).   WT/REG301/2 
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  (a) Could the Parties clarify whether there has been any dispute under their existing 
bilateral investment treaties?  If so, could they provide details? 
Joint Response from Canada and Colombia  
 
 To date, there have been no disputes under th e investor-State disput e settlement mechanism 
of the Canada-Colombia Free Trade Agreement. Cana da notes that any dispute under Section B would 
be subject to Article 830:  Public Access to Hearings and Documents  of the Canada-Colombia Free 
Trade Agreement with respect to publicly available details. 
 
(b) Could the Parties explain whether the Agreement foresees any compensation 
mechanism for financial institutions, wh ich could be adversely affected by 
actions included in Annex 1101.3(a) paragraph 2? 
Response from Canada 
 
 A specific compensation mechanism related to Annex 1101.3(a) does not exist in the 
agreement;  however, if the actions of a Party c onstituted a direct or indirect expropriation, the 
requirements of Article 811 would be applicable  and those requirements include the payment of 
compensation.  
 Response from Colombia 
 
 The possibility for the State to designate a monopol y is not at all affected by the obligations 
under the Agreement.  Annex 1101 clarifies this situation for activities pertaining to the public 
retirement plan or the statutory system of social  security, whilst Article 801.3 makes clear that the 
Colombian Government may affect the changes nece ssary to designate any monopoly, provided that it 
acts in a manner consistent with the provisions of the chapter on investment. 
 
 Consistency with the chapter on investment im plies that should it be necessary to expropriate 
an asset in order to establish a monopoly, the action must be consistent with Article 811 
"Expropriation".  These obligations also cove r the commitment made in Annex 1101.3(a) and 
compensation must therefore be paid if need be;  the creation of a mechanism separate from the one 
already established under the Free Trade Agreement is therefore not envisaged.  
 
Questions from the Delegation of Japan 
 
5. Paragraph 39, page 17,  of the Secretariat's Report WT/REG301/1 on the FTA between 
Canada and Colombia, there is a description of "cross-cumulation". 
 Has Canada or Colombia agreed to have a "cross-cumulation" provision similar to the 
one in the Canada-Colombia FTA in their previously-concluded FTAs?  
Response from Canada 
 
 Yes.  In addition to Colombia, Canada has agr eed to a cross-cumulation provision in many of 
its recently-concluded FTAs, including with Panama, Jord an and Peru.  Furthermore, in the context of 
FTA modernization, work is underway to include cr oss-cumulation provisions in Canada's agreements 
with Chile, Costa Rica and Israel.   
 
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  Response from Colombia 
 
 Colombia has negotiated a similar clause of cr oss-cumulation in its previous FTAs with Chile 
and México.  In the case of our FTAs with El Salvador, Guatemala, Honduras and United States the cross-cumulation only apply fo r Textile and Apparel products. 
 
6. Did Canada and Colombia agree to have th e provision for cross-cumulation with any 
particular countries assumed to be a "non-party " in the context of the Canada-Colombia FTA? 
Joint Response from Canada and Colombia:  
 
No.  The Canada-Colombia FTA does not assume any particular countries to be a non-party in the 
context of cross-cumulation.   However, to be c onsidered for cross-cumulation, a "non-party" must 
have an FTA (in force) with each Party and the FTA s must contain a provision of equivalent effect 
(Paragraph 3 of Article 306 -Accumulation-). As such , the cross-cumulation provision is open to any 
non-party that fulfils this condition. 
 
7. What industries would benefit most from using the provision for cross-cumulation? 
Response from Canada 
 
 The nature and scope of the benefits that would be realized from the implementation of a 
cross-cumulation provision between Canada and Colo mbia is dependent upon th e country or countries 
that are included in the expansion of the free trade ar ea as well as the coverage of the provision.  It is 
anticipated that industries that are well integrated into global value chains would be best placed to 
take advantage of cross-cumulation between Cana da, Colombia and another party or parties. 
 Response from Colombia 
  Cross-cumulation is an open clause, and the Parties (Canada and Colombia) have to define the product that could be covert by this clause.  I ndustries that have a short supply of inputs or raw 
materials in the Canada and Colombia FTA  area could benefit from this provision. 
 
8. Paragraph 75, page 25, the professionals listed in Appendix 1203. D are not covered 
under the Chapter on Movement of natural persons.  Regarding the list of professionals, how do 
the domestic laws and regulations of both Part ies define these professionals?  If the Agreement 
is not applied directly, please provide us with the relevant part of these laws and regulations. 
Response from Canada 
 
 Canada has a comprehensive system, the National Occupational Classification (NOC), which 
is the nationally accepted reference on all occupatio ns in Canada. It orga nizes over 40,000 job titles 
into 500 occupational group descriptions.  
  At the following internet link: http://www5.hrsdc.gc.ca/noc/englis h/noc/2011/OccupationIndex.aspx  - the detailed Occupational 
Structure is organized into ten categories, as such: 
  0  Management occupations   1  Business, finance and administration occupations   2  Natural and applied scien ces and related occupations  
 3  Health occupations  
 4  Occupations in education, law and social, community and government services   WT/REG301/2 
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   5  Occupations in art, cu lture, recreation and sport  
 6  Sales and service occupations   7  Trades, transport and equipment operators and related occupations  
 8  Natural resources, agriculture and related produc tion occupations  
 9  Occupations in manufacturing and utilities  
 
 For Canada, professionals covered by the oblig ations of Annex 1203 D are those engaged in 
speciality occupations that are listed under skill leve ls 'O' (i.e. all Management Occupations) and 'A' 
(occupations usually requiring uni versity education) of the National Occupation Classification.  A 
visual example of the skill level matrix  can be found at this internet link: 
http://www5.hrsdc.gc.ca/noc/e nglish/noc/2011/html/Matrix.html . 
 
 More information about the NOC system in general can be found at this link: 
http://www5.hrsdc.gc.ca/noc/english/noc/2011/Welcome.aspx . 
 
Response from Colombia 
 
 It is correctly stated that the list esta blished in Appendix 1203 is excluded from the 
application of the Chapter as the commitments on professionals have a negative list approach.  In 
Colombia the Agreement is enforced through the issu ance of a specific Law, therefore, this list is 
incorporated in the Colombian legal system directly by the FTA.  
 
Questions from the Delegation of Mexico 
 Provisions on Trade in Services and Investment 
 
9. Paragraph 85 states that for financial servic es, a "negative list" approach is also 
followed except for cross-border trade in or s upply of financial services where the Parties have 
specified the covered sectors on a positive basis. 
 Could the Parties please tell us whether th ey have agreed to liberalization beyond the 
current commitments in cross-border trade in financial services?  
Response from Canada 
 
 Canada did not agree to liberalize beyond its existing legislation in the Canada-Colombia 
FTA.  However, aspects of the provincial and territorial securities frameworks were bound for the first time in the agreement.  On a bilateral basis, Cana da and Colombia have not subsequently agreed to 
further cross-border financial services commitments.  
Response from Colombia 
 
 Commitments have been included to furthe r the liberalization of cross-border banking, 
portfolio management and insurance services (other than the mandatory ones), no later than four years 
following the entry into force of the Agreement.  It will be possible to offer banking and insurance 
company services through branches (this is not currently permitted), sell cross-border insurance 
(other than mandatory insurance services), and to provide portfolio management services;  these 
additional liberalization commitments are all set out in Annex III, Section III. 
   
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  Regulatory Provisions  
Recognition 
 
10. What are the Parties from the countries that have negotiated mutual recognition 
agreements with Canada or Colombia? 
Response from Canada 
 
 At this time, we are not aware of any mutual recognition agreement that has been or is being 
negotiated between professional bodies of the two Parties.  
Response from Colombia 
 
 Colombia and Canada have not yet begun negotia tions on the signing of an "Agreement on 
the Mutual Recognition of Degrees and Academ ic Qualifications" (MRA).  However, the 
commitments in the chapter on cross-border service s, Article 908 "Recognition", include the intention 
to recognize qualifications from higher learning, either autonomously or through the signing of 
mutual recognition agreements (which may be gui ded by the criteria laid out in Annex 908.4). 
  Another possibility for mutual recognition is th at of requesting the option to negotiate an 
MRA under the same terms and conditions as one to which the other Party is signatory.  Colombia 
currently has MRAs, inter alia,  with the Andean Community of Nations, Germany, Russia, Argentina, 
Chile, Bulgaria, Costa Rica, Mexico, Peru and Uruguay. 
 
Electronic Commerce 
 11. Could Colombia please tell us what the most recent policy directions have been in the 
electronic commerce sector? 
Response from Colombia 
 
 The entire policy on e-commerce and related ma tters can be viewed on the website of the 
Ministry of Information and Communications Technology (MINTIC) at: http://www.mintic.gov.co/colombiatic  
 
Labour and Environment 
Labour 
 
12. What is the relationship between Chapter 16 and the Labour Cooperation Agreement 
between Canada and Colombia? 
Response from Canada 
 
 Since 2007, Canada's trade agreements have  included a short principle-based, non-binding 
labour chapter that outlines the obligations found in the accompanying Labour Cooperation 
Agreement (LCA).  All binding obligations pertaini ng to labour continue to be found in the parallel 
LCA.  
 Response from Colombia 
  In negotiating the Free Trade Agreement ("FTA") it was agreed to incorporate a chapter on 
labour and to sign a Labour Coopera tion Agreement ("The Agreement") linked to the FTA and which 
very concretely expands on the principles laid out in the chapter.  WT/REG301/2 
 Page 7 
 
 
   Both Chapter 16 of the FTA and the Labour Cooperation Agreement aim to ensure the 
effective incorporation of the fundamental labour right s of workers in the domestic laws of the Parties 
and the enforcement of those laws in an endea vour to safeguard the fundamental labour rights of 
workers on a cooperative basis.  
 The Agreement thus develops the principles and objectives set out in Chapter 16 of the FTA 
through specific commitments by the Parties, despit e being an autonomous international instrument 
and therefore distinct from the FTA.   The relationship between the chapter on labour in the FTA and the Agreement is described in 
Article 1604 of the FTA as follows: 
 
"Article 1604:  Obligations 
 
  In order to further the foregoing objectives, the Parties' mutual obligations are set 
out in the Labour Cooperation Agreement between Canada and the Republic of Colombia (LCA) that addresses, inter alia: 
 
(a) general commitments concerning the internationally recognized labour principles 
and rights that are to be embodied in each Party's labour laws; 
 
(b) a commitment not to derogate from domestic labour laws in order to encourage 
trade or investment; 
(c) effective enforcement of labour laws through appropriate government action, 
private rights of action, procedural guarantees, public information and awareness; 
 
(d) institutional mechanisms to oversee the implementation of the LCA, such as a 
Ministerial Council and national Points of Contact to receive and review public 
communications on specified labour law matters and to enable cooperative 
activities to further the objectives of the LCA; 
 
(e) consultations regarding the implementation of the LCA and its obligations;  and 
 
(f) independent review panels to hold hearings and make determinations regarding 
alleged non-compliance with the terms of the LCA and, if requested, monetary 
assessments." 
 
 The Labour Cooperation Agreement for its part also clearly establishes its relationship with 
the FTA in the Preamble and in Articl es 29 and 30 of the Agreement, as follows: 
 
Preamble 
 
  "RECALLING  their resolve in the Free Trade Agreement between Canada and the 
 Republic of Colombia (CCOFTA) to:  
  (a) protect, enhance and en force basic workers' rights, 
 
  (b) strengthen cooperation on labour matters;  and 
   (c) build on their respective international commitments on labour matters." 
  
 Articles 29 and 30 of the Agreement likewise link the entry into force and termination of the Agreement with the FTA as follows: 
 
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  "Article 29:  Entry into force 
   Each Party shall notify the other Party in writing of the completion of the domestic 
procedures required for the entry into force of this Agreement.  This Agreement shall enter 
into force from the date of the second of these notifications, or the date that the Free Trade Agreement between the Government of Canada and the Government of the Republic of 
Colombia enters into forc e, whichever is later." 
 
"Article 31:  Termination 
 
1. This Agreement shall remain in force as long as the CCOFTA continues in force.  
Should the CCOFTA be terminated, either Party may terminate this Agreement by 
giving written notice to the other Party.  Such termination shall take effect 14 days after the date of the receipt of the written notice. 
 
2. This Agreement may terminate upon the mutual written agreement of the Parties 
and upon such conditions and within such time-frame as may be mutually agreed 
upon." 
 
13. What are the differences between Chapter 16 and the Labour Cooperation Agreement 
between Canada and Colombia? 
Response from Canada 
 
 Chapter 16 is a short non-binding chapter on la bour that reaffirms both countries' obligations 
and objectives as found in the parallel LCA. 
 
 The LCA is comprised of three core elements:  a high level of binding obligations;  a 
transparent and enforceable dispute settlement  mechanism in case of non-compliance; and a 
programme of cooperation or technical assistance.   On the level of obligations, both countries co mmit to reflecting international labour standards 
in domestic legislation and to enforcing such laws  effectively.  Specifically, they commit to having 
labour laws that respect the four fundamental principles of the ILO Declaration on Fundamental 
Principles and Rights at Work (1998).  These are the rights of freedom of association and collective 
bargaining, the abolition of child labour, the elim ination of forced or compulsory labour, and the 
elimination of discrimination in respect of employ ment and occupation.  The Parties also commit to 
establishing and maintaining acceptable conditions of work with respect to minimum wages, hours of 
work and occupational health and safety and providing migrant workers with the same legal 
protections as citizen in regards to working conditions.    Through the LCA, Canada and Colombia are obligated to respect the provisions of the 
Agreement.  The LCA provides an open, robust an d streamlined complaints and dispute resolution 
process.  As a last resort, financial penalties can be imposed in cases of non-compliance.  
 Cooperation is also a key element of the LCA.  The provisions of the LCA are complemented 
by concrete actions to address the labour situa tion in Colombia, notably through labour-related 
information sharing and technical assistance.   
Response from Colombia 
 
 As explained in the previous paragraph, the Labour Cooperation Agreement expands on the 
principles and objectives set out in Chapter 16 of th e FTA, and stipulates specific obligations to be 
fulfilled by the Parties signatory to the Agreement.  Chapter 16 thus sets out the general framework of  WT/REG301/2 
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  the principles and objectives being pursued in the FTA and the Labour Cooperation Agreement, as 
summarized in the following points:  
 It reaffirms the commitments of the Parties as members of the ILO, in particular to 
the ILO Declaration on Fundamental Princi ples and Rights at Work (1998) and its 
Follow-Up, as well as their continuing respect  for each other's Constitution and laws; 
 
 it stipulates that it is inappropriate to enc ourage trade or investment by weakening or 
reducing the protections afford ed in domestic labour laws; 
 
 it recognizes their respective international commitments, as well as the importance of 
strengthening their cooperation on labour in order to improve working conditions, 
promote compliance with and effective enfo rcement by each Party of its labour laws; 
 
 it enshrines the Parties' general obligations set out in the Labour Cooperation 
Agreement regarding general commitments c oncerning the internationally recognized 
labour principles and rights that are to be embodied in each Party's labour laws and the effective enforcement of labour laws, amongst other obligations;  and 
 
 it recognizes that labour cooperation is an essential element in raising the level of 
compliance with labour standards and as such provides for the development of a plan of action for cooperative activities. 
  In conclusion, the obligations assumed under the Labour Cooperation Agreement coincide 
with the above guidelines embodied in the FTA and expands on them th rough various provisions 
aimed at ensuring the effective en forcement of the fundamental labour  principles.  Differences cannot 
therefore be said to exist between Chapter 16 of th e FTA and the Agreement.  On the contrary, the 
two instruments are complementary.  
14. Does Chapter 16 contain provisions on the settlement of disputes between the Parties? 
Joint Response from Canada and Colombia:  
 
 Chapter 16 is non-binding and is not subject to  the free trade agreement's dispute settlement 
mechanism. Article 2102 (Scope of Application) states:   "Except for any matter arising under Chapte rs 16 (Labour) and 17 (Environment) and as 
otherwise provided in this Agreement, the dispute settlement provisions of this chapter shall apply 
with respect to the settlement of all disputes be tween the Parties regarding the interpretation or 
application of this Agreement or wherever a Party considers that (...)".     The binding obligations are found in the para llel LCA, which has its own separate dispute 
resolution mechanism.  
 
15. Under the Labour Cooperation Agreement between Canada and Colombia, can the 
Parties request the establishment of a Panel to review non-compliance with any principle of the 
International Labour Organization? 
 
 
  WT/REG301/2 
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  Response from Canada 
 
 Under the Agreement, Canada and Colombia commit to ensuring that their laws not only 
respect the ILO Declaration on Fundamental Principles and Rights at Work  (1998), but also provide 
acceptable protections for occupational health and saf ety, hours of work, wages and migrant workers. 
 
 The LCA provides a streamlined, open and robust dispute resolution process to ensure compliance.  Each country's obligation regarding the application of its own domestic labour law, 
along with the principles found in the ILO Declaration, can be taken through the entire dispute resolution process. 
 Following the conclusion of Ministerial Consultations, the Party that requested the 
consultations may request that a review panel be convened if it considers that: 
 (a) the matter is trade-related;  and 
 
 (b) the other Party has failed to comply with  its obligations under the agreement through:  
   (i) a persistent pattern of failure to  effectively enforce its labour law;  or 
  (ii) failure to comply with its obligations  to the extent that they refer to the ILO 
 1998 Declaration (Articles 1 and 2). 
 Response from Colombia 
  The Labour Cooperation Agreem ent concluded with Canada contains a procedure for 
reviewing compliance with the obligations as a mech anism for settling any disputes that may arise in 
its implementation.  The procedure is designed to en sure compliance with the obligations laid out in 
the Agreement concerning the effective application of the national laws that give effect to the 
fundamental principles and rights contained in the ILO 1998 Declaration.   Under Article 13 therefore, should a dispute not  be settled in the consultation phase, the Party 
that requested the consultations may thereafter request  that a review panel be  convened if it considers 
that:   (a) The matter is trade-related;  and  
 (b) the other Party has failed to comply wi th its obligations under the agreement through: 
 
(i) a persistent pattern of failure to e ffectively enforce its labour law;  or 
 
(ii) failure to comply with its obligations under Articles 1 and 2 to the extent that 
they refer to the ILO 1998 Declaration. 
 
 Pursuant to Article 1 of the Agreement, e ach Party shall ensure that its statutes and 
regulations, and practices ther eunder, embody and provide prot ection for the following labour 
principles and rights internationally recognized in the ILO Declaration of 1998:  
(a) Freedom of association and the right to co llective bargaining (inc luding protection of 
the right to organize and the right to strike); 
 
(b) the elimination of all forms of forced or compulsory labour;  WT/REG301/2 
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  (c) the effective abolition of child labour (including protections for children and young 
persons); 
 
(d) the elimination of discrimination in  respect of employment and occupation. 
 16. What institutional mechanisms are planne d to monitor the implementation of the 
Labour Cooperation Agreement be tween Canada and Colombia? 
Response from Canada 
 
 The LCA provides for a Ministerial Council, comprised of Labour Ministers from both 
Canada and Colombia, that shall meet within the firs t year after the entry into force of the Agreement 
and thereafter, as necessary, in order to discu ss matters of common interest, to oversee the 
implementation of the Agreemen t and review progress under it. 
 
 The first Ministerial Council meeting took pl ace in Bogotá, Colombia, on 23 January 2012. 
Outcomes of the meeting included:  the designation of formal contact points in each government for 
the LCA;  a discussion of recent Ministerial accomplishments and priorities; approval of the 2012-2013 Plan of Action for Cooperative Labour Activities, and discussions about the possible 
timing and agenda of the next Ministerial Council meeting.   As stipulated by the Agreement, the Canadi an and Colombian Ministers of Labour also met 
with members of the public, including both union and employer representatives, as well as 
representatives of international organizations, to obtain their views with regards to the LCA's 
implementation.   The formal contacts points under the Agreement maintain regular communication and 
exchange information on labour issues. A key elemen t of Canada’s labour approach is cooperation. 
The provisions of the LCA are complemented by co ncrete actions to address the labour situation in 
Colombia, notably through labour-re lated information sharing and technical assistance. Through the 
monitoring of technical assistance projects and rela ted exchanges, Canadian labour officials are able 
to improve their understanding of and appreciati on for the realities on the ground in Colombia. 
Labour officials also monitor media and reports pertaining to issues related to the LCA. 
 
 As mentioned, if issues of non-compliance arise, both Parties have access to the dispute resolution process.   There is also a provision for the Ministerial Council to review the operation and effectiveness 
of the LCA, including the degree to which progress has been made in implementing the obligations 
and institutional mechanisms, within five years after the date of entry into force of the Agreement and 
thereafter within such other period as may be decided by the Council.  Response from Colombia 
 
 The Labour Cooperation Agreemen t established institutional mech anisms that constitute the 
bodies required for reviewing the operation and eff ectiveness of the Agreement.  A Ministerial 
Council was created for that purpose, comprised of Ministers responsible for labour affairs of the 
Parties.  
 Similarly, a Point of Contact was establishe d within the governmental department of each 
Party responsible for labour affairs, inter alia,  to provide the other Party with relevant information, 
coordinate cooperative activities, a nd to review public communications. 
 WT/REG301/2 
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   Besides, the institutional mechanisms in the Agreement include national mechanisms 
enabling each country to convene a national labour committee or consult an existing one, so as to 
provide views on any issues related to this Agreem ent.  The aforementioned committee will comprise 
representatives of labour and business organizations.  9. What kinds of penalties can be applied by a review panel established under the Labour 
Cooperation Agreement?  
Response from Canada 
 
 The LCA provides a streamlined dispute reso lution process to ensure compliance.  Each 
country's obligation regarding the application of  its own domestic labour law, along with the 
principles found in the ILO Declaration, can be ta ken through the entire dispute resolution process 
with the possibility of up to $15 million in fines in  any one year.  All monetary assessments will be 
paid into a cooperation fund to be expended in the te rritory of the party complained-against to address 
labour issues. 
 
Response from Colombia 
 
 The Agreement foresees a procedure for the review of obligations as a mechanism for 
resolving any disputes that may arise in its implementation. 
 
 The mechanism consists of two phases:  
(a) Ministerial consultations phase:  A Part y may request consultations with the other 
Party at the ministerial level regardi ng any obligation under this Agreement. 
 
(b) Review panel:  If the dispute cannot be resolved in the consultation phase, the Party 
that requested the consultations may thereafter request that a review panel be convened. 
  The review panel will present to the Parties a report containing its determination as to whether 
or not the Party that is the object of the review has failed to comply with its obligations.  If it finds 
that there is non-compliance, it must pre sent its recommendation for settling the matter. 
  If the panel determines that there has been  non-compliance, the Parties may agree on a 
mutually satisfactory action plan to implement the panel's recommendations. 
 
 If the Parties fail to reach agreement on an ac tion plan or have agreed on an action plan and 
the requesting Party considers that the other Part y has failed to observe the terms thereof, the 
requesting Party may request that the review pa nel be reconvened to impose an annual monetary 
assessment on the other Party.  
 The monetary assessments may not exceed the amount of US$15 million annually, and must 
be paid into a fund designated by the Council cr eated under the Agreement and will be expended at 
the direction of the Council for appropriate labour in itiatives in the territory of the Party that was the 
object of the review.  In deciding how to expend m onies paid into the fund, the Council may consider 
the views of interested persons in the Parties' territories.       WT/REG301/2 
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  Environment 
 
17. According to the Report by the Secretaria t, in Chapter 17 the Parties reaffirm their 
environmental obligations under their multilatera l environmental agreements.  What are these 
multilateral environmental agreements? 
Response from Canada 
 
 Chapter 17 of the Canada-Colombia Free Trad e Agreement includes text whereby Canada 
and Colombia affirm their international obligatio ns under multilateral envir onmental agreements to 
which they are party.  For Canada, this would in clude all multilateral environmental agreements to 
which it is party, and for Colombia, this would in clude all multilateral environmental agreements to 
which it is party.    Response from Colombia 
 
 Although the list of multilateral environmental agreements ratified by each of the Parties in 
the text of Chapter 17 is not restrictive, each Party clearly delineates compliance with the 
environmental obligations that necessarily derive from  an international body of environmental rules 
that has been incorporated into their domestic laws. 
  The Parties agreed to reaffirm their obligati ons under the terms, rights and obligations of the 
multilateral environmental agreements to which they are party and which contain a tacit and 
special demarcation regarding those MEAs with trade implications.  Thus, Chapter One of the 
INITIAL PROVISIONS AND GENERAL DEFINITIONS - Section A - Initial Provisions, stipulates:  
Article 103:  Relation to Multilateral Environmental Agreements 
 
  In the event of any inconsistency between this Agreement and the specific trade 
obligations set out in the Multilateral Environmental Agreements referred to in Annex 103, 
such obligations shall prevail to the extent of the inconsistency, provided that where a Party 
has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other 
provisions of this Agreement. 
 
Annex 103 
 
Multilateral Environmental Agreements 
 
(a) the Convention on International Trade in Endangered Species of Wild Fauna and 
Flora,  done at Washington on 3 March 1973, as amended on 22 June 1979; 
 
(b) the Montreal Protocol on Substances that Deplete the Ozone Layer , done at 
Montreal, 16 September 1987, as amended 29 June 1990, as amended 
25 November 1992, as amended 17 September 1997, as amended 3 December 1999;  
 
(c) the Basel Convention on the Control of Transboundary Movements of Hazardous 
Wastes and Their Disposal , done at Basel on 22 March 1989;  and 
 
(d) the Rotterdam Convention on the Prior Informed Consent Procedure for Certain 
Hazardous Chemicals and Pesticides in International Trade , done at Rotterdam on 
10 September 1998. 
 
 
 WT/REG301/2 
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  18. Could you please explain whether Chapter 17 or the Agreement on the Environment 
provide for a mechanism to settle disputes between the Parties?  If so, is it an ad hoc dispute settlement mechanism? 
Response from Canada 
 
 The Canada-Colombia Environment Agreement includes a dispute resolution mechanism 
based on consultation and cooperation to address any ma tter that may arise under that Agreement.  It 
provides for consultations beginning at the officials'  level, followed by Ministerial-level consultation 
if necessary.  
 The dispute resolution mechanism in the Environment Agreement is separate from the 
mechanism in the FTA (i.e., there cannot be recour se to the FTA dispute mechanism on matters under 
the Environment Agreement).  As Chapter 17 refers to the Environment Agreement, it is not subject 
to the FTA dispute settlement mechanism.   
Response from Colombia 
 
 Chapter 17 does not provide for a dispute settlem ent mechanism, as the Parties have opted for 
a cooperative approach, given the long track reco rd of trade flows between the Parties.  
The mechanism has nevertheless been envisag ed under the environmental agreement. 
 
Article 12:  Dispute Resolution 
 
1. The Parties shall at all times endeavour to agree on the interpretation and 
application of this Agreement. 
 
2. The Parties shall make ever y attempt, through consulta tions and the exchange of 
information with an emphasis on cooperation to address any matter that might 
affect the interpretation and application of this Agreement. 
 
  It is a detailed scheme for requesting consultations under which, after an initial 
phase before the national coordinators is exhausted, the Parties would, as a last resort, turn to the government authority responsible for environmental matters in each of the Parties in 
order to bring any actual and/or possible non-compliance into line with international 
provisions. 
 
 The chapter on dispute settlement contains the following:  
Article 2102:  Scope of Application 
   Except for any matter arising under Chapters 16 (Labour) and 17 (Environment) 
and as otherwise provided in this Agreement, the dispute settlement provisions of this chapter 
shall apply with respect to the settlement of all disputes between the Parties regarding the interpretation or application of this Agreement or wherever a Party considers that:  … 
 
Article 2103:  Choice of Forum 
 
  Subject to paragraph 2, disputes regarding any matter arising under both this 
Agreement and the WTO Agreement or any anot her free trade agreement to which both 
Parties are party, or any successor agreement thereto, may be settled in either forum at the 
discretion of the complaining Party. 
   In any dispute referred to in paragraph 1 where the Party complained against 
claims that its measures are subject to Article 103 (Initial Provisions and General 
Definitions - Relation to Environmental and Conservation Agreements) and requests in  WT/REG301/2 
 Page 15 
 
 
  writing that the matter be considered under th is Agreement, the complaining Party, in 
respect of that matter, may have recourse to dispute settlement procedures only under this Agreement. 
 
19. Can failure to comply with obligations und er any multilateral environmental agreement 
result in sanctions or retaliation between the Parties? 
Response from Canada 
 
 The environment obligations that Canada ne gotiated with Colombia are not subject to 
monetary penalties or trade sanctions.  Dispute resolution under the Canada-Colombia Environment 
Agreement is based on a collabor ative and cooperative approach. 
 Response from Colombia 
  Reprisals or penalties have not been the essentia l denominator of the trade relations that have 
existed between Cana da and Colombia. 
  In line with the above considerations, the benefits derived from the agreement could be 
suspended, at best in cases of non-compliance with  obligations under the multilateral environmental 
agreements mentioned in Annex 103, give n their considerable trade implications. 
  In the light of the preceding paragraph, Artic le 2105 stipulates that the Parties may at any 
time agree to undertake an alternative method of di spute resolution, such as good offices, conciliation 
or mediation.  Such alternative methods will be c onfidential and without prejudice to the rights of the 
Parties in any other proceedings. 
 
20. What provisions are made for the protection and preservation of traditional knowledge 
in the Agreement on the Environm ent between Canada and Colombia? 
Response from Canada 
 
 Under Article 5 (Biological Diversity) of the Canada-Colombia Environment Agreement, 
both Parties reiterate their commitment, as establis hed by the Convention on Biological Diversity, to 
respect, preserve and maintain traditional knowledg e, innovations and practices of indigenous and 
local communities that contribute to the conserva tion and sustainable use of biological diversity, 
subject to national legislation.  Article 5 also allo ws for exchanges of information on the avoidance of 
illegal access to traditional knowle dge, innovations and practices. 
 Response from Colombia 
  The question of the protection and preservati on of traditional knowledge has always been a 
central consideration in our free trade agreements, a nd this one is no exception.  We must of course 
clarify that the agreement on the environment is not  the only vehicle that can provide such protection 
and preservation.   Article 5 of the agreement on the environm ent embodies the main provisions on biological 
diversity.  While not being the only precise menti on, paragraph 3 provides as follows:  The Parties 
reiterate their sovereign rights over their natural resources and recognize their authority and obligations as established by the Convention on Biological Diversity  with respect to access to genetic 
resources, and to the fair and equitable sharing of  benefits arising out of the utilization of those 
genetic resources.  WT/REG301/2 
Page 16  
 
   Likewise, subparagraphs (a), (b ) and (c) of paragraph 6 of the same Article describe how such 
protection is envisaged, as follows:   The Parties shall endeavour to cooperate in orde r to exchange relevant information regarding: 
 
(a) The conservation and sustainable use of biodiversity; 
 
(b) the avoidance of illegal access to genetic resources, traditional knowledge, 
innovations and practices;  and 
 
(c) the equitable sharing of the benefits ar ising from the utilization of genetic resources 
and associated knowledge, innovations and practices. 
 
21. What criteria are used to determine the environmental goods and services whose trade 
is promoted through the Agreement on the Environment? 
Response from Canada 
 
 The Environment Agreement does not includ e a definition or classification system for 
environmental goods and services.     Response from Colombia 
  More than criteria, this agreement has attempte d to give form to the possibility of operating a 
market for goods from our biodiversity - a "gr een market" - involving goods that obviously 
incorporate an environmental benefit, though we ha ve not included exhaustive lists of goods with 
correspondences in the Harmonized System. 
 
Questions from the Delegation of the United States 
Services 
 
22. Paragraph 63 of the Factual Presentation notes that Chapter 9 of the Agreement 
(concerning cross-border services trade) does not apply to "government procurement by a 
Party or a state company." 
 Neither Chapter 9 nor Chapter 1 (General Definitions) of the Agreement appears to 
contain a definition of "government procurement" applicable to Chapter 9.  How do the Parties 
understand this term to be defined for purposes of Chapter 9?  Does the exclusion from the scope of Chapter 9 for procurement by a Party or state company apply irrespective of whether 
services are being purchased for a governmental pur pose, or for use in the supply of services for 
commercial sale?  
Response from Canada 
  The Government Procurement chapter does not define "government procurement", it instead 
defines "procurement" for the purpo ses of the chapter and this defi nition does not include commercial 
procurement.  In our FTAs, including the Canada -Colombia FTA, it has been Canada's view that 
"government procurement by a Party or a state company", including their commercial procurement would be excluded from the Cross-Bo rder Trade in Services Chapter. 
 
 
   WT/REG301/2 
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  Response from Colombia 
 
 The exclusion of "government procurement" st ipulated in Article 9.1.2(c) is total.  
The understanding of the term held by the Parties is  similar to Article 13 of the GATS, where the 
treatment granted with respect to the commitments  to non-discrimination and access do not apply to 
anything related to procurement by the State in the pursuit of its public objectives.  In Colombia, the 
scope of the exclusion extends to all entities that have a system of public procurement, but does not 
include enterprises which act under a system of private procurement or which operate under conditions of free competition, even when they are majority State-owned. 
 
23. Paragraph 87 of the Factual Presentation no tes that the Agreement contains a "broad 
cultural carve-out."  Footnote 36 of the Presentation reproduces the definition of "cultural industries" for purposes of this general exception.  It then notes that Canada has "pointed out" 
that it considers a host of services activities, in cluding advertising, photography, and publishing, 
to be "services related to culture." 
 Could Parties clarify whether Canada’s ob servation about "services related to culture" 
reflects a provision contained anywhere within the text of the Agreement?  Do the Parties intend for the scope of the exception for "cultural indus tries" to be limited to that provided in the 
definition of this term in the Agreement, or for the exception to also apply to services "related to 
culture" as seems to be suggested in the observat ion by Canada?  If the latter, how do Parties 
define the scope of services that are "related" to culture? 
 Response from Canada 
  In the factual report, Canada was clarifying that regarding the category of other business 
services (CPC 879), some of its sub-sectors such as advertising services, photography and publishing 
services would fall under the scope of "culture" as unde rstood at the multilateral level since, as 
Canada stated the last time, Canada has refr ained until now from taking commitments in services 
related to culture at the WTO/GATS.  Canada's approach at the bilateral level focuses on excluding 
"cultural industries" as defined in each agreement.   Now that the Canada-Colombia FTA extends the 
standard definition of cultural industries to specifi c cultural areas, such as performing arts, visual arts 
and handicrafts, Canada's observation about "services related to culture" does reflect and characterize 
the broader cultural exemption provision contained in the text of the Agreement. 
 Response from Colombia 
  Article 2208 "Definitions" contains a full defin ition of the scope of "cultural industries".  
The Parties interpret the services covered under the ex ception fairly broadly, as the "related services" 
category includes the design, produc tion, publication, presentation, sale, exhibition, distribution, or 
other similar services, as applicable, as describ ed in the definitions given in Article 2208. 
 
24. Paragraph 94 of the Agreement compares Ca nada's horizontal mode 3 commitments 
under the Agreement with those under the GATS.  It notes that Canada has scheduled an 
approval requirement for direct acquisitions of certain Canadian businesses in the GATS, but 
that in the Agreement this requirement extends to all acquisitions, whether direct or indirect. 
 Do the Parties agree with the Secretariat's characterization of the treatment of this 
approval requirement in the Agreement?  That is, wa s it the intention of the Parties to include a 
more restrictive, less liberal mode 3 approval regime for Canada in the Agreement that is 
required of Canada under the GATS? 
  WT/REG301/2 
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  Joint Response from Canada and Colombia 
 
 Neither Party considers that the requirement in cluded in the restrictive measures for Canada 
can be understood as more restrictive than its specific commitments under the GATS.  
 
25. Paragraph 121 of the Factual Presentation  describes Colombia's commitments under 
the Agreement with respect to "other business servi ces."  It notes that Colombia's commitments 
with respect to certain fishing- and mining- related services are more restrictive under the 
Agreement than under the GATS. 
 Do the Parties agree with the Secretariat's ch aracterization of Colombia's commitments 
under the Agreement with respect to these sectors?  If  so, was it the intention of the Parties to 
include under the Agreement carve-outs and excep tions that are more restrictive than those 
applicable under Colombia's GATS commitments?  
Response from Colombia 
 
 We do not share the Secretariat's view that the commitments under the 
Colombia-Canada FTA are more restrictive than the GATS.  The commitments in the chapter on 
Services apply in general to fishing and mining-related services, with the exceptions set out in Annexes I and II.  Generally speaking this means th at services directly related to mining exploration 
and exploitation are accorded non-discriminatory treatment (national treatment and most-favoured-
nation), market access restrictions are eliminated, and strong commitments are established regarding 
transparency and domestic regulation;  the only ex ception is that as regards local presence (no local 
presence required in order to provide the service), th e exception takes effect when the services are to 
be provided for longer than one year.  If the services  will be provided for less than one year, there is 
no need to set up a company for the purpose. 
 
 Fishing services fall into two categories, the first of which covers services incidental to small-scale fishing, and the second, services related to commercial fishing.  The transparency and 
domestic regulation commitments apply without excepti on to fishing in general.  More specifically, 
only Colombian nationals may engage  in small-scale fishing and it is therefore exempt from national 
treatment for services and invest ment, as well as from most-favoured-nation treatment and the market 
access provisions in the chapter on services. 
  Commercial fishing services may be provided by foreigners but only in  partnership with a 
Colombian fishing company (exception to Market Access and National Treatment), and the cost of 
their permit will be higher than that paid by Colo mbian nationals (exception to National Treatment).  
These exceptions can nevertheless be eliminated when the country from which the foreign company 
originates offers to accord preferential treatment to Colombian vessels (exception to most-favoured-
nation treatment), in other words, this is subject to reciprocal treatment.   The reason for requesting establishment in Colombia or partnership with a Colombian company is the Government's concern a bout the liability that arises from these sensitive 
activities and the fact that they may cause environmen tal damage that is detrimental to animal, plant 
or human life.  
26. Paragraph 128 of the Factual Presentation notes that, pursuant to Article 908 of the 
Agreement, Parties will "try to ensure" that th eir professional bodies meet "within 12 months" 
to discuss the development of an agreement or arrangements on recognition. 
 What efforts have Parties made to fulfil th is Article 908 obligation, and what has been 
the outcome of those efforts?  WT/REG301/2 
 Page 19 
 
 
  Joint Response from Canada and Colombia:  
 
 There have been some exchanges but no final decision between the Parties yet on what the best approach might be to fulfil the requirements of this Article. 
 
 Colombia is currently reviewing its met hodology for the certification of professional 
qualifications, and a longer time-frame is th erefore needed to meet this commitment. 
 
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