WT/REG364/M/1  
 
12 July 2016  
(16-3736)  Page: 1/4  
Committee on Regional Trade Agreements 
Eighty-first Session   
 
 FREE TRADE AGREEMENT BETWEEN CANADA AND HONDURAS 
(GOODS AND SERVICES) 
NOTE ON THE MEETING OF 27 JUNE 2016 
Chairman: Ambassador Daniel BLOCKERT (Sweden) 
1.1.  The 81st Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/6/Rev.1 dated 16 June 2016. 
1.2.  Under Agenda Item C.III of the session, the CRTA considered the Free Trade Agreement 
between Canada and Honduras, goods and services, (hereinafter "the Agreement"). 
1.3.  The Chairman said the Agreement had ente red into force on 1 October 2014. It had been 
notified to the WTO by the Parties on 5 February 2015 under Article XXIV:7(a) of the GATT 1994 
and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG364/N/1) and under GATS Article:7(a) as an 
Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/791). The text of the Agreement was available, together with its Annexes, 
the Parties' official websites.  
1.4.  The Factual Presentation on the goods an d services aspects (document WT/REG364/1 dated 
18 April 2016) had been prepared by the Secretariat on its own responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional 
Trade Agreements (document WT/L/671). In addition, written questions and replies on the 
Agreement had been distributed in document WT/REG364/2 dated 14 June 2016. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to 
give any general comments, following which the Committee would turn to the specifics of the 
Agreement. 
1.5.  The representative of Canada thanked the WTO Secretariat for the factual presentation and 
the Government of Honduras for their contribution  to the process. The WTO Factual Presentation 
exercise was important to promote greater transp arency and enhance Members' understanding of 
regional trade agreements (RTAs). He also thanked WTO members for their questions about the Agreement. 
1.6.  Before turning to some specifics, he no ted that the overarching goal of Canada's trade 
agenda had been to increase its trade and attract job-creating investment to Canada. This included 
focusing on expanding trade with large and fast-g rowing markets, deepening Canada's trade links 
with traditional partners, as well as implementing and expanding its free trade agreements 
globally.  
1.7.  He said that Canada viewed increased engagement through trade and commercial-economic 
ties as one of the best ways to promote sust ainable economic growth in the Americas. The 
Agreement, which had come into force in October 2014, strengthened the commercial relationship between Canada and Honduras. It also benefite d Canadian businesses and workers in regions 
across the country and in many sectors of th e Canadian economy, including agriculture, 
professional services, value-added food processi ng and manufacturing, as well as commodity- and 
resource-based industries. WT/REG364/M/1 
 
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  1.8.  While it was still early to assess the full impact that the Agreement had been having on 
bilateral trade and investment, the signs had been positive. In 2015, Canada's two way merchandise trade with Honduras stood at $377 million. This represented a 35% increase from 2013, the year prior to entry into force of the Agreement. The Agreement was comprehensive, 
covering a wide range of sectors and aspects of Canada-Honduras trade, including market access 
for goods, cross border trade in services, inve stment and government procurement. It also 
contained provisions on labour and the environmen t. The Agreement also levelled the playing field 
for Canadian companies vis-à-vis  competitors benefitting from other FTAs with Honduras. 
1.9.  With regard to provisions on trade in goods, the elimination of tariffs on almost all trade 
between Canada and Honduras was central to the Agreement. Upon full implementation in 2028, 
based on recent trade flows, approximately 98% of bilateral trade would be duty free. 
1.10.  The Agreement provided for the immediate elimination of Canadian tariffs covering virtually 
all recent imports from Honduras. Canada's remaining tariff elimination commitments would be phased-in by 2020, making about 98% of Canada's ta riff lines duty free. With respect to Honduras' 
tariff elimination upon entry into force, Honduras had eliminated tariffs on 85.7% of total recent 
imports from Canada. Nearly all remaining tariffs on Canadian exports to Honduras would be phased-out by 2028.  
1.11.  In the area of services, the Agreement ha d provided a secure, predictable, transparent and 
rules-based environment that would facilitate access to the Canadian and Honduran services markets. It provided improved market access commitments that went beyond those in the WTO General Agreement on Trade in Services (GATS), incl uding in sectors such as professional services 
and information and communications technologies. 
1.12.  Services commitments had been scheduled on a "negative list" basis, whereby all service 
sectors and associated measures under the scope of the chapter were covered unless specifically 
excluded through reservations. The Agreement had bound the current level of liberalization, and 
had also ensured that future autonomous liberalization of either Party's regulatory regime had been automatically captured. Concessions accorded by either Party to another trading partner in 
future free trade agreements had also been extended automatically to Canadian and Honduran 
service providers. 
1.13.  Regarding the temporary entry of busine ss persons, the Agreement had recognized the 
importance of facilitating access for business visitors, intra-corporate transferees, professionals, 
spouses and dependants, in order to support the commitments taken in the goods, services, and 
investment chapters. For investment the Agreement had enhanced opportunities for Canadian investors, and had promoted two-way investment flows. It had protected investments through 
legally-binding provisions, and ensured that investors were treated in a non-discriminatory 
manner, while preserving each country's ability to regulate in the public interest. Investors also had access to a transparent and binding mechanism to resolve disputes. 
1.14.  In the SPS Chapter, the Parties had affirm ed their rights and obligations under the WTO SPS 
Agreement and established an SPS Committee to enhance bilateral cooperation and consultation on SPS trade-related matters. 
1.15.  Regarding government procurement, the Agreement had provided guaranteed non-
discriminatory market access to the other government's procurement market. In addition, the 
Agreement contained relevant chapters on a range of important issues, including: rules of origin; trade facilitation; monopolies and state-owned enterprises; electronic commerce; and dispute 
settlement. 
1.16.  The  parallel  Agreement on Environmental Cooperation , which had been negotiated and had 
entered into force alongside the Agreement,  committed both countries to pursue high levels of 
environmental protection, to enforce their environmen tal laws effectively, and to ensure that they 
did not relax their environmental laws to encour age trade or investment. It had also included 
provisions on encouraging the use of voluntary best practices of Corporate Social Responsibility (CSR), maintaining appropriate environmental assessment procedures, and promoting public 
awareness of the Parties' environmental laws and policies. WT/REG364/M/1 
 
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  1.17.  To further protect the rights of workers, the side Agreement on Labour Cooperation, which 
had entered into force at the same time as the Agreement, had included commitments to enforce domestic labour laws that should in turn embody and provide protection for fundamental labour rights and principles . These included: freedom of association and collective bargaining; the 
abolition of forced and child labour; the elimination of discrimination in employment and 
occupation; provision of  acceptable protections for occupational health and safety, working hours 
and minimum wages; and non-discrimination in respect of working conditions for migrant workers. 
The Agreement was enforceable through a dispute resolution process. 
1.18.  In further support of the side Agreement on Labour Cooperation , the Agreement's preamble 
stipulated that Canada and Honduras affirmed their commitment to promote and protect the human rights and fundamental freedoms identified in the Universal Declaration of Human Rights . 
Thus, the Parties had recognized that prosperity, security and democratic governance – including 
full respect for human rights – were interconnect ed and mutually reinforcing. There was a shared 
understanding between the Parties that trade and investment, supported by a strong FTA, could 
contribute to broad-based, sustainable growth. Canada looked forward to working closely with 
Honduras to fully implement and further promote the Agreement so that both countries could capitalize on its many benefits. He welcomed questions and comments from Members.  
1.19.  The representative of Honduras thanked the WTO Secretariat for its efforts in drawing up 
the Factual Presentation on the Agreement, and the Members who submitted questions. The 
review of this trade instrument contributed to the promotion of transparency and also facilitated better knowledge and understanding of the import ance of trade agreements in promoting clear 
rules in world trade, as well as how these could be combined with WTO rules to form a 
fundamental framework for trade relations between its Members. 
1.20.  As Honduras had noted in its third Trade Policy Review, which had taken place in May 2015, 
it was committed to long-term policies aimed at raising living standards for all Hondurans. It was 
in that context, and on the basis of a trade po licy whose objectives include the expansion of its 
network of preferential trade agreements with st rategic partners, that Honduras had negotiated 
and concluded the Free Trade Agreement with Canada. 
1.21.  The negotiations had begun in 2001 under the CA-4 format (Guatemala, El Salvador, 
Honduras and Nicaragua). However, at the end of 2010 Honduras and Canada had continued the process on a bilateral basis in order to progress more quickly. This process bore fruit, and the 
Agreement had entered into force in 2014, fixing  clear and predictable rules in the regulated 
areas. For Honduras, the Agreement had completed preferential access to North American markets for its products, given that there were already agreements in place with the U.S. and Mexico. 
1.22.  The approved legislation encompassed mark et access, rules of origin, customs procedures, 
sanitary and phytosanitary measures, technical barriers to trade, emergency action, government procurement, competition policy, environment and labour provisions, dispute settlement, services, 
investment, and institutional arrangements. Agreements on labour and environmental cooperation 
had also been negotiated. 
1.23.  The Agreement reflected Honduras' firm commitment to clear rules and to promoting trade 
by securing a high standard of liberalization of trade in goods and services, with rules of origin that 
took account of productive processes and encouraged production chains, and a high level of 
investment protection. With regard to investment, the Agreement guaranteed non-discriminatory treatment that was no less favourable than that which each Party accorded to its own 
establishments, investments and investors. All of these were accompanied by robust commitments 
in the labour and environmental areas that reflected Honduras' determination on these issues. 
1.24.  The results had been immediately noticeable. According to ITC figures, Canadian imports 
from Honduras had increased by 15.5% be tween 2013 and 2015, from  US$228.1 million to 
US$263.5 million. The main products exported by Hond uras included knitted clothing, fruit, electric 
harnesses, coffee, plain weave clothing, and marine products. In the case of clothing, a Canadian company was the biggest employer in the industrial sector, generating more than 25,000 direct 
jobs, representing a cumulative investment nearing US$1 billion. WT/REG364/M/1 
 
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  1.25.  Under the Agreement almost all Honduran exports to Canada were free from import duties. 
Once the Treaty had been fully implemented, bo th Parties would enjoy preferential access for 
almost all bilateral trade, contributing to greater interaction between their economies and greater economic integration. 
1.26.  Honduras would continue to work with Canada to identify more and better opportunities to 
strengthen their trade and investment relation s within the framework of the Agreement. The 
Parties hoped to organize an initial meeting of the administering bodies of the Treaty soon, in 
order to review the results and identify areas for joint action that would enable them to make 
better use of the Agreement. 
1.27.  The representative of the European Union thanked the Parties for their presentations and 
the Secretariat for the Factual Presentations. The EU had not submitted any questions in advance 
but did have a question concerning intellectual pr operty rights. The Agreement did not appear to 
contain a specific chapter on intellectual property rights but the Factual Presentation noted that there were sections in the text that referred to IP provisions such as the investment chapter and 
the EU wished to know what other sections referred to IP provisions as well as some details of the 
provisions. 
1.28.  The representative of Thailand thanked the Parties for their statements and the Secretariat 
for preparing the Factual Presentation. She thanked the Parties for their responses to Thailand's 
questions on disciplines on transfers, safeguar d measures and monopolies and reserved the right 
to come back with follow up questions. 
1.29.  The representative of Canada noted the question from the European Union and would refer 
it back to capital for a response. 1.30.  The representative of Honduras thanked Members for their questions and would respond to 
the question as soon as possible. 
1.31.  The Chairman noted that the consideratio n of the Goods and Services Aspects of the Free 
Trade Agreement between Canada and Honduras had allowed the Committee to clarify a number 
of questions and it could now conclude oral discussion of the RTA in accordance with paragraph 11 
of the Transparency Mechanism. If any delegation s wished to ask follow-up questions, they were 
invited to forward their questions in writing to th e Secretariat by 4 July 2016. In accordance with 
paragraph 13 of the Transparency Mechanism all written submissions as well as minutes of the meeting would be circulated promptly, in all WTO official languages and would be made available 
on the WTO website.  
1.32.  The Committee took note of the comments made.  
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