THE AGREEMENT ON INTERNAL TRADE

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THE AGREEMENT ON INTERNAL TRADE
AIT

• BY Chantelle Sylvester

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What is AIT?
When was it signed?

• The Agreement on Internal Trade is an agreement
  between the federal, provincial, and territorial
  governments to reduce and eliminate, to the
  extent possible, barriers to the free movement of
  persons, goods, services, and investment within
  Canada and to establish an open, efficient, and
  stable domestic market.
• The AIT has 18 chapters (sectors) and deals with
  11 different aspects of the economy - from Labour
  Mobility, Agricultural and Food Goods to
  Procurement
• The Agreement on Internal Trade is an
  evolutionary process that requires ongoing
  negotiations and adjustments in order to further
  liberalize trade throughout the Canadian economy
• The Agreement applies to the provincial,
  territorial and federal governments. It also
  applies to purchasing by municipalities, academic
  institutions, schools and hospitals. There are
  requirements to include Crown Corporations as
  well
• On July 18, 1994, First Ministers signed the
  Agreement on Internal Trade (AIT) to eliminate
  barriers to trade, investment and mobility within
  Canada
• The AIT came into force on July 1, 1995.

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What does AIT provide?

• six general rules which prevent governments from
  erecting new trade barriers and which require the
  reduction of existing rules in areas covered
  under the Agreement
• sectoral chapters outlining specific obligations
  in 10 economic sectors such as government
  purchasing, labour mobility and investment
  which cover most economic activity in Canada
• institutional provisions to establish the
  structure for the effective operation of the
  Agreement
• dispute resolution procedures that are accessible
  to individuals and businesses as well as
  governments
• a commitment to further liberalize trade through
  continuing negotiations and specified work
  programs

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General Rules of the Agreement on Internal Trade

• - Provinces agree to treat residents, goods,
  services, and investments of any other province
  no less favourably than they treat their own. The
  federal government agrees not to favour one part
  of the country over another part of the country.
• Right of entry and exit -Governments may not
  impose import or export controls.
• No unnecessary obstacles -Any measure adopted or
  maintained must not operate so as to create an
  obstacle to trade.
• Legitimate objectives - A measure may be
  inconsistent with rules 1, 2 and 3 if the
  objective is to protect health, safety, the
  environment or consumers, and the measure is
  carried out in the least trade-restrictive way.
• Reconciliation of standards -Standards will be
  reconciled through harmonization, mutual
  recognition, or other means.
• Transparency - Measures must be visible and made
  readily accessible.

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The 11 Aspects

• Environmental Protection

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Why do we need the agreement?

• A formal agreement that commits governments in
  Canada to remove trade barriers is the only way
  to eliminate harmful protectionism and improve
  the economy.
• It establishes rights, obligations, and
  exceptions provides for consequences and
  creates a rules based system to deal with
  interprovincial trade, establishing procedures
  and certainty

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Why does the Agreement use a rules-based approach?

• consistency, predictability, and stability in
  trade and commerce
• the opportunity for fairness and equity, which
  the existing economic and political structure of
  Canadian federalism does not always provide
• durability -it can only be changed through the
  unanimous consent of governments

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Does the agreement reduce costs?
...YES!

• fewer barriers mean lower costs. For example,
  companies no longer have to maintain an office in
  every province in which they do business.
• Governments are able to lower costs by purchasing
  goods and services at the lowest possible price
  from anywhere in Canada.
• There are also enhanced competitiveness,
  increased economic activity and increased
  investment