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1.25.2. General principles of trade agreements

  1. The government procurement obligations of all of Canada’s trade agreements are similarly structured:
    1. Procedural obligations for government procurement, such as rules on notices and time periods, are found in the Government Procurement Chapter of each trade agreement; and
    2. Market access obligations, such as which entities and commodities are covered, as well as exceptions specific to Canada, can be found in the Annexes to the Government Procurement Chapter.
  2. Where a procurement is covered by a trade agreement, the procedural obligations of the trade agreement must be followed. Procedural obligations of the trade agreements are aimed at ensuring compliance with the general principles of:
    1. Open, transparent, and competitive tendering;
    2. Non-discrimination and national treatment, which prohibit discrimination against goods, services, and suppliers of other Parties to the trade agreements, or from discriminating against domestic suppliers based on the degree of foreign affiliation or ownership. For the Canadian Free Trade Agreement (CFTA), this means Parties cannot discriminate between the goods, services, or suppliers of particular Provinces, Territories, or regions; and
    3. Prohibition of offsets. Offsets are any condition or undertaking that encourages local development, such as the use of domestic or local content. Note that, when a procurement is covered by the CFTA only, Canadian content requirements may be applied, so long as those requirements do not discriminate between Provinces, Territories, or regions and are applied in a manner consistent with CFTA obligations. For example, see Section 3.130 Canadian Content.
  3. The steps to determine coverage under a trade agreement are the same for all of Canada’s trade agreements. A procurement is covered by trade agreement if:
    1. its estimated value is equal to or greater than the relevant threshold;
    2. the client department is covered;
    3. the requirement is covered; and
    4. there is no express exclusion applicable (e.g. shipbuilding, etc.).*

    All four criteria must be met in order for the procurement to be covered by the applicable trade agreement. These steps are described in more detail in Section 1.25.3 Determining coverage under a trade agreement.

    * If a set-aside or an exception is made use of or relied upon (e.g. National Security Exception (NSE), general exception for human life and safety, set-aside for minority businesses, etc.), some or all aspects of the procurement may not be subject to certain trade agreement obligations.

    In such cases, in order to reduce risk, contracting officers should continue to follow the obligations of the trade agreements to the greatest extent possible, deviating only where necessary to serve the purpose(s) for which the exception is being used or the set-aside is being applied.

  4. Coverage Under Multiple Agreements:
    A proposed procurement can be, and often is, covered by more than one trade agreement. In these instances, all trade agreements must be complied with at the same time. In order to accomplish this, the procedures to be followed are the trade agreement procedures that are considered the most rigorous. This can generally be achieved by compliance with the procedural obligations of the WTO-AGP.