Handbook for Conducting Environmental Assessments of Trade Negotiations

March 2008

1. Introduction
- 1.1 Environmental Assessment Approach
- 1.2 How to Use This Handbook
2. Implementing the Framework – An Overview
3. Information Gathering, Communication and Engagement
4. Conducting an EA of Trade Negotiations
Annexes

1. Introduction

This Handbook for Conducting Environmental Assessments of Trade Negotiations (the handbook) is intended to serve as a guidance manual for federal government officials engaged in conducting strategic environmental assessments (EA) of trade negotiations. The handbook supplements Canada's Framework for Conducting Environmental Assessments of Trade Negotiations (the Framework) issued in February 2001.

The Framework was prepared with guidance from the 1999 Cabinet Directive on Environmental Assessment of Policy, Plan and Program Proposals (the Cabinet Directive) and was developed to improve policy coherence within and between federal departments, while contributing to Canada's sustainable development objectives.

Conducting an environmental assessment of trade negotiations has two key objectives:

to assist Canadian negotiators integrate environmental considerations into the negotiating process by providing information on the environmental impacts of the proposed trade agreement; and
to address public concerns by documenting how environmental factors are being considered in the course of trade negotiations.

It is important to note the difference between an environmental assessment of a policy, such as a trade negotiation and an environmental assessment of a project. While the process for conducting an environmental assessment of policy may appear similar to a project assessment, the two are different and should not be confused. A policy assessment is best characterized as a forecasting tool to anticipate environmental impacts and/or opportunities. The difficulty in undertaking such a process involves dealing with a host of data limitations and uncertainties, timing issues and numerous other complexities not commonly associated with project–based environmental assessments. See Annex 4 for further discussion on the differences between project and policy EA.

1.1 Environmental Assessment Approach

Assessing the environmental implications of trade is not a new undertaking for Canada. Environmental reviews conducted by Canada include the North American Free Trade Agreement (NAFTA), and the 1994 Uruguay Round of Multilateral Trade Negotiations. While these reviews provided valuable insight into Canada's trade and environment relationships, they did not inform the negotiation of the agreement as they were carried out in an ex post fashion (undertaken after the negotiations were completed).

While environmental reviews still serve as a valuable learning tool for improving our understanding of trade and environment linkages, the Framework establishes a process to gather and analyse the data necessary to inform policy–makers of the likely and significant environmental implications in an ex ante fashion (undertaken before the negotiations are completed) to help inform Canada's negotiators throughout the tradenegotiation process.

There are a number of challenges in undertaking an ex ante assessment of the environmental implications of trade negotiations. These challenges are also characteristic of strategic environmental assessments. Notable challenges include:

often having to conduct analysis with limited empirical data; and
the final outcome of the agreement is unknown and, as a result, the assessment is more of a 'forecasting' or 'anticipatory' exercise.

The advantages to pursuing an ex ante approach in many respects outweigh the challenges. Valuable aspects of this approach include:

assessments can help clarify national goals and priorities with respect to trade and environmental interests; and
the approach allows for the early identification of mitigation and enhancement options (policies, legislation, programs, environmental side–agreements) and discussion of jurisdictional concerns with provinces and territories.

Adopting an ex ante approach is in keeping with the Government of Canada's efforts to 'mainstream' environmental issues with trade policy rather than attempting to address these in an isolated fashion. Indeed, as noted in the Framework, EAs can improve overall policy coherence at the national level by assisting decision–makers to understand environmental implications of trade policy.

A full EA process has six distinct phases:

Preparing to undertake an EA
Initial EA Phase
Draft EA Phase
Negotiation Phase
Final EA
Follow–up & Monitoring

A report is produced and released to the public at the conclusion of the Initial, Draft and Final phases. Each document is an elaboration of the previous. For example, the Draft EA phase results in a relatively more detailed analysis and report, and is influenced by the findings of the Initial EA Report.

A Draft EA is not required if the Initial EA finds little likelihood of significant environmental impacts as a result of the intended negotiations. However, in such circumstances, environmental consideration based on the results of the Initial EA, will continue to inform ongoing discussions during the negotiations. The Final EA report is always prepared in order to reflect how environment was considered throughout the process as required by the Framework.

The same four–stage analytical methodology is applied regardless of when the analysis is undertaken during the course of an EA. The methodology identifies the economic effects of the negotiations, the likelihood and significance of resulting environmental impacts, followed by identification of mitigation and/or enhancement options to inform the negotiators. Communications and engagement are an integral component throughout the entire process.

Each trade negotiation is unique and provides its own set of challenges. Consequently, the level of effort committed to an EA should be commensurate with the scale of the trade negotiations and the likely environmental impacts. Accordingly, it is anticipated that an EA of a modest bilateral negotiation could be abbreviated if warranted by the scope of the negotiations, and the anticipated economic impact and environmental effects. EA Committees are responsible for determining the appropriate scope and nature of an EA.

It should be noted that the Framework was developed for application to the negotiation of international trade and investment liberalizing agreements. The Framework is not intended to apply to agreements that are negotiated to resolve bilateral trade disputes due to the dynamic nature of such negotiations and the unpredictable timing involved. However, this does not preclude consideration of environmental issues in the resolution of disputes.

1.2 How to Use This Handbook

The handbook is intended to be used as a working tool to guide officials engaged in the EA process. It is updated based on experience.

The handbook provides guidance for collecting, organizing and synthesizing the information during an EA of a trade or investment agreement. The handbook:

details the procedural steps necessary to conduct a full EA;
identifies key roles and responsibilities during an EA;
provides guidance for information collection and exchange, as well as communications and consultations;
provides practical guidance for applying the analytical methodology;
suggests approaches for follow–up and monitoring once negotiations have concluded, and
provides reference tools and sources for further research and increased understanding on issues related to trade and environment.

The handbook has four chapters:

Chapter 1 provides a brief introduction and identifies how the handbook supplements the Framework.
Chapter 2 provides an overview of the full EA process. This section should be consulted to gain a general idea of the EA process and the key steps involved. Figure 1 provides a snapshot of these steps.
Chapter 3 details the key steps for engaging federal government officials and individuals and groups external to the federal government, whose participation is essential to the EA process.
Chapter 4 outlines a step–by–step approach for applying the analytical methodology. A series of possible questions is provided for the Initial and Draft EA phases. Some of these questions may be more applicable to some negotiations than to others. For example, negotiations pertaining to services will likely require different questions than negotiations on goods or investment. Consequently, the questions listed should be used as a guide to gather the information needed, rather than a strict and exhaustive list. Chapter 4 also provides guidance on follow–up and monitoring as part of a comprehensive analytical approach to the EA process.

The handbook provides a series of 'checklists' identifying essential steps for each stage of the full EA process and the responsible parties for undertaking the tasks. Many of the criteria outlined in these checklists are taken from, or build on, those found in the Framework and are necessary for the thorough and consistent application of the EA process.

Supporting information can be found in the annexes to the handbook:

Annex 1 contains a copy of the Framework for Conducting Environmental Assessmentsof Trade Negotiations.
Annex 2 contains the checklists for communication and the analytical methodology provided throughout the handbook. These checklists can be used for documenting the EA process.
Annex 3 provides sample text for issuing the Notice of Intent to conduct and EA of Trade Negotiations.
Annex 4 contains a general outline for an Initial EA Report.
Annex 5 contains a general outline to guide the completion of a Foreign Investment Promotion and Protection Agreement (FIPA).
Annex 6 includes the Cabinet Directive on Environmental Assessment of Policy, Plan and Program Proposals and a short description of Strategic Environmental Assessment.
Annex 7 provides a glossary and list of acronyms.

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2. Implementing the Framework–An Overview

This chapter provides a brief overview of the environmental assessment (EA) process and the analytical methodology to undertake EA. Subsequent chapters explore the procedural and methodological steps in more detail. The chapter also provides a broad sketch of the trade negotiation process, the corresponding EA process, and the roles and responsibilities of the various participants in the process.

The principal starting point for initiating an EA of a trade negotiation is to establish an EA Committee. While the EA Committee is tasked with making numerous important decisions throughout the course of the EA, some of the most crucial decisions need to be made at the outset. For example, the EA Committee must decide at the outset the structure of the Committee, the work program and requisite resource requirements. In addition, the expected contributions and responsibilities of EA Committee participants (i.e., departments and agencies) throughout the EA of trade negotiations process and following the conclusion of negotiations (e.g., follow–up and monitoring) must be made clear at the outset. It is essential that the lead division for the negotiations work with the EA of Trade Secretariat to prepare materials to guide the work of the EA committee.

The timing and scope of the EA is another important decision. The EA Committee determines the pace, timing and scope of the EA in relation to the negotiation process. Key steps throughout the negotiations will trigger corresponding complementary action during the EA, such as consultation requirements. Similarly, the level of effort required to carry out the EA should be commensurate with the scale of the negotiations or proposed agreement.

2.1 The Trade Negotiation Process

As the EA process is guided by the trade negotiation process, it is worthwhile clarifying what constitutes "trade negotiations." This term is used to refer to negotiations of bilateral, regional and multilateral trade agreements, as well as Foreign Investment Promotion Agreements (FIPAs).

Negotiations may have several stages and go beyond the traditionally conceived notion of bargaining around a negotiating table. The overall trade negotiation process may contain several steps, and varies with the type and scale of agreement to be negotiated. The following list provides an indication of the general steps in the process:

Announcement of interest to pursue a trade agreement.
Exploratory discussions with negotiating parties.
Development of the Canadian negotiating position in consultation with federal governmental departments, provincial governments, industry associations and interest groups. This consultation process continues throughout the duration of the negotiation
Drafting of Memorandum to Cabinet (MC) by Government of Canada officials from one or more departments proposing a negotiating mandate for Cabinet approval..
Approval of the proposed negotiating mandate by Cabinet and initiation of the negotiations according to the approved mandate.
Negotiation with other countries to resolve issues and develop text for the agreement. This is where countries resolve differences between their negotiating positions to reach an agreement.
As required, amendment of the negotiating position with approval from cabinet.
Conclusion of the negotiations with initialing of the text ad referendum by the negotiators.
Approval of the agreement and signing authority sought from Cabinet, as well as approval to begin drafting the implementing legislation.
Parliamentary approval sought for the implementing legislation.

2.2 An Overview of the EA Process

An overview of the process for conducting an EA is provided in Figure 1. For a more detailed description of the information gathering, communication and engagement elements of the process, readers should consult Chapter 3. Chapter 4 gives further guidance on the analytical methodology for undertaking an EA.

A full EA process has six distinct phases:

Preparing to undertake an EA
Initial EA Phase
Draft EA Phase
Negotiation Phase
Final EA
Follow–up & Monitoring

A report will be produced and released to the public at the conclusion of the Initial, Draft and Final phases. Each document is an elaboration of the previous. For example, the Draft EA phase results in a relatively more detailed analysis and report, and is influenced by the findings of the Initial EA Report. Conducting a full EA will produce the following main outputs:

A Notice of Intent to publicize the government's intent to conduct an EA of trade negotiations. This should be issued in conjunction with the announcement of trade negotiations.
An Initial EA Report that identifies the main environmental issues expected to arise because of the proposed trade negotiations. The Initial EA phase is essentially a scoping exercise, and therefore is limited in its analysis and detail.
A Draft EA Report that elaborates on the Initial EA Report. The Draft EA phase involves a more thorough examination and assessment of environmental impacts of the trade negotiations. It is a detailed process, exploring the issues with more depth than the Initial EA phase. A Draft EA is not required if the Initial EA finds little likelihood of significant environmental impacts as a result of the intendednegotiations. However, in such circumstances, environmental consideration based on the results of the Initial EA, will continue to inform ongoing discussions during the negotiations. The Final EA report is always prepared in order to reflect how environment was considered throughout the process as required by the Framework.
A Final EA Report that details the outcome of the negotiations as related to the EA process. The Final EA Report is prepared and released after the negotiations are complete. A detailed account of any new information related to the EA process and the trade negotiations is provided in the text of the report, including mitigation and enhancement options.

Figure 1: Overview of the steps in the EA of Trade Negotiations

A statement on the nature of proposed or on–going trade negotiations, indicating Canada's intent to conduct an EA. Usually issued in conjunction with the announcement of exploratory talks or the launch of negotiations.
All trade negotiations are subject to an Initial EA. This is a 'scoping' exercise, usually conducted in the early stages of the negotiations, to identify the main environmental issues expected to arise.
Issued during the negotiations, the Initial EA Report identifies the most likely and significant environmental impacts that may arise from proposed trade activities.
If significant environmental impacts are likely, then further assessment will be undertaken in the Draft EA phase.
A Draft EA is not required if the Initial EA finds little likelihood of significant environmental impacts as a result of the intended negotiations. However, in such circumstances, environmental consideration based on the results of the Initial EA, will continue to inform the on–going negotiations.
The Draft EA is a detailed analysis of the most likely and significant environmental implications conducted in the early phase of the trade negotiations. It builds on the findings of the Initial EA Report and considers any new information pertaining to the negotiations.
Documents the findings of the Draft EA phase, released during the early phase of the negotiations. The outcomes of the Draft EA are used by negotiators to refine and inform Canada's negotiating position.
A Final EA Report is always required and should coincide with the conclusion of the negotiations. It documents the outcome of the negotiations in relation to the EA process, explains any divergence from previous EA Reports, responds to comments received on previous EA reports, and indicates how the EA informed the negotiating process

2.3 Roles and Responsibilities in the EA Process

This section details the roles and responsibilities of participants in the EA process. Table 1 summarizes the participants in the EA process, including those that will be involved in the process via communication and/or engagement.

The Interdepartmental Environmental Assessment Steering Committee is responsible for ensuring that all EAs are conducted in a manner consistent with the process outlined in the Framework and the guidance provided in this handbook. The Steering Committee plays an oversight role, reviewing progress of the EA Committees established for specific trade negotiations to ensure the process continues in an effective and efficient manner, including matters related to the human or financial resources required to complete the EA.

The Steering Committee is composed of senior officials from DFAIT (one of whom chairs the Committee), Environment Canada, the Canadian Environmental Assessment Agency and other relevant federal departments. All federal departments are invited to provide a representative to the Steering Committee. In cases where departments have more than one division or unit that should be involved they should still have one lead representative on the Steering Committee. The Chairs from the various EA Committees should also be members of the Steering Committee, or participate in meetings periodically as appropriate. This ensures that there is communication between the EA Committees, that EA Committee chairs are always apprised of any issues or concerns related to the EA of trade negotiations in Canada, and conversely that they are able to communicate issues related to the EAs they are directly involved in.

An EA Committee is established for each trade negotiation. Each EA Committee will include representatives from DFAIT, Environment Canada, the Canadian Environmental Assessment Agency and other relevant federal departments, depending on the nature of the trade negotiations. All federal departments are invited and encouraged to provide representation to the relevant EA Committees. These committees, under the guidance of their chair(s) are responsible for the application of the EA Framework as guided by this handbook and advice. EA Committees can seek guidance from the Steering Committee on broader EA application issues as well as coordination between the various EA Committees and their activities. They can also use the Steering Committee as a contact point when issues are limiting the progress of the process and require an interdepartmental decision at the executive level.

EA Sub–Committees will likely be necessary for comprehensive regional or multilateral negotiations. For example, negotiations at the World Trade Organisation (WTO) will require EA working groups for Services, Agriculture, and other negotiating committees. Similarly, the negotiations under the Free Trade Area of the Americas (FTAA) will likely require EA sub–committees. The number of sub–committees and the subsequent communication and reporting structure will need to be determined through interdepartmental consultations under the guidance of the lead negotiator and the EA Committee. The chair(s) of each sub–committee should be determined in the manner discussed below.

DFAIT's Sustainable Development Division (GDS) serves as the EA Secretariat, providing guidance and assistance to the EA Steering Committee as well as to th individual EA Committees or Sub–Committees established for each trade negotiation.

The EA Committee Chair will normally be the chief negotiator for the trade or investment agreement being negotiated. The administrative unit or division under this individual will normally become the lead group responsible for managing the EA process and drafting or commissioning EA reports. The Chair may be from another government department where the subject matter and scope of the negotiations warrant. For example, in the case of WTO negotiations on the Agreement on Agriculture, the Chair of the sub–committee will be from Agriculture and Agri–Food Canada.

The Chair is responsible for ensuring that EA process is carried out in keeping with the Framework. As noted earlier, the EA of trade negotiations is determined (in terms of scope and timeline) by the nature of the negotiations. In turn, the Draft EA Report informs Canada's negotiating position on integrating environmental considerations into trade policy. The chief negotiator, in the capacity of the EA Chair, must ensure that the EA findings are communicated, understood, and considered in the development and execution of the negotiating position(s). The outcome of the negotiations, and decision–making processes therein, are a substantive part of the Final EA Report.

Some divisions within DFAIT will serve in an advisory capacity to assist with the implementation and management of various aspects. The Consultation and Liaison Division (CSL) will provide assistance on managing and coordinating consultation activities. The Trade and Economic Analysis Division (EET) will advise on the economic effects of the negotiations.

Other Government Departments will sometimes lead or co–lead in the negotiations. In these cases, the chief negotiator from that department may co–chair the EA Committee and share responsibility for ensuring the completion of the EA process. Some departments are automatically members of all EA Committees (e.g. the Canadian Environmental Assessment Agency and Environment Canada). Other government departments have a particularly important role employing the findings of an EA, for example by introducing enhancement and/or mitigation measures during the implementation of the concluded trade agreement.

The Federal–Provincial–Territorial Trade Committee (C–Trade) and an Environmental Assessment Advisory Group (EAAG), composed of individuals from industry, academia and NGOs (formerly SAGITs) are consulted at various stages throughout the process, and given the opportunity to comment on EA Reports. Experts can be engaged as determined to be necessary by the EA Committee.

Public input, including views from the private sector and non–governmental organizations, will be sought at various stages, including with the release of EA reports. The timing and scope of public participation will vary depending on the nature of the agreement to be assessed.

Table 1: Roles and Responsibilities in the EA of Trade Negotiations Process (EA Steering Committee)

Interdepartmental Environmental Assessment Steering Committee	Composed of senior officials from DFAIT and other relevant federal departments Chaired by DFAIT Has representation from the chairs of all EA Committees, normally the lead negotiators Plays an over–sight role for the EA process Provides guidance for consistent application of the EA Framework Oversees establishment, coordination and management of all EA Committees Meets every 3–4 months to ensure EAs of negotiations are progressing and to address any problems Facilitates communication between/amongst EA Committees Acts as a contact point to address problems that affect progression of the EA process, including responding to funding issues that inhibit progress Responsible to the Interdepartmental Trade Policy Committee
Environmental Assessment Committee (EA Committee)	An EA Committee is formed for each negotiation DFAIT, Environment Canada and CEAA are always represented Responsible for applying the analytical methodology When necessary, the EA Committee can engage independent research bodies to undertake some of the required analysis
EA Committee Chairs	This position should normally be held by the Chief Negotiator One or two chairs manage the EA Committee Not necessarily an 'environmental specialist' Second chair should be held by lead from other lead federal department in negotiations Develop timeline and schedule for EA Committee Establish, coordinate, and manage EA Committee Responsible for the operational aspects of the EA process Responsible for identifying likely resource requirements for EA process
EA Secretariat	Advisory body to the EA Steering Committee and EA Committees Provides guidance to chairs on managing the EA process Principle liaison between the various EA Committees and the Steering Committee
Lead DFAIT Division	Establishes EA Committee Establishes timelines for the EA process Coordinates input from different negotiating areas Drafts the Initial, Draft and Final EA reports Disseminates EA Reports, collects and summarizes consultation submissions Coordinates consultations with C–Trade and non–governmental advisory group with CSL Coordinates communication and engagement with public Records communication and consultation activities and comments received therein
Negotiators	Lead negotiator(s) from DFAIT and/or OGDs are responsible for EA Process Chief Negotiator should chair the EA Committee(s) Output from the EA Process informs negotiations
C–Trade	Consulted throughout pre–negotiation and negotiation stages, and development of Initial, Draft and Final EA reports for guidance on Federal–Provincial–Territorial jurisdictional issues
Environmental Assessment Advisory Group	Meet with representatives from DFAIT and OGDs as required and provide comments on EA process and analysis Provided opportunity to comment and inform EA reports as appropriate
Experts	Consulted by the EA Committee as needed and identified during negotiations and development of Initial, Draft and Final EA reports
Public	Receives information provided from the EA Committee Consulted on Notice of Intent, Initial, Draft and Final EA reports Invited to provide constructive feedback on EA reports to inform the EA process

2.4 Relationship between the Strategic Environmental Assessment of Memorandum to Cabinet Process and the EA of Trade Process

In keeping with the Cabinet Directive on Environmental Assessment of Policy, Plan and Program Proposals, environmental considerations must be included in Memoranda to Cabinet (MCs). As outlined in Chapter 1, the Framework and this handbook have been prepared in part to address this requirement in relation to the trade negotiations.

Cabinet approval is required at various stages of the trade negotiation process as outlined previously in Section 2.1. Cabinet must be provided assurance that environmental issues have been, or will be, examined and addressed. The EA process helps to provide this assurance. In the early stages, when approval is required to develop negotiating mandates, an MC should indicate that an EA will be conducted for the trade negotiations in accordance with the Framework. At later stages, when approval is being sought for a mandate or an update is being provided through an Aide Memoires, information can be drawn from the EA findings to inform Cabinet of the potential environmental implications of the negotiations and resulting agreement.

In addition to providing assurance to Cabinet that environmental considerations have been incorporated into the trade negotiation process, EAs are instrumental in achieving increased policy coherence. The MC stage is a point for integrative policy development, as environmental considerations can be included both explicitly and implicitly in an MC pertaining to trade negotiations.

2.5 Resources

The Steering Committee, chaired by DFAIT, is responsible for the long–term management of the EA process in their capacity as the EA of Trade Secretariat, and is a focal point if resources become an obstacle to completing the EA process. The Framework specifically states "DFAIT will be responsible for ensuring that the necessary resources for undertaking the environmental assessments are identified and allocated in accordance with Treasury Board guidelines". As part of the EA, Committees should identify resource requirements to carry out the EA process, determine if existing resources will suffice or additional resources are required, and take corresponding action to secure them.

The resources required will be a function of the nature of the negotiations. For example, the resources to conduct an EA of a bilateral trade agreement would probably be significantly less than those required for the FTAA. As can be expected, the resource needs will also be a function of the level of detail inherent in each stage of the EA process with the majority of the resources required during the Draft EA phase. Specific resources needed may include:

costs incurred for consultations and communications (such as web site maintenance, Canada Gazette notices, travel and meeting costs associated with consultations, and document production for EA reports);
consultancy fees when necessary to supplement internal expertise;
costs for studies deemed appropriate and necessary by EA committees.

Possible sources for resources include existing resources or special submission to the Treasury Board. Again, it is the responsibility of the EA Steering Committee to identify what resources are required and to secure these in a manner that facilitates the effective application of the EA process. EA Committees should communicate possible resource needs as they become apparent to assist the Steering Committee on this matter.

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3. Information Gathering, Communication and Engagement

Information gathering, communication and engagement are central to the EA of Trade process. Effective communication mechanisms are essential for identifying and obtaining pertinent information for analytical purposes. Information is collected from a variety of sources throughout the EA process, and can include statistics, quantitative and qualitative studies. Consultations take place at various stages of the EA Process. These requirements allow us to provide information to, and get feedback from, provinces, territories, non–governmental advisory groups and the public. In fact, addressing public concerns by documenting how environmental factors are being considered in the course of trade negotiations is one of the key objectives of the Framework.

This chapter details how information for the EA is to be collected from within the federal government and from external sources. It introduces the concepts of engagement and communication and specifies key steps and principles to be remembered throughout the EA process.

Engagement comprises both the exchange of substantive information and consultation on it. Engagement occurs at various stages throughout the EA process.

Consultation is an interactive process through which the views of individuals or groups are sought.

Communication involves informing others within and outside of government, and can include information on processes or substance related to the EA of trade negotiations. Communication is ongoing through the EA process.

Exchanging information and consulting with provinces and territories, as well as individuals and groups outside of the federal government, is integral to the purpose, value and legitimacy of the EA of trade negotiations. Involving those outside of the federal government ensures that a wide variety of perspectives are involved and expands the information guiding the assessment of environmental impacts of trade. It also serves to increase the transparency of and trust in the EA process. The federal government's commitments in this regard are affirmed in the Policy Statement and Guidelines on Consulting and Engaging Canadians:

It is a policy of the Government of Canada to involve Canadians in the development, design, and evaluation of public policies, programs, and services through consultation and citizen engagement processes that are transparent, accessible, accountable, supported by factual information, and that take into account the broad diversity of Canada.

Table 2 illustrates how the type and scope of engagement vary (and tends to deepen) through the EA process from the announcement of trade negotiations to their conclusion. While all groups are invited to participate at any point, it is expected that most will engage in the EA process once the Initial EA Report identifying potential environmental impacts has been communicated, or in some cases, beforehand. During the Draft EA phase, where in–depth analysis takes place to produce a report to inform the negotiations, engagement will be most extensive. There will also be variations with respect to who is engaged throughout the EA process. Specifically, during negotiations, engagement will be more limited due to concerns regarding confidentiality of the negotiating position. For example, the provinces and territories will be engaged throughout via the Federal–Provincial–Territorial Committee on Trade (C–Trade), while the public will be engaged in a limited fashion during the negotiations phase, as per the guidance provided in Section 3.2

Table 2: Engagement and Communication throughout the EA Process

Stage in Negotiations	Announce Negotiations	Prepare for Negotiations	Prepare for Negotiations	Negotiations	Signing and Post–Negotiations	Follow up and Monitoring
Stage in EA Process	Notice of Intent to Conduct an EA	Initial EA	Draft EA	Draft EA Report informs negotiations	Final EA Report documents how environmental considerations integrated	As identified and outlined in EA Reports
Information Gathering/ Analysis?	Begin gathering information	Information gathering and summary analysis	Detailed information gathering and analysis	Depends on changes in negotiations after the Draft EA	Documentation	Need for Information gathering, documentation and further info dependant on confirmation of intent to conduct follow up and monitoring and its objectives.
Engagement Outside Federal Government?	Yes	Yes	Yes	Depends on changes in negotiations after the Draft EA	Yes	Depends on objectives of monitoring and if additional expertise required to address environmental effects of agreement not foreseen or provided for in Final EA.
Communication	Yes	Yes	Yes	Yes	Yes	Yes

3.1 Internal Consultations

Internal communications and consultations during the EA of a trade negotiation serve a number of purposes, including:

Identification of who should participate in the EA Committee;
Informing members of the EA Committee not directly involved in the negotiating process about the status of the negotiations;
Communication of EA of Trade requirements to the EA Committee;
Identification and collection of the information required for the EA;
Communication of findings to policy makers and senior management; and
Review and approval of the EA reports.

The EA Chair is responsible for establishing communication mechanisms to facilitate internal communications.

3.1.1 Identification of who should participate in the EA Committee

The lead negotiating division, with the support and advice of the EA of Trade Secretariat, establishes the EA Committee. Membership should be based on the issues being negotiated, and therefore the information that is required for conducting the analysis. This could include experts in the subject from within DFAIT for specific negotiating areas (e.g. non–agricultural market access, services, rules, trade facilitation, regulatory cooperation) and experts in the subject from other departments that develop policy in issue areas and sectors that are a focus of the negotiations (e.g. NRCan, Transport Canada, Agriculture and Agri–Food Canada, Fisheries and Oceans, and Finance). Participation of Environment Canada and the Canadian Environmental Assessment Agency will provide environmental expertise to the EA Committee, and should be sought wherever possible. The Consultations and Liaison Division should be included from the initial preparation stages for the EA Committee.

3.1.2 Informing the EA Committee on the status of the negotiations

The EA process is designed to, inter alia, assist Canadian negotiators integrate environmental considerations into the negotiating process. In order for all internal participants in the EA process to effectively meet this objective it will be imperative to understand the status of the negotiations. Regular status updates will be particularly important for members of the EA of Trade Steering Committee and EA Committees who may not be directly involved with the negotiations. These updates will also allow the EA of Trade Secretariat to provide guidance to help ensure the Framework is being applied in a timely and effective manner.

Lead divisions for negotiations should provide updates to the EA of Secretariat on a regular basis using Table 3 below.

Table 3: Status of Negotiations and associated Environmental Assessments

Negotiation	Status of Negotiations	Status of EA	Date of Next Round(s)	Status of Consultations (Public, EAAG, etc)
e.g. Korea FTA		e.g., Notice of Intent issued: date? e.g., Current work: Initial EA Report completed.
e.g., China FIPA

Lead divisions may also provide such updates at the same time as circulating the completed consultation templates (see p. 28) for recording the results of external consultations. This option may be used in circumstances where awaiting the conclusion of such consultation periods does not interfere with the need of EACommittee members to know the status of negotiations in a timely manner in order to inform and guide their effective engagement in the process.

3.1.3 Communication of EA of trade requirements to the EA Committee

The lead negotiating division, with the support and advice of the EA of Trade Secretariat, should communicate the requirements for EA of Trade within the federal government. Experience has shown that it is imperative that the lead division (with support from the EA of Trade Secretariat as needed) provides the EA Committee a timeline for key deliverables and clearly determines roles and responsibilities early in the process.

3.1.4 Information collection

The first priority of the EA Committee is to identify what information exists within participating departments and agencies regarding the trade negotiations under assessment, and their potential economic and environmental impacts.

Central steps to information collection include:

Identifying types of information required;
Identifying departments associated with the required information;
Determining the information that exists, and identifying the analytical requirements to address the gaps; and
Determining what steps need to be taken to obtain the necessary missing information.

For an indication of the type of information that is required at each stage of the EA process, the EA Committee should consult the questions provided at each stage of the analytical methodology in Chapter 4. Each departmental representative on the EA Committee should identify/establish the information available within their department. It is likely that they would need to consult with individuals in their department who work on economic analysis, environmental assessment, and/or sustainable development, and perhaps at later stages with technicians and scientists knowledgeable about specific issues.

The EA Committee should review the information available, and determine what steps, if any, need to be taken to obtain the necessary missing information. The Committee determines how the analytical methodology described in detail in Chapter 4 (economic analysis, analysis of the likelihood and significance of environmental impacts, and identification of enhancement and mitigation options) should be applied in assessing the information available. This occurs through interdepartmental consultations via the EA Committee, and can be assisted by external consultants as deemed appropriate by the EA Committee. Consultations will increase as the process deepens and the conclusions become more defined as the EA process progresses.

3.1.5 Communication of findings to policy makers

The chief negotiator, in his or her capacity as the EA Chair, must ensure that the EA findings are communicated, understood, and considered in the development and execution of the negotiating position(s). Members of the EA Committee can also report back to their senior management about the findings.

A section pertaining to the EA should be included in key planning and decision making documents (e.g., timelines for MCs, MCs, interdepartmental meetings, aide memoires, and decks).

3.1.6 Review and approval of the EA reports

When reports are produced in draft form during the Initial EA, Draft EA and Final EA, they are circulated to the EA Committee and EA of Trade Steering Committee for comment before they are provided to groups external to the Federal government.

Internal Consultations Checklist

In the early stages, the lead negotiating division:

identify relevant divisions and departments to be represented on the EA Committee
establish mechanisms for interdepartmental communication and consultations, including standard email lists for communicating information
take steps to establish an EA Committee and inform members regarding the EA Process

The EA Committee, under the leadership of its chair(s), should:

identify information required for each phase of the EA
identify existing information and gaps
identify methods available to fill information gaps
conduct interdepartmental consultations for analysis and synthesis of the collected information via the EA Committee
circulate draft reports interdepartmentally before providing external to the federal government
provide regular updates to the EA of Trade Secretariat regarding status of negotiations and EAs

The departmental representatives on the EA Committee should:

identify what information is needed from their department
consult within their department to identify what information exists
identify methods to obtain any additional information needed
circulate reports within their department for comment and consolidate input received
communicate results to policy–makers and senior management as appropriate

3.2External Consultations

The Framework contains a commitment to external consultations during the EA of trade process. A variety of groups can be engaged in the EA process. The following three subsections provide specific guidance for groups that the Framework specifically refers to: provinces and territories, a non–governmental advisory group and the public.

The scope and method of engagement will be determined by the EA Committee based on the nature of the negotiations under assessment. However, key activities such as the issuing of a notice of intent, release of draft reports to provinces and territories and release of reports for public feedback always occur. The lead negotiating division should keep a record of communications and consultations that includes the date, substance, and nature of consultations that take place throughout the EA; as well as when there is divergence on consultations from the guidance contained in the Framework and Handbook. A template for recording external consultation activities is provided on the following page. This record will be used to assist future officers preparing to conduct EAs and to, as needed, demonstrate that the Framework is being applied as intended.

A variety of engagement mechanisms are referred to in the Framework, and each is suitable for a different objective. DFAIT's Consultations and Liaison Division and similar groups within other government departments can provide guidance and assistance on a consultation strategy, outreach mechanisms, identifying stakeholders and how to exercise the EA Committee's discretion.

The difference between information exchange and consultation is particularly important when involving those outside the federal government. Again, consultation refers to processes through which the views of individuals or groups are sought on policies that affect them directly or in which they have a significant interest. Consultation means interaction among those involved, best assured through face–to–face meetings, but also possible through conference calls, and interactive web–based communication. This is distinguished from information exchange, which is more passive in nature. It also implies taking the views of those consulted into account and justifying the results.

The Access to Information Act enables citizens and residents of Canada to request certain types of documents held by the Government of Canada. Documents produced during the EA process may be requested through this Act. Confidentiality is necessary for development and execution of the Canadian negotiating position. The Access to Information request should be forwarded to the federal department that has control of the document(s) to determine whether the document(s) satisfies the requirements of the Act for disclosure of information. Within DFAIT, the Access to Information and Privacy Protection Division (DCP) handles concerns regarding the application of this act, and should be consulted on such matters. In negotiations where there are co–chairs of the EA Committee, the outcome may be that DFAIT and the other government department each has control of the document(s) and should consult their legal services and the Department of Justice to help with such a determination.

Documenting communications and consultations activities and results

Documenting communications and consultation activities is important because it increases efficiency, accountability and transparency of the Framework's implementation. Records of communication and consultation activities will also assist in future EA work.

A record of external consultations should be maintained by the lead division to document communications and consultations with external parties pursuant to the environmental assessment of a negotiation. Interdepartmental communications and consultations do not need to be recorded. A template that can be used for this purpose is provided below.

The lead division should note where there is divergence from the guidance in the Framework and Handbook and why this decision was made.

In support of the objective that the EA informs the negotiating process, the EA should be referenced in external communications regarding the negotiations where appropriate. Further, external communications and consultations regarding the negotiations should be coordinated with those regarding the EA of the negotiations wherever possible.

Template to Record External Consultations

Title of Negotiation:

Title	Date	Mode	Target(s)	Substance	Record#

Title: Provide a title for the communication or consultation, e.g. 'notice of intent', 'request for public comments', 'experts groupconsultations', etc.
Date: Indicate the date the communication or consultation occurred.
Mode: Indicate what mode the communication or consultation took place in, e.g. 'email', 'Canada Gazette','conference call', etc.
Target(s): Indicate the target audience for the communication or consultation
Substance: Provide a summary of the substantive elements of the communication or consultation.
Record#: Indicate any reference to further detailed information. For example, if there is an infobank number assigned to an email or meeting minutes

The lead division should also maintain a record of comments received during consultations with external parties pursuant to the environmental assessment of a negotiation. A template that can be used for this purpose is provided below.

Template for Recording Comments from External Parties

Title of Negotiation:

Respondent	Date	Issue area/sector	Objet	>Substance	Record #	Response action	Distribution

Respondent: Provide the name of the respondent/organization that provided the comment.
Date: Indicate the date the comment was received.
Issue area/Sector: Indicate what issue or sector the comment is directed toward (e.g. EA methodology, agriculture, NAMA, investment, etc.)
Object: Indicate what the comment was in response to (i.e. general, notice of intent, Initial EA, Draft EA, or Final EA)
Substance: Provide a summary of the substantive elements of the comment.
Record#: Indicate any reference to further detailed information. For example, if there is an infobank number assigned to the email or letter.
Response action: Indicate any responsive action taken, including the automatic response thanking the public for their comments.
Distribution: Indicate who the comment was distributed to and on what date.

Preparation for External Engagement–Checklist

In the early stages, the DFAIT division responsible for the negotiations should:

contact the Consultations and Liaison Division (CSL) at an early stage, and appropriate departmental equivalents, for guidance on how to engage external parties
use the templates provided in this chapter to record i) communications to and consultations with external parties, and ii) comments received from external parties, including the EA of Trade non–governmental advisory group and public consultations
establish a plan to circulate comments received from external parties to the EA Committee and Chief Negotiator(s) for use in analysis and development of EA reports
reference the EA in external communications regarding the negotiations
ensure time is provided for translation of all communication and engagement materials into both official languages

The EA Committee should:

consult documents on the Access to Information Act and contact the Access to Information and Privacy Protection Division (DCP) in DFAIT or departmental equivalents if required

3.2.1 Engaging the provinces and territories

Trade negotiations may involve matters under provincial or shared jurisdiction. The EA Committee should determine how provinces and territories should be involved in the EA process based on the nature and type of trade negotiations proposed, and according to general policy considerations. At a minimum, the EA Committee should provide briefings as appropriate to the Federal–Provincial–Territorial Committee on Trade (C–Trade).

C–Trade is part of a variety of different mechanisms put in place by the federal government that enables provinces and territories to exchange information, share perspectives and develop Canadian positions on a range of international trade policy issues, including negotiation of agreements. During preparation of the Framework, it was agreed that C–Trade Committee would be used as the primary point of contact between federal and provincial–territorial governments on matters related to the environmental assessment of trade negotiations.

The Intergovernmental Relations Division (PIP) is responsible for managing and coordinating input to and from C–Trade, and needs to be kept apprised of developments on an ongoing basis. The EA Committee, with the Consultations and Liaison Division, should both communicate information to, and seek information from C–Trade. C–Trade officials are in turn responsible for advising their colleagues in relevant provincial and territorial departments regarding the EA process.

C–Trade members are subject to a confidentiality agreement. This confidentiality arrangement also means that the nature and quality of information that is shared with C–Trade may be different–at all stages of the EA process–from that shared with those outside of the federal government who are not bound by similar agreements. The ongoing exchange of information for EA of trade negotiations will serve to better inform the assessment of environmental impacts and the identification of mitigation and enhancement options.

C–Trade officials should be provided copies of the EA Reports before they are issued for consultation with any non–governmental advisory group or publicly released. Due to logistical and timing constraints, consultations with C–Trade officials may occur in tandem with consultations with the Environmental Assessment Advisory Group.

To ensure the EA process is given due consideration in C–Trade, the EA Steering Committee may encourage that EA be regularly maintained as a forward agenda item for upcoming C–Trade meetings.

Actions taken to communicate or engage provinces and territories during an EA should be recorded by the lead division. A template for this record is contained in Section 3.2. A summary of the comments received should be distributed to the EA Committee and the lead negotiator(s). Findings and conclusions from these consultations should inform future EA of trade work as pertinent.

Other departments involved in the negotiations and in the EA Committee may have federal–provincial–territorial (FPT) mechanisms and networks. In the interest of coherence, outreach and consultations with provinces and territories are initiated and managed by the EA Committee Chair, in consultation with the members of the EA Committee. Departmental representatives on EA Committees are responsible for forming their respective communications experts about consultations undertaken pursuant to an EA.

Communication and Engagement with C–Trade– Checklist

The EA Committee should:

coordinate communication and engagement with C–Trade via the Consultations and Liaison Division
keep the Consultations and Liaison Division up to date on the EA process to enable them to identify issues and materials for C–Trade
ensure the Consultations and Liaison Division is kept apprised of information provided to other Federal–Provincial–Territorial mechanisms and networks
communicate EA findings to C–Trade for consultation
seek information from C–Trade to inform the EA process
distribute EA Reports to C–Trade for review/comment

The lead negotiating division should:

collate input received and record actions taken to communicate with and engage provinces and territories
summarize findings from engaging provinces and territories and distribute to EA Committee for use in future EA of trade work
summarize findings from engaging provinces and territories and distribute to lead negotiator

C–Trade members should:

apprise provincial/territorial colleagues regarding the EA findings
provide information regarding provincial/territorial concerns related to the EA process

3.2.2 Engaging non–governmental advisory groups

The Framework notes that in undertaking environmental assessments, EA Committees will seek the advice of relevant sectoral advisory groups. An Environmental Assessment Advisory Group (EAAG), composed of individuals from industry, academia and NGOs, has been established for this purpose. Members of the EAAG are bound by confidentiality agreements with the Department. They are appointed in their personal capacity, therefore it will not be possible for the EA Committee to state, for example, that "members of (given) industries or organizations have been consulted" solely on the basis of engaging the non–governmental advisory group. The terms of reference for the advisory group are available from the Consultations and Liaison Division or the EA of Trade Secretariat.

The advisory group can be engaged throughout the EA process. This will often include feedback on draft versions of EA reports, but may also include guidance on the EA of trade process and provision of information to fill gaps identified during the analysis. Since they are bound to a confidentiality agreement, they can receive qualitatively different information from that shared with those outside of the federal government who are not bound by similar agreements, and can remain engaged after the issuance of the Draft EA Report.

The Consultations and Liaison Division is responsible for coordinating input to and from the advisory group, and needs to be kept up to date on the developments within the EAs of specific negotiations on an ongoing basis. The EA Committee should seek the Consultations and Liaison Division's advice and assistance to determine the best format for engaging the advisory group. The Consultations and Liaison Division will also be able to advise on groups and individuals associated with other consultation mechanisms at DFAIT that will be interested in a given negotiation and/or have the relevant environmental expertise.

The lead negotiating division should document efforts to communicate or engage the advisory group during an EA and summarize comments received for distribution to the EA Committee and the lead negotiator(s). Findings and conclusions from these consultations should inform future EA of trade work as pertinent. For example, feedback on an Initial EA Report should be addressed in the Draft EA where possible but could also feed into EAs of other negotiations.

Communication and Engagement with Non–Governmental Advisory Group– Checklist

The EA Committee should:

work with the Consultations and Liaison Division for all communication and engagement with the advisory group
engage the advisory group early, providing them with appropriate documentation (i.e., draft reports) in a timely manner such that their expertise is used effectively
seek information, as appropriate, from the advisory group to inform the EA process
distribute EA reports, as appropriate, to the advisory group for review/comment

The lead negotiating division should:

record actions taken to communicate with and engage the advisory group
summarize findings from engaging the advisory group and distribute to the EA Committee for use in future EA of trade work
summarize findings from engaging the advisory group and distribute to the Chief negotiator(s)

3.2.3 Consulting the public

The Framework contains a strong commitment to communicate information throughout the EA process, and to provide the public with an opportunity to provide feedback.

There are key points in an EA where the public should be invited to submit comments. At the beginning of the EA process a 'notice of intent' to conduct an EA of Trade negotiations is issued. The notice can be published in the Canada Gazette, posted on and sent as an electronic announcement via DFAIT's Trade Negotiation and Agreements Division (TNA) web site. Chapter 4 contains draft text for use during a notice of intent. The public should also be invited to comment on the Initial EA Report, Draft EA Report and Final EA Report when a full EA is undertaken. Reports should be posted on the TNA web site in both official languages. Announcements that the reports are available for public comment can be published in the Canada Gazette.

The lead negotiating division should document efforts to communicate and consult with the public during an EA and summarize comments received for distribution to the EA Committee and the lead negotiator(s). Findings and conclusions from these consultations should also be recorded. A template for recording comments from external parties is provided on the next page and should be used for this purpose.

The findings from the public consultations should inform future EA of trade work as pertinent. For example, feedback on an Initial EA Report should be addressed in the where possible but could also feed into EAs of other negotiations.

Communication and Engagement with the Public– Checklist

The EA Committee should:

work with the Consultations and Liaison Division for all communication and engagement with the public
keep the Consultations and Liaison Division, informed of the pace of negotiations
ensure, as far as possible, that appropriate time, as outlined in the Framework, is afforded for public consultation
issue a notice of intent early in the EA process with an invitation for the public to provide feedback
publish all EA reports in a timely manner with an invitation for the public to provide feedback
record actions taken to communicate to and consult with the public in the "template to record comments from external parties"
summarize findings from consulting the public and distribute to the EA Committee for use in future EA of trade work
summarize findings from engaging the public and distribute to the Chief Negotiator(s)
provide a 6days comment period or lesser as deemed appropriate for the scope and stage in the EA process

3.2.4 Engaging other external sources

In addition to the non–governmental advisory group and the public, there may be other interest groups that are important sources of information and can contribute the EA process.

The EA Committee should determine which groups and/or individuals to consult, and how these consultations should occur. This determination should be based on the following considerations:

the objective of developing better informed policy;
the commitment to a transparent process and objective of increasing public;
confidence in recognition of environmental considerations in trade negotiation;
the nature and quality of information that the EA process requires; and
the Federal Government Policy Statement and Guidelines on Consulting and Engaging Canadians.

While the specific groups consulted will vary depending on the subject matter from negotiation to negotiation, the need for outside environmental expertise and sectoral knowledge will remain constant. These groups will need as much information on the proposed trade negotiation as appropriate to ensure they provide pertinent and informed comments.

The EA Committee should establish a list for communicating information. This is in addition to communication through publicly accessible mechanisms like the DFAIT web site. DFAIT's Consultations and Liaison Division will be a central resource for communication and consultations lists, but these must be adapted by the EA Committee to suit the negotiations at hand. To promote information exchange, understanding and awareness among the participants, it is important to develop and maintain communication and consultation lists as early as possible. This exercise could draw from existing lists provided by the EA Secretariat, the Consultations and Liaison Division, and the responsible divisions within DFAIT and OGDs. A shorter list of groups and individuals to engage on specific issues should also be formed. It is the responsibility of the EA Committee chair(s) to ensure that lists are developed and updated as necessary.

Communication and engagement with groups and individuals that are not subject to confidentiality agreements must take into account the confidential nature of any information. While the initial decision as to what information to disclose resides with the EA Committee and Canada's negotiators, such discretion is of course bound by the provisions of the Access to Information and Privacy Act, and is to be exercised in light of the considerations listed above.

3.3 Communications Management

Communication keeps individuals and groups within and outside government informed regarding both process and substance at all stages of the EA process. The communication content will vary as the EA process deepens and information and analysis become more complete. The EA Committee must ensure that there is a system in place for collecting information from internal and external sources, communicating the process for managing submissions, and disseminating requests for submissions, summaries of the submissions received, and the EA reports. The information and checklists provided throughout Chapter 3 of the handbook highlight the key principles and steps the EA Committee can follow for the engagement and communication aspects of the EA process.

When external input is solicited, contributors must be informed in advance on what will be done with the information they provide and the results of consultations (information, analysis, policy recommendations). A summary of how public feedback on EA reports will be used is provided on the TNA web site.

Contributors must be told that the information they submit will be shared with the EA Committee, other federal department officials and retained non–government advisors (if any). They must also be advised in advance how their input will be shared with others outside of government. Submissions will not be individually attributed in any public documents. The rationale for non–attribution is to encourage frankness and pursuant to the Privacy Act. However, they will be summarized and distributed to the EA Committee and lead negotiators. The rationale for distributing summaries of the submissions is that it:

increases understanding of the diverse inputs that need to be considered (and perhaps accommodated) in producing the EA reports;
serves as a concrete indication that the government has reviewed the information received;
facilitates the integration of feedback into future EA of trade work; and
widens the sphere of dialogue beyond the government and the particular individual or group.

Communication activities will be managed by the EA Committee and should be coordinated within existing mechanisms in the negotiating process. The Consultations and Liaison Division will be the central contact point for communication with C–Trade, EA non–governmental advisory group, and can provide guidance on communicating with other sources outside of the federal government. The lead negotiating division should maintain a record of all communication and engagement activities. The templates provided in Section 3.2.1 can be used for this purpose.

Communications Management–Checklist

The EA Committee should:

determine how information gained through engagement and communication activities will be managed, and communicate this process publicly and to anyone from whom information is sought
determine which communication tools are best employed at varying stages of the EA process
identify opportunities to integrate EA communications with announcements for the negotiations

The lead negotiating division should:

record communications actions using the template to ensure that the requirements of the Framework are being met
maintain a record of outcomes from communication and consultation activities and distribute this to the EA Committee and Chief Negotiator(s)

3.3.1Communication mechanisms

Communication of EA reports and notifications for public submissions will take place in both official languages through a series of mechanisms. At a minimum, all notifications must be posted on the DFAIT web site, with all other mechanisms. It is important to recall that the EA process should be integrated into the overall negotiating process. As such, communication relating to the EA process or reports should correspond with announcements pertaining to the negotiations wherever possible. For example, it is suggested that the Notice of Intent to conduct an Environmental Assessment of a particular negotiation be issued at the same time that preliminary outreach for a consultation regarding a potential trade or investment agreement is posted.

DFAIT Web Site
All notifications, including those for public submissions and release of the Initial, Draft and Final EA reports must be made available on the appropriate DFAIT web page. All reports should be made available in both HTML and PDF formats and in both official languages. DFAIT web staff should be given ample notification about material to be posted.

Canada Gazette
Notifications seeking public submissions for Initial, Draft and Final EA reports could be announced in the Canada Gazette. As the Gazette charges a cost per word, it is advised that the Initial, Draft and Final EA reports not be printed in the Canada Gazette, but rather that the notices specify where the reports can be viewed (i.e. the public can view the reports on the DFAIT web site, and as appropriate other sites, or have hard copies mailed or faxed to them). For Gazette questions or submissions, contact the Editing Services Manager at (613) 991–6902.

Communication and Consultation Distribution Lists
The EA Committee could also undertake a direct mailing (or email) to business groups, NGOs and interested individuals. Coordination of this distribution list with other participating divisions and departments will be key to avoiding gaps and duplication. The distribution list can provide both consultation notices and copies of the documents throughout the EA process. The EA Committee will also be responsible for coordinating internal DFAIT consultation lists with other participating federal departments.

Electronic Newsletters and Listservs, and Journals
Electronic newsletters and listservs are another effective way to reach a large audience of interested individuals and groups, specifically catering to the interest of those dealing with environment and trade issues. Some examples might be the Gallon Environmental Newsletter, Canadian Environmental Network and the Bridges Electronic Trade Journal. Trade and professional journals on the issues surrounding international trade (e.g. Journal of International Trade) could also be given a summary of the EA findings. This would enable communication of the findings to the international academic and professional community. Suitable journals can be identified by the content, sectoral relevance and audience.

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4. Conducting an EA of Trade Negotiations

This chapter provides step–by–step guidance for conducting an EA of a trade negotiation. It begins with a brief overview of the procedural and analytical steps, followed by illustrative lines of inquiry for each of the six phases of an EA. Figure 2 provides an overview of the six phases. Checklists are provided at the end of each section to highlight the key steps in each phase. These checklists are also in Annex 2, and could be used for documentation purposes.

It is important to note that the guidance presented in this chapter is illustrative. EA Committees will exercise judgement in applying this guidance, especially with regard to the lines of inquiry offered throughout. Undertaking an EA according to the Framework, supplemented with the guidance offered in this handbook, remains subject to the availability of data and limited resources, and is contingent upon numerous other factors beyond the control of EA Committees.

4.1 Phases of the EA Process

Conducting a full EA of a trade negotiation involves six main phases. The sequencing of the EA phases in relation to the negotiation process is an approximation and may not correspond in practice. The Framework and handbook were prepared to ensure that EAs of trade negotiations are carried out in a credible and consistent manner. At the same time, it is necessary to maintain a certain degree of analytical and procedural flexibility given that trade negotiations differ from one to the next, be they bilateral, multilateral, sectoral, investment related, goods or service–based agreements.

The Preparatory Phase. The main tasks undertaken during this phase include establishing an EA Committee, deciding on the appropriate scope of assessment, and issuing a Notice of Intent.
The Initial EA Phase. This phase entails the early identification of likely and significant environmental effects of the proposed trade negotiations, identification of key issues to be explored further at subsequent stages of analysis if required, and the release of an Initial EA Report during the early stages of the negotiations. The Initial EA report also summarizes and addresses, where possible, comments received in response to the Notice of Intent.
The Draft EA Phase. This phase involves a more detailed examination of the likely and significant environmental effects of trade negotiations based on further analysis and consultations, and the release of a Draft EA Report during the early stages of the negotiations. It also summarizes and addresses, where possible, comments received on the Initial EA.
The Negotiations Phase. This phase involves the continued use of the Draft EA Report by negotiators during the trade negotiation, and further analysis if required.
The Final EA Phase. This phase involves the examination and detailing of any new information related to the EA process, including identification of enhancement and mitigation options and recommendations for follow–up and monitoring. It is the occasion to assess the process itself.
The Follow–Up and Monitoring Phase. This phase involves conducting any follow–up and monitoring activity during the implementation of the resulting trade agreement deemed appropriate by the EA Committee as may have been identified early in the process (i.e., Initial or Draft EA Phase). This is later confirmed in the Final EA Report. While this phase, where required, will be overseen by the EA Committee, operationally, it is anticipated that departments and agencies with environmental expertise and capacity will lead follow–up and monitoring activities where required.
Exceptions to the six phases. The level of effort committed to an EA should be commensurate with the scale of the trade negotiations. Consequently, some EAs will not undergo all six phases. Similarly, in some cases, outputs of separate phases may be combined. For example, a Draft EA is not required if the Initial EA finds little likelihood of significant environmental impacts as a result of the negotiation. However, in such circumstances, environmental considerations will continue to be integrated into ongoing discussions during the negotiations. A Final EA Report is always required and should coincide with the conclusion of the negotiations. It documents the outcome of the negotiations in relation to the EA process, explains any divergence from previous EA Reports, responds to comments received on previous EA reports, and indicates how the EA informed the negotiating process.

4.2 Analytical Methodology

While it is recognized that a standard analytical template for different kinds of trade negotiations will pose some difficulties, the Framework outlines four basic stages of analysis. Regardless of when the analysis is undertaken during the course of an EA, the same analytical stages would be applied.

Each stage of analysis seeks to establish whether or not a particular trade activity should be subjected to the next stage of the analytical methodology. The four stages are intricately linked. When addressing questions at any given stage in the analysis, all other stages should be kept in mind to ensure that the level of effort applied reflects the possible nature and scope of impacts. The areas covered by the negotiations determine what will be subjected to environmental assessment.

The four analytical stages are:

Stage 1: Identification of the economic effects of the negotiation
Stage 2: Identification of the likely environmental impacts of economic effects
Stage 3: Assessment of the significance of the identified likely environmental impacts
Stage 4: Identification of enhancement/mitigation options to inform the negotiations

This analytical methodology acts as a screening process to identify the most crucial environmental issues for Canada's trade negotiators to consider when entering into negotiations. The analytical methodology provides a series of questions in each of the four stages. This list of questions serves as a guide for the type of information that will be needed to successfully fulfill the requirements of each analytical stage; however, it should not be seen as a prescriptive or exhaustive list of points for inquiry.

The remainder of this chapter presents step–by–step instructions for each of the six phases of a full EA.

Figure 2: Conducting an EA of Trade Negotiations

Conducting an EA of Trade Negotiations

4.3 Tools and Concepts for Analysis

Typesof Effects

The linkages between trade and environment can be investigated through an examination of the potential changes to trade flows and economic activity arising from an agreement, and specifically the scale, structural, product, technology and regulatory effects that may result.^{Footnote 1} The examination of these kinds of changes is common to most EA of Trade methodologies. These categories of effects are used in the remainder of this handbook.

Scale effects refer to changes in the overall level of economic activity or macro– economic effects of trade agreements. Positive environmental effects may result from economic growth and financial gains when appropriate environmental policies or regulations are in place. In the absence of such policies or regulations, or when they are impeded or not enforced, negative environmental effects may result, such as unsustainable use of natural resources or pollution resulting from trade–related increases in transportation.

Structural effects refer to the changes in the patterns of economic activity or micro– economic effects of trade agreements. Positive effects may result when the agreement promotes the efficient allocation of resources and efficient patterns of production and consumption. Negative effects may result when the patterns of consumption are inefficient or unsustainable and/or when appropriate policies and regulations are not present. Baseline scenarios may be established as appropriate at this stage to help measure the changes resulting from the trade negotiations.

Product effects pertain to changes in trade flows of goods and/or services. Positive effects may result when an agreement leads to increased trade in beneficial products, such as energy–efficient goods. Negative effects may result if the agreement leads to an increase in the production and trade of products that have direct or indirect negative impacts on the environment.

Technology effects relate to changes in the flow of technologies, for example, technologies that reduce the resource requirements (energy, inputs) or reduce or eliminate pollution that may otherwise result from production.

Regulatory effects refer to the likely legal and/or policy effects of agreements. Positive effects may result when appropriate environmental regulations, standards or other measures are in place to address macro– and micro–economic changes. Negative effects may result when appropriate environmental policies or regulations are not present, or if the agreement impedes the development or implementation of such policies or regulations in the future.

Indicators

Indicators provide information on the amount or rate of change. Economic and environmental indicators will be useful in identifying the likely economic effects and environmental impacts of the negotiation being assessed. They can be used during the Initial, Draft and Final EA phase.

Indicators can reduce the total amount of data required for assessments and provide a simplified way of analysing and presenting results. They provide early identification of trends and suggest causal relationships that are useful to communicate the potential positive and negative environmental impacts of changes from the agreement being negotiated.

There is a wide range of indicators available to study economic and environmental impacts. The careful selection of indicators is crucial to achieve relevant and credible results. The following criteria should be considered when selecting appropriate indicators:

Indicators should:

be easily measurable and quantifiable;
be scientifically reliable and sound;
be appropriate for the sector they are meant to represent;
focus on key components and reflect actual concerns;
as a group, be balanced in their coverage of economic and environmental aspects; and
be comprehensive and compatible when analyzed collectively.

Most EA methodologies use a set of core indicators:

economic indicators such as rate of production, export and import by sector, real income; consumption rates; and employment.
environmental indicators such as air, soil and water quality; biodiversity; species populations; habitat destruction; waste generation; toxic releases; and depletion of natural resources.

4.4 Determining Likelihood

Stage 2 of the analytical methodology requires a determination of likelihood with respect to environmental impacts. Likelihood provides insight into the probability that an identified environmental impact will occur. Likelihood represents a qualitative value, and probability represents a quantitative value. The quantitative measure of probability can be associated with the qualitative terms of likelihood, as shown in the example below:

Probability

0%
100%

Likelihood

Not likely
Increasing Likelihood
Certain

Exposure, which is the regularity with which an activity occurs, may increase the likelihood that a given environmental impact will occur. It can be described in terms such as:

never
yearly
monthly
weekly
daily
continuously

The determination of likelihood can involve both judgement and measurement. Assigning the best estimate for likelihood can be challenging, depending on the nature of the impact, whether an increase or decrease in exposure is relevant, and the availability of data. For example, detailed historical records of flooding due to soil erosion can help to assess the likelihood of future flooding due to the same cause.However, in areas where little or no previous data exists, it will be necessary to estimate likelihood based on judgement, similar past experiences and expertise.

Any determination of likelihood must consider the scientific uncertainty associated with the data and the resulting assessment, and thus the EA Committee should account for the limitations of such an evaluation in its Report. When determining the likelihood of environmental impacts, it is important to remember that both positive and negative environmental impacts should be identified and assessed.

4.5 Phase 1: Preparatory Phase

The preparatory phase is crucial as it establishes the main parameters of the assessment process and the EA Committee is formed to determine the environmental assessment requirements in relation to the proposed trade negotiations.

4.5.1 Establishing an EA Committee

The principal starting point is establishing an EA Committee. While the EA Committee is tasked with making numerous important decisions throughout the course of the EA, some of the most crucial decisions need to be made at the outset. The EA Committee must decide on the structure of the Committee, the scope of the assessment, the work program and requisite resource requirements. The integrity of the EA process rests on the Committee structure and the pivotal role of collective decision–making. With the overarching goal of increased policy coherence, the fundamental role of an EA Committee is to represent the various departmental views thereby informing the negotiation process.

The EA Committee has considerable flexibility and discretion in undertaking an EA. In keeping with the principle of self–assessment as defined in the Cabinet Directive, the EA Committee will often have to base decisions on sound judgement rather than conclusive evidence. The discretion afforded to the EA Committee is conditioned by the various avenues for peer review and oversight by departmental colleagues and the EA Steering Committee. Recalling that the second objective of an EA of trade negotiations is to address public concerns, the EAs will have to be able to withstand public scrutiny and any reviews by the Commissioner of the Environment and Sustainable Development.

The Sustainable Development Division (GDS) within Foreign Affairs and International Trade Canada serves as the EA Secretariat and provides guidance and assistance to initiate and manage the EA process.

4.5.2 Initiating the EA process

The following is a rough outline of the steps to initiate the EA process.

Develop an understanding of the EA process. The EA Secretariat should brief the chief negotiator on establishing and managing the EA Committee. It is important to note that neither the chair nor the EA Committee members are expected to be 'environmental specialists'. Expertise will be provided throughout the process by the EA Secretariat, specialist divisions within Foreign Affairs and International Trade Canada, other government departments and external parties as appropriate.
Identify which departments should be represented on the EA Committee. The EA Secretariat maintains a list of departmental economic and trade policy, environment, and sustainable development officials that the lead DFAIT division can contact when establishing EA Committees. The EA Committee must always have representation from Foreign Affairs and International Trade Canada, Environment Canada, and the Canadian Environmental Assessment Agency. Other departments, relevant to the negotiations at hand, should also be represented. Industry Canada, Finance, Natural Resources Canada, Agriculture and Agri–Food Canada, Fisheries and Oceans and Transport Canada are often involved. The size of the EA Committee will vary with the nature of the negotiations. With larger negotiations, it may be necessary to have a large EA Committee with smaller, specialized working groups. It may also be determined that each agreement or chapter within an agreement should have an EA working group.
Hold an initial meeting to establish the EA Committee. The EA Committee Chair should convene an initial meeting to establish the membership of the Committee, and to begin determining the appropriate scope of the EA and work program of the Committee. The EA Secretariat should brief the Committee on the EA process. EA Committee members should receive copies of the Framework, this handbook, and previous EA reports for illustrative purposes. The lead division should share relevant documents regarding the negotiations, including previous economic analysis done in relation to the negotiation and information regarding the Canadian goals for the negotiation.
Develop materials for second meeting of the EA Committee. The EA Committee Chair should develop and distribute materials to guide the Initial EA phase. This may include a draft timeline for the process, communication mechanisms to be used within the EA Committee, a general list of the types of information to be collected to begin the Initial EA. This list may be in the form of questions that need to be answered, including those provided in this handbook.
The Chair may also want to ensure a first draft of the scoping for the EA is conducted and a report template developed by the lead division that the Committee can use, including the structure that each Committee member should use to draft their input. The analytical sections of EA reports are generallyorganized according to the areas being negotiated (e.g. Agriculture, NAMA, Services, Trade facilitation, Rules, Investment, etc.) with sub–headings for the fours steps of the analytical methodology (identification of likely economic effects, identification of likely environmental impacts, assessment of the significance of environmental impacts and identification of enhancement and mitigation options).
Hold second EA Committee meeting. At this time, the Committee should confirm the scope and timeline for undertaking the assessment, and tasks should be distributed so that information collection for the Initial EA can begin. On this note, the Framework notes that analysis undertaken during EAs will rely largely on existing information, augmented as necessary by additional research. The EA Committee should determine early in the EA process what quantitative and/or qualitative information is available, and how that data should be collected and analyzed, whether individually or collectively, and internally or externally. The EA Secretariat can advise the EA Committee on this determination.
Establish documentation to record communication and consultation activities. As discussed in Chapter 3, the lead negotiating division should keep a record of communications and consultations that includes the date, substance, and nature of consultations that take place throughout the EA; as well as when there is divergence on consultations from the guidance contained in the Framework and Handbook. They should also record the comments that are received from external individuals and organizations as a result of consultations. Template for recording external consultation activities and feedback are contained in Chapter 3.

The preceding is not a strict list of steps, but rather a rough indication of the key actions required to initiate the EA process. Subsequent steps are not outlined here because the EA Committee is responsible for delineating these as appropriate in keeping with the Framework, the guidance provided in the handbook, the advice provided by the EA Secretariat and the specific nature of the negotiations.

4.5.3 Determining the scope of the assessment

The EA Committee, with advice and assistance from the EA Secretariat and others, determines the timing and scope of the EA based on the content and progress of the negotiations.

Issues being negotiated form the basis of the EA.
The phases of assessment (Initial, Draft and Final EA) correspond to progress in the negotiations.

The EA Committee is also responsible for defining the work program and timetable to carry out the EA in a manner that meets the intent of the Framework, and to identify the roles and responsibilities of the EA Committee members in undertaking this work. Roles and responsibilities in the EA process were outlined in Section 2.3.

A table outlining the issues being discussed for the negotiation and the basis for their exclusion/inclusion in the EA should be included at the beginning of the EA report.

To illustrate, a sample EA 'Scoping' Table is provided below.

Issue area	Anticipated outcome	Potential environmental implications and provisions
Preamble	e.g., The preamble will provide guidance on the general intentions of the parties to the agreement, but is not binding.	e.g. The preamble is expected to reference the parties ongoing commitment to sustainable development and cooperation on environment.
Objectives	This chapter will establish the free trade area between the parties, lay out the overall objectives for the agreement...
Transparency	This chapter facilitates the administration and smooth operation of the agreement ...etc.
Rules of origin
Customs procedures
Trade facilitation
Non–tariff measures and regulatory cooperation
Emergency action
Financial services
Telecommunications
Electroniccommerce
Competition policy
Government procurement
Intellectual property
Dispute settlement

4.5.4 Preparing a notice of intent

A Notice of Intent announces the Government's intention to conduct an EA and invites comments on environmental matters related to the proposed negotiations. This notice can be included with Foreign Affairs and International Trade Canada's primary notification that Canada is entering into trade negotiations multilaterally, regionally or bilaterally. The Notice of Intent will be published and comments will be sought for 60 days, unless a shorter or longer period is considered appropriate and justifiable. The date that the notice of intent should be documented in the record of communications and consultations established for the EA.

The Notice of Intent is a short statement (only a couple of paragraphs) that should include the following information:

the nature of the trade negotiations Canada is entering into and with whom;
a statement that Canada's EA Framework will be applied (with a link to the Framework and background documents);
an invitation for public comments with a note that it may be too early in the process for substantial input;
where people should send comments to (mail and email addresses);
how long the public has to respond and final date for submissions; and
where the public can retrieve background information on the proposed trade activity.

The Notice of Intent will be published via the Canada Gazette, and/or the DFAIT web site, and will be sent to consultation lists (via email) of various identified groups and individuals.

An example of text for the Notice of Intent is found in Annex 2.

It is suggested that the Notice of Intent to conduct an Environmental Assessment of a particular negotiation be issued at the same time that preliminary outreach for a consultation regarding a potential trade or investment agreement is posted. This approach better integrates the EA with the negotiating and decision making process.

It is important to note that, in keeping with the discretion accorded to the EA Committee as noted in Section 4.1.1, the Committee may determine that a separate Notice of Intent is not required and may choose to issue a Notice of Intent together with the Initial EA.

Phase 1 Checklist: The Preparatory Phase

By the end of Phase 1, the following should be checked as completed:

The lead division has:

formed an EA Committee
reviewed the communications checklists in Chapter 3
established a document to record communications and consultations activities as advised in Chapter 3

The EA Committee has:

decided the structure of the committee and member's respective roles
developed an understanding of the EA Process
organized internal and external communication and engagement
determined the scope of the assessment, outlining the broad parameters of the work program and timetable to carry out the EA
identified the issues to be considered in the Initial EA based on the scope of the negotiations
issued a notice of intent through chosen communication mechanisms with information regarding opportunities for participation

4.6 Phase 2: The Initial EA

The Initial EA phase is carried out for all trade negotiations to identify the key issues that warrant further attention at later stages. It occurs early on during the negotiations. Essential tasks undertaken during this phase include the 'scoping' or initial analysis of the range of likely environmental effects of the proposed negotiations, as well as the release of an Initial EA Report. The EA Committee determines the scope and method for preparing the Initial EA.

The Initial EA may indicate that further application of the EA process is not required if environmental impacts are unlikely or insignificant during the initial analysis. In this circumstance, the findings would be documented and published in the Initial EA Report and the public would be invited to provide comments. No further analysis would be pursued unless warranted by new information. However, environmental impacts and opportunities should continue to be considered in the course of the negotiations.

'Scoping' is a critical step in the preparation of an EA. It helps to identify the most important environmental issues that are likely to arise, thereby assisting in the prudent allocation of resources. The scoping process is to identify:

the important environmental issues to be considered;
the appropriate boundaries for the study; and
the information requirements necessary for further analysis.

The Initial EA Report acts as a 'scoping paper' to identify areas of environmental interest and potential concern that might arise during the conduct of negotiations. It should provide a description of the range of issues to be covered in the negotiations as well as the factors to be considered in the analysis and the scope of those factors. In so doing, the scoping undertaken within the Initial EA will help to focus on relevant issues and concerns throughout the process. Approached effectively, the scoping process will also draw on the knowledge and views of individuals with relevant expertise in the negotiating areas and with respect to their environmental impacts. In fact, the value of an effective scoping process cannot be overstated. Where ineffective scoping occurs, delays and inefficiencies in the overall process are likely to be encountered.

The Draft and Final EA reports will be elaborations of the Initial EA Report. For example, the Draft EA Report will have a similar look and feel to the previous Initial EA Report, but will contain more detail and information as a result of further analysis and consultation.

The Initial EA Report should, where possible, summarize the relevant comments received following the Notice of Intent. The Framework allows for consultations on the Initial EA with the provinces and territories, as well as external advisory groups, before the Initial EA Report is issued. The format of these consultations is to be determined by the EA Committee.

The Initial EA Report will be posted on DFAIT's web site and may be published in the Canada Gazette. Once released, comments will be sought for 60 days unless the EA Committee determines that a longer or shorter period is appropriate and justifiable. Comments received will be used in preparation of the Draft EA.

The EA Committee Chair should maintain a record of communications and consultations activities, and the comments received therein. Chapter 3 contains templates for this purpose.

4.6.1 Applying the analytical methodology during the Initial EA

The analytical methodology is applied in a cursory manner during the Initial EA phase. Analysis will rely largely on existing information, augmented as necessary by additional research.

This section contains questions that could be used to guide the information required for each stage of the analytical methodology. Each stage of the analysis seeks to establish whether or not a particular trade activity should be subjected to the next stage within the analytical methodology. It is important to reiterate that the four stages are intricately linked. When addressing questions at any given stage in the analysis, all other stages should be kept in mind to ensure that the level of effort applied reflects the possible nature and scope of impacts.

Some basic questions should be answered to provide a basis for the analysis:

What will the trade/investment negotiations cover?
What are the general goals of these negotiations?
What has Canada proposed?

Stage 1: Identification of the Economic Effect of the Agreement to be Negotiated

This first stage of the analysis establishes the overall domestic economic relevance of the agreement being negotiated. The analytical methodology seeks to identify the sectors of the economy that are likely to be affected by the negotiations and/or associated trade–related issues. This is in keeping with the Framework, and helps to define the scope of the assessment.

Previous economic analysis that was undertaken to inform the initiation of the negotiations should be used wherever possible.

Stage 2: Identification of the Likely Environmental Impact of Such Economic Changes

The second stage of analysis is identification of the likely environmental impacts following from the economic changes in Canada that were identified in Stage 1.

Stage 3: Assessment of the Significance of the Identified Likely Environmental Impacts

After the most likely domestic environmental impacts have been identified, they must be evaluated to determine their significance. The attribution of significance begins early and extends throughout the EA process. To accomplish this evaluation, the EA Committee must first establish criteria to measure impact, and then determine what constitutes a significant environmental impact using appropriate environmental indicators. Evaluation of significance helps focus resources and define priorities for the remainder of the EA process.

The concept of significance is difficult to define, as it is subjective in nature. Common understanding of the term correlates increasing significance with the magnitude and/or the severity of the impact. In fact, to assess significance requires consideration of duration, frequency, permanency, magnitude, impact on quality and quantity of environmental indicators, geographical cover and ecological context, and effects on people resulting from environmental impacts. Establishing the effects of "significance" also involves considering the level of risk, uncertainty, burden of proof and weighing of decision–making factors.

Stage 4: Identification of Enhancement / Mitigation Options to Inform the Negotiations

Stages 1 to 3 have identified in a cursory manner the economic effect and the expected environmental impacts of negotiations and assessed their likelihood and significance. Stage 4 identifies the policy options or actions to address those impacts. Enhancement activities increase the benefits that may accrue to environmental quality, while mitigation actions take steps to control possible negative environmental impacts.

Examples of possible enhancement and/or mitigation options to consider include altering the negotiating position, introducing negotiations for complementary cooperative agreements on environmental issues, introducing or modifying existing policies or programs, and implementing monitoring mechanisms. The same analytical stage is carried out with more rigour in the Draft EA phase when further analysis has been conducted on the various environmental impacts, and the optimal enhancement/mitigation options are better known.

Follow–up as part of the EA process provides a key mechanism by which the impacts of trade agreements can be monitored and documented, the findings of the EA validated and EA methodologies refined so the accuracy of future EAs can be improved. Follow–up can also provide a vehicle to ensure that EA findings and recommendations are addressed through adequate and effective mitigation and enhancement policies.

Although follow up and monitoring actions where appropriate will largely be undertaken following the conclusion of negotiations and when an agreement is in its implementation phase, Stage 4 of the Initial EA process should include early consideration for follow up and enhancement / mitigation options commensurate with the environmental effects expected at the Initial EA phase. Where possible, these options should build on other activities being anticipated for follow–up and monitoring of the agreement (e.g., reporting, data collection, ongoing dialogues, etc.).

Consideration should be given to how ongoing institutional mechanisms and environmental cooperation activities associated with the trade agreement could be used in follow–up and mitigation.

4.6.2 Preparing an Initial EA Report

Upon completion of the analysis for the Initial EA phase, the Initial EA Report is compiled or commissioned by the EA Committee. It will summarize the most likely and significant environmental impacts that may arise as a result of the proposed trade agreement.

The Initial EA Report should contain some key elements:

a description of methodological developments, if any, since past studies;
an account of the state of trade relations between Canada and the other countries in the negotiations;
an overview of what is being negotiated;
a statement of Canadian goals in the negotiations;
a selective review of literature, tools and references relevant to the EA of negotiations underway;
a screening exercise of key issues and probable impacts; and
a summary of findings from stages one to four of the analytical methodology.

Following a review and discussion within the EA Committee, members should consult within their respective departments/agencies and consolidate comments.The document should then be revised to reflect comments received from departments before it is forwarded to members of C–Trade and appropriate non–governmental expert advisory groups for their review and comments. Consultation activities, and the comments received therein, should be documented in the template established during the preparatory phase. Comments should be circulated to the EA Committee and EA of Trade Secretariat. Where possible, the Initial EA report should be revised to address the comments received. If it is not possible to address the comments in the short term, they should be referred to the EA of Trade Steering Committee for consideration in future work plans.

The EA Committee should communicate the key findings of the EA to policy makers in their respective departments. These findings should also be included in briefing materials for negotiators.

The Initial EA report should be posted on the DFAIT web site. Comments should then be sought from the public for 60 days unless either a longer or shorter period is deemed appropriate by the EA Committee. Comments received during the specified period should be documented and shared with the EA Committee. These will be used in the preparation of the Draft EA.

While Initial EAs will be conducted for all trade negotiations, it may be determined that a full environmental assessment is not required if significant environmental impacts are unlikely to occur. In that event, such circumstances would be documented and published in the Initial EA Report and no further EA action would be required unless additional information becomes available. Otherwise, further assessment is undertaken in the Draft EA phase.

Phase 2 Checklist: The Initial EA

Under the leadership of its chair(s), the EA Committee should:

carry out pre–scoping analysis using the four–stage analytical methodology, identifying preliminary indication of likely and significant environmental impacts of the proposed trade agreement
conduct "quality control" of information to: evaluate capacity for monitoring and reporting, organise systematic collection of data, ensure sound science and reliability of sources, and evaluate availability of required information
determine the strategy for engagement based on the guidance provided in Chapter 3
engage the C–Trade forum and identify jurisdictional issues with provinces and territories
produce an Initial EA Report based on the scoping analysis using the four– stage analytical methodology
circulate the Initial EA Report for comments interdepartmentally, to CTrade and to non–governmental advisory groups as required
document consultation activities and comments received therein
circulate comments received during consultations to the EA Committee and EA of Trade Secretariat
release Initial EA Report through established communication mechanisms, with information about opportunities for feedback and consultation
document comments received on the Initial EA Report, and circulate these to the EA Committee and EA of Trade Secretariat
if required, start reviewing those environmental implications identified in the Initial EA Report for a more thorough analysis in the Draft EA phase
evaluate the need to conduct further analysis
commensurate with the anticipated environmental effects identified, consider potential opportunities for follow up and monitoring, including how these could be built into existing follow–up actions for the agreement and how these could inform current negotiations and future activities.

4.7 Phase 3: The Draft EA

The Draft EA phase involves a more detailed examination of the likely environmental impacts of trade negotiations based on further analysis and consultations, and the release of a Draft EA Report at the start of, or during, the negotiations. The Draft EA will continue to inform the negotiators of the identified environmental concerns during the conduct of the negotiations.

Linkages between trade and environment were categorized in Section 2 under the headings of scale, structural, product, technology and regulatory effects. These are used throughout the Draft EA phase in the same manner that they were used in the Initial EA Phase.

This section elaborates on the procedural and analytical steps detailed in previous sections. The Draft EA should outline and analyze in further detail those issues identified in the Initial EA as having the most likely and significant environmental impacts. As well, any new comments or concerns identified from the submissions received throughout the consultation process should be considered.

The Draft EA phase will follow the same analytical methodology outlined in the Initial EA. It is important to reiterate that the lines of inquiry offered are for illustrative purposes and EA Committees will need to exercise judgement in their application. As well, the illustrative lines of inquiry used during the Initial EA should be re–visited, as appropriate.

Before reviewing the suggested analytical and procedural steps to prepare a Draft EA, two suggestions are offered to assist in organizing the analysis: establishing and using scenarios to conduct the analysis; and grouping the analysis on a sectoral basis.

The EA Committee may wish to organize its research around one or more scenarios of possible outcomes of the negotiations. Three scenarios are offered below as examples. It is important to underscore that the use of scenarios is not a statement of Canada's objectives. Rather, it is strictly a tool for conducting the analysis. Furthermore, it is important to underscore that scenarios are to be used at the discretion of the EA Committee and may not be appropriate in certain cases.

A base scenario representing status quo, from an environmental standpoint, of the trade relationship between the negotiating countries. In other words, no new agreement is achieved. The principle purpose of this scenario is to provide a "benchmark" for comparative purposes.
A modest result scenario which assumes the negotiations result in tariffs being cut by 5% of present levels.
An ambitious result scenario which assumes that tariffs are completed eliminated.
Trying to tackle the analysis of the impact of the trade negotiations at once can be a rather daunting prospect, and it is recommended that the EA Committee approach the undertaking on a sectoral basis, and then connect the results. A sectoral approach can also help to facilitate the work to be carried out by participating departments and agencies.

To carry out the analysis on a sectoral basis, it is necessary to identify the sectors of the economy that are likely to be affected by the areas covered by the trade negotiations, and then estimate the range of environmental impacts the negotiations may have on those sectors. EA Committees may also choose to establish priority sectors for analysis within the EA. Box 4.1 offers criteria in this regard.

Box 4.1 Criteria for Selecting Priority Sectors

The following criteria are offered to help identify priority sectors:

The sector is important to the national economy and in particular in its contribution to export revenues.
The sector relates directly or indirectly to major environmental media and natural resources.
The sector relates directly or indirectly to important issues of equity and social well–being.
The sector provides a strategic natural resource (such as a certain foodstuff) that a large proportion of the population depend upon for their livelihood.
The sector has been, or might become, the subject of changes in economic rules induced by trade–related policies.
The sector is one with significant trade flows in both volume and financial terms and is experiencing changes in trade flows.
The sector is one where one might expect, a priori, that there are important sustainability effects attributable to trade–related policies.

Source: United Nation Environment Programme, Reference Manual for the Integrated Assessment of Trade–Related Policies p.12 (drawing on the work of the OECD, NACEC and WWF)

Stage1: Identification of the Economic Effects of the Agreement to be Negotiated

During Stage 1 of the Initial EA, the economic importance of the agreement to Canada was established and possible changes to the economic landscape were identified in a cursory manner. By the beginning of the Draft EA phase, there should be increased knowledge of the negotiations and the issues, thus a more detailed analysis may be feasible. Any new economic analysis that pertains to the negotiations should therefore be carried out. Those sectors or trade–related issues that have been identified as factors influencing the economy will be the focus of the analytical methodology. This first stage is very important as it provides the necessary information from which to extrapolate environmental impacts.

The categorization of linkages between trade and environment outlined in Section 4.2 is applicable throughout the Draft EA phase.

Stage 2: Identification of the Likely Environmental Impact of Economic Changes

A more rigorous series of questions is asked at this stage of the Draft EA to establish a detailed understanding of the likely environmental impacts of economic changes related to the negotiations. The same definition of likelihood is applied as in the Initial EA (see Section 4.2.1), and again, both positive and negative environmental impacts are to be considered. This analysis will require collaboration with environmental specialists from the relevant federal departments and agencies. As well, the EA Committee may wish to seek expert analysis from outside the government as appropriate.

The credibility of an EA is based on the appropriate use of scientific principles and practices. There is an obligation, therefore, to use widely recognized standards and trustworthy sources for data gathering during the analysis to ensure a transparent, objective and credible report.

The resources identified in Section 4.4.3 for the environmental analysis during the Initial EA, will be useful for Stage 2 of the Draft EA as well.

Environmental indicators established during the preparation of the Initial EA should be reviewed and refined as appropriate, or established if not previously done so. Recall that, as discussed in Section 4.2.1, the criteria for establishing environmental indicators should be measurability, consistency, reliability and flexibility. Relevant indicators are quantifiable and identifiable measurements of environmental quality that assist in determining the likely environmental impacts of economic activities. To fulfill this goal it is important that the selected indicators be reflective of the complexity of the sector they are meant to cast light on, and that they have the potential to indicate something about more than one area or sector.

What environmental quality indicators currently exist that may act as a measure to environmental impact?
Are the current indicators yielding relevant information? Are they adequate for the questions they attempt to answer?
Are there relevant indicators for all sectors under analysis?

Stage 3: Assessment of the Significance of the Identified Likely Environmental Impacts

The Draft EA will require a more thorough and substantial elaboration of the significance of the environmental impacts identified during the Initial EA. As outlined in Section 4.2.1 (Stage 3), while the concept of significance is difficult to define as it is subjective in nature, there are guideposts to help determine "levels of significance." Based on those guideposts, Committees may wish to establish a scale of significance using descriptors such as low, medium and high. Any scale established should describe the criteria or rationale employed in the analysis.

If the impacts cannot be quantified or reasonably approximated, the EA Committee, to the best of its ability and considering available information, should attempt to judge the likelihood that the impact in question will reach significant proportions. The analysis undertaken to reach these conclusions should be explained in the Draft EA Report.

Stage 4: Identification of Enhancement / Mitigation Options to Inform the Negotiations

The final stage of analysis is the consideration of enhancement and mitigation options. In the Initial EA, options for enhancement or mitigation may have been developed and/or proposed depending on the level of analysis and information available at that time. A key component of the Draft EA will be to expand and elaborate the enhancement and mitigation options available to address the identified likely and significant environmental impacts. Canada's negotiators will wish to have clear assurances that current policies, plans or programs are in place, or can be introduced, to enhance positive and/or address negative impacts identified.

The enhancement and mitigation options would assist the negotiators in identifying, as appropriate, what steps can be taken outside or within the negotiations to either reduce or enhance environmental outcomes. Examples of possible options include:

abandon a negotiating position and developing a new approach;
retain a negotiating position;
retain a negotiating position with the assurance that other steps can be taken to mitigate the effects (such as parallel environmental agreements);
establish new, or modify existing policies or programs to address and/or enhance the environmental impacts;
establish mechanisms for follow–up to monitor the outcomes of an agreement in the course of its implementation, create bodies to investigate and enforce the agreement;
work with like–minded countries or organizations on issues identified during the course of the assessment (collaborative agreements or other joint initiatives); and/or
negotiate the addition of provisions/regulations to allow for environmental concerns.

If mitigation/enhancement options cannot be addressed directly at the negotiations phase, other options need to be evaluated, these options can be:

measures by government to remedy market failures;
reinforcing existing mechanisms; and
enacting regulations: competition laws, environmental laws, etc.

4.7.1 Preparing the Draft EA Report

The findings of the four stages of analysis are documented in the Draft EA Report, prepared or commissioned by the EA Committee. EA Committee members consult within their respective departments to ensure that the Draft EA Report reflects a balance of departmental views. The EA Committee should then forward the EA Report to C–Trade Committee, as well as any non–governmental advisory groups as appropriate, for review and comment. Efforts to engage provinces and territories should be recorded in the template to record external consultations discussed in Chapter 3 of this handbook.

The EA Committee should release the EA Report to the public through established communication mechanisms, and seek comments for 6days unless a shorter or longer period is considered appropriate and warranted. Comments received during the specified period would be considered during the course of negotiations. This does not preclude the opportunity for comment at any point during negotiations, particularly as new issues arise.

The Draft EA should contain the following sections:

Executive summary
Table of contents
Purpose of the assessment
Objectives of the proposed trade agreement
Analysis of impacts by negotiating issue and sector
Integrated analysis and findings
Conclusions and suggestions
Appendices

Phase 3 Checklist: The Draft EA

Under the leadership of its chair(s), the EA Committee should:

use comments from the Initial EA phase to inform Draft EA phase
determine the strategy for engagement based on guidance provided in Chapter 3
record any communications and consultations activities undertaken during the Draft EA phase
complete all four stages of the analytical methodology: identify the economic effects, and the significance of likely environmental impacts of the proposed trade agreement, develop enhancement and mitigation options as well as revisiting the potential approach to follow up and monitoring identified in the Initial EA and to be confirmed in the Final EA phase
engage the C–Trade forum to identify any jurisdictional issues with provinces and territories
produce/commission Draft EA Report by the designated/lead DFAIT division in collaboration with co–leads
circulate Draft EA Report for comments amongst EA Committee, relevant interdepartmental networks, C–Trade and non–governmental advisory groups
document consultation activities and comments received therein
circulate comments received during consultations to the EA Committee and EA of Trade Secretariat
update 'formal' and 'informal' consultation lists
publish the Draft EA Report through established communication mechanisms for an appropriate time period, with information on how feedback will be provided
document comments received on the Draft EA Report, and circulate these to the EA Committee and EA of Trade Secretariat

4.8 Phase 4: Negotiations

This phase calls for the continued use of the Draft EA Report to inform the negotiations. If required, further analysis is also conducted using the same four–stageanalytical methodology previously outlined.

4.8.1Employing the Draft EA during the trade negotiations

The results of the Draft EA will be used by negotiators to further develop and refine Canada's negotiating position. Given the confidentiality of the negotiating process, further assessment, if any, during the negotiations would not normally be made public, but would be documented in the Final EA Report issued at the conclusion of negotiations. As indicated earlier, the C–Trade Committee and EAAG are bound by confidentiality agreements and may be engaged during the negotiating period on EA matters.

Given the Canadian government commitment to a transparent policy development process, the EA Committee may provide public updates on the negotiations and consultations on new issues that occur during the negotiations. If the negotiations are expected to take place over a prolonged period of time, and as any new circumstances or issues arise during the negotiation process, further research to complement the Draft EA Report may be warranted. The negotiators may also request further analysis on specific issues.

4.8.2 Applying the analytical methodology during negotiations

If required, any new analysis of environmental impacts of the negotiations would be undertaken using the same four–stage analytical methodology described throughout Chapter 4. Any new analysis required would be undertaken or commissioned by the EA Committee, with advice and assistance from the EA Secretariat. The new analysis would be documented and outlined in the Final EA Report.

Phase 4 Checklist: Negotiations

During the Negotiation Phase and under the leadership of its chair(s), the EA Committee should:

use the Draft EA Report to inform the negotiations
if required, undertake or commission any new analysis of environmental impacts of the negotiations using the same four stage analytical methodology described throughout Chapter 4. Any new analysis undertaken should be documented and outlined in the Final EA Report
assess the need for more information to be collected
if required, refine Canada's negotiating position
ensure the Status of Negotiations Table is kept up to date and re–distributed to the EA Steering Committee and other stakeholders as appropriate
provide public updates as appropriate
evaluate new issues that arise during negotiations using analytical methodology outline in the Framework

4.9 Phase 5: The Final EA

The Final EA Phase involves the documentation of any new information related to the Negotiations Phase of the EA process, and the examination, as appropriate, of the enhancement and mitigation options that were considered during the negotiations.

4.9.1 Applying the analytical methodology for the Final EA

If any new analysis was conducted during the negotiations phase, the outcome of that analysis should be documented in the Final EA Report. In the context of comprehensive multilateral trade negotiations, for example at the WTO or FTAA, EAs would be undertaken using an agreement–by–agreement approach, with sub–committees pursuing assessments on various tracks. The Interdepartmental EA Steering Committee would undertake or commission the consolidation of the various Final EA Reports produced by the sub-committees to examine the cumulative impacts, if any, of the negotiations. Again, such analysis would be undertaken using the same four–stage analytical methodology described throughout Chapter 4.

4.9.2 Preparing the Final EA Report

The purpose of the Final EA Report is to document the outcome of negotiations in relation to the EA process. The Final EA Report is prepared or commissioned by the EA Committee. Input will be required from individuals directly involved in the negotiation process, if not already represented on the EA Committee, to identify how environmental considerations were integrated into the negotiation decision–making process in relation to enhancement and mitigation options identified in the Draft EA. The Final EA Report will be posted on web site and/or published in the Canada Gazette after negotiations have concluded.

The Final EA Report may identify the following:

how the Draft EA informed the negotiations, and any pertinent information regarding the relationship between the EA process and the negotiations;
what comments were received in response to Draft EA Report;
subsequent analysis undertaken during the course of negotiations and the anticipated environmental implications, if any;
subsequent analysis, if any, undertaken after the negotiations and the anticipated environmental implications, if any;
any notable divergence from the Draft EA Report;
final assessment of environmental implications and accommodation of the new trade agreement;
an approach to follow up and monitoring of the effects of the agreement
any additional information or comments received from the public on the EA process and findings during the course of negotiation; and
how the Final EA Report could be disseminated for use by federal departments and agencies, other levels of government, aboriginal groups, business groups, non–governmental organizations, and the public.

The EA Committee will use the Final EA Report to communicate these points, and demonstrate the steps taken to integrate environmental considerations into the trade negotiations.

Comments on the Final EA Report will be welcome from the public and will be useful in the periodic updating/improvement of the Framework as experience and knowledge is gained in applying the Framework.

Phase 5 Checklist: The Final EA

The Final EA Report is prepared or commissioned by the EA Committee, and those involved in the negotiating process. During the Final EA phase and under the leadership of its chair(s), the EA Committee should:

identify and document the findings and actions since the Draft EA Report
examine any new information as appropriate
evaluate mitigation/enhancement options discussed during the negotiations and, where previously identified as necessary, confirm the approach for follow up and monitoring
determine the timetable and responsibilities to produce the Final EA Report
produce the Final EA Report in a manner that identifies the ways in which environmental considerations were integrated into the decision–making process, summarizes the comments received on the Draft EA Report documents the outcome of the negotiations in relation to the EA process, and establishes requirements and recommendations for follow–up and implementation of enhancement and mitigation measures
circulate Draft EA Report for comments amongst EA Committee, relevant interdepartmental networks, C–Trade and non–governmental advisory groups
document consultation activities and comments received therein
circulate comments received during consultations to the EA Committee and EA of Trade Secretariat
update 'formal' and 'informal' consultation lists
publish the Draft EA Report through established communication mechanisms for an appropriate time period, with information on how feedback will be provided
document comments received on the Draft EA Report, and circulate these to the EA Committee and EA of Trade Secretariat

4.10 Phase 6: Follow–Up & Monitoring

The EA Framework anticipates that mitigation and enhancement measures, and follow–up and monitoring actions would be confirmed in the Final EA phase. The need for and effort invested in follow–up and monitoring should be commensurate with the anticipated environmental effects of the negotiations as outlined in the various phases of the EA process. The follow up and monitoring phase involves the review of any mitigation/enhancement actions recommended by the EA Committee in the Final EA Report. Follow–up and monitoring can take place at any time during the implementation of the concluded trade agreement on the recommendation of the Steering Committee.

In general, the approach to follow up and monitoring should be flexible and adaptable to the Canadian context and supportive of the objectives of the Framework for Conducting the EA of Trade Negotiations. In general, a follow up and monitoring approach should:

Set clear objectives from the outset.
Include a screening process to establish the extent of follow up needed.
Undertake a scoping exercise for follow up and monitoring needs.
Undertake a cost–benefit analysis of follow up options.

In addition:

Follow–up activities may include ex post environmental studies to determine the accuracy of the original EA findings.
Follow–up and monitoring activities should be integrated with ongoing reporting and cooperation activities associated with the negotiation. For example, annual reports regarding trade agreements, environmental cooperation activities, and ongoing institutional information sharing among parties.
Monitoring may include any on–going activities to assess impacts and/or the effectiveness of mitigation/enhancement measures established in response to recommendations identified in the Final EA Report.
Work on follow–up should proceed incrementally to avoid raising expectations and commitments should not be made to any new resource–intensive activities where it is deemed unnecessary. Efforts should build where possible on existing processes.
Follow–up should be seen as an area for potential improvement over the long–term based on experience; and,
Follow–up activities should respect the mandates of Federal departments and the jurisdiction of provincial and territorial governments.

Finally, it is important to note that measures and actions will vary between EAs and may, in certain cases, not be required.

The EA Steering Committee will be responsible for leading the continual improvement of the EA process generally, and the periodic revision of the Framework and Handbook. This may include development of a system to compile the various EA Reports and establish a monitoring system to track the environmental performance of a trade agreement with respect to its Final EA Report recommendations and mitigation options. In the WTO context, the results of any follow up and/or monitoring activities may be useful as part of Canada's obligations under the Trade Policy Review Mechanism (TPRM).

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Annex 1: Canada's Framework for Conducting Environmental Assessments of Trade Negotiations

Web site:
www.dfait-maeci.gc.ca/tna-nac/documents/FinalFramework-e.pdf

Annex 2: Checklists

Checklists for communication and the analytical methodology provided throughout the handbook. These checklists can be used for documenting the EA process.

Internal Consultations Checklist

In the early stages, the lead negotiating division should:

identify relevant divisions and departments to be represented on the EA Committee
establish mechanisms for interdepartmental communication and consultations, including standard email lists for communicating information
take steps to establish an EA Committee and inform members regarding the EA Process

The EA Committee, under the leadership of its chairs, should:

identify information required for each phase of the EA
identify existing information and gaps
identify methods available to fill information gaps
conduct interdepartmental consultations for analysis and synthesis of the collected information via the EA Committee
circulate draft reports interdepartmentally before providing external to the federal government
provide regular updates to the EA of Trade Secretariat regarding status of negotiations and EAs

The departmental representatives on the EA Committee should:

identify what information is needed from their department
consult within their department to identify what information exists
identify methods to obtain any additional information needed
circulate reports within their department for comment and consolidate input received
communicate results to policy–makers and senior management as appropriate

Preparation for external engagement–Checklist

In the early stages, the DFAIT division responsible for the negotiations should:

contact the Consultations and Liaison Division (CSL) at an early stage, and appropriate departmental equivalents, for guidance on how to engage external parties
use the templates provided in this chapter to record i) communications to and consultations with external parties, and ii) comments received from external parties, including the EA of Trade non–governmental advisory group and public consultations
establish a plan to circulate comments received from external parties to the EA Committee and Chief Negotiator(s) for use in analysis and development of EA reports
reference the EA in external communications regarding the EA
ensure time is provided for translation of all communication and engagement materials into both official languages

The EA Committee should:

consult documents on the Access to Information Act and contact the Access to Information and Privacy Protection Division (DCP) in DFAIT or departmental equivalents if required

Communication and Engagement with C–Trade– Checklist

The EA Committee should:

coordinate communication and engagement with C–Trade via the Consultations and Liaison Division
keep the Consultations and Liaison Division up to date on the EA process to enable them to identify issues and materials for C–Trade
ensure the Consultations and Liaison Division is kept apprised of information provided to other Federal–Provincial–Territorial mechanisms and networks
communicate EA findings to C–Trade for consultation
seek information from C–Trade to inform the EA process
distribute EA Reports to C–Trade for review/comment

The lead negotiating division should:

collate input received and record actions taken to communicate with and engage provinces and territories
summarize findings from engaging provinces and territories and distribute to EA Committee for use in future EA of trade work
summarize findings from engaging provinces and territories and distribute to lead negotiator

C–Trade members should:

apprise provincial/territorial colleagues regarding the EA findings
provide information regarding provincial/territorial concerns related to the EA process

Communication and Engagement with Non–Governmental Advisory Group– Checklist

The EA Committee should:

work with the Consultations and Liaison Division for all communication and engagement with the advisory group
engage the advisory group early, providing them with appropriate documentation (i.e., draft reports) in a timely manner such that their expertise is used effectively
seek information, as appropriate, from the advisory group to inform the EAprocess
distribute EA reports, as appropriate, to the advisory group for review/comment

The lead negotiating division should:

record actions taken to communicate with and engage the advisory group
summarize findings from engaging the advisory group and distribute to the EA Committee for use in future EA of trade work
summarize findings from engaging the advisory group and distribute to the Chief Negotiator(s) negotiator

Communication and Engagement with the Public– Checklist

The EA Committee should:

work with the Consultations and Liaison Division for all communication and engagement with the public
keep the Consultations and Liaison Division informed of the pace of negotiations
ensure, as far as possible, that appropriate time as outlined in the Framework is afforded for public consultation
issue a notice of intent early in the EA process with an invitation for the public to provide feedback
publish all EA reports in a timely manner with an invitation for the public to provide feedback
record actions taken to communicate to and consult with the public in the template to record comments from external parties"
summarize findings from consulting the public and distribute to the EA Committee for use in future EA of trade work
summarize findings from engaging the public and distribute to the Chief negotiator.
provide a 60 days comment period or lesser as deemed appropriate for the scope and stage in the EA process

Communications Management–Checklist

The EA Committee should:

determine how information gained through engagement and communication activities will be managed, and communicate this process publicly and to anyone from whom information is sought
determine which communication tools are best employed at varying stages of the EA process
identify opportunities to integrate EA communications with announcements for the negotiations.

The lead negotiating division should:

record communications actions using the template to ensure that the requirements of the Framework are being met
maintain a record of outcomes from communication and consultation activities and distribute this to the EA Committee and Chief Negotiator(s)

Phase 1 Checklist: The Preparatory Phase

By the end of Phase 1, the following should be checked as completed:

The lead division has:

formed an EA Committee
reviewed the communications checklists in Chapter 3
established a document to record communications and consultations activities as advised in Chapter 3

The EA Committee has:

decided the structure of the committee and member's respective roles
developed an understanding of the EA Process
organized internal and external communication and engagement
determined the scope of the assessment, outlining the broad parameters of the work program and timetable to carry out the EA
identified the issues to be considered in the Initial EA based on the scope of the negotiations
issued a notice of intent through chosen communication mechanisms with information regarding opportunities for participation

Phase 2 Checklist: The Initial EA

Under the leadership of its chair(s), the EA Committee should:

carry out pre–scoping analysis using the four–stage analytical methodology, identifying preliminary indication of likely and significant environmental impacts of the proposed trade agreement
conduct "quality control" of information to: evaluate capacity for monitoring and reporting, organise systematic collection of data, ensure sound science and reliability of sources, and evaluate availability of required information
determine the strategy for engagement based on the guidance provided in Chapter 3
engage the C–Trade forum and identify jurisdictional issues with provinces and territories
produce an Initial EA Report based on the scoping analysis using the four– stage analytical methodology
circulate the Initial EA Report for comments interdepartmentally, to C–Trade and to non–governmental advisory groups as required
document consultation activities and comments received therein
circulate comments received during consultations to the EA Committee and EA of Trade Secretariat
release Initial EA Report through established communication mechanisms, with information about opportunities for feedback and consultation
document comments received on the Initial EA Report, and circulate these to the EA Committee and EA of Trade Secretariat
if required, start reviewing those environmental implications identified in the Initial EA Report for a more thorough analysis in the Draft EA phase
evaluate the need to conduct further analysis
commensurate with the anticipated environmental effects identified, consider potential opportunities for follow–up and monitoring as well as how these could inform current negotiations and future activities

Phase 3 Checklist: The Draft EA

Under the leadership of its chair(s), the EA Committee should:

use comments from the Initial EA phase to inform Draft EA phase
determine the strategy for engagement based on guidance provided in Chapter 3
record any communications and consultations activities undertaken during the Draft EA phase
complete all four stages of the analytical methodology: identify the economic effects, and the significance of likely environmental impacts of the proposed trade agreement, and develop enhancement and mitigation options as well as revisiting the potential approach to follow–up and monitoring identified in the Initial EA and to be confirmed in the Final EA phase
engage the C–Trade forum to identify any jurisdictional issues with provinces and territories
produce/commission Draft EA Report by the designated/lead DFAIT division in collaboration with co–leads
circulate Draft EA Report for comments amongst EA Committee, relevant interdepartmental networks, C–Trade and non–governmental advisory groups
document consultation activities and comments received therein
circulate comments received during consultations to the EA Committee and EA of Trade Secretariat
update 'formal' and 'informal' consultation lists
publish the Draft EA Report through established communication mechanisms for an appropriate time period, with information on how feedback will be provided
document comments received on the Draft EA Report, and circulate these to the EA Committee and EA of Trade Secretariat

Phase 4 Checklist: Negotiations

During the Negotiation Phase and under the leadership of its chair(s), the EA Committee should:

use the Draft EA Report to inform the negotiations
if required, undertake or commission any new analysis of environmental impacts of the negotiations using the same four stage analytical methodology described throughout Chapter 4. Any new analysis undertaken should be documented and outlined in the Final EA Report.
assess the need for more information to be collected
if required, refine Canada's negotiating position
ensure the Status of Negotiations Table is kept up to date and re–distributed to the EA Steering Committee and other stakeholders as appropriate
provide public updates as appropriate
evaluate new issues that arise during negotiations using analytical methodology outline in the Framework

Phase 5 Checklist: The Final EA

The Final EA Report is prepared or commissioned by the EA Committee, and those involved in the negotiating process. During the Final EA phase and under the leadership of its chair(s), the EA Committee should:

identify and document the findings and actions since the Draft EA Report
examine any new information as appropriate
evaluate mitigation/enhancement options discussed during the negotiations and, where previously identified as necessary, confirm the approach for follow-up and monitoring
determine the timetable and responsibilities to produce the Final EA Report
produce the Final EA Report in a manner that identifies the ways in which environmental considerations were integrated into the decision–making process, summarizes the comments received on the Draft EA Report documents the outcome of the negotiations in relation to the EA process, and establishes requirements and recommendations for follow–up and implementation of enhancement and mitigation measures
circulate Draft EA Report for comments amongst EA Committee, relevant interdepartmental networks, C–Trade and non–governmental advisory groups
document consultation activities and comments received therein
circulate comments received during consultations to the EA Committee and EA of Trade Secretariat
update 'formal' and 'informal' consultation lists
publish the Draft EA Report through established communication mechanisms for an appropriate time period, with information on how feedback will be provided
document comments received on the Draft EA Report, and circulate these to the EA Committee and EA of Trade Secretariat

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Annex 3: Sample Text–Notice of Intent

Examples of text and formats for documents that have to be produced during the EA process.

Example text for Notice of Intent for EA of trade negotiations

The notice of intent should be communicated with the announcement to initiate negotiations.

The Department of Foreign Affairs and International Trade in consultation with other federal government departments and agencies will soon begin an environmental assessment (EA) of negotiations for a trade agreement with_____________ (list other countries involved in the negotiations or equivalent). The EA will be guided by Canada's Framework for Conducting Environmental Assessments of Trade Negotiations.
The public is invited to provide comments on the EA by_____________ (deadline for comments in MM/DD/YR). Comments can be sent to: mailto:consultations@international.gc.ca or to the following mailing address:
EA Trade Consultations
Lester B. Pearson Building
125 Sussex Drive
Ottawa ON K1A OG2
Your views will help us to ensure that Canada's position reflects the interests of all Canadians.
To learn more about Canada's trade negotiations and agreements, you are invited to visit Foreign Affairs and International Trade Canada. For information about Canada's Framework for Conducting Environmental Assessments of Trade Negotiations you are encouraged to read the document, which is available at: Foreign Affaires and International Trade Canada: Environment

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Annex 4: General Outline of an Initial EA Report

I. Executive Summary
II. Overview of the Environmental Assessment Process
- A. Assessment Methodology
III. Background
- A. Overview of the Trade and Investment Relationship
IV. Trade and the Environment
V. Initial Environmental Assessment Findings
- A. Trade In Goods
- B. Trade In Services
- C. Investment

The Analysis Should Be Guided by the Following Four Steps:

Step 1. Identification of the Economic Effects of the Trade Negotiations

Established the overall domestic economic relevance of the agreement to be negotiated
Provide a brief and "reader friendly" explanation of methodology used: modelling (include information on modelling and assumptions in an Annexe) and/or literature review.
In your negotiating area, please examine the potential changes to trade flows and economic activity arising from an agreement, and specifically the scale, structural, product, technology and regulatory effects that may result.
Identify the sectors/industries where economic activity is expected to increase/decrease. Explain how. Will these effects be concentrated in a particular region?

Step 2. Identification of the Likely Environmental Impact of Economic Changes

Provide a brief and "reader friendly" explanation of methodology used to identify the environmental impacts due to trade liberalization: modelling (include information on modelling and assumptions in an Annexe) and/or literature review.
What are the environmental impacts of these economic changes (scale, structural, product, technology, regulatory effects)?
What is their likelihood? (qualitative assessment)
Think about the probability that an impact will occur and the extent of impacts

Step 3. Assessment of the Significance of the Identified Likely Environmental Impacts

Based on the nature, the geographical scale, the magnitude, the frequency and duration, the timing, the extent, the severity of the environmental impacts, and possible synergies between them, what is their "level of significance".
Both positive and negative environmental impacts should be subjected to this analysis.

Step 4. Identification of Enhancement/Mitigation Options

Identify laws, regulations, policies, initiatives that will enhance/mitigate environmental impacts. If some of these fall under provincial jurisdiction, working groups should start thinking about questions we may wish to ask to provinces.
Will our ability to develop environmental regulations and standards be affected?
Both positive and negative environmental impacts should be subject to this analysis.

VI. Conclusion

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Annex 5: General Outline of a Foreign Investment Protection and Promotion Agreement (FIPA) EA Report

The purpose of the template is to establish a standard approach for conducting Initial EAs of FIPAs. The first page of this document is an outline of the template. The rest of the document contains an example of text that could be included. We welcome comments on the outline and text from the EA Steering Committee.

Overview of Template Sections

I. Introduction

Brief Overview of the purpose of the EA of FIPAs with references to the Framework
Explanation of how comments can be submitted in response to the Initial EA report
Why Canada Negotiates FIPAs
Canada's new FIPA model

II. Structure and provisions anticipated in the FIPA agreement (including how the new model has addressed environmental concerns associated withinvestment agreements.)

Background /General Approach of the new Model
Specific Provisions
Addressing Stakeholder concerns
Environment and SD Initiatives related to the FIPA

III. Background on the FIPA being Assessed and Identification of likely economic impact

Introduction
Snapshot of current inward and outward investment with the partner country
Overview of anticipated economic impact including changes in investment flows / sectors where investment flows are expected to increase.

IV. Identification and assessment of likely environmental impacts both positive and negative (within Canada)

Environmental Impacts
Policy and Regulatory Context

V. Other Environmental Considerations

Transboundary
Activities in country X

VI. Identification of enhancement/mitigation options for any positive/negative environmental impacts to inform the negotiations

VII. Conclusion

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Annex 6: The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals

Consistent with the government's strong commitment to sustainable development, ministers expect that policy, plan and program proposals of departments and agencies will consider, when appropriate, potential environmental effects.

More specifically, ministers expect a strategic environmental assessment of a policy, plan or program proposal to be conducted when the following two conditions are met:

the proposal is submitted to an individual minister or Cabinet for approval; and
implementation of the proposal may result in important environmental effects, either positive or negative.

Departments and agencies are also encouraged to conduct strategic environmental assessments for other policy, plan or program proposals when circumstances warrant. An initiative may be selected for assessment to help implement departmental or agency goals in sustainable development, or if there are strong public concerns about possible environmental consequences.

Ministers expect the strategic environmental assessment to consider the scope and nature of the likely environmental effects, the need for mitigation to reduce or eliminate adverse effects, and the likely importance of any adverse environmental effects, taking mitigation into account. The strategic environmental assessment should contribute to the development of policies, plans and programs on an equal basis with economic or social analysis; the level of effort in conducting the analysis of potential environmental effects should be commensurate with the level of anticipated environmental effects. The environmental considerations should be fully integrated into the analysis of each of the options developed for consideration, and the decision should incorporate the results of the strategic environmental assessment. Departments and agencies should use, to the fullest extent possible, existing mechanisms to involve the public, as appropriate. Departments and agencies shall prepare a public statement of environmental effects when a detailed assessment of environmental effects has been conducted through a strategic environmental assessment. This will assure stakeholders and the public that environmental factors have been appropriately considered when decisions are made.

For further information, or to view the Guidelines on Implementing the Cabinet Directive.

What is a Strategic Environmental Assessment?

Federal officials may be more familiar with the federal government's Canadian Environmental Assessment Act (CEAA), which pertains to project–based initiatives. It is important to note there are both similarities and differences between project-based assessment and Strategic Environmental Assessments (SEAs) or policy–based assessment. Similarities include terminology, use of an ex ante approach, links to integrated decision making, use of scoping phase before detailed analysis, and identification of mitigation and enhancement options. Assessments conducted under the framework are policy–based EAs and do not fall under CEAA and are not guided by any of the regulations laid out in that Act. Rather, SEAs are governed by the Cabinet Directive on the Environmental Assessmentof Policy, Plan and Program Proposals, and more specifically the SEA of trade negotiations is governed by the framework. The following table outlines a number of the differences between the two types of EAs.

Issue: Legislation

EA of Trade Negotiations: SEAs are governed by the Cabinet Directive. The EA process for trade negotiations is guided by the framework and not governed by CEAA
Project-Based EAs: Governed by CEAA, with a well established legal infrastructure and dedicated resources.

Issue: Application

EA of Trade Negotiations: Applied to all ‘liberalizing’ trade negotiations. Such negotiations can encompass a wide range of sectors. The EA focuses on the possible impacts of the policy.
Project-Based EAs: Established 'triggers' indicate whether a project requires an EA as defined by the CEAA. The EA focuses on the impacts of a specific project.

Issue: Content

EA of Trade Negotiations: Assesses the environmental implications of trade negotiations
Project-Based EAs: Considers the project's effect on health, socio–economic, cultural heritage, environment and land use

Issue: Public Participation

EA of Trade Negotiations:
- Public is engaged throughout the EA process. Environment Assessment Advisory Group (EAAG) is also engaged.
- DFAIT communicates findings of EA Process in the form of reports at varying stages throughout the process.
- Trade negotiations and Memoranda to Cabinet are confidential for strategic policy reasons.
Project-Based EAs:
- Varies depending on the level of assessment. Comprehensive studies require mandatory public participation and panel reviews. Public participation is not mandatory for screenings.
- All assessments should be included in a public registry.

Issue: Decision-Making

EA of Trade Negotiations: Negotiators provide results of strategic environmental assessment to aid in decision–making by Cabinet.
Project-Based EAs: Decision rests with the responsible authority, as defined by the CEAA.

Issue: Timing

EA of Trade Negotiations: SEA is a requirement for all documents provided to cabinet, and as such is necessary for MCs on the trade agreement. The timing of this EA process is guided by the trade negotiation process, which varies with the nature of the agreement.
Project-Based EAs: The EA must be complete before irrevocable decisions are made.

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Annex 7: Glossary & Acronyms

Glossary

Environment: Refers to the components of the Earth, including land, water, air, all layers of the atmosphere, all organic and inorganic matter and living organisms (including humans) and the interacting natural systems that include components of the foregoing.
Environmental Assessment (EA): Used synonymously with 'Strategic Environmental Assessment' in this framework, an EA is a systematic process to identify and evaluate likely environmental effects of an initiative to ensure that they are fully considered and addressed from the earliest stage of decision-making.
Mitigation: The elimination, reduction or control of the adverse environmental effects that may result from the proposed initiative under review.
Sector: A group of closely related industries. See Annex 5 for more information on sector classification.
Strategic Environmental Assessment: Used synonymously with Environmental Assessment (EA) in this handbook, a Strategic Environmental Assessment is a systematic process to identify and evaluate likely environmental effects of an initiative to ensure that they are fully included and addressed at the earliest stage of decision making. The term "strategic" is added to the title to distinguish the activity from project-level environmental assessment.

List of Acronyms

C–TRADE: Commerce–Trade Committee (federal–provincial–territorial)
DFAIT: Department of Foreign Affairs and International Trade
EA: Environmental Assessment
EAAG: Environment Assessment Advisory Group
EC: European Commission
FAO: Food and Agriculture Organization
FTAA: Free Trade Areas of the Americas
FTA: Free Trade Agreement
GATT: General Agreement on Tariffs and Trade
ILO: International Labour Organization
MEA: Multilateral Environmental Agreement
NACEC: North American Commission for Environmental Cooperation
NAFTA: North American Free Trade Agreement
NGO: non-government organization
OECD: Organization for Economic Cooperation and Development
SAGIT: Sectoral Advisory Group on International Trade
UNEP: United Nations Environment
UNCTAD: United Nations Conference on Program Trade and Development
WTO: World Trade Organization

Footnotes

Footnote 1

These types of effects were first identified by the OECD in 1994. See Organisation for Economic Co–operation and Development (OECD) 1994. Methodologies for Environmental and Trade Reviews. Paris: OECD. OCDE/GD(94)103. Available on–line at: OCDE.

Return to footnote 1 referrer

Handbook for Conducting Environmental Assessments of Trade Negotiations

Table of Contents

1. Introduction

1.1 Environmental Assessment Approach

1.2 How to Use This Handbook

2. Implementing the Framework–An Overview

2.1 The Trade Negotiation Process

2.2 An Overview of the EA Process

Figure 1: Overview of the steps in the EA of Trade Negotiations

2.3 Roles and Responsibilities in the EA Process

Table 1: Roles and Responsibilities in the EA of Trade Negotiations Process (EA Steering Committee)

2.4 Relationship between the Strategic Environmental Assessment of Memorandum to Cabinet Process and the EA of Trade Process

2.5 Resources

3. Information Gathering, Communication and Engagement

Table 2: Engagement and Communication throughout the EA Process

3.1 Internal Consultations

3.1.1 Identification of who should participate in the EA Committee

3.1.2 Informing the EA Committee on the status of the negotiations

Table 3: Status of Negotiations and associated Environmental Assessments

3.1.3 Communication of EA of trade requirements to the EA Committee

3.1.4 Information collection

3.1.5 Communication of findings to policy makers

3.1.6 Review and approval of the EA reports

Internal Consultations Checklist

In the early stages, the lead negotiating division:

The EA Committee, under the leadership of its chair(s), should:

The departmental representatives on the EA Committee should:

3.2External Consultations

Documenting communications and consultations activities and results

Template to Record External Consultations

Title of Negotiation:

Template for Recording Comments from External Parties

Title of Negotiation:

Preparation for External Engagement–Checklist

In the early stages, the DFAIT division responsible for the negotiations should:

The EA Committee should:

3.2.1 Engaging the provinces and territories

Communication and Engagement with C–Trade– Checklist

The EA Committee should:

The lead negotiating division should:

C–Trade members should:

3.2.2 Engaging non–governmental advisory groups

Communication and Engagement with Non–Governmental Advisory Group– Checklist

The EA Committee should:

The lead negotiating division should:

3.2.3 Consulting the public

Communication and Engagement with the Public– Checklist

The EA Committee should:

3.2.4 Engaging other external sources

3.3 Communications Management

Communications Management–Checklist

The EA Committee should:

The lead negotiating division should:

3.3.1Communication mechanisms

4. Conducting an EA of Trade Negotiations

4.1 Phases of the EA Process

4.2 Analytical Methodology

Figure 2: Conducting an EA of Trade Negotiations

4.3 Tools and Concepts for Analysis

Typesof Effects

Indicators

4.4 Determining Likelihood

4.5 Phase 1: Preparatory Phase

4.5.1 Establishing an EA Committee

4.5.2 Initiating the EA process

4.5.3 Determining the scope of the assessment

4.5.4 Preparing a notice of intent

Phase 1 Checklist: The Preparatory Phase

By the end of Phase 1, the following should be checked as completed:

4.6 Phase 2: The Initial EA

4.6.1 Applying the analytical methodology during the Initial EA

Stage 1: Identification of the Economic Effect of the Agreement to be Negotiated

Suggested questions to guide completion of Stage 1 of the Initial EA

Suggested resources to aid in answering these questions

Stage 2: Identification of the Likely Environmental Impact of Such Economic Changes

Suggested questions to guide completion of Stage 2 of the Initial EA

Suggested resources to aid in answering these questions

Stage 3: Assessment of the Significance of the Identified Likely Environmental Impacts

Suggested questions to guide completion of Stage 3 of the Initial EA

Stage 4: Identification of Enhancement / Mitigation Options to Inform the Negotiations