Summary of Initial GBA Plus for Canada-Indonesia CEPA Negotiations

Table of contents

• Introduction
• Process
• Stakeholder consultations: What we heard
• Data for the initial GBA Plus
• Economic impact assessment
• Issue-specific GBA Plus
  • Group 1: Goods
  • Group 2: Services, investment, and government procurement
  • Group 3: Labour and environment
  • Group 4: Inclusive trade
  • Group 5: Institutional provisions and dispute settlement
• Indigenous focus
• Domestic laws, policies, programs
• Conclusion
• Next steps
• Annex A – Background on GBA Plus
• Annex B – Background on Canada's inclusive approach to trade
• Annex C – List of other Government departments, agencies or Crown Corporations that lead, co-lead or provide support to Global Affairs Canada on trade negotiations
• Annex D – Questions to guide GBA Plus of trade negotiations
• Annex E – Initial economic impact assessment
• Annex F – Background on Canada's FTA objectives
• Annex G – Background on the Trade and Gender Nexus
• Annex H – Women's economic empowerment programming in Canada

Introduction

On June 20, 2021, Canada and Indonesia launched negotiations toward a Comprehensive Economic Partnership Agreement (CEPA).

Global Affairs Canada, with the support of other government departments^{Footnote 1}, has conducted a comprehensive initial gender-based analysis plus (GBA Plus) to assess the potential impacts of a Canada-Indonesia CEPA on Canadians, taking into account gender and other inclusivity factors. The GBA Plus does not assess the potential impacts of the agreement on populations in Indonesia.

The GBA Plus^{Footnote 2} is an analytical tool used by the Government of Canada to support the development of responsive and inclusive initiatives, including policies, programs, and other initiatives. GBA Plus is a process for understanding who is impacted by the issue being addressed by the initiative; identifying how the initiative could be tailored to meet diverse needs of the people most impacted; and anticipating and mitigating any barriers to accessing or benefitting from the initiative. In a trade context, GBA Plus helps to inform Canada's position in trade agreement negotiations and to advance the government's inclusive approach to trade^{Footnote 3}, which seeks to ensure the benefits of trade liberalization are more widely shared, including by groups traditionally underrepresented in international trade, such as women, Indigenous peoples, and small and medium-sized enterprises (SMEs). The COVID-19 pandemic and its disproportionate impact on diverse groups have made the GBA Plus an increasingly important tool to help policymakers analyze the potential impact of proposed initiatives.

GBA Plus for trade agreements is an iterative process that is conducted throughout the course of negotiations. The initial GBA Plus contributes to a better understanding of the potential differential impacts of a Canada-Indonesia CEPA on Canadians, and helps negotiators integrate gender and other inclusivity considerations into Canada's negotiating positions from the onset.

The Minister of International Trade, Export Promotion, Small Business and Economic Development's mandate letter directs her to implement the United Nations Declaration on the Rights of Indigenous Peoples and to work in partnership with Indigenous peoples to advance their rights. As well, it commits the Minister to ensure that public policies are informed and developed through an intersectional lens, including by applying frameworks such as the GBA Plus and the quality of life indicators in decision-making. These commitments inform the work undertaken in the initial GBA Plus for a Canada-Indonesia CEPA and the enhanced attention to inclusive trade in Canada's FTA negotiations.

The initial GBA Plus is complementary to and advances Canada's Feminist Foreign Policy and Feminist International Assistance Policy. It also furthers progress on Goal 6 of the government's Gender Results Framework—gender equality around the world—in order to achieve a more peaceful, inclusive, rules-based, and prosperous world by pursuing a feminist international approach to all policies and programs, including trade.

Process

In November 2020, the Trade Policy and Negotiations Branch at Global Affairs Canada initiated work on a GBA Plus, using a custom-designed guidance questionnaire^{Footnote 4} and other supporting material, to guide negotiators in their analysis of the potential effects of a Canada-Indonesia CEPA as it relates to their respective areas.

From June to December 2021, the department consulted the draft initial GBA Plus with gender focal points within the Government of Canada, and then with the GBA Plus Sub-Committee of Global Affairs Canada's Gender and Trade Advisory Group (GTAG), whose mandate is to provide officials with expert recommendations on achieving gender-responsive trade agreements and advancing the government's inclusive approach to trade.

The final draft of the initial GBA Plus was completed in January 2022, in advance of a first round of Canada-Indonesia CEPA negotiations, which took place in March 2022.

The GBA Plus will be updated throughout negotiations as new data, evidence, research, stakeholder feedback, and negotiating results become available. A final GBA Plus will be conducted following the conclusion of a Canada-Indonesia CEPA to evaluate the potential gender and inclusivity effects based on the agreement's final negotiated outcome.

Stakeholder consultations: What we heard

From January 9 to February 23, 2021, the Government of Canada held public consultations to seek the views of Canadians on a possible CEPA with Indonesia, including the potential effects an agreement may have on the environment, labour, gender, and inclusivity.

The department received feedback through a notice of intent published in the Canada Gazette from a diverse group of partners, stakeholders, and interlocutors, including: provinces and territories, Indigenous peoples' representatives, businesses and business associations, labour unions, chambers of commerce, SMEs, academia and think tanks, and civil society. The government also conducted targeted engagement with businesses and business associations across a range of sectors, as well as labour and employer organizations, Global Affairs Canada's Indigenous Working Group on Trade Policy, and the Gender and Trade Advisory Group. A report of the feedback received was published on May 31, 2021. At the time of publication of the report, the department had received a total of 83 written submissions and had engaged directly with over 100 stakeholders and partners through virtual roundtables and meetings.

Overall, Canadians expressed a high level of support for a Canada-Indonesia CEPA. Over the course of consultations, the government heard from many stakeholders and partners on issues related to gender, Indigenous peoples, SMEs, and sustainable economic development in the context of a CEPA. Numerous submissions noted the importance of advancing an inclusive approach to trade to help ensure that the benefits of trade are widely shared. Some of these submissions noted the potential for a CEPA to create new opportunities for underrepresented groups (e.g. women-owned businesses, Indigenous peoples, SMEs) and address the associated challenges and barriers they face in international trade. Several submissions also suggested that a CEPA could improve access for these groups by addressing broader, systemic barriers such as inconsistent and opaque regulations and corruption, in addition to seeking dedicated provisions on gender and SMEs. Many submissions noted the importance of improving market access for SMEs by simplifying procedures, ensuring SMEs have access to government procurement opportunities, and establishing government-to-government cooperation activities on supporting SMEs.

Submissions related to Indigenous peoples highlighted the importance of protecting Indigenous rights and creating conditions favourable to Indigenous-to-Indigenous trade. Several stakeholders and partners expressed support for an Indigenous general exception to protect the rights of Indigenous peoples, in addition to Indigenous-specific provisions, in an agreement with Indonesia.

During public consultations, some stakeholders expressed concerns related to labour standards and human rights in Indonesia, including the rights of Indigenous peoples and members of the LGBTQ2 community. Stakeholders encouraged the government to address these issues in a potential CEPA with Indonesia.

Data for the initial GBA Plus

A variety of data sources were used in conducting the GBA Plus and the economic impact assessment. Data publications from the Government of Canada represented the main source, including:

• Women in Canada: A Gender-Based Statistical Report
• Labour Force Survey
• Census of Population
• Survey on Financing and Growth of Small and Medium Enterprises
• Indigenous-Owned Exporting Small and Medium Enterprises in Canada
• Annual Demographic Estimates: Canada, Provinces and Territories

This summary of the initial GBA Plus begins with an overview of the quantitative economic impact assessment (EIA) conducted by Global Affairs Canada's Office of the Chief Economist, which includes a module to assess the potential labour market impacts of a Canada-Indonesia CEPA.

Economic impact assessment

Indonesia is Canada's largest export market in Southeast Asia and a key destination for Canadian investment. In 2021, two-way merchandise trade between Canada and Indonesia totalled $4.2 billion. Two-way services trade reached $292 million in 2020. The stock of Canadian direct investment in Indonesia was valued at $3.5 billion at the end of 2021. In Canada, 9,002 jobs are directly or indirectly supported by merchandise exports to Indonesia, 2,653 of which are occupied by women. Women-owned and equally owned Canadian businesses also account for a significant portion of Canadian exporters (19%) and importers (31%) doing business with Indonesia.^{Footnote 5} A CEPA is expected to further deepen commercial relations between Canada and Indonesia and contribute to long-term economic growth for both parties.

In 2021, Global Affairs Canada's Office of the Chief Economist conducted an initial economic impact assessment (EIA) to study the potential economic impacts of a Canada-Indonesia CEPA. The EIA includes a labour market module that takes into account gender, age, and the distribution of Canadian workers across 8 different occupational groups and 65 sectors of the economy. This allows the quantitative model to assess the potential economic impact of liberalization under the proposed Canada-Indonesia CEPA on labour, gender, and other inclusive trade considerations.

For the purpose of this analysis, complete elimination of all agricultural and non-agricultural protections between Canada and Indonesia is assumed, with no exceptions made for sensitive products. In negotiating a Canada-Indonesia CEPA, Canada will seek to address sensitivities by exempting certain sectors from liberalization or including provisions that circumscribe the applicable extent of liberalization.

The key findings of EIA are presented below. A more detailed summary of the results is also available on the Global Affairs Canada website.

GDP gains: A Canada-Indonesia CEPA is projected to boost Canada's real GDP by $328 million, or 0.012% in the long term.

Trade gains: The EIA projects that Canadian exports to Indonesia could increase by $447 million (7.9%) by 2040, based on the assumption of full trade liberalization, compared to a baseline scenario without liberalization, with the gains spread across a broad range of sectors, including agriculture and agri-food, manufacturing, and business services. Canada's imports from Indonesia could increase by $1.1 billion (47%), primarily driven by apparel, leather, and other labour-intensive products.

Job and wage gains: It is estimated that a potential agreement would generate 1,857 jobs in Canada. Employment in certain industries is expected to increase due to greater opportunities in manufacturing and services sectors. There could be job displacement in some industries, though the impact is projected to be small relative to the job gains in manufacturing and services. Real wages could appreciate by 0.015% and would be well-balanced across all 8 occupational groups.

Gendered impacts: A Canada-Indonesia CEPA is expected to affect men and women almost equally, with a slightly larger increase in job gains for women (1,005 jobs created for women compared to 852 jobs created for men). Services and manufacturing sectors are projected to add the most jobs.

Labour force participation: The agreement has the potential to increase participation in the Canadian labour force by attracting workers from the non-participating working age population and distributing the income gains more widely. The increase would be moderately weighted in favour of women, which shows the CEPA would likely benefit women and improve gender equity.

Youth: It is estimated that a Canada-Indonesia CEPA would result in higher youth employment.

Conclusion: The findings of the EIA suggest that enhanced economic cooperation between Canada and Indonesia is desirable. A CEPA would generate economic benefits for both economies, with positive impacts for underrepresented groups in the Canadian economy. The expansion of trade with Indonesia would help advance Canada's trade diversification strategy, support post-COVID-19 economic recovery, generate economic gains, promote gender equality, and encourage youth employment in Canada. These effects would support a broader sharing of the benefits of the agreement, including among groups traditionally underrepresented in the economy and international trade.

Issue-specific GBA Plus

The initial GBA Plus includes an issue-specific analysis for all negotiating areas proposed as part of a Canada-Indonesia CEPA. Each issue-specific analysis examines the potential gender and inclusivity impacts associated with the negotiating area in question, as well as opportunities to enhance benefits and mitigate risks. For the purposes of this summary report, the analysis is organized into five groups of related issues, as outlined below:

• Goods
• Services, investment, and government procurement
• Labour and environment
• Inclusive trade
• Institutional provisions and dispute settlement

Group 1: Goods

Commitments pertaining to trade in goods aim to improve market access for Canadian-produced goods by eliminating trade restrictions and establishing clear and predictable rules for trade. The negotiating issues comprising this group include tariffs; non-tariff barriers (e.g. technical barriers to trade and sanitary and phytosanitary measures that could inadvertently impede trade); trade remedies; and trade facilitation measures. Annex F provides a summary of the purpose of each of these negotiating issues.

Economic modelling of the impact of a Canada-Indonesia CEPA indicates that the majority of export gains for Canada comes from trade in goods. While the proposed goods-related obligations do not generally include gender-specific provisions, they could have indirect impacts on groups underrepresented in international trade, such as women, Indigenous peoples, and small- and medium-sized enterprises (SMEs).

The initial GBA Plus identified several sectors that are expected to benefit from increased exports under a Canada-Indonesia CEPA, including manufacturing and agriculture. Notably, the EIA found that the manufacture of metal products, electrical products, and equipment are expected to see job gains as a result of increased exports to Indonesia. While men hold more jobs than women in these sectors, increased demand for labour could also benefit women. Increased agricultural exports under a Canada-Indonesia CEPA may also have a positive economic impact (e.g. greater employment opportunities) for women and visible minority groups employed in the food manufacturing sector, as well as Indigenous peoples operating livestock farms in the primary agriculture sector.

It is anticipated that a Canada-Indonesia CEPA could lead to increased imports of apparel and leather products from Indonesia, which are expected to offset imports from other countries. While increased imports could negatively affect employment in these sectors in Canada, it is expected that the potential impact would be small. Furthermore, any potential negative effect on employment would be offset by gains in other sectors. When looking across the Canadian economy, the overall effect of a Canada-Indonesia CEPA is expected to be positive and result in job gains, with a slightly larger increase in jobs for women.

The GBA Plus indicates that many of the proposed goods-related commitments are expected to benefit Canadian workers and business owners, including women, Indigenous peoples, and SMEs. In negotiations, Canada will seek outcomes that aim to enhance transparency, improve predictability, and reduce red tape—all of which will make it easier for Canadian companies to access the information they need to do business and to reduce costs for Canadian exporters and importers. SMEs, including those owned by women, Indigenous peoples, and other underrepresented groups, are expected to benefit more from these provisions as they serve to reduce certain fixed costs, which account for a greater proportion of their expenditures relative to larger enterprises.

Group 2: Services, investment, and government procurement

The commitments in this group aim to help Canadian suppliers, services providers, and investors secure market access and to enhance transparency and predictability in the regulatory environment. These provisions, particularly those related to Cross-Border Trade in Services, Temporary Entry for Business Persons, and Intellectual Property, serve to advance Canada's knowledge-based economy, which is highly dependent on services and intellectual capital. The objectives of the Investment provisions are to create rules to promote and protect investment and investors from Canada and its FTA partner, while protecting each party's right to regulate in areas such as health, safety, and the environment. The Government Procurement provisions seek to ensure that procuring entities in both countries treat the suppliers of the other party in the same manner as domestic suppliers for procurements covered by the provisions. Annex F provides a summary of the purpose of each of these areas.

According to the EIA, a Canada-Indonesia CEPA would create a significant number of jobs in the services sectors. Sectors that are expected to benefit the most from the agreement include business services, health and social services, and retail trade. In 2020, women accounted for 54.6% of employment in the Canadian services industry.^{Footnote 6} It is expected that an agreement would generate additional opportunities for female employment in the services sector.

The GBA Plus found opportunities to pursue gender-responsive and inclusive trade provisions in 7 of the 10 negotiating issues in this group, including:

• Cross-Border Trade in Services: Canada's approach aims to improve market access across a wide range of services sectors, including those where women's participation is significant (e.g. private education, business management), and in sectors that could benefit from their increased participation (e.g. professional, scientific, and technical services). In a Canada-Indonesia CEPA, there is also opportunity to seek a provision to ensure that all service professionals be treated fairly, without being discriminated against based on gender, in the area of licensing and qualification requirements and procedures. Given that a significant proportion of Canadian women work in services sectors with licensing requirements, such a provision would contribute to support gender equality and inclusivity in professions and occupations that require a license.
• Temporary Entry for Business Persons: Canada's approach typically seeks to provide reciprocal coverage for the accompanying spouses of eligible business persons, thus allowing the spouse of the principal applicant to work. Recognizing that many households rely on dual incomes, providing work authorizations for spouses can help promote family unification and economic independence for both spouses. For Canada, this would include same-sex marriages and partnerships.
• Digital Trade: Digital trade provisions could help narrow the digital divide by facilitating access to international markets for women, Indigenous peoples, and other underrepresented groups and increase their participation in the economy. In particular, the COVID-19 pandemic has demonstrated the importance of digital trade for businesses, particularly SMEs. In a Canada-Indonesia CEPA, there is opportunity to seek cooperation commitments that promote access to information and communication technologies for persons with disabilities. Canada could also seek a commitment on Personal Information Protection, committing each party to ensure that they maintain a domestic legal framework that provides for the protection of personal information of e-commerce users. This may be of particular importance to members of the LGBTQ2 community concerned about discrimination from their employer, state, or the public.
• Financial Services: The Canadian financial sector is making progress toward building a more representative workforce, with women holding 49% of middle management positions and 38% of senior management positions at Canada's 6 largest banks and 33% of the seats on financial institutions' boards of directors.^{Footnote 7} In recognition of the gender gap that still exists in senior management positions, the Canada-Indonesia CEPA is an opportunity for Canada to seek a commitment that contemplates measures regarding the representation of women in senior management positions and on the boards of financial institutions.
• Investment: Canada's proposed approach includes a number of provisions that could help advance gender-responsive and inclusive outcomes. For example, provisions on Right to Regulate and senior management and boards of directors (SMBD) seek to preserve the government's right to regulate, protect, and promote Indigenous rights, gender equality, and cultural diversity, and allow parties to nominate women to SMBD positions. Other provisions, such as Minimum Standard of Treatment (MST) and Expedited Arbitration, aim to ensure all Canadians can benefit fully from a trade agreement with Indonesia, including by protecting investors from discrimination (such as on the basis of gender, race, or religious beliefs) and establishing a simplified dispute settlement mechanism of benefit to SMEs. There is also opportunity to explore an article to encourage responsible business conduct (RBC), which addresses wide-ranging areas including gender equality and human rights.
• Intellectual Property (IP): The GBA Plus notes the existence of gaps in the participation of SMEs and underrepresented groups across most areas of IP. In a Canada-Indonesia CEPA, there may be opportunity to explore cooperation-based provisions aimed at improving Parties' understanding of how IP rights may be utilized by and benefit underrepresented groups (including Indigenous peoples and traditional/local/rural communities), with the aim of increasing their participation in the IP system.
• Government Procurement: The GBA Plus recognizes there are opportunities to increase the participation of SMEs and women and Indigenous-owned businesses in Canada's government procurement markets. In this context, Canada's approach includes exceptions that provide the government flexibility to set aside certain procurements to support the development and growth of SMEs, including those owned by underrepresented groups, such as Indigenous businesses. Canada may also explore provisions in support of social procurement, which involves integrating socio-economic considerations into the procurement process to promote socio-economic development opportunities for socially or economically disadvantaged people, such as persons with disabilities or underrepresented groups.

Group 3: Labour and environment

The proposed labour and environment provisions aim to ensure that international standards on labour conditions and rights are implemented effectively and that high levels of environment protection are maintained as trade is liberalized. These provisions help to establish a level playing field between the parties in order to prevent one party from gaining a competitive advantage over the other at the expense of labour and environment standards. For more information on the objective of each of these areas, please see Annex F.

Labour: Canada's approach seeks comprehensive and enforceable outcomes that would protect all workers, notably the most vulnerable, including women, LGBTQ2 persons, persons with disabilities, Indigenous peoples, and racialized individuals. Robust labour provisions would seek to ensure parties effectively implement their respective labour laws, which should in turn embody and provide protection for internationally recognized labour rights and principles (i.e. freedom of association and collective bargaining, non-discrimination in occupations, and the elimination of child labour and forced labour). Canada also intends to seek provisions that could have a positive impact on gender equality and inclusion. For example, provisions on the elimination of discrimination in employment and occupation would require each party to implement statutes and regulations to protect workers from discrimination on the basis of gender (including with regard to sexual harassment), pregnancy, sexual orientation, gender identity, and family-related responsibilities. There is also opportunity to explore provisions that promote the adoption of programs and polices to encourage women's participation in the labour market and address violence against workers, which could benefit women and LGBTQ2 individuals; eliminate forced or compulsory labour, which affects women and children in particular; and reduce inequalities related to citizenship status, which could help protect migrant workers.

Environment: Canada's approach seeks to advance comprehensive and enforceable outcomes to ensure that environmental standards are upheld by parties as trade and investment are liberalized. This includes core environment provisions focused on ensuring robust environmental governance as well as commitments to address a range of global environmental issues. In CEPA negotiations, Canada would seek GBA Plus related provisions consistent with its recent approach, which recognizes that positive environmental outcomes for underrepresented groups, such as women and Indigenous peoples, are key to ensuring sustainability, equality, and high levels of environmental protection. Examples of such provisions include recognition by parties of the importance of traditional knowledge of Indigenous peoples, which contributes to the conservation and sustainable use of biological diversity, and engaging with Indigenous peoples to achieve high levels of environmental protection. Canada's recent FTAs also include obligations for broad-based public participation that create opportunities for increased participation, including by underrepresented groups in environment-related cooperation activities.

Group 4: Inclusive trade

In recent trade negotiations, Canada has pursued commitments that advance an inclusive approach to trade, including those on Trade and Gender, Trade and Indigenous Peoples, and SMEs. The provisions in these areas are cooperation-based and seek to ensure that the benefits of liberalized trade are more widely shared, including by underrepresented groups in the economy, such as women, SMEs, Indigenous peoples, persons with disabilities, youth, LGBTQ2 persons, and newcomers to Canada. Please refer to Annex F for more information on the objective of each of these areas.

The initial GBA Plus for a Canada-Indonesia CEPA identified several barriers faced by underrepresented groups in the context of international trade and investment, such as unequal access to financing, information, networks, senior positions, and infrastructure. The commitments sought by Canada in these areas can play a role in addressing these barriers and contribute to more gender-responsive and inclusive outcomes.

Trade and Gender: Canada's Trade and Gender provisions seek to have a positive impact on women's economic empowerment and increase their participation in international trade and investment activities. This includes by:

• acknowledging the importance of incorporating a gender perspective into economic and trade issues to ensure that economic growth is inclusive;
• reaffirming relevant international instruments against gender discrimination, such as the Convention on the Elimination of All forms of Discrimination Against Women (CEDAW);
• providing a framework to undertake cooperation activities on issues related to trade and gender and remove barriers to participation; and
• establishing a committee to oversee these cooperation activities and review the operation of the provisions.

Trade and Indigenous Peoples: Canada's approach recognizes the historical and cultural connections that trade has for Indigenous peoples, and the important role it plays in support of their economic empowerment and development. In CEPA negotiations with Indonesia, there may be opportunity to explore cooperation-based Trade and Indigenous provisions that seek to:

• acknowledge the importance of enhancing the ability of Indigenous peoples and Indigenous-owned businesses to benefit from liberalized trade and investment;
• reaffirm each party's existing international commitments related to Indigenous rights (e.g. the United Nations Declaration on the Rights of Indigenous Peoples, the Sustainable Development Goals of the United Nations 2030 Agenda);
• recognize the important role of the environment in the economic, social, and cultural well-being of Indigenous peoples and the importance of respecting, preserving, and maintaining the knowledge and practices of Indigenous peoples that contribute to the conservation of the environment;
• acknowledge that laws, regulations, and policies related to international trade and investment should advance the rights and interests of Indigenous peoples and recognize it is inappropriate to weaken or reduce protection to Indigenous peoples in their respective laws and regulations so as to encourage international trade and investment;
• encourage businesses to incorporate responsible business conduct (RBC) into their internal policies and practices and respect the rights of Indigenous peoples;
• highlight the importance of the right of Indigenous peoples to maintain, control, protect, and develop their cultural heritage, traditional knowledge, and traditional cultural expressions;
• facilitate cooperation activities between the parties, such as the sharing of information and the creation of a dedicated website containing information on the agreement that is useful to Indigenous entrepreneurs and businesses; and
• establish a mechanism to facilitate these cooperation activities.

Small and Medium-Sized Enterprises (SMEs): SMEs play a crucial role in the Canadian economy, representing 97.4% of goods-exporting Canadian establishments and an important source of innovation and job creation^{Footnote 8}. Canada's approach to SMEs in trade agreements is cooperation-based. In CEPA negotiations with Indonesia, Canada intends to pursue dedicated provisions on SMEs that aim to address the unique challenges they face in the international environment and enhance their competitive edge, such as to:

• acknowledge the importance of SMEs in the economy and their contribution to achieving inclusive economic growth, community and sustainable development and enhanced productivity;
• encourage SMEs to incorporate responsible business conduct practices that have been endorsed, supported or observed by the Parties, including the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights;
• affirm commitments and recognize work related to SMEs being undertaken under the aegis of existing multilateral fora;
• require the parties to establish a dedicated website to help SMEs access information related to the agreement;
• develop a list of potential cooperation activities to advance SME participation in international trade, including those owned by underrepresented groups (e.g. women, Indigenous peoples, LGBTQ2+, persons with disabilities, and youth); and
• establish a bilateral SME Committee that meets to exchange and discuss best practices for promoting SME participation in international trade and explore possibilities for capacity building.

Group 5: Institutional provisions and dispute settlement

Institutional and dispute settlement provisions are largely administrative in nature, setting out how a Canada-Indonesia CEPA would be interpreted, managed, and implemented. The aim of these provisions is to provide clarity, specificity, and procedural rules as it applies to the administration of the agreement. For more information on the purpose of each of these areas, please see Annex F.

The initial GBA Plus identified several areas where gender-responsive and inclusive provisions could be explored. For example, in line with the government's inclusive approach to trade, Canada is working to address the lack of gender parity and diversity among panellists in international dispute settlement proceedings. In CEPA negotiations with Indonesia, Canada intends to pursue a provision that requires parties to make efforts to increase diversity in panel appointments, and specifically through the increased representation of women. In addition to gender, the promotion of greater diversity on panels could also take into account diversity with regard to ethnicity, race, age, and geographic representation, for example. The inclusion of such a provision is expected to lead to greater diversity in the pool of experienced and qualified panellists over time, which could lead to greater efficiency and facilitate new perspectives on the dynamics of a dispute.

The institutional provisions also present potential opportunities to pursue gender-responsive and inclusive commitments. Notably, Canada intends to pursue language in the Preamble that affirms the importance of ensuring underrepresented groups, such as women, Indigenous peoples, and SMEs, can access the benefits and opportunities associated with increased trade and investment. Canada could also explore provisions in the areas of Transparency, Anti-Corruption, and Responsible Business Conduct (RBC) that would encourage companies to incorporate RBC principles and guidelines into their business practices. These provisions would seek to promote gender equality, rights and protection of Indigenous peoples, and non-discrimination. Consistent with Canada's past FTAs, as part of the agreement's General Exceptions, the government would seek to preserve Canada's ability to adopt measures to protect the rights of Indigenous peoples in Canada, and to preserve the ability to adopt measures to protect cultural industries, which contribute to the promotion of minority cultures, including Indigenous and Francophone cultures.

Domestic laws, policies, programs

Canada recognizes that domestic and trade policies need to be coherent and complementary. Canada has many domestic laws, policies, and programs in place to support gender equality and economic empowerment for traditionally underrepresented groups. These laws, policies, and programs will serve to mitigate any potential negative effects of trade agreements, including a potential Canada-Indonesia CEPA. Similarly, positive opportunities granted by trade agreements can be leveraged and amplified by these existing programs and policies. More information on Canada's domestic gender equality laws can be found on the Global Affairs Canada website.

Conclusion

The Government of Canada has made achieving gender equality and supporting the empowerment of women and girls a priority for domestic and international policies; conducting a GBA Plus of all policies and programs is an important tool to help deliver on that goal. The findings of the initial GBA Plus will help shape Canada's position and strategy during the negotiating process to deliver results for women and other underrepresented groups, as well as inform future discussions on trade policy.

The initial GBA Plus for a Canada-Indonesia CEPA indicates that the agreement is expected to lead to job and wage gains for Canadians, including women. The GBA Plus also notes several opportunities to pursue gender-responsive and inclusive provisions in the agreement. This includes provisions that directly target challenges faced by women, Indigenous peoples, and SMEs in international trade, as well as provisions that seek to enhance cooperation between Canada and Indonesia on issues such as women's economic empowerment.

Furthermore, many of the provisions in a possible Canada-Indonesia CEPA, though not targeted at specific groups, could still have positive benefits for these groups. For example, provisions that aim to make trade rules more transparent and predictable are particularly important for SMEs that may have relatively fewer resources at their disposal to navigate complex regulatory environments. It is also important to recognize that all FTAs are a negotiated outcome and the ability to secure these provisions will be dependent on a willing partner.

Next steps

The government will continue to engage with Canadians to ensure that a broad spectrum of perspectives, including those of women, Indigenous peoples, and SMEs, are represented throughout negotiations. Global Affairs Canada invites stakeholder feedback on this summary of the initial GBA Plus until November 18, 2022. Stakeholders can provide comments based on the questions below or on any other issue. Stakeholders are invited to submit their comments online via email to consultations@international.gc.ca.

Global Affairs Canada will continue to integrate stakeholder comments into the GBA Plus to inform negotiations toward a Canada-Indonesia CEPA. Officials will update and renew the GBA Plus of each chapter as negotiations proceed and as new data and evidence become available. Following the conclusion of negotiations, Global Affairs Canada will conduct the final GBA Plus based on the negotiated outcomes of the agreement and publish a summary online.

Questions for stakeholder consideration when submitting feedback and comments for the summary of the initial GBA Plus:

1. Based on the summary of the initial GBA Plus, what gaps do you see in the analysis and what risks do these pose?
2. What other provisions could be included in Canada's trade agreements in order to advance gender-related and inclusivity issues?
3. From your point of view, what are the effects and opportunities for underrepresented groups in Canada of the proposed CEPA with Indonesia?
4. Are there unintended negative effects of trade due to a Canada-Indonesia CEPA on Canadian women or other groups that you would like to highlight? In your view, what can be done to promote further positive effects or to help mitigate negative effects?

Annex A – Background on GBA Plus

For more information about the GBA Plus process, please consult the Global Affairs Canada page on Trade Policy and Gender-based Analysis Plus.

Annex B – Background on Canada's inclusive approach to trade

For more information about Canada's inclusive approach to trade, please consult the Global Affairs Canada website.

Annex C – List of other Government departments, agencies or Crown Corporations that lead, co-lead or provide support to Global Affairs Canada on trade negotiations

Departments

• Global Affairs Canada
• With the support of:
• Agriculture and Agri-Food Canada
• Crown-Indigenous Relations and Northern Affairs Canada
• Canadian Heritage
• Department of Finance Canada
• Fisheries and Oceans Canada
• Department of Justice Canada
• Environment and Climate Change Canada
• Employment and Social Development Canada
• Immigration, Refugees and Citizenship Canada
• Indigenous Services Canada
• Innovation, Science and Economic Development Canada
• Natural Resources Canada
• Public Services and Procurement Canada
• Transport Canada
• Women and Gender Equality Canada

Agencies

• Canada Border Services Agency
• Canadian Food Inspection Agency

Crown Corporation

• Standards Council of Canada

Annex D – Questions to guide GBA Plus of trade negotiations

Below is a list of questions provided to officials in conducting the GBA Plus of the effects and opportunities on people in Canada of trade negotiations throughout the negotiating process. When answering each question below, officials were instructed to keep in mind key diversity and inclusivity dimensions that go beyond gender. These include: Indigeneity; age; geographical/regional implications (i.e. urban, rural, remote, Northern, coastal); newcomer/immigrant status; visible minority; religion; disability; sexual orientation; and other. Officials were encouraged to provide as much quantitative (data) analysis as possible. Qualitative analysis from research, using various sources, including the results of consultations, is also of great value.

Questions:

1. What is the purpose of your Chapter? What are its intended effects?
2. What are the potential unintended effects of your Chapter?
3. Does your Chapter include any provisions that you think could impact gender or inclusivity in a positive/intended or negative/unintended way?
4. What are the top industries/sectors/goods/services that are potentially affected by your Chapter?
5. What is the level of gender or diversity participation in those sectors across Canada in terms of jobs, business ownership, consumption? (Provide any data or evidence to support your analysis)
6. What are the potential risks in terms of gender or inclusivity effects? How could you mitigate them in a trade policy provision in your chapter?
7. What are the potential opportunities or positive effects of your Chapter in terms of gender or inclusivity effects? How could you realize this opportunity through enhanced provisions in your chapter?
8. How are you factoring considerations around gender and inclusivity into provisions in your chapter? Consider both direct impacts (e.g., primary industry or regions affected) and indirect impacts (e.g. secondary industries or regions affected).
9. Does your Chapter include/are you planning to include any specific gender or inclusivity provisions? If so, what are they? If not, could you consider developing a new innovative inclusive or gender responsive provision to address an issue or a risk that you foresee?
10. What are the policy options/recommendations that you can develop to advance gender equality and inclusivity outcomes in your Chapter and the FTA? For example, would you recommend domestic actions such as the development or redesign of a policy or program potentially lead by another government department?

Annex E – Initial economic impact assessment

A detailed summary of the findings of the initial economic impact assessment (EIA) of a Canada-Indonesia CEPA, along with background on the state of trade and investment between Canada and Indonesia, is available on the Global Affairs Canada website.

Annex F – Background on Canada's FTA objectives

Nation Treatment and Market Access (NTMA) for Goods – The NTMA provisions establish clear and predictable rules on a range of issues affecting trade in goods, such as the elimination of customs duties and import and export restrictions, among others. Canada's approach seeks to enshrine the foundational World Trade Organization principle of "national treatment," which ensures that a country treats imported goods no less favourably than it treats domestically produced goods. Tariff schedules, which are often appendices to the NTMA provisions, set out each country's obligations to eliminate custom duties (i.e. tariffs) within specified timeframes. Canada's FTAs typically involve elimination of all customs duties, except on a limited number of highly sensitive products.

Rules of Origin – The Rules of Origin provisions set out the general requirements under which a good may be considered originating in the territory of the parties to the agreement and therefore eligible for preferential tariff treatment. These provisions are intended to benefit Canadian importers, exporters, producers, and consumers by establishing a predictable rules-based environment for trade in goods. The economic impact of these provisions is dependent on the extent to which market access increases as a result of tariff reduction.

Origin Procedures – The Origin Procedures provisions establish the procedures used to administer the rules of origin and set out obligations for importers, exporters, and the customs authorities. The procedures clarify the processes and obligations required for importers and exporters to take advantage of the reduced or free rates of duty and provide the customs authorities with an applicable methodology to ensure that only qualifying goods receive preferential tariff treatment under the FTA. One of Canada's main objectives is to ensure that the rules of origin are administered in a fair and transparent manner by the customs administrations and to provide the trade community a facilitative means in which to take advantage of the preferential tariff treatment under the FTA.

Trade Facilitation – The Customs and Trade Facilitation provisions are administrative in nature. It seeks to facilitate the movement of Canadian exports into FTA partner markets by establishing obligations that aim to modernize, simplify, and standardize trade-related customs procedures, while safeguarding Canada's ability to protect its borders and to provide certainty around Canada's ability to administer or introduce new measures that ensure or enhance trader compliance with Canada's laws, regulations or procedural requirements relating to the importation, exportation, or transit of goods. Such measures include those that seek to ensure the safety and security of Canada and its citizens through proper reporting and accounting declaration of goods and payment of duties, taxes, fees and charges by traders. With the WTO Agreement on Trade Facilitation as the baseline, Canada's approach seeks to address various stages of the customs process and establish commitments that will lead to greater predictability, consistency, and transparency in customs matters.

Sanitary and Phytosanitary (SPS) Measures – The Sanitary and Phytosanitary Measures provisions maintain each party's right to take measures necessary to protect against risks to food safety, animal or plant life, or health, while ensuring that such measures are science-based, transparent, and do not create unnecessary and unjustifiable SPS trade restrictions.

Technical Barriers to Trade (TBT) – The Technical Barriers to Trade provisions build on the existing WTO World Trade Organization Technical Barriers to Trade Agreement's provisions in order to better ensure regulatory measures are, for example, non-discriminatory and no more trade restrictive than necessary to achieve a legitimate objective. A TBT is a non-tariff barrier to trade—such as a technical regulation, standard, or conformity assessment procedure—that sets out specific technical or other requirements for products to be exported or imported to a certain country.

Good Regulatory Practices – Good Regulatory Practices provisions aim to promote enhanced transparency and good regulatory practices, with a view to improving governance and predictability while taking into account the legitimate policy objectives of each country. They can include commitments in areas such as evidence-based regulation; rigorous analytical frameworks; transparency and predictability; consultations; central oversight; and cooperation.

Intellectual Property – The Intellectual Property (IP) provisions strive to support efficient, predictable and transparent IP systems that balance the interests of rights holders, intermediaries and users, and consider broader public policy objectives. To reduce barriers to trade and investment, the IP provisions seek to promote and build on international and regional standards in the administration, protection and enforcement of IP rights, including through co-operation between Canadian and Indonesian IP officials.

Cross-Border Trade in Services – The Cross-Border Trade in Services provisions set out the rules regarding the treatment of service suppliers in partner countries.

Temporary Entry for Business Persons – The Temporary Entry for Business Persons provisions describe the labour mobility provisions that support the facilitated movement of covered business persons between partner countries.

Telecommunications – The Telecommunications provisions enhance regulatory certainty for telecommunications service suppliers.

Digital Trade – The Digital Trade provisions help facilitate the use of e-commerce by consumers and businesses, in recognition of the growing digitalization of trade and its impact on the economy.

Financial Services – The Financial Services provisions provide protections for investments in financial institutions, establishes a framework for regulatory transparency, and includes a dispute settlement framework tailored to the financial sector.

Investment – The Investment provisions protect investors from discriminatory or arbitrary treatment in their host country.

State-Owned Enterprises – The State-Owned Enterprises provisions seek to ensure that private firms can fairly compete with enterprises owned or controlled by a government. Such provisions ensure that state-owned enterprises act in accordance with commercial considerations, except when performing a public mandate.

Competition Policy – The Competition Policy provisions promote open and competitive markets, and help ensure that the benefits of trade liberalization are not offset by anti-competitive business conduct. These provisions require that the parties adopt or maintain measures to proscribe anti-competitive business conduct, and include specific commitments for transparency and procedural fairness.

Trade Remedies – The Trade Remedies provisions reaffirm WTO rights and obligations for anti-dumping, countervailing, and global safeguard measures under the relevant WTO Agreements.

Dispute Settlement – The Dispute Settlement provisions describe transparent, effective, and efficient dispute settlement mechanisms, including for state-to-state and investor-state disputes. State-to-state mechanisms help to resolve differences between the FTA partners relating to the agreement by way of consultations and binding dispute settlement.

Government Procurement – The Government Procurement provisions help to ensure that suppliers of goods, services, and construction services are treated in an open, transparent and non-discriminatory manner when competing for government procurement opportunities covered by the government procurement chapter in partner markets.

Environment – The Environment provisions ensure that parties effectively enforce their environmental laws and do not lower environmental standards to promote trade or attract investment. It also includes commitments that support efforts to address global environmental challenges, such as climate change, conservation of biological diversity, illegal wildlife trade, invasive alien species, sustainable fisheries management, and sustainable forestry.

Labour – The Labour provisions reaffirm common values and establish a concrete commitment that trade and investment do not come at the expense of workers' protections. Parties commit to effectively enforce their domestic labour laws, which should in turn embody and protect internationally recognized labour rights and principles, including those set out in the International Labour Organization's Fundamental Conventions. Canada's approach also seeks to create a framework for future cooperation and collaboration on cross-cutting issues in the area of labour.

Trade and Gender – The Trade and Gender provisions aim to advance women's economic empowerment and gender equality by removing barriers to participation in trade. These provisions also facilitate cooperation activities and information sharing.

Trade and Indigenous Peoples – The Trade and Indigenous Peoples provisions seek to remove barriers to participation in trade and enhance the ability of Indigenous peoples and businesses to benefit from the opportunities created by an FTA, including by facilitating cooperation activities and information sharing.

Small and Medium-Sized Enterprises – The Small and Medium-sized Enterprises provisions support the growth and development of small and medium-sized enterprises by enhancing their ability to participate in and benefit from the opportunities created by an FTA, through identifying and removing barriers to participation, and facilitating cooperation activities and information sharing.

Institutional Provisions:

Preamble – The Preamble introduces the purpose of the agreement. The Preamble reflects the intentions of the parties and the scope of the agreement.

Initial Provisions and General Definitions – The Initial Provisions and General Definitions set out how the FTA respects WTO commitments and how it links with existing agreements. These provisions also define commonly used terms in the agreement.

Administrative Provisions – The Administrative Provisions establish the structure of the bodies that will be charged with the governance and the implementation of the agreement.

Exceptions and General Provisions – These provisions include exceptions, such as for essential security, cultural industries, and taxation, that would apply across the entire agreement.

Transparency, Anti-Corruption, and Responsible Business Conduct (RBC) – These provisions aim to facilitate trade by enhancing transparency, reducing corruption, and encouraging businesses from both parties to adopt internationally recognized RBC principles.

Final Provisions – These provisions concern the entry into force or accession to the agreement.

Annex G – Background on the Trade and Gender Nexus

For more information on the Trade and Gender Nexus, including the impact on workers and businesses, please refer to the Global Affairs Canada website.

Annex H – Women's economic empowerment programming in Canada

Canada's Trade Commissioner Service—part of Global Affairs Canada—organizes and executes women-focused business delegations and trade missions to new markets and prominent global trade shows and events, including those focused on providing opportunities for women-owned businesses through supplier diversity programs.

The Government of Canada's Women Entrepreneurship Strategy (WES) is a nearly $5 billion investment aimed at increasing women-owned businesses' access to the financing, talent, networks, and expertise they need to start up, scale up, and reach new markets. Under the WES, and through it's over 20-year-old Business Women in International Trade (BWIT) initiative, the TCS received an additional $2 million per year to enhance export support services to women entrepreneurs. This funding helped establish a cadre of officers at TCS regional offices whose role is to support women-owned and women-led businesses.

The TCS network of offices in over 160 locations around the world, and six Regional Offices across Canada, helps Canadian companies including underrepresented groups (women, Indigenous Peoples, visible minorities, youth and members of the LGBTQ2 community) navigate the complexities of international markets, and make better business decisions for their international expansion.

The TCS's CanExport program provides over $33 million a year to Canadian SMEs, innovators, associations, and communities to help them diversify exports and expand their international footprint. In line with Canada's Export Diversification Strategy, the CanExport program seeks not only to diversify where Canada exports, but also to achieve trade that is more inclusive for all Canadians. To this end, CanExport's new dedicated Concierge Service for women and Indigenous entrepreneurs encourages applicants from those underrepresented groups in international trade to access its funding. The TCS Regional Offices deliver the Concierge Service by providing application guidance in an effort to make the CanExport program more accessible. CanExport also provides special considerations during the assessment of proposals to applicants from underrepresented groups in international trade (women, Indigenous peoples, visible minorities, LGBTQ2+, and youth).

The TCS is committed to offering business opportunities to underrepresented exporters, including women entrepreneurs, through funding and support programs that support their growth in global markets, and including through Canada's suite of 14 FTAs with 49 countries. FTAs ratified by Canada connect Canadian businesses to 1.5 billion of customers worldwide and provide them with preferential access to diverse markets all over the world.

On March 4, 2021, the Embassy of Canada to Indonesia and Timor-Leste organized a webinar to promote Canadian women-owned businesses in Indonesia. This first webinar is part of a three-year plan to bring a Business Women in International Trade delegation to Indonesia. The webinar covered three sectors: education, information communication technologies, and consumer products. Five successful Canadian companies were identified and promoted their services to over 150 attendees during a half-day webinar. The Embassy also recently conducted a market study on opportunities and associated challenges for Canadian women-led business in Indonesia. This product aims to build market intelligence and develop associated material to support Business Women in International Trade (BWIT) interested in accessing the Indonesian market. This was a first step to develop affiliated products to help Canadian women-led businesses integrate into the Indonesian market by focussing on specific sectors such as agri-food, clean technology, digital industries, and vitamins and supplements.