ARCHIVED - NAFTA Secretariat — Canadian Section

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SECTION 1 - DEPARTMENTAL OVERVIEW

1.1 The Minister's Message

The North American Free Trade Agreement (NAFTA) - now in its 15th year - stands as a clear example of success for all three North American partners. NAFTA has contributed to the competitiveness of the North American region by sharpening the competitive advantages of businesses and increasing the prosperity of our citizens.

The principal dispute settlement mechanisms of NAFTA are found in Chapters 11 (Investment), 19 (Review and Dispute Settlement in Antidumping and Countervailing Duty Matters), and 20 (Institutional Arrangements and Dispute Settlement Procedures). For investment disputes relating to obligations of NAFTA parties under Chapter 11 , the NAFTA sets out dispute resolution procedures to resolve complaints between NAFTA investors and the host State. Chapter 19 establishes a mechanism to provide an alternative to judicial review by domestic courts of final determinations in antidumping and countervailing duty cases with review by independent binational panels. Although Chapter 19 panel decisions are binding, an Extraordinary Challenge Committee (ECC) procedure may be initiated, in extraordinary circumstances, by a NAFTA government to review a binational panel decision. Finally, Chapter 20 dispute settlement provisions are applicable to all disputes regarding the interpretation or application of the obligations of NAFTA for which there are no special dispute settlement provisions such as those found in Chapter 19. The steps set out in Chapter 20 are intended to resolve disputes by agreement, if at all possible.

The NAFTA Secretariat, which is composed of the Canadian Section, the U.S. Section and the Mexican Section, is responsible for the administration of the dispute settlement provisions in Chapters 19 and 20 of NAFTA. Through increasing the quality of the management of international trade dispute settlement processes, the Canadian Section of the NAFTA Secretariat also contributes to the strengthening of Canada's international trade performance. Exporters and investors are far more likely to engage in international commerce when they have access to impartial dispute settlement mechanisms should disagreements arise.

For the 2007-2008 reporting period, the Canadian Section of the NAFTA Secretariat continued to focus its efforts on the improvement of its service delivery through support to panels and committees and through a continued commitment to an unbiased and equitable administrative process, to openness and accountability, to national and international collaboration, to operational efficiency and effectiveness and to the maintenance of high quality service. All of these priorities were met in the 2007-2008 period, during which a total of ten NAFTA Chapter 19 panel proceedings were administered by the NAFTA Secretariat, Canadian Section. Of these, one resulted in a decision being issued, six were terminated and, as of March 31, 2008, the remaining four were still in progress.

I encourage the Canadian Section of the NAFTA Secretariat to continue its high level of service in support of the effective, unbiased and equitable administration of the dispute settlement mechanisms of the NAFTA.

The Honourable Stockwell Day
Minister for International Trade

1.2 Management Representation Statement

I submit for tabling in Parliament, the 2007- 08 Departmental Performance Report for the NAFTA Secretariat, Canadian Section.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007-08 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;

Anne McCaskill
Secretary
NAFTA Secretariat, Canadian Section

1.3 Summary Information

This report begins by briefly describing the purpose of the NAFTA Secretariat, Canadian Section, followed by the Canadian Section's strategic outcome and performance results for the period under review, including financial performance, operating environment and key co-delivery organizations. The report then summarizes risks and challenges as well as human and financial resources. The final section provides organizational information on who we are and what we do.

The report reflects the four principles for public reporting set by Treasury Board of Canada Secretariat (TBS). These principles require departments and agencies to:

• focus on the benefits for Canadians, explain the critical aspects of planning and performance, and set them in context;
• present concise, credible, reliable, and balanced information;
• associate performance with plans, priorities, and expected results, explain changes, and apply lessons learned; and
• link resources to results.

1.3.1 Raison d'être

The NAFTA Secretariat, Canadian Section is an independent agency created in 1994 under the North American Free Trade Agreement Implementation Act (see Annex A for the full mandate of the Secretariat). Its principle responsibility is to administer the dispute settlement provisions in NAFTA Chapters 19 and 20. It also supports the Ministerial level Free Trade Commission and participates in the Chapter 19 Working Group. The Canadian Section's mandate was expanded in 1997 and again in 2002 to include the administration of dispute settlement provisions in Canada's Free Trade Agreements with Israel, Chile and Costa Rica.

To fulfill its mandate, the Canadian Section must maintain a highly effective and impartial process for the implementation of dispute settlement provisions under NAFTA and the bilateral Agreements. This contributes importantly to preserving the benefits of free trade for all stakeholders.

1.3.2 Strategic Outcome and Program Activity Architecture

In its 2007-2008 Report on Plans and Priorities (RPP), the NAFTA Secretariat, Canadian Section identified one key program activity, which is the administration of international trade dispute settlement mechanisms. In addition, a second program activity has been defined as internal services, in line with TBS directives. This program activity is used by all departments and agencies to describe corporate services designed to deliver cost-effective support services that facilitate the achievement of departmental objectives.

The following table provides the NAFTA Secretariat, Canadian Section's strategic outcome supported by two program activities (see Sections 1.4, 2.1 and 3.1 and Section 3 for a summary of planned and actual spending for our key program activity as well as a link to the Government of Canada outcome area).

Strategic Outcome	A highly efficient, impartial and rules-based international trade dispute resolution process that benefits Canadian exporters to NAFTA countries, as well as NAFTA country exporters doing business in Canada
Program Activity	Administration of International Trade Dispute Settlement Mechanisms	Internal Services1

1. Internal services provide governance and management support and resource and asset management services that enable the NAFTA Secretariat, Canadian Section to conduct its key program activity. All financial and non-financial performance information relating to this program activity is captured under our key program activity, which is the administration of dispute settlement mechanisms.

1.3.3 Operating Framework

The Canadian Section of the NAFTA Secretariat is funded by Parliament through a program expenditures vote. It operates within the context of Canada's international trade framework.

The Canadian Section reports to Parliament, for financial accountability purposes, through the Minister of International Trade (see Section 4.7 - Responsibility Chart).

For more details on the operating context, see the NAFTA Secretariat website at http://www.nafta-sec-alena.org and the Canadian Section website at http://www.nafta-sec-alena.org/canada/index_e.aspx.

1.3.4 Key Co-Delivery Organizations

Although the NAFTA Secretariat, Canadian Section operates at arm's length from other federal and provincial government institutions, it must maintain appropriate working relationships with key players in order to successfully deliver its strategic outcome. Accordingly, the Canadian Section interacts directly with:

• Foreign Affairs and International Trade Canada;
• Canada Border Services Agency;
• Canadian International Trade Tribunal;
• roster members (list of international trade law experts established by the NAFTA governments to serve as panelists in disputes);
• panelists (adjudicators of these disputes chosen on a case by case basis by the involved governments);
• counsel for participants in the disputes, including counsel for investigating authorities (government agencies whose decisions are reviewed by binational panels);
• representatives of the NAFTA country governments;
• university academics; and
• the general public.

Furthermore, the Canadian Section has established memorandums of understanding with other federal government departments for the provision of human resources support services, financial systems, various back-up services and the administration of Public Servants Disclosure Protection Act. Such agreements are currently in place with, among others, Public Works and Government Services Canada, Health Canada and the Military Police Complaint Commission.

1.3.5 Risks and Challenges

The following are key environmental factors that could affect the planning and priority setting of the NAFTA Secretariat, Canadian Section:

1.3.5.1 Tripartite Nature of the NAFTA Secretariat

The NAFTA Secretariat is comprised of the Canadian, the United States and the Mexican national sections. Pursuant to Article 1908 of the NAFTA, the involved national sections are required to “act jointly in providing administrative assistance to all panels and committees”. In light of this, maintaining close working relationships with its counterpart sections in the United States and Mexico is fundamental to the Canadian Section's effective performance.

In this regard, the NAFTA Secretariat operates in a context where different legal, linguistic, business and cultural traditions prevail. Managing the Canadian participation in this tripartite organization must be conducted within the policies and practices of the Canadian Government and also be harmonized with administrative practices of its U.S. and Mexican partners. New initiatives often require extensive consultations and negotiation before they can be implemented.

1.3.5.2 Maintaining Organizational Capability

The success of the NAFTA Secretariat and its credibility as an independent tribunal depends on the expertise, professionalism and competence of its employees. Hence, we have continued essential training for employees and managers to ensure they have the knowledge and skills to meet evolving mandatory job requirements and works to ensure the retention of key personnel.

1.3.6 Financial and Human Resources

Total Financial Resources ($ 000)

2007-2008
Planned Spending	Authorities	Actual Spending
$3,001	$2,908	$1,618

Total Human Resources (FTEs)

2007-2008
Planned	Actual	Difference
13	10	-3

1.4 Summary of Departmental Performance

In its 2007-2008 RPP, the NAFTA Secretariat, Canadian Section identified six priorities, which were aimed at finding and improving ways to enhance its service delivery (see Sections 2.3.1 to 2.3.6 below). Overall, substantial progress was achieved against all priorities. Table 1 provides an overview of the results achieved during the year under review.

Table 1: Departmental Priorities

Name	Type	Performance Status
Support to panels and committees	Ongoing	successfully met
Unbiased and equitable administrative process	Ongoing	successfully met
Openness and accountability	Ongoing/new	successfully met 1
National and international collaboration	Ongoing/new	successfully met 1
Operational efficiency and effectiveness	Ongoing/new	successfully met 1
Highest quality of service	Ongoing	successfully met 1

1. Some are ongoing, multi-year strategic priorities.

Table 2: Program Activities by Strategic Outcome

	Expected Results	Performance Status1	2007-2008		Contributes to the following priority
			Planned Spending ($,000)	Actual Spending2 ($,000)
Strategic Outcome: A highly efficient, impartial and rules-based international trade dispute resolution process that benefits Canadian exporters to NAFTA countries, as well as NAFTA country exporters doing business in Canada.
Program Activity Administration of International Trade Dispute Settlement Mechanisms	Improved support to panels and committees	Successfully met	650	318	1
	Unbiased and equitable administrative process	Successfully met	500	220	2
	Corporate culture that ensures transparency in management processes	Successfully met	320	180	3
	Increased national and international collaboration	Successfully met	381	200	4
	Improved management practices and continuous learning	Successfully met	550	300	5
	Maintenance of the highest quality of administration	Successfully met	600	400	6

1. The results shown reflect feedback on its program and services from TBS on our Management Accountability Framework (MAF) assessment and from its employees at regular management meetings and other key strategic planning meetings. Additionally, the audit carried out by the Canadian General Standards Board determined that our management systems meet the standards of ISO 9001:2000. As a result, the Canadian Section obtained a recertification (see also Section 2.3.3).

2. Cost includes program spending and salaries and benefits.

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