Benefits of the Agreement on Internal Trade
The Agreement on Internal Trade (AIT) saves the Canadian economy billions of dollars each year by reducing barriers to trade.
Direct costs of barriers are estimated at about 1% of Gross National Product (GNP) or approximately $7 billion per year. Direct costs are the costs associated with the effects of having barriers in place.
Indirect costs are estimated at least 2 per cent of GNP or approximately $14 billion per year. Indirect costs include the "discouragement" factor, as a result of which investment is lost because of the perception of barriers and excessive red tape.
Among other things, the Agreement:
- includes obligations to remove additional barriers through future negotiations;
- opens up the domestic market;
- prohibits the establishment of new barriers to internal trade; and,
- requires provincial, federal and territorial governments to be transparent, and to fully disclose all information and practices that may impede an open domestic market.
The AIT also requires governments to treat all persons, goods, services and investments from other provinces as well as they treat their own. Entities, which face trade restrictions from governments, can take advantage of an effective dispute resolution mechanism that is available under the Agreement. For instance, the vast majority of Albertans and Alberta entities that submitted complaints under the Agreement had their grievances addressed.
By reducing barriers to trade within Canada, the AIT provides a stronger foundation for local businesses to compete internationally.
Dispute settlement, under the Agreement, focuses on cooperation and resolving complaints before they become full-blown disputes.