World Trade Organization (WTO)
Current WTO Negotiations
INFORMATION BULLETIN – WTO NEGOTIATIONS
SEPTEMBER 2006
Current Status of WTO Negotiations –
Overall Progress
Despite the efforts of trade ministers and negotiators since the
conclusion of the Sixth WTO Ministerial
Conference in Hong Kong, China (13-18 December 2005), at the
end of July, all negotiations under the Doha Development Agenda
were suspended until further notice.
While some progress was realized at the Ministerial Conference,
including in the key areas of agriculture and development, which
enabled the release of the Hong
Kong Ministerial Declaration, many difficult issues remained
to be resolved and much work was required for members to achieve
the goal of reaching a final agreement under the Doha Development
Agenda by the end of 2006.
Along with the commitments made at Hong Kong, WTO members set
April 30, 2006 as the date by which full modalities (methodologies
for detailed commitments) in the agriculture and non-agricultural
market access (NAMA) negotiations were to be completed. Intensive
regular meetings were held in Geneva by the various negotiating
groups, and informal meetings of ministers responsible for the WTO
took place in Davos, Switzerland (January 27-28) and Geneva (June
28 – July 1). Members of the G6 (U.S., EU, Australia, Brazil,
India, and Japan), have also been actively engaged. Although Canada
is not a member of the G6, we meet regularly with G6 members bilaterally
and in small-group sessions. As well, Canada has been well positioned
to influence developments in the negotiations through our participation
in other informal groupings, including the Services Core Group,
and the core senior officials' process.
Despite some progress, large gaps remained between the positions
of the key players and as a result, the April 30 deadline was missed.
Negotiations continued and although negotiating texts were released
in agriculture and NAMA on June 22, 2006, and two informal meetings
of trade ministers were held in Geneva (the first on June 28-July
1, 2006 which was attended by International Trade Minister Emerson
and Agriculture and Agri-Food Minister Strahl, and the other a G6
trade ministers’ meeting July 23-24), the differences in negotiating
positions remained too wide to bridge and the negotiations were
subsequently suspended in all negotiating areas. The Doha Development
Agenda operates under a key negotiating principle called a “single
undertaking” which stipulates that each negotiating area is
tied to the overall success or failure of the other negotiating
areas mandated by the Doha Ministerial Declaration; therefore, all
areas that fall under the Single Undertaking were suspended. Since
then, members have been reflecting on ways to move the talks forward.
No official date to resume negotiations has been set.
Canada is extremely disappointed with the suspension of the Doha
Development Agenda negotiations. A successful outcome to the Round
was an important opportunity to advance Canadian objectives of increased
access to global markets for Canadian agricultural producers and
processors, as well as manufacturers and service providers, who
depend heavily on international commerce for their livelihood. It
is especially unfortunate for developing countries, which stood
to gain from further integration into the world trading system,
and from the reduction in agricultural subsidies.
However, Canada remains committed to more liberalized trade, to
the rules-based multilateral trading system, and to the objectives
of the Doha Development Agenda negotiations, including the “Aid
for Trade” agenda. We will continue to work with other WTO
members and Director-General Pascal Lamy to promote our interests
in the Doha negotiations, and to help find a way forward to achieve
an ambitious outcome to the Round. Our Current
WTO Negotiations website will continue to carry updates as both
formal and informal discussions take place among WTO members.
Current Status of the Negotiations
– by Negotiating Area
Agriculture
Throughout the Doha Round, Canada has been working hard to achieve
a more level international playing field for our agricultural producers
and processors. Canada participated in the Sixth WTO Ministerial
Conference in Hong Kong from December 13-18, 2005. There, WTO members
adopted a Ministerial
Declaration, which reflected progress achieved on several issues
important to Canada’s agricultural sector. While the outcome
was not as ambitious as Canada would have liked, the Declaration
included several
commitments significant to Canada.
The Hong Kong Ministerial laid the groundwork for next steps in
the WTO agriculture negotiations and continued to provide scope
for Canada to pursue its objectives in key areas. WTO members agreed
to establish modalities in the three main areas of the agriculture
negotiations - export competition, domestic support and market access
- by April 30, 2006, and further agreed to submit comprehensive
draft schedules by July 31, 2006. In the winter and spring of 2006,
WTO members worked hard to reach agreement on modalities for agriculture;
however, despite some advances at the technical level, the negotiations
remained stalemated by the largest players, with no-one prepared
to move until their demands were met by the other negotiating partners.
This stalemate meant that key issues remained under-developed, and
led to agreement among members to miss the deadline set in Hong
Kong for full modalities in agriculture. On April 24th, WTO Director-General
Pascal Lamy confirmed that the April 30th deadline would be missed.
An urgent, continuous and intensive negotiating process was then
launched and WTO members re-doubled their efforts to resolve outstanding
issues. The Chair of the agriculture negotiations, Mr. Crawford
Falconer, released a number of working papers, including a text
outlining draft modalities in all three negotiating pillars in an
effort to move the negotiations forward. From June 28 -July 1, 2006,
WTO members met at the ministerial level in Geneva to try to reach
agreement. Unfortunately, the agriculture negotiations did not reach
a sufficient level of detail to allow progress to be achieved. After
a meeting by members of the G6 from July 23-24 failed to bring about
further progress, Director-General Pascal Lamy recommended the negotiations
be suspended in all areas within the Single Undertaking, including
the negotiations in agriculture.
The suspension of the negotiations is a significant setback, given
the economic benefits that Canada stood to achieve from an ambitious
outcome in the Doha Development Agenda, including for the agriculture
and agri-food sector. It is especially so for developing countries,
which stood to gain from further integration into the world trading
system, and from the reduction in agricultural subsidies. However,
Canada remains committed to the objectives of the Doha Development
Agenda.
For further information on Canada’s agriculture policy and
objectives at the WTO, click
here.
Non-Agricultural Market Access
In the negotiations on non-agricultural
market access (NAMA) Canada has been among the most ambitious
members, pressing for a result that would yield reduced tariffs
for our exporters. Most of Canada’s trade is with our free
trade partners, but there are still significant gains to be made
in developed markets in Europe and Japan and in large developing
economies such as India and Brazil.
By late June 2006, the NAMA negotiating group was close to consensus
on the methodology for reducing tariffs on the full range of NAMA
goods (industrial goods and natural resource products including
metals and minerals, fish and forest products). Practically all
members had accepted as a working hypothesis a “Swiss
formula” with two coefficients (one for developed countries
and one for developing countries in order to provide for lesser
cuts to developing country tariffs), that would reduce high tariffs
by proportionately more than low ones. They had agreed that all
unbound tariffs (i.e. those with no maximum committed under WTO
rules) would be bound against future increases, and the methodology
for reducing these newly-bound tariffs had also been agreed.
Some developing countries that began the NAMA negotiations in highly
defensive positions now appear to appreciate that an ambitious Round
could deliver gains that support their development goals, provided
that they are offered some flexibility through elements of special
and differential treatment. By late June 2006, the negotiating group
had agreed on provisions for developing countries that include longer
implementation periods for tariff reductions and a higher coefficient
for developing countries than developed countries in the tariff-reduction
formula that would allow developing countries to make somewhat smaller
proportional tariff reductions. It was also agreed that developing
countries would have the option of either exempting some of their
tariffs from the full effect of the formula or keeping some tariffs
unbound. Least developed countries, it was agreed, would not be
required to reduce any tariffs.
Although these structural elements are very close to being finalized,
there remains the difficult question of numerical values for the
developed and developing country coefficients in the tariff-reduction
formula, for the treatment of unbound tariffs, and for the other
elements of the special and differential options for developing
countries. There is a deep divide among members regarding ambition
as reflected in the numbers, and this will have to be bridged in
order to move the negotiations ahead. However, the Hong Kong Ministerial
Declaration of December 2005 made an explicit link between ambition
in the NAMA and the agriculture negotiations, and many members have
been unwilling to make commitments in NAMA until they are satisfied
that their interests are being addressed in agriculture.
Other NAMA issues have made some progress, including the situations
of preference-receiving countries, least developed countries, small
and vulnerable economies and recently acceded members. However,
since many solutions appear to involve exceptions to the tariff-reduction
formula and/or the special and differential treatment options, progress
in these areas depends on resolution of the key modalities.
Other elements of the NAMA negotiations, such as agreements to
further reduce or eliminate tariffs in certain sectors (e.g. forest
products, fish products, raw materials, chemicals) and also non-tariff
barriers (NTBs), are discussed in the non-agricultural
market access section of the Trade in Goods page.
Services
On the eve of the suspension of the Doha Development Agenda negotiations,
services negotiations were active, with Canada and other WTO members
preparing to release new offers. Negotiations on the WTO’s
General Agreement on Trade in Services (GATS) had gained much needed
momentum after the Sixth WTO Ministerial
Conference in Hong Kong, China (December 13-18, 2005). One of
the key outcomes of this meeting was an agreement among ministers
to commence a plurilateral request-offer
negotiating process as a means to address members’ concerns
that services talks were lagging behind those in other areas. The
purpose of this plurilateral process is to complement, not replace,
the bilateral request-offer process that has been employed since
the launch of the market access phase of negotiations on services
in 2002. With the release of plurilateral requests in March 2006
and subsequent meetings of WTO members in April and May 2006, the
process had begun to have its desired effect, adding increased focus
and efficiency to the GATS negotiations. Work also remained focussed
on horizontal issues
such as disciplines for domestic regulations, and how least-developed
countries (LDC’s) will be treated. During the Hong Kong Ministerial,
a timeline had been created for these issues to be addressed.
Canada’s priority sectors continue to be financial services,
telecoms and computer and related services, engineering and other
professional services, energy services and environmental services,
among others.
Rules
The rules negotiating group substantially
intensified its work in 2004, which aimed to clarify and improve
disciplines in relation to the taking of antidumping and countervailing
measures, subsidies (in general) and fisheries subsidies, as well
as in regard to WTO provisions applying to regional and bilateral
trade agreements (RTAs). The group has been involved in detailed
informal technical discussions of issues identified by members for
negotiations. These discussions contributed to a better understanding
of the underlying problems and the identification of possible solutions
in the form of proposed amendments to the agreements.
Following the Hong Kong Ministerial Conference of December 2005
the rules negotiating group further intensified its work and focused
on discussing or further sharpening text-based proposals with a
view to complete the analytical phase of its work in early 2006.
This was to provide the Chair of the negotiating group with a framework
from which consolidated texts would be prepared and used as the
basis for the final phase of the negotiations. The Chair had targeted
July as the time for the tabling of these texts.
As the Chair indicated in his July 2006 report to the Trade Negotiations
Committee, during this period the Negotiating Group examined a large
number of proposals and demonstrated real commitment to achieving
results in this area. However, progress in rules was inextricably
linked to progress in other negotiating areas. In this regard, the
Doha Development Agenda was suspended in July 2006, largely as a
result of WTO members’ inability to advance discussions in
the key areas of agriculture and non-agricultural market access
(NAMA). As a result, the Chair did not table any consolidated texts
for members’ consideration.
Canada has been among the most active participants in the rules
negotiating group, having put forward several
proposals to clarify or improve disciplines both in the anti-dumping
and subsidies/countervail areas. Canada supports improving anti-dumping/countervail
disciplines (while maintaining their effectiveness) to reduce the
scope for abuse, as well as strengthening subsidy disciplines particularly
to ensure fair competition for Canadian exporters in foreign markets.
Trade Facilitation
Negotiations on trade facilitation,
to simplify trade procedures and expedite the movement, release
and clearance of goods, had been progressing well at the time the
Doha Development Agenda negotiations were suspended in July 2006.
In the preceding two years, members agreed on methodologies for
the trade facilitation negotiations and have submitted over 50 proposals
on specific measures that could eventually form part of an agreement.
Developing countries have been actively and constructively engaged
in the negotiations, with Canada having worked closely with both
developing and developed members.
Canada has been a long-time advocate of trade facilitation at the
WTO. Canada’s priority is to secure strong, binding rules
governing trade facilitation in a manner that is both practical
and meaningful to traders; i.e. to build on existing WTO obligations
to maximize transparency and streamline customs procedures. In addition,
Canada has been working with other developed and developing members
on how special and differential treatment (S&DT) and technical
assistance and capacity-building could be integrated into an agreement
to best address the needs and priorities of developing countries.
In addition to continuing to support advancing trade facilitation
in the WTO, Canada will continue to advocate the merits of reducing
red-tape at borders and expediting the movement, release and clearance
of goods, through our bilateral free trade agreements and in forums
such as Asia Pacific Economic Cooperation (APEC), where we are an
active member.
Trade and Development
At the start of the Doha Development Agenda Round in 2001, WTO
members agreed to place the needs and interests of developing countries
at the heart of the Round, so as to help developing countries better
integrate into, and benefit from, the multilateral trading system.
Since then, Canada and other WTO members have worked to address
a wide range of development issues, including in the negotiations
themselves. Discussions on modalities (methodologies for developing
detailed commitments) have been accompanied by discussions on a
number of issues of interest and importance to developing countries
(e.g. cotton, food aid, preference erosion). In some instances,
there have also been discussions on the tailoring of special and
differential treatment (S&DT) measures, which are special rights
and obligations that respond positively to developing countries’
needs. Prior to the suspension of the negotiations, progress had
been made in this regard.
For example, in the agriculture negotiations, S&DT has figured
prominently in all aspects of the discussions, with particular focus
on the area of market access. Besides certain flexibilities such
as lesser tariff cuts, there were other proposed tools to provide
flexibility for developing countries including: the ability to designate
a certain number of products as “special”; and the establishment
of a special safeguard mechanism allowing developing countries to
raise duties on a specific set of products if faced with significant
import price fluctuations or import surges. In the non-agricultural
market access negotiations (NAMA), S&DT discussions included:
flexibility with respect to the application of the tariff cutting
formula; certain exceptions to the formula; and/or longer phasing-in
of tariff reductions. S&DT provisions for developing countries
that participate in sectoral agreements were also envisioned. In
the services negotiations, several meetings had been held to identify
areas of market access interest to developing countries and to discuss
the implementation of the “Least-Developed Countries (LDCs)
Modalities”. Similarly, in the trade facilitation negotiations,
WTO members were trading ideas on how best to address the capacity
issues with a view to developing a workable S&DT mechanism for
implementing commitments on trade facilitation.
Outside the negotiations, progress had also been made to advance
the “development work program” set forth in the Doha
Ministerial Declaration.
For example, in Hong Kong, WTO members endorsed the Enhanced Integrated
Framework Task Force, which was created in the fall of 2005 to improve
the Integrated Framework (IF), a multi-agency, multi-donor program
that helps LDCs integrate trade into their national development
plans. Additionally, an Aid for Trade (AfT) agenda was adopted to
help developing countries, particularly LDCs, to build the supply-side
capacity and trade-related infrastructure that they need to assist
them to implement and benefit from WTO agreements, and to expand
their trade in general. Accordingly, a Task Force was created to
provide recommendations on how AfT might contribute most effectively
to the development dimension of the Doha Development Round. Both
Task Forces have since developed and endorsed recommendations, but
work remains to be done to operationalize them. Canada stands ready
to pursue this work despite the suspension of the negotiations.
Beyond work on trade-related technical assistance and capacity-building
and broader Aid for Trade, WTO members have engaged in discussions
in the context of WTO work programs on subjects of importance to
developing countries. These subjects include: trade-related problems
of small, vulnerable economies and of LDCs; trade and technology
transfer; intellectual property; trade, debt and finance; and implementation-related
issues and concerns.
In light of the above, Canada is extremely disappointed at the
impasse reached in the WTO Doha Development Agenda negotiations.
We continue to believe that a successful outcome to the Round, one
that is ambitious while also including appropriate consideration
of developing countries’ concerns, would bring significant
benefits to developing countries. Even greater benefits would accrue
if multilateral trade liberalization under the auspices of the Doha
Development Agenda was accompanied by an enhanced Integrated Framework
and increased AfT assistance.
Despite the suspension of the WTO Doha Development Agenda negotiations,
we will continue to work with other WTO members and the WTO Director-General
to advance the development dimensions of the Round as best we can.
For more information on trade and development issues, click
here.
Trade and Environment
Canada has three broad goals in the negotiations on trade and environment:
ensuring mutual-supportiveness of WTO rules and multilateral environmental
agreements; improved information exchange and transparency between
WTO committees and multilateral environmental agreement secretariats;
and elimination of tariff and non-tariff barriers on trade in environmental
goods in a manner consistent with our objectives in the agriculture,
non-agricultural market access (NAMA), and services negotiations.
Before negotiations were suspended in July 2006, negotiations on
trade and environment had focussed on the third area – market
access for environmental goods and services - as it appeared to
hold the best prospect for an outcome. Very early on in the negotiations,
members recognized that there was some overlapping of the mandates
of the Committee on Trade and Environment in Special Session (CTESS)
and other negotiating bodies. In particular, delegations noted that
work was already underway on environmental services and so they
decided to focus their efforts on environmental goods.
A series of useful technical meetings were held in the first half
of 2006, with in-depth discussion on hundreds of environmental goods
proposed by WTO members. Unfortunately, the pace of the negotiations
continued to be tied to progress in other negotiating groups, and
in particular to the NAMA negotiations. While much work remained
on environmental goods, significant progress had been achieved,
with some WTO members - including Canada and New Zealand - submitting
revised lists of environmental
goods as a result of discussions during the technical meetings.
Canada, together with the United States, the European Community,
New Zealand and other proponents of a list-based approach to the
negotiations on environmental goods, also proposed
modalities (methodologies for making detailed commitments) for
tariff elimination, including flexibilities for developing countries.
The Doha Development Agenda mandate to liberalize environmental
goods represents a unique and historic opportunity to contribute
to a triple-win for trade, the environment and development. Canada
is disappointed at the impasse reached in the negotiations; however
we remain committed to the objectives of the Doha negotiations on
trade and environment.
TRIPS (Trade-Related Aspects of Intellectual Property Rights)
Negotiations
Negotiations on the establishment of a multilateral system of notification
and registration of geographical indications (GIs) for wines and
spirits have shown little progress in the past year, and differences
of view have not been narrowed. The key points of difference that
continue to impede efforts toward finding agreement remain legal
effects, participation, costs, and administrative burdens.
Canada is calling for a voluntary, facilitative, simple and low-cost
registration system that will provide information on GIs that are
notified by participating WTO Members. Canada does not favour a
system that includes obligations beyond those currently contained
in the TRIPS Agreement, especially in light of the development focus
of the Doha Round of WTO trade negotiations.
Another related issue that the European Union and its Member States,
together with Bulgaria and Switzerland, would like to include in
the negotiations is extending the enhanced level of GI protection
currently reserved for wine and spirit GIs to a broad range of agricultural
products. Canada and its allies believe the current system is working
well and are opposed to launching negotiations.
Dispute Settlement Understanding (DSU)
Negotiations to improve and clarify the Dispute
Settlement Understanding have progressed alongside negotiations
in other areas of the Doha Development Agenda. Through constructive
discussions at the Special Session of the Dispute Settlement Body,
WTO members’ contributions have been the subject of comprehensive
review, such that a much better picture of potential revisions to
the DSU has been formed. However, it is clear that greater WTO member
engagement is required. What is not yet clear is how great the impact
of the suspension of the Doha Development Agenda negotiations will
be on the DSU negotiations, which are outside of the DDA’s
Single Undertaking.
Canada believes that there are significant benefits to be gained
by improving and clarifying the DSU to address a number of issues.
These issues include what is known as the "sequencing"
issue, enhanced third party rights, rules and procedures governing
participation by amicus
curiae, improvements targeted to greater efficiency in
the dispute settlement process, enhanced surveillance of implementation
procedures, post-retaliation procedures, effective and viable alternatives
to retaliation, transparency of the dispute settlement process,
and the protection of business confidential information. To date,
many of these issues have been the subject of proposals tabled by
Canada and the other WTO members in these negotiations. Canada has
worked productively with a broad range of like-minded members to
refine outstanding proposals and secure consensus on the direction
that negotiations should take.
Concluding
the Doha Round: the Challenges Ahead
Although there are nine negotiating
areas, the negotiations have become focussed on a “triangle”
of contentious issues: agricultural domestic support, agricultural
market access, and non-agricultural market access (NAMA). The Doha
Development Agenda negotiations are considered a “single undertaking”;
that is, every item of the negotiation is part of a whole and indivisible
package and cannot be agreed to separately. Therefore, concluding
the Doha Development Agenda in all nine areas will be contingent
upon a breakthrough in the triangle of issues.
With the recommendation by WTO Director-General Pascal Lamy to
suspend negotiations in all negotiating areas, work on issues within
the Single Undertaking have been deferred until further notice.
Despite this setback, Canada encourages commitment to the current
Round and urges key players to show the necessary flexibility to
move the negotiations toward a successful conclusion.
Canada’s Commitment to the WTO and to Multilateral Trade
Canada remains committed to the WTO and the goals of the Doha Development
Agenda. Working with 148 other partners is bound to be complex;
however the WTO provides the forum to discuss trade-related issues,
settle disputes and work with like-minded states in one venue, rather
than individually. Many of our key trading partners are members,
such as the U.S., EU, Japan and Mexico.
Canada has provided influential leadership in all aspects of the
Doha Round negotiations, and our officials are actively pursuing
our interests through many informal alliances and groups such as
such as the Cairns Group, Friends of NAMA and Friends of Services.
The position of Chair of the non-agricultural market access (NAMA)
group is currently held by Canada’s Ambassador to the WTO,
Don Stephenson. Ideas from Canada’s proposals are being considered
in number of areas such as in NAMA, agriculture, rules, services
and trade facilitation.
In line with the Doha Development Agenda mandate, Canada has also
been engaged in discussions on subjects of importance to developing
countries. We have worked in various groups comprising both developed
and developing countries to ensure that developing country concerns
are taken into consideration. Canada chaired the Task Force to enhance
the Integrated Framework, and is now co-chairing the Transition
Team which has been put into place to operationalize the Task Force’s
recommendations. Canada is also actively engaged in advancing the
Aid for Trade Agenda, and was a member of the Task Force established
to develop recommendations on how Aid for Trade might contribute
most effectively to the development dimension of the Doha Development
Agenda. Our least-developed country preferential scheme with its
liberal rules of origin, is another good example of Canada’s
commitment to helping developing countries increase their trade,
stimulate economic growth and reduce poverty.
Canada welcomes the opportunity to continue to provide leadership
when officials re-group to discuss the Doha negotiations further.
Ongoing consultations with stakeholders and input from Canadians
are critical components in the development of Canada’s trade
priorities and positions. Please visit our Consultations
page to find out more about our program of engagement, to submit
your comments and views, or to ask questions regarding these negotiations.
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