World Trade Organization (WTO)
Current WTO Negotiations
Update on Negotiations
Backgrounder - July 31, 2004
JULY 2004 WTO FRAMEWORK AGREEMENTS:
WHAT WAS ACHIEVED
Canada is pleased that the 147 World Trade Organization (WTO) members
were able to agree today on a framework for future negotiations.
While we remain a long way from any final outcome, this week’s
agreement enables us to move to the next phase of negotiations.
The text adopted by the General Council is positive for many Canadian
agriculture producers and processors, manufacturing producers, service
providers and consumers. The potential benefits for both developing
and developed countries are immense. We now have a road map for
cutting harmful trade-distorting agriculture subsidies. We have
the outlines of future negotiations that will provide our producers
with better and more assured access to global markets. And we are
united in our efforts to better integrate developing countries into
the global economy.
The agreement today is a vote of confidence for multilateralism,
as all WTO members joined together in shaping the future global
economy. As the detailed rules are negotiated over the months ahead,
Canada will continue to vigorously advance the interests of all
Canadians.
Major Elements
With respect to agriculture, the framework supports many of Canada’s
key negotiating objectives, including the elimination of export
subsidies, substantial reductions in trade-distorting domestic support,
and substantial improvements in market access for all products.
While some provisions relative to state trading enterprises such
as the Canadian Wheat Board (CWB) went further than we would have
liked, Canada will continue to strongly promote the view that the
CWB is a fair trader, and will make every effort to minimize any
impact on the CWB.
The framework offers an opportunity to address the price-depressing
impact of subsidies and improve market predictability and fairness
through the elimination of export subsidies. It points in the direction
of negotiating the removal of unfair, distorting foreign subsidies,
which will help our grains and oilseeds, red meats and horticultural
sectors compete. It also offers our agri-food sector a good basis
on which to negotiate enhanced opportunities to market its products
(from primary to value-added) in key foreign markets. Finally, the
framework moves in the direction of righting the imbalances that
have faced Canadian producers since the Uruguay Round. In this way,
the framework positions Canada’s agri-food sector well to
increase its competitiveness and profitability in the future.
Canada continues to support the rights of producers to maintain
orderly marketing systems within Canada.
On the non-agricultural market access negotiations (NAMAN), the
text represents a good basis for progress toward further trade liberalization.
Further negotiation will determine a tariff-cutting formula and
the parameters for sectoral agreements, which could remove or reduce
tariffs and non-tariff barriers in specific industrial sectors.
Canadian industrial producers are competitive across a very wide
range of sectors and will benefit greatly from the improved market
access that these negotiations could deliver. Canada’s proposals
on sectoral duty-free agreements could deliver significant benefits
to Canadian producers in sectors such as energy-related equipment,
environmental goods, fertilizers, fisheries products, forestry products,
and non-ferrous metals. Canada is also looking to attract additional
participants into existing sectoral agreements, boosting the gains
already delivered to Canadian producers of agricultural equipment,
beer, civil aircraft, construction equipment, brown distilled spirits,
office furniture, information technology products, medical equipment,
paper, pharmaceuticals, steel, and toys.
With respect to the ongoing negotiations on trade in services,
we are pleased that the text provides additional momentum by calling
on members to submit any outstanding initial market access offers
and agreeing to set a date for the submission of improved offers
as soon as possible. These negotiations will provide exciting opportunities
for our services exporters, especially in newly emerging markets
such as China, Brazil and India, and, in turn, jobs in Canada. Of
particular interest is the area of commercial services—such
as financial, professional, telecommunications, and research and
development—which account for nearly half of Canada’s
international trade in services.
The agreement also provides for a launch of negotiations on trade
facilitation that will lead to new rules that will lower costs for
Canadian businesses. Various surveys have suggested that red tape
at the border can add costs of as much as 15 percent of the value
of the goods being traded. This is our opportunity to lessen, or
even eliminate, those costs. Canadian businesses, including the
Canadian Chamber of Commerce, have been active advocates for the
launch of these negotiations and for new rules to simplify and cut
red tape in trading transactions.
The text reaffirms WTO members’ commitment to progress in
the rules negotiations that seek to improve rules governing the
application of anti-dumping, subsidy and countervailing measures,
and the means by which disputes are resolved.
Finding the means to better integrate developing countries into
the global economy remains central to these negotiations. Developing-country
concerns are integrated within the framework for agriculture, non-agriculture
market access, and trade facilitation. There are strong provisions
relating to trade-related technical assistance, capacity building,
special and differential treatment, and other specific concerns
of developing countries. The agreement to negotiate substantial
reductions in agricultural subsidies will enable developing countries
to compete in world agricultural trade on a level playing field.
The market access negotiations on goods and services will provide
the opportunity for increased access to developed country markets,
and increased South-South trade that will help developing countries
to realize their full economic potential.
The agreement by the 147 members of the WTO is a vote of confidence
for multilateralism. WTO members have joined together to shape the
future global economy and to create greater opportunities to improve
the quality of life for people everywhere.
Progress in these negotiations is especially important to Canada.
International trade supports and stimulates Canada’s economic
growth. We trade about $2.3 billion in goods and services every
day, and our exports alone represents roughly 40 percent of our
gross domestic product. With an estimated one in four Canadian job
linked to exports, and with all consumers benefiting from access
to a wider range of lower-priced goods and services, a strong and
forward-looking multilateral trading system benefits all Canadians.
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