|
Opening Doors to the World:
Canada's International Market Access Priorities 2000
|
2. Getting the International Rules Right:
The World Trade Organization
Canada benefits greatly from the open rules-based trading system that has been developed over the past 50 years. As a medium-sized economy, our current and future prosperity depends on open markets, a stable trading environment and a means to settle trade disputes based on right, rather than political and economic might. The WTO, which oversees the administration and functioning of multilateral trade agreements and helps to maintain the rules governing world trade, remains the cornerstone of Canadian trade policy and the foundation for Canada's relations with its trading partners.
Canada is active in the various bodies of the WTO and in several multilateral fora that influence and guide the international trade policy agenda. We participate actively in the meetings of the G-7/G-8 major powers; the Quadrilateral (United States, European Union, Japan, Canada) Trade Ministers; the OECD; the FTAA; APEC; and United Nations (UN) economic institutions and agencies. Our participation in these bodies and in informal trade ministerial meetings helps us to reach consensus on trade issues of importance to Canada. Canada continues to lead efforts in these fora to improve coherence among international trade, financial, economic and social policies to further strengthen markets and promote economic growth and sustainable development. As well, to promote public understanding and support for the WTO and its activities, and for the pursuit of trade liberalization as a whole, Canada continues to support greater transparency, both in ongoing WTO activities and in the conduct of future multilateral trade negotiations.
Preparations for the Third WTO Ministerial Conference in Seattle and for FTAA negotiations were prominent in the Government's trade agenda in 1999. In preparing for these, the Government initiated an extensive outreach and consultation program. Consultations were undertaken with the provinces, the business sector, other interest groups and the public. The Government also created a website (http://www.dfait-maeci.gc.ca/tna-nac) providing information on trade policy issues and inviting public comments on negotiating priorities and objectives. The Parliamentary Standing Committees on Agriculture and Agri-food (SCAAF) and on Foreign Affairs and International Trade (SCFAIT) conducted public hearings across the country on Canada's future trade agenda. The results of the SCAAF consultations were recorded in its March 1999 Summary Report. The Standing Committee on Agriculture and Forestry also concluded its own consultations and made its report in August 1999. SCFAIT's report contained some 45 recommendations, to which the Government responded in a report tabled in Parliament on November 15, 1999. This response outlined the trade policy objectives and priorities that will guide the Government as it seeks expanded and more certain access to global markets for Canadian goods and services. Canada's position will continue to be refined as the Government continues its active program of public consultations.
Although most WTO Members expected the launch of broad-based trade negotiations at the Third WTO Ministerial Conference, agreement was not reached in Seattle. This delay highlighted the need to rekindle support for further trade and investment liberalization and multilateral rule-making, with the objective being the eventual expansion of the WTO negotiating agenda. Another consequence of this delay has been a renewed interest, in some countries, in regional and bilateral trade liberalization initiatives. While developments in this area will be watched closely, progress is expected to be modest. We also may see a rise in trade disputes between Members due to the lapsing of the provisions of certain agreements and because Seattle did not launch the negotiations that were expected to resolve some existing differences between Members. We will be working closely with our trading partners to discourage any rise in disputes among members and to develop support and momentum for expanded negotiations.
The key elements in rebuilding this support will be achieving progress on the ongoing work of the WTO (including the implementation of existing agreements in an effective and somewhat flexible manner, and continued efforts to facilitate trade); addressing the concerns of developing countries through improved market access for least developed countries (LDCs) and expanded capacity building (including trade-related technical assistance and a re-invigorated Integrated Framework); and improvements to the WTO itself, in the form of improved transparency and agreement on revisions to the Dispute Settlement Understanding (DSU). Of particular importance will be achieving real progress on establishing the modalities for the Uruguay Round-mandated negotiations on agriculture and services, which are now underway.
Minister for International Trade Pierre Pettigrew is seeking the support of Canada's trading partners for his medium-term objective of strengthening the world trading system and global markets -- using trade liberalization and rule-making as a means to assist sustainable development and alleviate poverty. These efforts would be pursued in the context of improving governance, economic and social infrastructure and domestic policy coherence, as well as in the context of improved international policy and institutional coherence among economic, development and social organizations. One of the important elements of this work will be improving the management and decision-making structure of the WTO.
Improving Access for Trade in Goods
Information Technology Agreement
The WTO Information Technology Agreement (ITA), signed in December 1996 at the Singapore WTO Ministerial Conference, required participants to eliminate customs duties and other duties and charges on a wide range of IT products by 2000. Canada and 47 other countries -- which together produce over 93 percent of world trade in this sector -- have joined the ITA, mandating further efforts to expand the product coverage, a process known as "ITA II". In November 1998, the Chair of the ITA Committee proposed a new product list based on Members' proposals. The list covers a wide range of products, including: machinery and equipment for manufacturing printed circuit boards; some consumer electronics; selected radar and navigational aid equipment; and certain inputs for IT manufacturing. Canada has actively supported this initiative and will continue to support efforts to reach a consensus on expanding the product coverage.
The ITA also provides for the examination of non-tariff measures. The committee continues to work on standards and conformity assessment procedures, and Canada continues to promote the examination of import licensing policies and procedures.
Tariff Liberalization of Pharmaceutical Products
In 1999, Canada and the other members of the WTO Agreement to Eliminate Duties on Specified Pharmaceutical Products implemented the third tranche of tariff cuts associated with this agreement. This phase included 639 additional products, including inputs.
Agriculture
Global annual trade for agricultural products is in the order of US$500 billion. Canada strives to ensure that market access and other commitments negotiated during the Uruguay Round are fully implemented through our participation in the notification and consultation process of the WTO's Committee on Agriculture. This process will continue throughout 2000. Canada's long-term objective is to strengthen the rules-based multilateral trading system for agriculture and thereby increase the market orientation in agricultural trade. Common rules that apply to all countries are important to enhance Canada's access to world markets, not only for bulk agricultural commodities, but also for the consumer-oriented and intermediate products that now contribute, respectively, 39 percent and 26 percent of our agri-food exports.
Although the Third WTO Ministerial Conference in Seattle did not launch a broad-based round of multilateral trade negotiations, the existing Uruguay Round Agreement on Agriculture provided a mandate (so-called "Built-in Agenda") for WTO members to commence agricultural negotiations, which began in January 2000. In these negotiations, Canada continues to pursue the objectives in the initial negotiating position announced on August 19, 1999 by Minister Pettigrew and Agriculture and Agri-Food Minister Lyle Vanclief. The key features of this position are as follows:
-
the elimination of all export subsidies as quickly as possible;
-
maximum possible reductions in trade-distorting domestic supports and an overall cap on all forms of domestic support;
-
substantial improvements in market access for all agriculture and value-added agri-food products through tariff reductions and harmonization, tariff quota expansion and the elimination of in-quota tariffs;
-
maintenance of Canada's ability to continue orderly domestic marketing (e.g. Canadian Wheat Board, supply management);
-
securing new disciplines on export taxes and export restrictions; and
-
support the establishment of a WTO working party on biotechnology to determine the adequacy of existing rules and to secure improvements in SPS disciplines.
Canada's initial position was developed through an extensive consultation process with the provinces, the agri-food industry and civil society. As events unfold in Geneva, the Government looks forward to continuing this dialogue with Canadians.
Technical Barriers to Trade
Canada's objective is to ensure that standards-related measures, which are generally put in place to protect health and safety, the consumer or the environment, are science-based and do not unjustifiably discriminate against Canadian products. Such measures include mandatory technical regulations, voluntary standards and conformity-assessment procedures that determine whether a product meets the requirements of a particular regulation or standard.
|
Throughout the country chapters of this document, we will describe specific measures by individual countries that affect Canadian exports. We will also outline what the Canadian government is doing to address such measures.
|
The WTO Agreement on Technical Barriers to Trade (TBT) defines the international rights and obligations of Members with respect to the development and application of standards-related measures that affect trade. The agreement is based on the principle that countries have the right to adopt and apply mandatory standards-related measures (i.e. to regulate), as long as these do not restrict international trade more than is necessary. TBT-related disagreements are subject to WTO dispute settlement provisions.
Canada promotes wide acceptance of and adherence to the TBT Agreement and Code of Good Practice (which applies to voluntary standards), as demonstrated by the Standards Council of Canada's acceptance of the code. Canada also participates in the activities of the International Organization for Standardization (ISO). Canada was among the first countries to develop the necessary infrastructure for Canadian industries to adopt ISO 14000 environmental system standards, thus facilitating our exports by meeting the requirements of our foreign customers.
The issue of precaution (sometimes cited as the precautionary approach or the precautionary principle) to regulation is becoming an increasingly important issue in a large number of areas of interest to Canada, such as health and safety and the protection of the environment and fisheries. The concept of precaution can take different forms both domestically and internationally, based on the specific context, and for this reason, it has been open to misunderstanding and misuse. It has already been invoked in an attempt to justify trade-distorting measures, such as the beef hormones dispute with the EU, and in ways that undermine a science-based approach to regulation. Canada will work to ensure that there is a clear and coherent Canadian position on the definition and operation of the precautionary approach both at home and internationally. The precautionary approach should be based on agreed principles, including science-based risk assessment, and should not be susceptible to abuse or arbitrary decision-making.
Under the TBT Agreement, Canada will continue to facilitate access to markets by pressing for the removal of unnecessary regulatory-based trade barriers, thus lowering costs to producers and exporters. We will also work to improve transparency, promote regulatory reform, align or harmonize standards internationally and with trading partners and negotiate mutual recognition agreements (MRAs) on conformity assessment. Canada is an active participant in the ongoing work program of the WTO Committee on Technical Barriers to Trade and is preparing for the second TBT triennial review in 2000, which will provide Canada with an opportunity to work toward further implementation of the agreement internationally.
Sanitary and Phytosanitary Measures
The WTO Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures is designed to prevent the misuse of SPS measures as disguised restrictions on trade, while safeguarding a country's right to take measures needed to protect the health of human, animal or plant life (including forestry).
The SPS Agreement has been in force since 1995 and is working reasonably well in making the trading system more transparent, in identifying the misuse of SPS measures, and in promoting the use of science-based risk assessments when establishing new measures. The agreement has also provided a basis for resolving SPS-related trade disputes both formally and informally. Through participation in the WTO SPS Committee, the body responsible for the operation and implementation of the agreement, WTO Members have been able to raise and resolve concerns about measures being applied by other WTO Members. The agreement has also had some success in promoting the development and use of international standards.
One of the most significant benefits of the agreement has been increased transparency in international trade. Through the notification procedures in the agreement, Members are now more aware of measures that are being proposed by other Members and have the opportunity to comment at an early stage on the impact that the proposed measure could have on trade.
The SPS Committee was mandated to review the operation and implementation of the agreement three years after it came into force. It could then propose amendments to the text to the Council on Goods based on experience gained from implementation. The review began in March 1998, and a final report was agreed to at the March 1999 meeting of the committee. Although several problems were identified and discussed during the review, none were considered serious enough to warrant an amendment to the text.
Canada continued to be active in 1999 in using the WTO dispute settlement procedures to challenge unjustified SPS measures taken by our trading partners, most notably with respect to the EU's ban on Canadian beef meat produced from animals treated with growth-promoting hormones and Australia's ban on imports of Canadian fresh, chilled and frozen salmon.
Biotechnology (WTO)
As one of the global leaders in biotechnology research and development, Canada considers biotechnology as an issue of particular significance. Biotechnology, especially agricultural biotechnology and its products, is becoming a contentious issue in global trade, with possible implications for government, industry and consumers. It has engendered discussion in many international fora, such as Codex Alimentarius, Biosafety Protocol, the OECD, the FAO and the World Health Organization (WHO). Within these circles, the issue has re-focussed attention on safety and management of risk, but there is a corresponding trade dimension that must be addressed by the WTO.
In the WTO, Canada has submitted a formal proposal for the establishment of a working party on biotechnology. Canada is of the view that there is a need to engage in a broad, horizontal, fact-finding, time-limited, collective exercise aimed at establishing how WTO provisions apply to biotechnology. We would seek to determine whether the existing rules constitute a sufficient and effective framework and whether further elaborations and/or clarifications may be required. Canada will continue to pursue the establishment of a WTO working party on biotechnology as part of the regular work of the WTO Council.
Trade Remedies
Canada continues to regard the pursuit of improved disciplines, transparency and clarity in the use of trade-remedy measures by its trading partners as a priority. This is the basis of Canada's support for new multilateral negotiations in the area of anti-dumping and subsidies/countervail. The importance of this objective is evident as new and non-traditional users of trade remedies continue to initiate investigations. For instance, over the past two years, anti-dumping investigations by Indonesia and India on imports of Canadian newsprint were concluded without the application of additional duties, while an investigation by China on the same product resulted in the application of duties. Canada will continue to monitor and assist Canadian exporters involved in investigations of Canadian exports, analyse changes in the trade remedy laws and practices of Canada's most important trading partners and make representations as appropriate in specific investigations. Regarding the latter, the Canadian government was particularly active with respect to a U.S. countervail investigation on live cattle from Canada, two U.S. safeguard investigations involving steel products, the Chinese newsprint case and several U.S. reviews of anti-dumping and countervailing duty orders in place on imports from Canada.
Canada continues to contribute to the work of the WTO Committees on Subsidies, Anti-Dumping Practices, and Safeguards to ensure that all Members administer their trade remedy laws in a WTO-consistent manner. Canada continues to work in the context of the WTO Agreement on Subsidies and Countervailing Measures as well as the Committee on Agriculture to ensure appropriate implementation and possible expansion of the subsidy disciplines negotiated in the Uruguay Round.
Rules of Origin
The WTO Agreement on Rules of Origin established a work program to develop common rules of origin for several purposes involving non-preferential trade. Canada's objective is to achieve common rules that will provide greater transparency and certainty for traders; to prevent countries from using origin rules to impair market access; and to have rules that are technically proficient, reflecting the global nature of production and sourcing of goods and materials.
Although the work program was originally slated for completion in July 1998, it has been extended due to the technical complexity of agreeing on rules for all products. In June 1999, the results of the examination conducted to date by the Technical Committee on Rules of Origin was turned over to the WTO Committee on Rules of Origin for its review and eventual completion. Negotiations will continue throughout 2000, although a completion date has yet to be determined.
Trade Facilitation
In 1996, Trade Ministers directed the Council on Trade in Goods to undertake exploratory and analytical work, drawing on the work of other relevant international organizations, on the simplification of trade procedures in order to assess the scope for WTO rules in this area. In pursuing the work, WTO Members compiled a comprehensive inventory of the work accomplished or being undertaken on trade facilitation in other international organizations, including non-governmental organizations (NGOs).
In 1998, a WTO trade symposium was held to help identify the main areas where traders face obstacles when moving goods across borders. Private-sector traders at the symposium made it clear that the WTO should play a key role in this area, both in terms of ensuring the full implementation of existing obligations that facilitate trade (e.g. the Customs Valuation and Rules of Origin agreements) and expanding and developing rules aimed at simplifying and harmonizing border-related procedures. The objectives are to create greater efficiencies and cost-savings for both the trading public and governments and to promote investment.
Canada strongly supports this initiative and, during the exploratory and analytical discussions held during 1998-1999, made some specific and practical suggestions around which WTO trade-facilitation provisions might be developed. The Canadian suggestions have reflected the view that the WTO should work to add value and fill gaps in existing initiatives in other international organizations and should build on existing WTO provisions related to trade facilitation. The Canadian objective is to facilitate trade in a practical manner that is meaningful to traders, i.e. to build on existing WTO obligations to maximize transparency, expedite the release of goods and reduce, simplify, modernize and harmonize border-related requirements, procedures and formalities. Canada strongly supports the inclusion of trade facilitation in the next round of WTO negotiations.
Improving Access for Trade in Services
World trade in services in 1998 represented 19.5 percent of the total world trade. Services production is a core economic activity in virtually all countries and has grown significantly in recent years. In 1996, the services share in total value added to GDP ranged from almost 40 percent in LDCs, to more than 70 percent in highly developed countries such as Canada.
Closer to home, the Canadian services sector is extremely dynamic. In fact, it exhibited stronger growth than the rest of the economy over the 1990s. In 1999, for example, services represented two-thirds of total GDP, and our exports of services grew by 7.1 percent to $49.2 billion. In 1998, 10.6 million Canadians were employed in services-sector jobs, accounting for 74 percent of total employment. Over the past two decades, most of the new jobs created in Canada have been in the services sector. Out of the 4.5 million net gain in jobs since 1976, 4.2 million were in services-producing industries. The services sector is leading the transformation of the Canadian economy into a knowledge-based economy.
Canada is the 12th-largest exporter of services in the world. Given the importance of services exports to our economy, Canada has much to gain from negotiating further liberalization and expansion of international markets for services. The United States is our most important trading partner for services, as it is for goods. Our services exports are, however, less dependent on the U.S. market than is the case for our goods exports, and our fastest-growing export markets are elsewhere. Commercial services exports to Brazil, for example, grew by an average of 82 percent between 1992 and 1997; to Chile by 65 percent; and to China by 28 percent. The growing importance of these markets reinforces the benefits of a multilateral approach to liberalization of trade in services.
One of the ways in which this liberalization can be undertaken is via the upcoming negotiations of the WTO's General Agreement on Trade in Services (GATS). The GATS, which has been in effect since the WTO entered into force in 1995, represents the first multilateral, legally enforceable framework of rules governing this huge area of trade.
Under the GATS, this year WTO Members began further negotiations on trade in services, which are aimed at achieving progressively higher levels of liberalization. In preparation for the negotiations, WTO Members, and Canada in particular, have embarked on an exercise of consultation with the private sector and with stakeholders representing a wide range of interests, with a view to identifying negotiating interests and objectives.
As negotiations progress, the Government will continue to consult extensively with provincial governments, Canadian industry and other stakeholders to ensure that Canada's negotiation positions reflect the interests of all Canadians. As a significant exporter of services, Canada will pursue multilateral, legally-enforceable rules that will allow increased access to foreign markets for Canadian services firms. Issues for consideration include sectors of export interest to Canadian industry; markets of interest to Canadian industry; current or potential barriers faced by Canadian industry in providing services to foreign markets or consumers; improving access to countries that are key export destinations for Canadian services; and providing Canadians with access to quality services at a competitive price. In addition, Canada will work collectively with other WTO members to improve the agreement's transparency and clarity in order to make it more user-friendly.
In the negotiations, Canada will push for greater market access for services suppliers in sectors of expansionary interest (professional, business, financial, telecommunications, computer, environmental and transportation services). At the same time, however, there are certain domestic services sectors in which our interest in undertaking further liberalization may be limited. The Canadian government intends to continue to uphold its clearly defined and long-established objectives to safeguard Canada's freedom of action in key services sectors, including health, education and culture.
Financial Services
Financial services are involved in every domestic or international trade operation. For that reason, Canadian financial institutions (FIs) play a central role in supporting the activities of Canadian exporters of goods and services. Moreover, beyond their intermediary role, Canadian FIs are themselves exporters of services. In 1999, their exports totalled over $5 billion.
Key market access priorities are the United States, Mexico, Asia (notably China) and Latin America. In that respect, the completion of China's accession to the WTO will provide Canadian financial institutions with new opportunities. In addition, in the context of the current GATS negotiations, Canada is looking to build on the results of the GATS Agreement on Financial Services, which was concluded in 1997 and entered into force on March 1, 1999.
Basic Telecommunications Services
The GATS Agreement on Basic Telecommunications (ABT) was concluded in February 1997, with the participation of countries accounting for over 90 percent of worldwide telecommunication revenues, and came into effect on February 5, 1998. It consists of the participants' specific commitments regarding market access, national treatment and the application of pro-competitive regulatory principles. To date, Canada has implemented all of its commitments on or ahead of schedule, and the last Canadian telecommunications monopoly, the Telesat monopoly on fixed satellites, ended on schedule on March 1, 2000. The ABT does not cover broadcasting services. The commitments made by participating countries will be implemented over the next decade. Canada will closely monitor implementation of the agreement by its trading partners to ensure Canadian industry can take advantage of access to new markets.
Professional Services
In recent years, Canadian professional services providers (which include engineers, accountants, architects and foreign legal consultants) have increasingly exported their expertise abroad. As an illustration, Canadian engineering consulting firms ranked fourth in total international billings after the United States, the United Kingdom and the Netherlands. Canadian law firms are well placed to take advantage of business opportunities worldwide, as Canada functions within the two main law regimes: common law and civil law. Canadian accountancy firms are increasingly moving to develop international alliances in addition to the national or interprovincial affiliations that some have established. Our architectural firms have undertaken projects in areas in which they are recognized world experts (school buildings, airports, Arctic design and construction technology and office complexes) and are particularly active in the Asia-Pacific region.
Canadian professional services benefited greatly from the commitments that Canada obtained from other countries in the GATS. The upcoming GATS negotiations will be an excellent vehicle to promote greater market access for our professional services; this could be achieved through securing improved commitments from our WTO partners and through strengthening the existing GATS disciplines on domestic regulations (i.e. qualification requirements and procedures, technical standards and licensing requirements) to ensure that they are based on objective and transparent criteria. In this regard, the WTO established a Working Party of Domestic Regulations in April 1999, with a mandate to develop general disciplines for professional services (and, potentially, other services), building on the work done since 1995 by the Working Party on Professional Services.
Another tool to enhance the potential for Canadian exports of professional services is the facilitation of MRA negotiations between Canadian and foreign professional bodies. As an example, 1999 marked the successful conclusion of an important MRA between the Canadian Council of Professional Engineers and the equivalent organization from France. The Government will continue to promote and support the negotiation of such agreements.
Issues that Affect Access for Trade in Goods and Services
Government Procurement
To take advantage of the significant potential for international trade represented by the hundreds of billions of dollars spent annually on government procurement worldwide, Canada has pursued market access in a number of fora. Increased sectoral coverage and a reduction of discriminatory barriers in the United States and other key markets would create significant opportunities for Canadian exporters. To increase opportunities, Canada supports a range of activities to broaden and strengthen government-procurement disciplines and to ensure effective implementation of existing disciplines.
Canada, along with 25 other countries, is party to the WTO Agreement on Government Procurement (AGP), which provides the basis for guaranteed access for Canadian suppliers to the markets of the United States, the European Union, Japan and other key markets. The North American Free Trade Agreement (NAFTA) provides further access for Canadian exporters to U.S. and Mexican government procurement.
Canada continues to pursue greater and more secure market access through the AGP. The review of the AGP, with its mandate to expand coverage, eliminate discriminatory provisions and simplify the agreement remains a priority. Work is continuing with input from provinces and other stakeholders to establish Canada's priorities for further market opening. In 1999, Canada and other APEC countries finalized non-binding procurement principles. We continue to work with our EU and EFTA counterparts to make progress in removing barriers to selling to governments worldwide and are taking an active role in the FTAA government-procurement negotiations.
Electronic Commerce
The use of e-commerce may be one of the most important factors in the expansion of trade flows in the 21st Century. Both the WTO and the FTAA have been conducting work programs to examine the trade-related aspects of e-commerce. The WTO work program has provided some useful clarification of the manner in which the WTO agreements apply to e-commerce transactions. However, additional work remains in this regard. The FTAA Joint Government-Private Sector Committee of Experts on Electronic Commerce has brought together government and private-sector representatives of countries at many different levels of development with respect to e-commerce. As work progresses within these and other fora, such as the World Intellectual Property Organization (WIPO), the Government will consult with Canadians on the development of a trade policy to facilitate global e-commerce. Canada is particularly interested in identifying and resolving issues requiring action at the governmental and international levels.
Dispute Settlement
The WTO dispute settlement mechanism serves Canada's overall trade interests by contributing to clear trading rules for all Members and by assuring global market access for Canadian goods and services. The Dispute Settlement Understanding (DSU) is an agreement among WTO Members that sets out how disputes are to be resolved. It is rightly viewed as a cornerstone of the WTO because it sets out a fair, effective and credible dispute settlement system that is accessible to all Members. The DSU contains more detailed procedures and timetables than the previous procedure under the General Agreement on Tarriffs and Trade (GATT). Another important difference from the GATT procedure is that the country losing a dispute cannot block the adoption of the decision. The Dispute Settlement Body (DSB), which comprises the General Council with a different chairperson, is responsible for administering the DSU.
With rules for the automatic establishment of panels and for the adoption of panel reports, and with the creation of an independent Appellate Body, the DSU reinforces the rule of law and thereby strengthens the rules-based multilateral trading system. Members' confidence in the system continues to grow, as evidenced by the number of cases brought forward (over 180 to date) and by the proportion of these being settled at the consultation stage (about one in four).
Canada will continue to use the WTO dispute settlement mechanism wherever necessary to ensure that our exporters do not face barriers inconsistent with WTO agreements. Canada has been one of the most active users of the WTO dispute settlement system. Since 1995, we have been a complainant in six cases under the DSU and have joined other Members' consultations or intervened in panel proceedings in over 30 other cases.
Recently, Canada has used the WTO dispute settlement mechanism to advance Canadian interests in the fishing, mining and aerospace sectors. On November 6, 1998, the DSB adopted panel and Appellate Body reports confirming that Australia's ban on the importation of fresh, chilled or frozen salmon from Canada was inconsistent with Australia's WTO obligations. Specifically, the reports found that the ban, in place since 1975, was not based on a risk assessment and that Australia had adopted arbitrary or unjustifiable distinctions in its levels of sanitary protection resulting in discrimination or a disguised restriction on international trade. Canada challenged the new fish import policies announced by Australia on July 19, 1999, on the grounds that they were too trade-restrictive and did not comply with Australia's WTO obligations. On January 31, 2000, a WTO panel confirmed this position, and Canada is now awaiting an arbitration decision over the amount of retaliation it can take against Australia. Canada is also challenging France's prohibition of the manufacture, processing, sale and importation of asbestos and asbestos-containing products.
Canada and the United States challenged an EU ban on the importation of beef produced with growth-promoting hormones. A WTO dispute settlement panel and the Appellate Body both found that the EU ban violated the Agreement on the Application of Sanitary and Phytosanitary Measures as it was not based on a risk assessment. The EU failed to comply with the rulings by the May 13, 1999 deadline, and as a result, Canada imposed retaliatory tariffs on certain imports from the EU in the amount of $11.3 million annually.
Canada challenged the Brazilian export subsidy PROEX under the WTO Subsidies and Countervailing Measures Agreement. PROEX, under its "interest equalization" component, provides for the payment of subsidies to reduce financing costs for Brazilian exports. Canada's complaint related to the application of PROEX in the aircraft sector. Brazil, in return, challenged a number of Canadian programs that support various Canadian industries, including the aerospace industry. On August 20, 1999, the DSB adopted panel and Appellate Body reports for both complaints. With respect to Canada's challenge on export subsidies granted under PROEX, the DSB found that Brazil's measures were inconsistent with its obligations under the Subsidies and Countervailing Agreement. The reports also found that some of Canada's measures were inconsistent with certain provisions of the same agreement; however Brazil's claim that assistance from the Export Development Corporation (EDC) to the Canadian regional aircraft industry constituted export subsidies was rejected. On December 9, 1999, the DSB established two panels to examine the WTO consistency of the measures adopted by Brazil and Canada to implement the rulings of the DSB. At press time, the decisions of these panels were expected in mid-March or early April.
Two complaints against Canada, one by the United States and the other by New Zealand, were recently decided by the same panel. The U.S. complaint dealt with subsidies allegedly granted by Canada on dairy products and with Canada's administration of the tariff rate quota on milk. New Zealand complained about an alleged dairy export subsidy regime. The DSB found that the measures complained against were inconsistent with some of Canada's WTO obligations. However, the Appellate Body did uphold the conditions Canada attached in its schedule to its tariff rate quota. Canada is taking steps to implement the DSB recommendations by December 31, 2000.
A WTO panel examining complaints by Japan and the EU has found that Canada's measures taken in the implementation of the Auto Pact are inconsistent with its WTO obligations. The Government has appealed aspects of the panel's report on the basis that the panel made legal errors and took an overly broad view of key WTO obligations. The WTO Appellate Body is expected to provide its report by May 2000.
A panel has also been established to examine a EU complaint about an alleged lack of protection of inventions by Canada in the area of pharmaceuticals.
Canada actively follows the development of trade disputes involving other WTO Members and joins in whenever our trade interest or system interest in the WTO warrant our intervention. Canada reserves third-party rights to present arguments to panels and the Appellate Body, such as in a complaint against the United States concerning measures affecting the importation of fresh, chilled and frozen lamb from New Zealand. Canada's interest in this dispute is to ensure the WTO-consistency of NAFTA Article 802 dealing with exclusion from safeguard actions. In 1999, Canada participated as a third party in WTO panels on the U.S. Foreign Sales Corporation and Section 301 of the U.S. Trade Act (1974).
With a view to further strengthening this cornerstone of the multilateral trading system, Canada was actively engaged in a review of the DSU and proposed refinements in the following areas: enhancing transparency in the system; improving mechanisms for implementing DSB recommendations and rulings; reducing scope for unilateral action by any Member; and ensuring the dispute settlement system is accessible to all Members. The review process resulted in a package of proposed amendments to the DSU, which was presented to ministers at the Third WTO Ministerial Conference in Seattle. Although the conference was suspended, it is hoped that the package of amendments will soon be adopted by WTO Members.
Accessions to the World Trade Organization
In 1999, accession negotiations were concluded between WTO Members and three countries -- Latvia, Estonia and Jordan -- bringing the WTO membership to 136. Georgia is expected to join soon, while approximately 30 additional countries and customs territories are in various stages of the accession process, including Algeria, China, Chinese Taipei, Croatia, Lithuania, Russia, Saudi Arabia, Ukraine and Vietnam. China has been brought closer to WTO membership with the conclusion in November 1999 of bilateral market access agreements with the United States and Canada, although much work remains to be done at the multilateral level (e.g. on the application of agricultural trade rules).
As in previous years, Canada will continue to take an active role in accession negotiations. Canada supports the expansion of WTO membership for two reasons:
-
to secure more open, non-discriminatory and predictable access for Canadian exports of goods and services to these markets; and
-
to achieve transparent, rules-based trade regimes in additional markets, thus contributing more broadly to economic stability, peace and prosperity.
The negotiations take place on two parallel tracks: multilateral and bilateral. For each accession, a WTO working party of interested Members examines the applicant's trade regime and identifies the reforms required to achieve conformity with WTO rules. By participating in working party deliberations, Canada satisfies itself that the accession will bring about more predictable, less discretionary trading conditions in the applicant's market.
In bilateral market access negotiations, Canada aims to achieve better access in targeted goods and services sectors. Canada focuses on the reduction or elimination of tariffs and non-tariff barriers, and on obtaining commitments in the four modes of services trade: cross-border supply of services; consumption abroad; commercial presence; and the movement of persons. Accession negotiations offer a unique opportunity to resolve Canadian market access problems in the applicants' markets.
To Report a Trade and Investment Barrier
Click Here
|
