International Trade Negotiations & Agreements
The
World Trade Organization ( or WTO) is the international
organization that maintains the basic rules of global trade in
goods and services negotiated and agreed by its member
governments. Currently the WTO has 149 member governments,
including Canada. Viet Nam is set to become the WTO’s 150th
member.
The WTO was established in 1995. It is the successor of the
General Agreement on Tariffs and Trade (or GATT) established in
1947 following the breakdown of the world trading system in the
1930s and World War II.
Signatories to the GATT held seven “Rounds” of trade
negotiations after 1947 to further liberalize trade. The
Uruguay Round that ran from 1986 to 1994 included agreement to
establish the WTO. The General Agreement on Tariffs and Trade
is now simply one of many trade Agreements (referred to as
GATT-1994) administered by the WTO.
Apart from the creation of the World Trade Organization
itself, arguably the most significant achievement of the
1986-1994 Uruguay Round was the
Agreement on Agriculture. It brought agriculture clearly
within the disciplines of the multilateral trading system for
the first time.
Prior to the establishment of the WTO and the Agreement on
Agriculture, international trade rules were largely ineffective
with respect to agriculture. A number of loopholes and
exceptions for agricultural products were able to develop under
the old General Agreement on Tariffs and Trade that, in effect,
exempted agriculture from the multilateral rules that typically
apply to trade in all other goods.
A consequence of this failure was a distorted world market
for agriculture and food products. Many countries maintained
high support levels, leading to overproduction and stock
accumulation. The aggressive use of export subsidies to dispose
of these surplus stocks contributed to weaken world market
prices. Market access barriers restricted the size of world
markets, and further interfered with the adjustment of supply
and demand. This made it difficult even for efficient producers
in low subsidy countries to compete in export markets or their
own domestic markets.
The combination of these factors, together with the
escalating budgetary burden of agricultural subsidies in key
developed countries, made agricultural trade reform an
increasing priority. By the 1980s, there was consensus on the
necessity of reform.
The WTO Agreement on Agriculture rests on three pillars.
These are its rules on:
Another
important breakthrough in the Uruguay Round for the agriculture
and food sector was negotiation of the
Agreement on the Application of Sanitary and Phytosanitary
Measures, otherwise known as the SPS Agreement. As
traditional tariff barriers are reduced, non-tariff or technical
barriers to trade become a greater concern -- both for exporters
and for the protection of human, animal and plant health and
safety and the environment. As its preamble makes clear, the
WTO SPS Agreement aims to strike the sometimes delicate balance
between the right and responsibility of each government to set
the appropriate level of health and safety protection within its
jurisdiction, while ensuring that measures taken are not, in
reality, to disguise restrictions on trade competition (more
information).
Canada has
used the SPS Agreement to take forward complaints and
successfully obtain WTO rulings on trade concerns of importance
to British Columbia's agriculture, aquaculture and food sector.
These include:
-
Australia’s restrictions on imports of fresh and frozen
salmon (market access opened);
-
European
Union restrictions on imports of
beef (trade retaliation authorized and implemented for
non-compliance);
-
European Union and member state
restrictions on imports of canola and corn that are products
of
biotechnology
(in progress).
The World
Trade Organization (WTO)
Agreement on Agriculture contains a provision that required the
initiation of new negotiations by the end of 1999 to continue
the agricultural trade reform process with a view to making
further "substantial progressive reductions in support and
protection."
These negotiations were launched in Geneva, Switzerland in
February 2000.
In November 2001 the WTO’s
Fourth Ministerial Conference was held in Doha, Qatar. At
that Conference, Ministers representing its member countries
agreed to launch a new comprehensive round of multilateral trade
negotiations in many areas involving trade in all goods and
services. This is referred to as the Doha Development Agenda.
The Ministerial Declaration launching the negotiations
incorporated the already ongoing agriculture trade negotiations
into these broader negotiations. It gave them a clearer mandate
and deadlines. In particular, the agriculture negotiations were
directed to aim for:
-
substantial improvements in agricultural
market access;
-
the
reduction, with a view to phasing out, of all forms of
agricultural export subsidies; and
-
substantial reductions in trade-distorting
domestic support.
The Ministerial Declaration also launched negotiations in
other areas that are important to British Columbia's
agriculture, aquaculture and food sector. These include:
-
negotiations to clarify and improve rules on the application
of anti-dumping measures and on subsidies and countervailing
duties (more
information)
-
market
access negotiations for non-agricultural products (more
information), which includes aquaculture and seafood
products
-
negotiations on new rules that specifically single out
fishery subsidies for attention.
An agreement on methods and targets for each member country
to undertake improvements in agriculture market access,
phase-out export subsidies and reduce trade-distorting support –
so-called “agriculture modalities” -- was originally targeted
for March 2003. Negotiations in all areas of the Doha
Development Agenda were mandated to be completed by January 1,
2005.
Agreement on agricultural modalities has proven difficult to
reach and become the lynch-pin of the entire Doha Round of
negotiations.
Considerable progress has been made including a
“Framework Agreement” on modalities in July 2004. Agreement
to eliminate all export subsidies by 2013 was reached at the
Sixth WTO Ministerial Conference in Hong Kong in December
2005. However, successive deadlines for full agreement have
continued to be pushed back and missed.
Following the most recent failure to reach agreement, in
June 2006 in Geneva, on July 24, 2006, the WTO’s Director
General recommended that the negotiations be “suspended” in all
areas to give WTO members time to reflect: “Time out to review
the situation, time out to examine available options and time
out to review positions.”
Negotiations have yet to formally resume.
All of the papers tabled to date in the negotiating sessions,
including agreements and draft texts to date; the chair's
reports on each negotiation session; proposals by World Trade
Organization member governments: and background technical papers
prepared by the World Trade Organization Secretariat, are
available on the
World Trade Organization's website for the agriculture
negotiations.
In July 1996, Canada's federal and provincial Ministers
responsible for agriculture and food agreed on a process,
including an industry consultation process, to develop Canada's
initial negotiating position for the World Trade Organization
negotiations to begin in 1999. This culminated in a major
federal/provincial/industry conference, called "Toward a
Canadian Agri-Trade Position: Dialogue with Canadian Industry"
held in Ottawa in April 1999.
The results of the conference were discussed at the July 1999
Annual Conference of Federal, Provincial and Territorial
Ministers of Agriculture and Food. In August 1999 the Federal
Government announced Canada's initial
negotiating objectives for the World Trade Organization
negotiations on agriculture. Canada's key objectives are to
achieve significant further trade reforms in the core areas of
market access, domestic support and export competition.
Agriculture and Agri-Food Canada’s status reports on Canada’s
negotiating objectives can be found
here.
British Columbia's agriculture, aquaculture and food
industries have both export and domestic market interests at
stake in the World Trade Organization negotiations.
British Columbia puts particular emphasis on achieving
improved market access and a level competitive playing field for
our producers and processors.
To enable broad-based policy advice and industry input on the
opportunities and challenges for British Columbia posed by the
World Trade Organization agriculture negotiations -- and other
international and interprovincial agri-food trade negotiations
and trade issues -- two main steps have been taken.
In April 2002, a
British Columbia Agri-food Trade Council was established.
The Trade Council is a group of 22 British Columbia agri-food
sector leaders appointed to reflect the full depth and breadth
of the provincial agriculture and food sector. It is configured
to reflect producers in all major commodity sectors; primary
processors and value-added processors - as well as all British
Columbia regions.
In February 2006, as WTO agriculture negotiations
intensified, the Minister of Agriculture and Lands established a
WTO Advisory Group,
drawn from the Trade Council, to meet more frequently to put the
province in position to respond quickly and effectively to
developments in the final stages of the agriculture
negotiations.
