WORLD TRADE WT/MIN(98)/ST/73
18May1998
ORGANIZATION(98-2051)
Original: English/
MINISTERIAL CONFERENCE French
Second Session
Geneva, 18and20May1998
CANADA
Statement Circulated bytheHonourable Sergio Marchi,
Minister forInternational Trade
I. THE IMPORTANCE OFTRADE AND INVESTMENT TOCANADA
Canada 'seconomic prosperity depends heavily onanactive andoutward-looking tradestrategy.
Canada isthemosttrade-dependent major economy intheworld. Forty percentofCanada 's
GDP(gross domestic product) depends ontrade. OnejobinthreeintheCanadian economy isdirectly
tiedtoourexports.Internationaltradefuelsoureconomicprosperity.Between1992and1996,Canadian
exports grew roughly fourtimes asfastasourGDP. Ingood measure because ofourstrong trade
performance inthisperiod, theCanadian economy created almost 1million newjobsasourtotallabour
force grew from 14.5million to15.4million Canadians.
ForeigninvestmentalsoplaysakeyroleinCanada.Every$1billioninforeigndirectinvestment
creates some 45,000 jobs, sothetotalof$188 billion thatforeigners haveinvested inCanada means
abrighter future forallCanadians. Similarly, theprofits, technologies andjobsthatcome toCanada
fromourinvestmentsabroad,whichtotalled$194billionin1997,underlinetheimportanceofdeveloping
rules thatpromote andprotect foreign investments.
Itisnowonder that,fromthebeginning, Canada hasputthehighest priority onaninternational
economic andtrade system thatisbased notonpower butontheruleoflawsetoutinanetwork of
rights andobligations.
II. TRADE, INVESTMENT AND THE MULTILATERAL SYSTEM
Thenetwork ofrights andobligations thatform themultilateral trading system hasbrought
unprecedented global prosperity through liberalized trade andinvestment.
Canada wasactive inthenegotiations thatledtothefounding oftheGeneral Agreement on
Tariffs andTrade (GATT); Canada wasoneofthefounding members oftheGATT; aCanadian,
Dana Wilgress, served asthefirstChair oftheCONTRACTING PARTIES in1948, andanother
Canadian, JakeWarren, wasthefirstChair oftheGATT Council, in1960. Thisengagement in,and
commitment to,themultilateral trading system hasnever wavered, andthereasons areclear.
Global trade ingoods nowtotals astaggering $5.2trillion peryear. Intheperiod from1950
to1994, world merchandise trade grew bymore than6percentayear, while theannual growth in
world output waslessthan4percent. Over theyears, national economies havebecome much more
dependent oninternational trade. When theGATT wasnegotiated, notmore than7percentofglobalWT/MIN(98)/ST/73
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economic activity wasbased ontrade. Today, thatfigure averages 22percentandishigher fora
number ofcountries.
Thistripling oftheroleoftradeillustrates twofacts: nations arebecoming moreinterdependent
intheireconomic relations, andourwork isnotfinished. There isstillroom forgrowth.
TheGATT andtheWorld Trade Organization (WTO) provide aninvaluable network ofrules
inkeyareassuchastradeingoods, services, agriculture, intellectual property, government procurement
and(most recently) telecommunications andfinancial services. Theprosperity thatthishasbrought
toourpeoples underpins oureconomic development andmakes asubstantial contribution toglobal
peace andsecurity. Thisisoneofthemajor achievements wearecelebrating thisweek ontheoccasion
ofthe50thAnniversary oftheGATT. Theglobal community needs toappreciate andhearmore about
thisunique contribution made bytheGATT andthemultilateral trading system. Canada firmly believes
thatthisnetwork oftransparent, predictable andenforceable rulesshould continue tobeexpanded for
themutual benefit ofallWTO Member countries.
III. REGIONALISM AND MULTILATERALISM: COMPLEMENTARY, NOTCOMPETING
Regional andbilateral free-trade arrangements strengthen themultilateral system by
demonstrating newavenues forliberalization andbydefining forourcitizens therole,purpose
andbenefits oftheWTO.
Canada hasbuiltonthelessons ofthemultilateral trading system indeveloping bilateral and
regional trade agreements.
TheCanada-United States FreeTrade Agreement (FTA) andtheNorth American FreeTrade
Agreement (NAFTA) haveshown howtrade liberalization canstimulate economic growth andcreate
employment. Since theFTAcame intoeffect tenyears ago,tradebetween Canada andtheUnited States
hasmore thandoubled toover$1billion every single day.
Canada willactively participate onthefullrange ofissues within theWTO, butwearenot
standing stillonother fronts. Wehavenegotiated free-trade agreements withIsrael andChile. We
areanactive member ofAPEC (theAsia-Pacific Economic Cooperation forum), thepremier trade
andeconomic cooperation forum intheAsiaPacific region. Prime Minister Chrétien and33other
leaders fromthehemisphere haveformally launched negotiations foraFreeTrade AreaoftheAmericas
(FTAA), duetocome intoeffect in2005. Canada hasthehonour ofchairing theTrade Negotiating
Committee forthenext18months andhosting thenextmeeting ofFTAA Trade Ministers inCanada
in1999, aswellasthenextLeaders 'Summit. Canada isengaged inexploratory discussions onthe
scopeofapossiblefree-tradeagreementwithEFTA(theEuropeanFreeTradeAssociation).Wecontinue
toexplore alloptions toenhance transatlantic trade liberalization withtheEuropean Union.
Canada iscertainly notalone inthisexpansion andexploration ofnewtrade arrangements.
Onlyahandful ofcountries intheworld nowdonothavesome sortofpreferential trading arrangement
aspartoftheiroverall trade structure. Animportant challenge fortheWTO istoconsider howto
integrate these regional processes intoglobal rules forthebenefit ofallMembers.
TheCanadian experience isthatbilateral andregional tradeagreements, properly constructed
withduerespect toWTO obligations, cancomplement andassist theWTO. They challenge the
multilateral system bydemonstrating newavenues andnewambitions fortheliberalization oftrade
andinvestment. Countries cansometimes achieve inasmaller grouping what theyarenotready to
negotiate multilaterally, buthaving doneso,theysetnewstandards forthemultilateral system.WT/MIN(98)/ST/73
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Theimpact ofbilateral andregional agreements canbemore immediate andmore measurable
thanistheeffect ofbroad multilateral rules. When theimpact isaspositive asithasbeenforthe
Canada –United States FTAandtheNAFTA, there isacleardemonstration effect oftheroleoftrade
ineconomic well-being, andhence abaseonwhich tobuild broader support forgeneral trade
liberalization.
IV. THE WTO: ENGAGEMENT AND TRANSPARENCY
TheWTO isaddressing anewandmore challenging trade agenda thatdemands much greater
engagementandcommunicationatnationallevels,andnewlevelsoftransparencyinternationally.
In1948, theGATT waslaunched with19founding members. Now themultilateral trading
system isaglobal undertaking of132countries, withabout 30countries atvarious stages ofnegotiating
accession totheWTO.
Thetrade policy agenda hasnotstood still.Thenewagenda goesbeyond traditional border
measures, tariffs andquotas. Itpresents considerable challenges, nottheleastintheneedforgreater
transparency inshaping andconducting negotiations, andintheday-to-day work oftheWTO.
Themostrecent meeting ofQuadrilateral Ministers encouraged theDirector-General toexplore
means within theWTO toenhance consultations withrepresentatives ofcivilsociety. Forthistobe
successful, Members mustbeopentoexploring newavenues. Onepossibility worth considering might
beintheFTAA negotiations, where acommittee hasbeenstruck toreceive inputs andpresent arange
ofviews toMinisters frombusiness andother sectors ofcivilsociety, suchaslabour, environmental
andacademic groups working withgovernment representatives. Ifwecanbeambitious andinnovative
inoneforum, whynotinothers?
TheWTO hassome distance togoinpromoting greater transparency andridding itselfofthe
image ofaclosed andsecretive shop. Given theimportance ofinternational trade toglobal prosperity
andthekeyroleplayed bymultilateral rulesingoverning trade, theneedfortransparency attheWTO
isallthemore acute. Members should beabletoagree quickly onanumber ofmeasures thatwould
showourcommitmentandwillingnesstoopentheprocess.Wecould,forinstance,undertaketocirculate
more documents asunrestricted; wecould release apublic version ofpanel submissions forinclusion
ontheWTO Website attheappropriate time; wecould issueproposed agendas formeetings aspublic
documents; andweshould beabletoagree onafaster derestriction oftheminutes ofmeetings -namely,
afteronemonth instead ofsix.
Thewhole areaofdispute settlement isonethatneeds reconsideration interms ofincreased
transparency. Weshould agree thatthiswillbeakeyelement inreview ofthedispute settlement
understanding, tobecarried outlaterthisyear.
Improved transparency andopenness attheinternational levelmustbematched bydomestic
engagementandcommunication.Thereissomeapprehensiongloballyaboutthepaceofeconomicchange,
asenseofpowerlessnessinthefaceofglobalmovementsandcorporateamalgamations,andaquestioning
ofthevalue oftradeliberalization, particularly itseffects ontheenvironment andwider social issues.
Inlightoftheseconcerns, governments mustengage inopenandwell-informed public debates
ontrade andinvestment liberalization. They mustdefine thepositives, forwhich goodstarting points
aretheOrganization forEconomic Co-operation andDevelopment (OECD) Study ontheBenefits of
Trade andInvestment Liberalization, andtheWTO Annual Report. They must alsoensure thatthe
gains fromliberalization areaswidely shared aspossible, andthatpolicies areinplace tohelpthose
most affected byadjustment.WT/MIN(98)/ST/73
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V. DEFINING THE WAY AHEAD
There isconsiderable work under waynowintheWTO, preparing formandated negotiations
andbuilding ondecisions taken attheSingapore Ministerial Meeting. Thenewchallenge is
toreview these andother possibilities forliberalization inclose consultation withdomestic
interests, inorder todevelop options andrecommendations forthe1999Ministerial Meeting.
Thecoreofcurrent work intheWTO iscompleting thebuilt-in agenda thatweagreed toin
Marrakesh, andcontinuing todevelop thework programme agreed toinSingapore. Canada remains
firmly committed totheview thatfullimplementation oftheUruguay Round agreements iskeyto
thewayforward. Butjustasthemodern world ofcommerce doesnotstand still,neither doesthework
oftheWTO itself.
What shape willfuture work take? Clearly, theworld ismoving inthedirection ofcontinued
tradeliberalization. However, many questions remain astohowwemight bestbalance different ideas
onthescope, timing andshape offuture negotiations totakeintoaccount individual countries 'concerns
andaspirations.
Some havecalled forthelaunch ofacomprehensive newround ofmultilateral negotiations,
covering afullarray ofnewissues andunfinished business fromprevious talks. Others wishtotackle
sectors onanindividual, case-by-case basis.
Between these twoextremes, Canada believes thatconsideration should begiven toacluster
approach thatwould group issues together fornegotiation asdistinct packages andatdifferent times.
Thiswould offer abalance ofincentives toencourage different countries tomove forward, while
providing anearly harvest insome sectors andavoiding theintimidation ofafull-blown round that
would likely takeyears tonegotiate. Talks would notbeheldhostage tothemostdifficult andtherefore
slowest issue ofnegotiation. Countries would alsohave timetoconsolidate gains from previous
negotiations.
Inaddition, questions havebeenraised regarding thesubstance ofpotential future negotiations.
Wewillneedtoaddress these issues through extensive consultations attwoequally important levels:
internationally, between WTO Members; anddomestically, between individual governments andtheir
publics. These questions include thefollowing:
- How canweensure thatWTO disciplines areconducive tostrengthening electronic
commerce? ThisfallinOttawa, Canada willhostamajor international conference at
theministerial levelonglobal electronic commerce;
- Within theglobal trading system, whatcanwedotodevelop amore certain andsecure
framework forpromoting andprotecting cultural industries?
- Howcanweguard against erosion ofrights toregulate forreasons ofpublic health,
consumer safety, social policy andother public interests?
- Inthesaleofgoods andservices abroad, whatstepscanwetaketoreduce impediments
caused bythearbitrary application ofstandards andregulations? Howcanweensure
thatthesestandardsandregulationsaresetatappropriatelyhighlevels,appliedequitably
andbased onscience?
- Howdoweapproach thepotential further reduction orelimination ofcustoms tariffs
onindustrial goods tobenefit ourindustries andconsumers?WT/MIN(98)/ST/73
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- Howcanwefacilitate andimprove trade through more efficient customs procedures
andborder measures?
- Howshould wedealwiththeunjustified useofanti-dumping andother trade remedy
measures?
- Inwhatways canwepromote better rules forservice providers?
- HowcanwebuildonWTOworktoaddressissuesaffectinginvestmentandcompetition?
Asmentioned earlier, inconsidering alloptions, wemustcontinue toengage civilsociety to
carefully define ourlong-term objectives. Ouractions mustbegoverned byopenness andflexibility,
notbyrigid ideologies orinstitutions. Wemust increase thetransparency oftheWTO andbuild
broad-based constituencies withathorough understanding andconfidence inthemultilateral trading
system. Wealsocannot proceed without respecting andengaging theinterests ofallWTO Members.
Inparticular, wemustrecognize thespecial concerns oftheless-developed orleast-developed Members.
Allthiswillbevitaltoensuring thattrade andinvestment liberalization meets thekeyneeds
andinterests ofallourpeoples. Only thencantrade liberalization -andtheprosperity itbrings -be
sustainable forourlong-term, mutual benefit.
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