Note: Advance written questions by WTO Memb ers and the replies provided by Canada are 
reproduced in document WT/TPR/M/179/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.  WORLD TRADE  
ORGANIZATION  WT/TPR/M/179/Rev.1 
29 June 2007 
 (07-2754) 
Trade Policy Review Body 
21 and 23 March 2007  
 
  
TRADE POLICY REVIEW 
 
CANADA 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Vesa Himanen (Finland) 
Revision  
 
    Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
 II. OPENING STATEMENT BY THE REPRESENTATIVE OF CANADA 4 
 
III. STATEMENT BY THE DISCUSSANT 7 
 
IV. STATEMENTS BY MEMBERS 9  
V. REPLIES BY THE REPRESENTATIVE OF CANADA AND 
 ADDITIONAL COMMENTS 20  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 27 
  WT/TPR/M/179/Rev.1 
Page 3 
 
 
 I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The eighth Trade Policy Review of Canada  was held on 21 and 23 March 2007.  The 
Chairperson H.E. Mr. Vesa Himanen (Finland), we lcomed the delegation of Canada, headed by 
H.E. Mr. Gerry Salembier Director General of Mu ltilateral Trade Policy from the Department Foreign 
Affairs and International Trade, Canada;  H.E. Mr. Don Stephenson, Permanent Representative of 
Canada to the WTO, and the discussant H.E. Mr. Mario Matus (Chile).  As usual, the discussant 
would speak in his personal capacity and, in accordance with established procedures, had made 
available in advance a broad outline of th e themes he intended to raise (WT/TPR/D/155). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The Report by  Canada was contained in document WT/TPR/G/179 
and that of the Secretariat in document WT/TPR/S /179.  As indicated in document WT/TPR/6/Rev.1, 
the Member under review should provide written answers,  by the beginning of the review meeting, to 
questions submitted at least two weeks before the m eeting.  Questions posed subsequently should be 
answered, to the extent possible, be fore the start of the second session of the meeting.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  Questions by the following dele gations had been submitted in writing at least two 
weeks in advance of the meeting and had been tran smitted to the delegation of  Canada:  Singapore;  
Australia;  Switzerland;  New Zealand;  Euro pean Communities;  Japan;  Norway;  Chile;  
United States;  Honduras;  Chinese Taipei;  Colombia;  and Brazil.  Copies of these questions and of 
the answers provided by the delegation of Canada we re available in the meeting room.  Argentina;  
China;  the Republic of Korea;  Co sta Rica;  Turkey;  Hong Kong, China;  Thailand;  Pakistan;  India;  
Bolivia;  and Viet Nam had submitted written questions  after the two-week deadline.  Copies of all 
advance questions, as well as the responses received from  the delegation of Canada, were available in 
the meeting room. 
3. The Chairperson said that he was pleased to learn from the reports by Canada and by the 
Secretariat that Canada considered international trad e to be integral to its continued prosperity, and 
that its outward-looking orientation had helped its  economy's adjustment to a number of external 
shocks.  He welcomed the statement by Canada th at the WTO remained the cornerstone of its trade 
policy, and the foundation for its relationships with  trading partners.  The Secretariat Report had 
indicated that Canada's trade regime had not chan ged significantly since its last Review in 2003 when 
it was described as generally open and transparent;  th is finding was welcomed.  However, this also 
meant that there remained trade barriers and foreign investment restrictions that could be having an 
adverse impact on productivity and the level of comp etition in the domestic market.  In this context, 
he thought Members would welcome learning more about changes in the international environment 
that would improve prospects for reform in areas such as supply-managed agriculture 
telecommunications, or air transport. WT/TPR/M/179/Rev.1 
Page 4 
 
 
 II. OPENING STATEMENT BY THE REPRESENTATIVE OF CANADA 
4. The representative of Canada  said he wanted to use the opp ortunity presented by the Trade 
Policy Review meeting to underscore Canada's recent economic and trade performance, and to 
highlight the strong correlation between that pe rformance and Canada's commitment to an open 
international trade system.  With respect to Cana da's economic performance, he noted that 2006 was 
Canada's 15th year of uninterrupted economic growth, although growth slowed in that year.  Private 
sector forecasters expected growth to strengthen over  the course of 2007, as the impact of the past 
appreciation of the Canadian dollar dissipated a nd U.S. demand growth strengthened.  Employment 
had expanded in every year since 1993, and had conti nued in spite of a recent fall-off in GDP growth 
rates.  Nearly 315,000 jobs had been created in 200 6, the vast majority of them full-time positions, 
compared with 223,000 in 2005. 
5. Canada's fiscal situation continued to be one of the major success stories for Canadian 
economic policy.  Canada's  debt burden had declined from the se cond highest to the lowest among the 
G7 countries between 1995 and 2005.  In 2005, total ne t government debt as a percentage of GDP had 
fallen to 26%, well below the G7 average of ar ound 52%.  On a total government, national accounts 
basis, Canada was the only G7 country in fiscal surplus.  The Canadian Government had forecast 
surpluses for fiscal years 2006/07 and 2007/08.  The OECD expected that Canada would be the only G7 country to record surpluses in both 2006 and 20 07.  In 2005, the Canadian dollar was the only 
major currency to appreciate against the U.S. dolla r.  From 2000 to 2005, the Canadian dollar had 
appreciated more than any other currency ag ainst the U.S. dollar, except for the euro. 
6. Taken together, imports and e xports were equivalent to ove r 71% of Canada's GDP.  The 
share of exports in total economic activity was 38% in 2005, down from 45% in 2000;  as imports 
comprised close to a third of the content of Cana da's exports, it was unsurprising that the share of 
imports had also fallen.  Imports had declined to 34% of GDP from a peak of almost 40% in 2000.  
One of the reasons for Canada's strong economic performance was its good trade performance;  its 
openness to trade and commitment to bring down barri ers to trade through bilateral, regional and 
multilateral trade agreements was the underpinning of  Canada's strong trade performance.  Trade with 
FTA partners (United States, Mexico, Chile, Isr ael, and Costa Rica) covered some 72% of total 
Canadian merchandise trade in 2006.  Canada's b ilateral and regional trade initiatives and the WTO 
were mutual supportive and reinforcing.  Bilateral and regional trade agreements could take countries 
farther than the WTO by securing deeper and broader market access.  In addition, such agreements 
could encourage collateral benefits, such as building common understanding among parties and 
helping move the multilateral agenda forward in a more coherent and effective manner. 
7. Canada was one of the most trade-intensive c ountries in the industrial world.  Its current 
account surplus had been at a record high of ove r $30 billion in 2005, and Ca nada had registered 
consecutive annual current account surpluses sin ce 1999.  Surpluses in the goods and services 
balances had more than offset deficits in the i nvestment income balance.   The surpluses for goods 
were on the rebound, though still belo w 2001 levels, while the deficit for services trade had expanded 
slightly.  Overall goods and services trade remained in a healthy surplus position.  The value of 
Canadian goods exports had risen steadily, and increases were sp read across the major groupings.  
Energy products had led the advances, aided in part  by the highest real oil prices in more then 
25 years.  Exports of goods were up to the level of all major trading partner groupings, and imports 
increased across-the-board for the major groupings.   Imports of energy products were up strongly 
mainly because of the aforementioned price effects.   Imports in 2005 were up from all major trading 
partners.  Canadian services exports  expanded by 1.7% in  2005, down from 4.5% the previous year.  
A slight contraction in travel exports partially o ffset the expansion in tr ansportation and commercial 
services exports.  Overall, exports of services were up by $1.1 billion in 2005.  Increases in imports of 
travel and transportation services were partially offs et by a decline in commercial services.  Overall, 
Canadian services imports increased by $2.1 billion in 2005. WT/TPR/M/179/Rev.1 
Page 5 
 
 
 8. The United States accounted for the bulk of Canadi an trade.  This relationship was fuelled by 
the increasing integration of the two economies and was facilitated by the rules-based trading system 
of the WTO and NAFTA.  Many Canadian and Amer ican industrial sectors were highly integrated, 
especially the automotive sector.  The United States was an important supplie r to Canada, given the 
advantages of geography and the importance of just-in-time inventory management for many 
Canadian businesses.  The United States was the prin cipal market for Canadian exporters because of 
its proximity, common language, and the size of the consumer market.  The United States had 
accounted for over three quarters of Canadian e xports of goods and services since 1995, however its 
share had been falling steadily since 2000.  Many factors were likely contributors to this trend – 
including the strength of the Canadian dollar, inro ads made by Canada's competitors in the U.S. 
market, and the increase in offshoring and outsourcing.   The picture was similar on the import side.  
The United States accounted for about two thirds of all Canadian imports, down from about three 
quarters at the end of the previous decade.  While the U.S. share of Canadian  exports and imports had 
fallen, the value of trade had increased throughout  the 1990s and had remained at just below the 
$2 billion a day mark since that time.  In 2006, Canadians exchanged more goods with the 
United States (merchandise exports and imports) in  four weeks than it exchanged with any other 
country throughout the year. 
9. Canada's trading relationship with least deve loped countries (LDCs), had been quite stable 
and fairly equal up until 2001.  Im ports from LDCs had taken off in 2003, and this was likely a result 
of the Kananaskis LDC market ac cess initiative, whereby Canada eliminated virtually all duties and 
quotas on LDC imports.  This measure was accompanied by liberal rules of origin provisions. 
10. With respect to direct investment, the representative of Canada noted that an important 
objective of Canada's trade policy was to position it self as a magnet for investment and, at the same 
time, support investment by Canadian companies in key global markets.  He mentioned some recent 
examples of acquisitions of Canadian companies by foreign investors. 
11. The Government of Canada committed in its 2006 Budget to develop a broad-based agenda to 
promote a more competitive and productive Canada, and as a follow-up to that commitment, in November 2006, the Minister of Finance introdu ced Advantage Canada:  Building a Strong Economy 
for Canadians – a long-term economic plan designe d to improve Canada's economic prosperity.  
Advantage Canada was focused on creating five key advantages:  a tax advantage, by reducing taxes 
for Canadians and establishing the lowest tax rate on new business investment in the G7;  a fiscal 
advantage, by eliminating Canada's total net go vernment debt in less than a generation;  an 
entrepreneurial advantage, by reducing unnecessary  regulation and red tape, increasing competition in 
the Canadian marketplace and encouraging free trade and foreign investment;  a knowledge advantage, by creating a highly educated, highly skill ed and flexible workforce;  and an infrastructure 
advantage by building modern, world-class infrastruct ure.  The Government had already started to 
implement the Advantage Canada Plan, most recently with the 2007 Budget.  As part of the plan, it 
had committed to developing a comprehensive globa l commerce strategy to ensure that Canadian 
business could fully participate in  global market opportunities.  Canada's trade policy priority 
remained to push to achieve an ambitious result in  the Doha Round.  The Strategy would include three 
core elements:  pursuing regional and bilatera l trade, investment, and science and technology 
agreements;  reinvigorating Canada's comprehens ive trade and investment relationship with the 
United States;  and extending Canada's reach to ne w markets – for example by opening new points of 
service in key growth centres in Asia.  The framework  would promote the coherence of Canada's trade 
policy with other policies, not limited to business development, such as sustainable development, environmental and labour policies.  The new strate gy was being developed in  consultation with key 
stakeholders. 
 WT/TPR/M/179/Rev.1 
Page 6 
 
 
 12. The representative of Canada emphasized that an  open and transparent policy of international 
trade firmly based on a multilateral system of rul es and commitments was fundamental to Canada's 
economic success.  Canada's prosperity depende d on maintaining and improving access to global 
markets for its manufactured and agricultural goo ds, services, and natural resources.  Canada's 
bilateral and regional FTAs were complementary trad e and liberalization instruments that would help 
Canada achieve these objectives.  There was no doubt that Canada's membersh ip in the WTO was the 
cornerstone of its trade policy, and the WTO was es sential to the task of building a more open, rules-
based and equitable world trading system.  He encouraged all WTO Members to work towards 
reaching a broad and ambitious conclusion to the Doha Round that would benefit all members.  
Canada was proof that an open, fully-participa ting member nation enjoyed increasing benefits the 
more liberalized the WTO trading system became.  Canada would promote the benefits of freer trade 
for developed and developing countries;  it would c ontinue to bring down barriers to trade and work 
to strengthen the institutions and rules gove rning international trade and investment. WT/TPR/M/179/Rev.1 
Page 7 
 
 
 III. STATEMENT BY THE DISCUSSANT 
13. The discussant, H.E. Ambassador Mario Matus, touched upon some of the features of the 
Canadian economy; including its overall size; its openness to immigration as measured on a per capita 
basis; and high rankings in indexes measuring globalization, competitiveness, environmental 
sustainability;  and economic freedom.  It was a priv ilege to be ranked high in any of those indices, 
but none of them taken alone was necessarily a goo d indicator of development:  economic freedom 
did not necessarily entail equity and global integr ation and competitiveness did not necessarily entail 
environmental sustainability.  Canada, however, had co mbined all of the indicators with the result of 
creating a highly egalitarian, transparent, and integr ated society, which was why 10 out of 16 times, 
Canada had been ranked number one in the United Nations Human Development Index. 
14. He noted some of the positive attributes of Ca nada's trade policy, including its impressive 
economic performance: over the last 15 years Canada  had had the best overall economic performance 
in the G8.  It had achieved a level of unemployment of 6.3%;  one of the highest per capita incomes in 
the world (US$40,000);  federal surpluses;  a reducti on in the federal debt burden by 9 points during 
the review period;  a 16.5% increase in its outward FDI stock and 22.1% in inward stock;  and stable 
but slow growth in recent years.  These indicators were not likely to change, although expected growth until 2011 would remain at a slow 2.8%. 
15. Canada's growth was based on natural resour ces with abundant reserves of oil, gas, and 
minerals, and on the development of the primary sector with important logging and agriculture 
industries.  This was a clear demonstration and an  excellent example for developing countries that 
high levels of development might be  achieved if appropriate policies we re taken, even if growth was 
based on the production and export of these types of products.  Canada had also developed a 
considerable manufacturing industry and three quarte rs of Canadians were employed in the service 
sectors.  The combination of natural resources with the use of technology and good marketing tools had led the machinery industry, the automotive sect or, and energy products to show the way for 
exports. 
16. Canada provided duty-free and quota-free treat ment to virtually all imports from least 
developed countries.  Nearly 99% of tariff lines were eligible for duty-free treatment, although the 
remaining 1% were subject to average tariffs of around 224% and covered out-of-quota tariffs on 
dairy, poultry, and egg products, which ha d been excluded from preferential treatment. 
17. He commended Canada for its efforts to involve different sectors in the formulation of trade 
policy, with regular consultations between th e Federal Government, provinces, industry, non-
governmental and public interest groups, and the p ublic at large.  This was an example of good 
policy-making that all WTO Members should follow. 
18. With respect to intellectual property, he noted that Canada combined effective protection to 
right holders with progressive measures in favo ur of consumers, especially in the area of 
pharmaceuticals and copyright. 
19. The discussant was concerned, however about th e strong protection granted to certain sectors 
of Canada's economy.  There were several restric tions to investment in certain sectors, such as 
fisheries, mining, energy, air transportation, te lecommunications, and culture.  In agriculture, the 
average applied tariff of 22.4% was huge compar ed with 3.8% on other products.  There was a 
possible case of discrimination in that wine pr oduced from Canadian-grown  grapes was exempt from 
federal excise duties.  In the case of beer, in itial production volumes by domestic brewers were 
subject to lower tiered excise duties, whereas import ed beer was not eligible for these lower rates.  
Another possible area of discrimination was with re spect to the prohibition on imports of used motor 
vehicles, except for those coming from the United States, provided they met Canadian safety WT/TPR/M/179/Rev.1 
Page 8 
 
 
 standards.  The variety of programmes to assist e xports, in the form of credits and guarantees were 
another possible case of WTO-inconsistency;  ED C financial had been the subject of two WTO 
dispute panels, both of which had found some aspects inconsistent with mul tilateral rules.  With 
respect to supply managed products, strong support in  the form of subsidies and high tariff protection 
was given to dairy products, chicken, turkey, eg gs, and broiler hatching eggs.  With respect to 
telecommunications, the Secretariat report stated  that facilities-based common carriers providing 
telecommunications services in Canada had to be Ca nadian-owned and controlled, and that Canadian 
broadcasting legislation limited fo reign content in a number of areas to ensure minimum levels of 
Canadian cultural content.  With respect to mar itime transport, cabotage was reserved for Canadian-
flagged ships unless Canadian ships were not available.   In air transport, foreign-owned airlines were 
prohibited from providing cabotage services.  With respect to professional services, strong nationality 
and residence requirements a pplied, although Canada had offered to eliminate some. 
20. The discussant believed that a lack of coheren ce between federal and provincial governments 
was a big problem, and that numerous obstacles to internal trade were in place.  According to an article in the Economist  in March 2007, some economists had said that the balkanisation of the 
economy was a big reason for Canada's sluggish produc tivity growth;  that there were perhaps 500 
separate trade impediments, ranging from regulatory fine print to outright protectionism, such as Quebec's ban on margarine coloured to look like butt er;  and that according to the Fraser Institute, a 
pro-business think-tank, these barriers costed the e quivalent of 1% of GD P.  He acknowledged, 
however, that some provinces were taking measures  to eliminate these obstacles, for example, an 
Agreement on Trade, Investment, and Labour Mobility  between British Colombia and Alberta to enter 
into force on 1 April 2007, would practically eliminate all of these obstacles, and other provinces 
would be thinking about joining them. 
21. The discussant concluded that Canada was a st able, multicultural, egalitarian, integrated, 
bilingual, transparent, and respectful country.  It was a successful market economy that dealt 
intelligently with market failures, achieving good leve ls of distribution and environmental policies.  
Regarding trade, there were some flaws, but Canada was taking the right steps. WT/TPR/M/179/Rev.1 
Page 9 
 
 
 IV. STATEMENTS BY MEMBERS 
22. Members welcomed the delegation of Canada, led by H.E. Mr. Gerry Salembier.  They 
commended Canada for its impressive economic pe rformance over the review period, its sound 
macroeconomic performance, its infl ation rates, its resilience to ex ternal shocks, and the outward 
orientation of its trade regime.  Members looked fo rward to further cooperation with Canada to reach 
a successful conclusion of the DDA and more br oadly in promoting a more open world trading 
system.  In this regard Members expressed appr eciation for Ambassador Stephenson's role as 
Chairman of the Negotiating Group on Market Access. 
23. The representative of Malaysia  speaking on behalf of ASEAN  Members noted the general 
openness of the Canadian economy in the area of ta riffs.  According to the Secretariat Report, 
Canada's simple average MFN tariff declined slightly from 6.8% in 2002 to 6.5% in 2006, and about 
53% of all products entered Canada duty free in 2006 .  Malaysia was concerned however, that in spite 
of the general openness, supply-managed agricultura l products remained protected;  tariff escalation 
remained;  out-of-quota tariffs were as high as 200%;   and there were discriminatory internal taxes 
favouring Canadian wines and beer.  ASEAN welcomed  the reduction in Canada ’s use of contingency 
measures in the period under review.  Sector-specifi c restrictions to foreign direct investment in 
mining and energy, fishing, telecommunications, air transport, and cultural activities were noted, as 
was the fact that foreign acquisitions above a certain threshold were subject to ‘net benefit’ review.  
ASEAN was pleased to note Canada's strong support for the multilateral trading system and its active 
participation in the DDA negotiations and appreciat ed Canada’s continued constructive partnership 
with ASEAN. 
24. The representative of Australia  noted that his country and Canada enjoyed strong and wide 
ranging trade and investment relations.  Canada was an important economic partner for Australia with 
two-way trade of almost $A5 billion in 2005-06, and an increasingly diversified stock of investments 
in both directions, including in mining an d energy, food processing, engineering, and 
telecommunications.  Australia and Canada were also increasingly comparing notes on public policy 
challenges, particularly in the economic realm.  Australia worked closely with Canada in many 
international fora, including the WTO,  APEC a nd the G-20 group of Finance Ministers, and it 
appreciated Canada’s commitment to a strong rules-based multilateral trading system, and its active participation across the Doha Development Agenda.   
25. Australia shared, with Canada, a long-standing commitment to the comprehensive reform of 
global agricultural trade, and would continue to work with Canada to address distortions in 
agricultural markets.  Canada had shown strong supp ort for the key objectives of the Doha mandate in 
the agriculture sector, including the elimination of export subsidies, the subs tantial reduction of trade-
distorting domestic support, and s ubstantial improvements in market access, as well as making an 
outstanding technical contribution to the negotiatio ns.  Australia acknowledged Canada's efforts to 
secure further domestic reform in the context of the DDA negotiations, however more needed to be 
done to reform certain sectors such as the system of supply management in Canadian agriculture, and 
the associated barriers to imports.  Australia was concerned about Canada's announcements that it 
would seek to renegotiate its tariff commitments so as to restrict imports of milk protein concentrates, 
and that it would review compositional standards for cheese, potentially creating non-tariff barriers. 
26. The Secretariat had identified a number of areas where improvements could help to accelerate 
the economy’s relatively slow productivity growth;  Australia encouraged Canada to pursue such 
further reforms, including in relati on to its supply managed agriculture. 
27. The representative of Switzerland
 noted the excellent economic relations between 
Switzerland and Canada.  Swiss exports to Cana da, the bulk of which were pharmaceuticals and 
chemicals, reached CHF 2.7 billion in 2006, an in crease of 21% over 2005.   Imports from Canada WT/TPR/M/179/Rev.1 
Page 10 
 
 
 had also increased significantly, including by 23% in  2006.  Pharmaceuticals, vehicles, and machines 
accounted for most of Swiss imports from Canada .  Switzerland had a strong investment position in 
Canada and Canadian firms were also very active in Switzerland. 
28. Switzerland noted that Canada had benefited from the boom in commodity prices, as reflected 
in the changes in the relative weight of the vari ous categories of goods exported.  Outstanding policy 
reforms would have to be undertaken in order to  address the low growth of labour productivity.  
Switzerland highlighted Canada's c onstructive role in helping to integrate developing countries into 
the world economy, including through the granting of unilateral tariff preferences to several groups of 
developing countries.  The LDC market access in itiative had enabled LDCs to increase very 
significantly their textiles exports to Canada sin ce 2003; as a consequence, Canada had had to deal 
with a sharp fall in employment and output in the domestic clothing sector.  Switzerland commended 
Canada's comprehensive contribution to aid for trade with numerous initiatives helping developing 
countries to take an effective part in the world tr ade system.  It also commended Canada for its active 
and constructive participation in WTO work.  It  was pleased to note a decline in anti-dumping 
measures.  The customs self-assessment proce dure was worth further examination under the 
perspective of trade facilitation.  With respect to technical regulations, conformity assessment, and 
standards, Switzerland considered it important that international standards be used as a basis for 
domestic standards.  Switzerland would appreciate an opening of Canadian government procurement 
markets at the subfederal level on a reciprocal basis.  Switzerland noted the amendments to the 
intellectual property data protection regulations to pr otect test data from unfair commercial use;  these 
changes were important for innovative drug firms and of particular relevance for Switzerland. 
29. The representative of New Zealand  noted both Canada's strong economic performance as well 
as areas outlined in the Secretariat Report wher e Canada could implement reforms, including 
eliminating barriers to agricultural imports, removing restrictions on foreign investment, minimizing subsidies that distorted competition, and dismantli ng obstacles to internal trade.  Initiatives underway 
included:  the new Global Commerce Strategy;  th e Blue Sky civil aviation policy;  Advantage 
Canada;  and possible reforms to the Canadian te lecommunications and financial services sectors.  
The British Columbia-Alberta Agreement on Trade Investment and Labour mobility was a significant 
development, elevating discussions on breaking down barriers to the free-flow of goods, people and 
capital within Canada.  New Zealand, noted the link between Canada's st rong economic performance 
and international trade and welcomed Canada's cons tructive contribution to the DDA, as well as the 
importance it attached to the WTO as the foundation fo r its relationships with its trading partners.  
New Zealand and Canada enjoyed close collabor ation across a range of WTO discussions, and 
New Zealand appreciated Canada's contributio n as a fellow member of the Cairns Group. 
30. New Zealand was concerned about protection afford ed to some sectors: parts of the agri-food 
sector in Canada, particularly supply-managed comm odities, remained heavily protected with out-of-
quota tariffs in excess of  200%, while in-quota vol umes were, in some cases, small.  The average 
applied tariff for fats derived from milk in 2006 was 313.5% in comparison to 22.7% for Canadian 
agricultural products overall.  New Zealand was partic ularly concerned about protectionist policies in 
Canada’s dairy sector, since its last Review, namely  the expansion of Canada’s special milk class 
programme designed to dispose of its structural da iry surpluses, and the announcement that it intended 
to invoke GATT Article XXVIII to impose new tariff-rate quotas on the import of milk protein concentrates (a dairy ingredient not produced in Ca nada).  At the same time the Government of 
Canada had initiated a process to regulate compositi onal standards, which might also have a negative 
affect on prospects in the dairy sector for Canada’s trading partners.  These policies were out of sync with Canada's otherwise outward-oriented and li beral trade philosophy;  they penalized other 
Members, and did not work in the best interests of  all Canadians.  New Zealand was also concerned 
about the conditions imposed on the import and sa le of wine, including complex and different 
provincial systems regulating the sale of wine and other alcoholic drinks;  exemptions from excise 
duties for 100% Canadian produced, which appear ed to be  inconsistent with Canada’s WTO WT/TPR/M/179/Rev.1 
Page 11 
 
 
 obligations, disadvantage imported wines, and we re unnecessary given that the domestic wine 
industry in Canada was vibrant and expanding.  While New Zealand believed that adjustments in 
some sectors would be beneficial for Canada a nd for its trading partners, it highly valued positive 
contribution to global trade and trade rules. 
31. The representative of the European Communities , noted that the EC and Canada were 
important trade and investment partners under the WTO umbrella and shared a partnership agenda 
that included furthering global economic pros perity through promoting the WTO and Doha 
Development Agenda.  The EC was the second largest foreign investor in Canada and benefited from 
the sound economic conditions in Cana da.  The EC would be interested to hear more about Canada's 
plans and projects to reflect the link between trade and employment in its multilateral trade policy and 
its bilateral trade agreements. 
32. Although the overall picture was positive, the EC ha d some areas of concern.  One of these 
was Canada's taxation regime fo r wine and beer, which was important since Canada was among the 
largest non-European markets for European wines.   While wines produced from Canadian grapes 
benefited from excise duty exemptions, imported wines did not.  There were also excise duty 
reductions on beer and malt liquor produced and p ackaged in Canada but not for imported products.  
The EC asked about Canada's plans to eliminate this discriminatory treatment.  Another, concern 
related to the protection and enforcement of certain IP Rs in Canada, in particul ar border enforcement.  
The EC was interested in hearing how Canada inte nded to strengthen its enforcement activities and in 
details and the timeline for Canada's legislative review  in this regard.  The EC also had some technical 
questions with respect to geographical indications (GIs):  while the EC and Canada had diverging 
views on the GI issue, for the EC, any balanced out come of the DDA had to include results on GIs.  
The EC noted that a very significant proportion of Canada's total procurement was taking place at the 
sub-federal level and access for foreign participan ts was problematic.  Th e EC hoped that Canada 
would further liberalize its public procurement markets. 
33. The EC welcomed the Government's prepara tions to remove the monopoly powers of the 
Canadian Wheat Board, and asked about Canada's  plans for opening the market for newcomers, and 
on the issue of transparency.  The EC appreciat ed the general openness of the Canadian services 
markets, and encouraged Canada to consolidate ex isting practice in the WTO.  It was concerned, 
however, about Canada's foreign ow nership cap for telecom services. 
34. The representative of Japan  expressed appreciation for Canada ’s constructive contribution in 
the overall DDA negotiations, and the importance it a ttached to the WTO as the foundation for its 
relationship with trading partners.  Japan said it was important that the major trade flows between 
Canada and the United States should contribute, no t only to the bilateral prosperity of the two 
countries, but also to the multilateral trading system , by way of trade diversification.  Japan was 
concerned about Canada's restrictions to FDI, incl uding the "net benefit" criterion in the Investment 
Canada Act, as well as specific sectors such as uranium mining and telecommunications.  Japan asked 
for information on the progress in reforming these s ectors.  The Canada Business Corporations Act, 
required a certain number of directors to be reside nt Canadians, and Japan asked about the reasons 
and background for maintaining this requirement.  Japan referred to the cross-border designation 
systems in WTO document (G/TBT/19) under the TBT Treaty and the Conformity Assessment 
System in the telecommunication equipment sector;  these cost-effective systems were beneficial for 
Canada and its trade partners.  Japan asked Canada to explain its position in relation to these 
standardization policies.  Japan looked forward to further cooperation w ith Canada under the 
Economic Framework agreed in November 2005. 
35. The representative of Norway  commended Canada for its open and liberal trade and 
investment regime and its constructive role in the DDA.  Norway was the seventh largest exporter of 
goods to Canada and Canada was one  of the most important export markets for Norwegian firms.  WT/TPR/M/179/Rev.1 
Page 12 
 
 
 Around 90% of Norwegian exports to Canada were petroleum-based products and crude oil. Imports 
from Canada consisted to a large de gree of metals and also some electrical machines and equipment.  
The oil and gas sector was a priority for Norwegian firms with respect to investment in Canada;  the 
first large oil field on the Canadian east coast had began production in 1997.  Norway envisaged 
increased cooperation in fisheries, and new possib ilities in paper, mining, biotechnology, medicine, 
and information technology. 
36. Norway had not experienced many problems in its trade relationship with Canada, with good 
access to the Canadian market, low tariffs, a signifi cant number of duty-free tariffs.  However in some 
sectors, import duties, technical requirements, and complicated rules had created problems;  in particular, the Canadian framework for trade an d investment policy involving shared federal-
provincial competencies, which sometimes created a complicated situation with different rules 
between regions.  With respect to energy, first c onsideration was given to services provided and goods 
manufactured within the respective provinces, which meant that foreign companies and sub-
contractors were discriminated against.  Norway  welcome the significant decrease in the use of 
Canadian anti-dumping measures since the prev ious review.  Anti-dumping rules contained 
weaknesses and some provisions lacked clarity leading to abuses;  Norway advocated the 
development of stricter rules for the use of anti- dumping measures in the DDA.  Norway appreciated 
its cooperation with Canada with regard to the WTO negotiations on fisheries subsidies, as well as in 
the TBT Committee to avoid implementation by othe r Members of unfounded trade restrictions on 
seals, which would not comply with WTO obligations. 
37. The representative of Chile
 noted that a free-trade agreement with Canada had been in force 
for a decade.  This had been Chile's first agreem ent with an industrialized country and it covered 
innovative themes, including investment, servic es, trade remedies, transparency, and dispute 
settlement.  Chile and Canada had committed themselves to refraining from applying anti-dumping 
measures to bilateral trade.  A chapter on govern ment procurement and a double taxation treaty had 
been added to the agreement since 2006.  Bilatera l trade had grown exponentially since the entry into 
force of the agreement.  Chile and Canada shared views on many trade topics, transparency, and civil 
society.   In the multilateral context, Chile and Canada shared interests in many areas of the DDA, 
including services, NAMA, agriculture, geographical indications, and trade facilitation.  Canada's 
trade policy was generally open.  However, th ere were some concerns, including investment 
restrictions in fishing, mining, energy, air tran sport, telecommunications, and cultural activities.  
Imported wine and beer seemed to be subject to di scrimination.  Dairy, poultry, and eggs benefited 
from high levels of protection. 
38. The representative of the United States , noted that Canada and the United States, had an 
especially close relationship.  Roughly US$1.5 bi llion worth of goods and services crossed their 
border every day (more than US$1 million per minut e), representing the largest two-way bilateral 
trading partnership in the world.  The North Am erican Free Trade Agreement, and the U.S.-Canada 
Free Trade Agreement before it, also reflected the strength and long history of close partnership and 
economic interdependence between th e two nations.  Canada was currently the United States' largest 
goods trading partner with US$534 billion in tota l two-way goods trade during 2006, an increase of 
44% since 2002.  Services trade had grown by mo re than 27%, totalling US$54.5 billion in 2005.  
Bilateral direct investment exceeded US$379 billi on, generating enhanced employment opportunities 
in both countries.  Both countries had a large stake in furthering liberalization of world trade, and 
shared many priorities.  The United States particul arly welcomed Canada’s constructive approach on 
market access in agriculture, industrial goods, and services in the DDA, as well as its commitment to 
concluding the negotiations.  The United States noted the conclusion and implementation of the 
Softwood Lumber Agreement in October 2006, ending pending dispute settlement cases in the WTO. 
39. The United States was concerned about the practic es of the Canadian Wheat Board (CWB).  
It was encouraged that a staged elimination of the CWB’s monopoly had been recommended, and WT/TPR/M/179/Rev.1 
Page 13 
 
 
 asked to hear more about plans and timetables to implement the recommendation.  The United States 
encouraged Canada to re-examine policies that imposed excessive tariffs and restricted imports of certain domestic “supply-managed” ag ricultural products, such as dairy products, eggs, and poultry.  
It had concerns about the proposed “dual marketin g” system for dairy products, as well as current 
price support mechanisms for dairy products.  It was also concerned that some of Canada’s standards 
and SPS requirements were overly restrictive and costly for American food manufacturers, such as the 
prohibition on imports of fresh or processed fruits and vegetables in packages exceeding certain 
package sizes unless the Government of Canada granted a ministerial exemption;  the requirement 
that manufacturers of baby food had to sell in only two standardized container sizes that existed only 
in Canada;  and SPS requirements for foods fortified with vitamins and minerals.  The United States, 
regretted that in the DDA Canada had not so far been willing to consider an ambitious broad-based 
prohibition on subsidies contributing to fishing fleet overcapacity and overfishing.  In regard to IPRs, 
the United States encouraged Canada in its review  of the possibility of granting Canadian customs 
ex officio  authority, and requested  an update on progress. 
40. The representative of Honduras
 noted that despite the good performance of the Canadian 
economy there were some negative aspects.  Productivity growth was slow, some agricultural activities remained highly protected through trade barri ers, and investment rest rictions persisted in 
sectors like telecommunications, audiovisual services, and air and maritime transport.  Reforming these sectors could lower costs for Canadian taxpa yers and consumers, and increase productivity and 
competition in the domestic market.  Canada ha d granted preferential treatment to Honduras since 
1974 through the generalized system of prefer ences.  Honduras, El Salvador, Nicaragua, and 
Guatemala, had started free-trade negotiations with  Canada in December 2001;  these had not yet 
been concluded.  The free-trade agreement would lead to increased export opportunities in goods and 
services and promote investment by offering guarantees and creating a stable legal framework for investors.  Access to the Canadian  market was restricted in sectors such as textiles and clothing, and 
agri-food.  Canada was an important partner.  Hondur as had registered a trade deficit with Canada.  Its 
main export products included shrimp, coffee, a nd biscuits;  its imports consisted of fertilizer, 
potatoes, and paper.  Honduras thanked Canada for th e important work of the Canadian International 
Development Agency (CIDA) in Honduras over the past 30 years. 
41. The representative of Chinese Taipei
 noted that Canada had long been Chinese Taipei's major 
trading partner, and the products traded were of  a complementary nature. Chinese Taipei imported 
Canadian paper, fishery products, and telecommuni cation equipment, and Canada was an important 
market for Chinese Taipei's machinery and IT pro ducts.  Annual trade between the two countries had 
reached US$3 billion in 2005, and continued to  grow.  Chinese Taipei was Canada’s 8th largest 
trading partner (counting the EC as one), and it looke d forward to a closer economic partnership in the 
future, and possibly a free trade agreement. 
42. Chinese Taipei applauded the steady growth of  Canada’s economy and noted that according 
to the Secretariat's report Canada’s performance could be made better by, inter alia , removing 
restrictions on foreign investment and dismantling obstacles to internal trade.  Chinese Taipei was 
concerned about Canada’s GPT (General Prefer ential Tariff) programme, whereby Canada provided 
tariff-free treatment for textiles and clothing imports  from LDC countries, on the condition that these 
products were made from yarn or fabric from a GPT beneficiary.  Chinese Taipei had not been 
granted beneficiary status under this GPT programme, while such status had been accorded to other 
Members at a similar development stage to Chinese Taipei;  this discrimination put Chinese Taipei's 
yarn and fabric exports at a disadvantage and aff ected LDC’s exports of finished products made from 
yarn or fabric from Chinese Taipei.  Such measures made LDCs less attractive to investors in Chinese 
Taipei, and it called for Canada to reassess its GPT programme. 
 WT/TPR/M/179/Rev.1 
Page 14 
 
 
 43. The representative of Colombia  commended Canada for the economy's exemplary results.  
Canada was one of the five leading world traders,  and was highly integrated into the global economy, 
with trade in goods and services representing 72% of GDP.  Macroeconomic indicators reflected 
Canada's stability and dynamism, with  growth rates near 3%, inflation rates near 2%, a fiscal surplus, 
and decreasing federal debt.  Solid ties with th e world economy and a sound record of economic 
management had also permitted Canada to adjust successfully to a 36% real appreciation of its 
currency during the past three years.  Average tariff protection was 3.8% for manufactured goods, and 22.4% for agriculture.  Poultry, dairy, wheat, and barl ey were subject to particularly high levels of 
protection.  Since Canada was a world leader in agricultural trade, she asked about prospects for 
further opening.  Canada was a very committed  and proactive WTO Member, as reflected its 
contributions to most areas of the DDA, both in te rms of number and content.  Colombia and Canada 
shared the aspirations of the Cairns Group.  B ilateral trade had increased by 80% between 2003 and 
2006, reaching close to US$700 million.  Canada pr ocessed applications for sanitary permits in a 
timely manner.  Canadian FDI in Colombia was im portant, and had remained stable during the past 
three years at approximately US$8 billion;  it was concentrated in telecommunications, energy, 
financial services, and paper. 
44. The representative of Brazil
 drew attention to expanding trade and investment links between 
Brazil and Canada, notably in the mining and industr ial sectors, and the potential for further economic 
ties.  Brazilian exports to Canada had increased by 17% in 2006;  the main export items included 
airplanes.  Imports from Canada had risen at th e same rate.  Two-way bilateral trade reached 
US$3,468 billion.  Brazil was one of the primary des tinations for Canadian foreign direct investment 
in the Latina American region, and Canadian i nvestment stock in Brazil had increased by 75% 
between 2000 and 2005.  Brazilian FD I in Canada had also grown. 
45. Brazil was concerned about the overall incr ease in Canadian government support to 
agriculture since 2003.  Brazil sought clarification on  whether the recent decline in Canada's recourse 
to anti-dumping actions was solely the result of mark et circumstances, or whether it reflected broader 
changes in Canadian anti-dumping legislation or trade policy.  Brazil asked for further elaboration on 
the various federal government initiatives benefiting the Canadian aircraft sector mentioned in the 
Secretariat's report.  It also requested an update on steps taken to implement paragraph 6 of the Doha 
Declaration on the TRIPS Agreement and Public Health, as well as information on whether genetic 
resources were considered patentable subject matter under Canadian legislation.  It was not clear how 
the amendment of the Patent Medicines (Notice of Compliance) Regulations could accelerate the 
entry of generic drugs into the Canadian market and Brazil was concerned that the result of the 
amendment seemed to be more monopoly power for proprietary drugs and therefore less affordability 
and access.  Brazil also had concerns on the eff ectiveness of the new eight-year period of market 
exclusivity on test data, also being adopted by Ca nada.  Brazil hoped that Canada might take a more 
positive approach in DDA negotiations on the introduc tion of a “disclosure of origin” requirement in 
the TRIPS Agreement. 
46. The representative of Argentina  noted that the outward-looking nature of the Canadian 
economy had helped it to adjust to external shocks and had contributed to the economy's good 
performance.  Canada had been ab le to take advantage of the space provided by international 
agreements to promote activities valued by its soci ety.  The economy was flexible, and this helped 
explain Canada's good results in spite of external factors.  Canada occupied a prominent position in 
the DDA, and was an active participant in various negotiating groups.  Around 53% of Canada's tariff 
lines were duty-free.  However, there were important differences between average rates on 
agricultural and non-agricultural products;  there was also tariff escalation between semi-processed 
and processed goods.  Canada's use of export-rela ted measures demonstrated that the multilateral 
trading system offered policy space for sectoral de velopment.  Canada also maintained domestic-
content requirements for petroleum and gas, and fiscal incentives for mineral processing in certain 
provinces.  Bilateral trade relati ons had expanded significantly since Canada's last Review.  Between WT/TPR/M/179/Rev.1 
Page 15 
 
 
 2002 and 2006, Argentina's expor ts to Canada had increased by  130%, and imports by 186%.  
Argentina's imports of capital goods and autos fro m Canada had grown by 227% and 943%.  This 
demonstrated that new trade flows and real mark et access were spurred by economic growth, rather 
than the reduction of tariffs applied on many indus trial products by developing countries, which were 
designed to facilitate trade and growth. 
47. The representative of China  acknowledged Canada's active par ticipation in the WTO and the 
DDA negotiations, and welcomed the outward orientati on of Canada’s trade regime, which helped to 
explain its good economic performance.   Canada and China were importa nt trading partners.  In 2006, 
Sino-Canadian trade reached US$23.2 billion, an in crease of 21% over 2005.  Canada was China’s 
eleventh largest trading partner, and China was Canada’s second largest.  China was concerned that 
Canada’s laws and regula tions on trade remedies set relatively low thresholds for the initiation of 
investigations, granted the competent authorities too much discretion in the investigation process, and 
placed little burden on the petitioners to provide ev idence, leading in countervailing measures, for 
example, to easy conclusions of the existence of  so-called “subsidies”. China hoped that Canada 
would do its utmost to avoid the use of these measures for protectionist purposes.  China was 
concerned that some of Canada's technical regul ations, standards, and SPS measures had gone beyond 
the extent necessary, such as very specific require ments regarding the size of packaging for fresh 
vegetables and fruits.  China urged Canada to review  these requirements.  China also noted that many 
Chinese companies had faced difficu lties in applying for visas and working permits, affecting their 
business and investment activities in Canada. 
48. The representative of the Republic of Korea  stated that Korea and Canada had maintained a 
sound trade relationship over the years.  Bilate ral trade volume had increased steadily, reaching 
US$6.7 billion in 2006.  Korea hoped that with the successful conclusion of an ongoing bilateral FTA 
negotiation would further cultivate their bilateral ec onomic partnership.  Korea appreciated Canada's 
role in the WTO and the DDA.  Korea also co mmended the Canadian government for its successful 
macroeconomic policy and fiscal surpluses.  Korea welcomed the significant drop in the number of 
trade remedy measures taken by Canada, and request ed Canada to be prudent in not utilizing anti-
dumping investigations as a systemic trade barrier.  Korea welcomed Canada’s recent ‘Asia-Pacific Gateway and Corridor Initiative’ to expand and im prove its transportation infrastructure, and hoped 
this would improve the efficiency of and acces s to Canada’s port and transportation services by 
foreign exporters, particularly in light of increased costs caused by the slowdown in the distribution of 
goods between Vancouver and Toront o.  Canada had not yet opene d its sub-central government 
procurement market despite its commitment to do so  no later than July 1997, and most Canadian 
provinces had introduced discriminatory procuremen t policies, such as price preferences favouring 
suppliers located within the province;  Korea encour age Canada to take action to address these issues.  
Korea was also concerned that Canada has mainta ined a de-facto prohibition on the import of used 
motor vehicles of all kinds except some products or iginated from the United States.  Korea asked 
Canada to explain the rationale for this policy and to open up its used motor vehicles market. 
49. The representative of Costa Rica
 noted that Costa Rica and Canada had a free-trade 
agreement, in force since 1 November 2002.  A lthough bilateral trade, which totalled US$144 million 
in 2004 and US$163 million in 2005, had grown by  24% in 2004 and 12% in 2005, it remained 
modest.  The bilateral trade balance had been favourab le to Canada during the past five years.  Costa 
Rica's exports to Canada amounted to US$73 million in  2006, or 0.9% of exports, mainly comprising 
agricultural products, tropical fruits, and mini ng products.  Imports from Canada amounted to 
US$90 million, around 0.9% of Costa Rica's total im ports, and included paper and carton, chemical 
products and prepared potatoes.  Costa Rica valued Canada's participation in  the multilateral trading 
system, particularly its role in the DDA.  Like Costa Rica, Canada had supported fundamental reform 
of world agricultural trade.  Both  countries also shared  an interest in the liberalization of non-
agricultural products, trade facilitation, and the improve ment and clarification of WTO rules.  Repair WT/TPR/M/179/Rev.1 
Page 16 
 
 
 and maintenance services for aircraft were very impor tant for Costa Rica, whose providers in this area 
had experienced serious obstacles in accessing the Canadian market. 
50. The representative of Turkey  noted that despite a consider able level of openness, Canada 
maintained sector-specific restrictions to foreign di rect investment and applied a net benefit criteria;  
there was room to remove these restrictions.  Cana da considered trade as an engine for its economy, 
was pursing liberalization at different levels, and saw the multilateral trading system as the 
cornerstone of its trade policy.  Canada was seek ing an ambitious outcome to the DDA, and Turkey 
commended Canada's strong emphasis on better inte grating developing and the least developed 
countries into the multilateral trading system, including through unilateral initiatives and its 
contribution to aid for trade. 
51. The representative of Hong Kong, China  congratulated Canada for its positive economic 
performance.  Canada and Hong K ong, China had very good trade and economic rela tions and had 
launched cooperative initiatives on various fronts. Around 150 Canadian companies had branches or 
subsidiaries in Hong Kong, including a significant num ber of insurance companies, while another 450 
Canadian firms were represented in various forms.  Bilateral trade in goods had grown steadily over 
the years, with a growth of 7.3% recorded in 2005 and 2006.  Among the main imports from Canada 
were non-ferrous metals, electrical machinery and gold coins.  
52. Hong Kong, China was pleased to note Canada's efforts to lower its applied tariff for non-
agricultural goods and its participation in the NAMA negotiations.  While the Canadian investigation 
regime in relation to anti-dumping and counter vailing measures was marked by its overall 
transparency, Hong Kong, China urged Canada to adopt a more stringent approach in initiating 
investigations, which in themselves could have tr ade distorting effects.  Canada had liberalized 
inflows of investment since 1998, however, Hong K ong, China remained concerned that there were 
restrictions in a number of areas under the Canadian investment and services regime, and noted in this 
regard the net benefit review, limitations that might  be imposed by provincial and federal authorities 
in privatization initiatives, and sector-specific restri ctions.  Hong Kong China asked Canada to lift the 
restrictions and the remaining MFN exemption granting preferential access to the local insurance 
market.  Hong Kong China expressed its appreciation for Canada's active participation in the DDA as 
well its contribution in the area of technical assistance. 
53. The representative of Pakistan commended Canada for its suc cessful economic performance, 
and its open, stable and predictable trade and invest ment regime, notwithstanding higher duty rates on 
textiles, clothing, footwear, animal products, a nd dairy products, ranging be tween 8% and 237.3% on 
an average MFN.  Bilateral trade with Canada  had hovered around US$600 million for the previous 
four years.  Textile products, which accounted for 80% of Pakistan's total exports to Canada, were 
subject to higher import duties, and other suppliers at a similar or better le vel of development were 
enjoying duty-free or preferential market access.  Pakistan was concerned that its exports faced 
unnecessary delays upon reaching Canadian destinations  as a result of inspections, the imposition of 
levies on inspections and diversion of cargo to othe r ports.  Some of Pakistan's business leaders had 
faced problems obtaining routine visas for even short business trips.  Pakistan expressed its 
appreciation for the leadership role  played by Canada in the DDA. 
54. The representative of India  expressed appreciation for Canada's active role in the WTO and 
the DDA, and congratulated Canada for its strong economic performance.  India was concerned about 
restrictions on foreign direct investment, and emphasised the need for Canada to reduce barriers by eliminating ownership restrictions in telecommunica tions and transport and by allowing a majority of 
board members to be non-residents in sectors where th is was not allowed.  India was Canada's largest 
trading partner in South Asia.  In 2005-06, India’s merchandise exports to Canada were 
US$1,021.58 million, 17 .86% over the previous year.  Im ports from Canada amounted to 
US$919.87 million, an increase of 18.58% over the prev ious year.  India's main exports to Canada WT/TPR/M/179/Rev.1 
Page 17 
 
 
 included cotton;  pharmaceuticals;  chemicals;  a nd manufactures of metals;  Canada's major exports 
to India included newsprint;  ores and metal scrap;  pulses;  machinery and electronics and transport equipment.  India continued to increase its share in Canada's imports of services while that of Canada 
has fluctuated between 0.4% to 0.5% .  In 2005,  India's foreign dir ect investment in Canada reached 
US$145 million, up 58% from the previous year, while  Canadian direct inv estment in India was 
valued at US$204 million; and that the two countri es hoped shortly to conclude a bilateral Foreign 
Investment Protection and Promotion Agreement.  The Indian Government had received reports of 
non-payment of Indian exporters by Canadian importe rs.  India was concerned that Canada’s policy of 
not interfering and leaving the issue to be resolved  by the exporter concerned was costly and acted as 
a NTB to small exporters from India.  India also ex pressed concerns that expo rters of Indian spices 
continued to face difficulties on account of non-stan dardized labelling requirements.  India hoped 
Canada would take effective steps to address these trade concerns.  India had also received reports that Indian participants at Canadian trade show s were frequently being refused visas by Canadian 
missions in India, which should be addressed. 
55. The representative of Bolivia
 noted that Bolivia's trade bala nce with Canada had shown an 
extremely high deficit during the last four years.  Its exports to Canada amounted to US$37 million in 
2006, their best performance ever;  imports from Ca nada were ten times that amount.  The deficit 
reflected the type of products imported from Canada, which included sieves, money counting 
machines, vehicles, and perforation equipment;  Boli via's exports included zinc, lead, coffee, quinoa, 
essential oils, sweaters, and palm hearts.  At the regional level, the Andean Community and Canada 
were exploring the possibility of a free-trade agreem ent;  at the multilateral level, Bolivia and Canada 
were members of the Cairns Group.  Canada's economic performance had b een outstanding and the 
Advantage Canada Strategy had made  Canada a preferred business part ner;  she sought clarification 
on the tax advantages under Advantag e Canada.  Canada was an activ e participant in the DDA, and 
Bolivia and Canada agreed that its objective was to increase economic opportunities for, and the 
prosperity of, all Members;  profound agricultural tr ade reform was central to this.  In the context of 
the DDA, Canada attached importance to the capacity  of developing and least  developed countries to 
apply new rules;  this implied taking into account the real interests of developing countries in the 
negotiations.  One of the main interests of deve loping countries had to do with the relationship 
between TRIPS and the Convention on Biological Dive rsity;  Bolivia sought Canada's support in this 
regard. 
56. The representative of Haiti  noted the friendly links between Haiti and Canada.  With a large 
Haitian population living in Canada, there was free movement of professionals, intellectuals, and 
businessmen to Canada.   Canada re presented a reliable trading partner for Haiti.  Since 1990 the trade 
balance with Haiti had been in deficit, and to co mpensate, Canada had been helping to reduce poverty 
in Haiti.  Haiti expressed appreciation for Canada's  active participation in the WTO and the DDA, and 
noted also that Canada, since 2003 had been guaranteeing duty-free, quota-free access for almost all imports from Haiti. 
57. The representative of Ecuador
 reported that bilateral trade between Ecuador and Canada had 
increased slightly since 2001, and there had been a considerable increase in exports of oil from 
Ecuador to Canada in 2005.  Am ong Ecuador's main exports to Ca nada were:  roses, shrimps and 
lobsters, palm hearts, medicine, as well as various sweets and jellies.  Overall, however, Ecuador had 
a trade deficit with Canada. 
58. Ecuador shared Canada's position report with rega rd to the elimination of all forms of export 
subsidies applying to agricultural and food produc ts, as well as substant ial reductions of trade 
distorting domestic support and improved access to  markets for these products.  Ecuador however, 
also believed that Canada needed to review its trade policies, which protected some agricultural 
activities.  Ecuador thought it would be interesting to  look at Canada's reforms with regard to trade 
facilitation, aimed at reducing the costs of customs services and simplifying procedures. WT/TPR/M/179/Rev.1 
Page 18 
 
 
 59. With respect to assistance provided by intern ational organizations, Ecuador agreed with 
Canada that it was important for recipient count ries to take ownership of assistance programmes to 
allow them to take into account their socioeconom ic and cultural realities.  Technical assistance and 
capacity building programmes as well as trade assi stance for development should be given to all 
developing countries, without exception, through sectoral  need assessments.  Ecuador also reiterated 
its will and determination to sign a free-trad e agreement with Canada as soon as possible. 
60. Ecuador asked for information on Canada's on 2005 access to medicines regime, with a view 
to discussing how this regime could achieve its humanitarian objective of facilitating developing 
countries' access to medicine while respecting intern ational trade and international patent system 
obligations.  Ecuador expressed its  appreciation for Canada's valu able contribution to the DDA. 
61. The representative of the Dominican Republic  noted Canada's importance as a major world 
trader, and an important generator and recipien t of FDI.  Canada had made some important 
investments in the Dominican Republic especially in  the mining and financial sectors.  Canada's 
efforts to diversify the destination of exports and origin of imports through the DDA was noted. 
62. The Dominican Republic welcomed the LDC market-access initiative with the resulting 
growth in imports from LDCs into Canada;  chang es to Canada's food assistance policy, which meant 
that 50% of food aid from Canada could be bought from developing countries;  Canada's contribution 
to technical assistance and capacity building at the regional and multilateral levels; Canada's 
commitment to trade and environment as part of its vision of sustainable development;  and the 
Canadian Government's efforts to involve stakeholde rs in the development of its trade policy agenda. 
63. Canada's average tariff was low except for agricultural products and OECD estimates 
suggested that aid to the agriculture sector had in creased during the review period.  There were also 
limitations to foreign investment in certain sect ors.  The Dominican Republic commended Canada's 
active role in the DDA. 
64. The representative of Benin  noted Canada's commitment to open world markets and a stable 
trade environment.  It commended Canada's good ec onomic performance, and noted its importance in 
global trade and the significance of services to its GDP.  Benin mentioned Canada's active 
participation in the DDA, as well as its commitment to developing countries and in particular LDCs, 
including with respect to issu es such as access to medicine, ma rket access for LDC exports, and 
technical assistance. 
65. The representative of El Salvador  noted long-standing diplomatic and trade relations with 
Canada and, since 2001, the start of negotiations to  conclude a free trade agreement.  Canada was 
among El Salvador's top ten trade partners, with trade including a textiles and clothing as well as a 
number of agricultural and fish products, beverages, and sauces.  Trade relations had led to the growth 
and diversification of exports from El Salvador to  Canada, however, the trade balance still showed a 
deficit for El Salvador.  Dynamic trade, social, and cultural ties between the two countries had been 
established by a large number of citizens of El Sa lvador living in Canada, and a growing number of 
Canadians living in El Salvador.  In 2004, a Cana dian Embassy was opened in  San Salvador;  this 
should facilitate migration, trade procedur es, and investment in both directions. 
66. The WTO represented the cornerstone of Canadi an trade policy and the  foundation for its 
trade relations with its various trade partners.  El Salvador drew attention to  the concerns of small, 
vulnerable economies in the NAMA negotiating group.  It also referred to the services negotiations, noting that one Canadian bank operated in El Salv ador, and it had invested significantly in the 
country.  El Salvador noted the changes in the Canadian Patent Law to cover the 30 August 2003 
Decision on TRIPS and Public Health, and the ch ange in December 2006 to the Rule on Patent 
Medicine in respect of the conformity statem ent and provisions on data protection for food and WT/TPR/M/179/Rev.1 
Page 19 
 
 
 pharmaceutical products, and changes in its framework legislation.  El Salvador thanked Canada for 
these initiatives, as well as for its contributions to the Doha Development Global Trust Fund and the 
ITC. WT/TPR/M/179/Rev.1 
Page 20 
 
 
 V. REPLIES BY THE REPRESENTATIVE OF CANADA AND ADDITIONAL 
 COMMENTS 
(i) Economic and institutional environment 
67. The representative of Canada  noted that Canada' strong economic and fiscal performance was 
a reflection of its liberal trade policy.  It was difficult to produce a comprehensive list of factors 
underlying Canada’s low productivity growth.  It might  be related to lower i nvestments, on average, 
in research and development, and in machinery and equipment compared with other OECD countries.  
The participation of Canadian businesses in wo rkplace training was also lower than in many 
comparable economies.  Canadian businesses needed to  be exposed to international markets to make 
them more competitive, and increased market acces s opportunities were needed.  The Government's 
Advantage Canada  initiative was a strategic, long-term economi c plan rooted in the realities of global 
competition and Canada’s existing strengths and economic challenges.  The plan was designed to 
reduce barriers to investment and was focused on cr eating five Canadian advantages to help improve 
quality of life in Canada, and to help Canada succ eed on the world stage:  tax advantage;  fiscal 
advantage;  entrepreneurial advantage;  knowle dge advantage;  and infrastructure advantage. 
68. In response to a question on the tax advantages under Advantage Canada, he stated that the 
2007 Budget proposed tax reductions th at would lower Canada’s tax rate on new business investment.  
The plan would also help manufacturing and proc essing businesses make the investments needed to 
respond to the stronger Canadian dollar and to risi ng global competition by allowing them to write off 
their capital investments in machinery and equipm ent acquired on or after 19 March 2007 and before 
2009, using a special two-year, 50% straight-line rate.  The Government would also increase the 
capital cost allowance rate from 4% to 10% for bui ldings used in manufacturing and processing, and 
from 45% to 55% for computers.  There were also  plans to update the Canada-U.S. Tax Treaty. 
69. Canada would be making efforts to pursue a trade policy of diversification.  It was focused on 
expanding its overall trade.  Cana da's open, export-oriented economy should sustain healthy trade 
relationships with partners a ll around the globe, and progress in the DDA was key to creating such 
opportunities. 
70. Openness to FDI was reflected in the high leve ls of FDI in Canada.  The Canada Business 
Corporations Act (CBCA) required that 25% of th e board of directors of most federal business 
corporations be resident Canadians.  Prior to the 2001 amendments to the CBCA, boards of federal 
corporations had to comprise a majority of resident  Canadians.  The amendments had sought to allow 
corporations more flexibility in organizing thei r boards, and to encourage globally oriented 
corporations to incorporate and locate their headqua rters in Canada.  Nevertheless, a 25% residency 
requirement had been maintained to ensure that corporations had Canadian views represented during 
board deliberations.  If needed, resi dent Canadian directors should be available to be served with legal 
documents or answer for the activities of the corpor ation.  This was a residency requirement, not a 
citizenship requirement, and was considerably easi er to meet.  The OECD index of openness to 
foreign investment failed to make this important distinction.  Additionally, Canadian provinces and 
territories were constitutionally permitted to establish  and administer their own corporate statues.  
Directors' residency requirements  varied, from 25% in Ontario and Alberta to no requirement in 
British Columbia and New Brunswick.  Corporations we re free to incorporate in the jurisdiction that 
suited their needs. 
71. One Member had raised the issue of foreign inv estor participation in privatizations.  This 
varied in Canada:  some limitati ons had been established to further specific public policy objectives or 
respect international treaty obligations, such as on the non-resident ownership of former state-owned 
businesses dealing with nuclear technology.  Howe ver, two of the largest and most prominent 
privatizations of federal SOEs, Petro-Canada and Canadian Nati onal Railway, had resulted in the WT/TPR/M/179/Rev.1 
Page 21 
 
 
 majority of shares being owned by non-residents.  Canada had taken major steps to liberalize its 
foreign investment restrictions and was one of the most open countries in the world.  Advantage Canada committed the Government to reviewing re maining foreign ownership restrictions in a 
number of industry sectors, with the aim of maximi zing the benefits of foreign investment, while 
retaining Canada's ability to protect national interests. 
72. Canada was actively engaged in the DDA a nd would continue to support it, working 
constructively with other Members to resolve outsta nding issues.  On fisheries subsidies, Canada was 
seeking a meaningful result to address subsidies that  contributed to overcap acity and over-fishing.  
There were too many boats chasing too few fish, and this should be the focus of the work in the 
negotiations.  Canada was looking for workable and transparent disciplines that  could be effectively 
enforced by the WTO and would continue to work with Members to achieve these goals.  Canada was 
examining the recently released proposal by the United States on this issue. 
73. Some Members had noted that their business people sometimes faced difficulties in obtaining 
visitor visas in a timely manner.  Canada had si gnificant GATS commitments and had a strong offer 
on mode 4 that covered business visitors, intra-corp orate transferees, contract service suppliers, and 
independent professionals.  Canada’s Uruguay Rou nd commitments had eliminated the need for a 
labour market test for Members.  This was one of the major hurdles business persons faced when 
entering a country to work on a temporary basis.  Furthermore, Canada's commitments on business 
visitors covered business persons en tering Canada to attend trade fair s, and participate in business 
meetings or similar activities, without the requireme nt of a labour market test or a work permit.  
Under the GATS Annex on the movement of natu ral persons, Members could apply measures to 
regulate the entry of natural persons into their terr itories, including through visas.  Canada was always 
seeking to improve the administration of its immigration framework. 
74. The discussant
 noted that investment issues had been raised by eight Members during the first 
day of the meeting.  Concerns related to reside ncy requirements for directors, foreign ownership 
restrictions, the net benefit criterion for foreign acqui sitions above a certain threshold, and restrictions 
in telecommunications, audiovisual, and air and maritime transport services.  Some steps had been taken to address these concerns.  The Governme nt had committed itself to reviewing foreign 
ownership restrictions in the context of Advantage Canada. 
(ii) Trade policies by measure 
75. The representative of Canada
 noted that the Agreement on Internal Trade (AIT) had entered 
into effect in 1995.  The AIT was a significant achievement toward building a stronger Canadian 
economy.  In September 2006, all AIT parties had agreed on an am bitious action plan to further 
reduce internal trade impediments.  From a federa l perspective, one priority was labour mobility.  
Ministers announced that Canadians would face no r estrictions on labour mobility by April 2009.  On 
28 April 2006, Alberta and British Columbia had si gned a comprehensive free-trade agreement, the 
British Columbia-Alberta Trade, Investment an d Labour Mobility Agreement.  In its Budget 
Announcement on 19 March 2007, the federal Govern ment committed itself to examining with 
interested provinces/territories how the agreement could be applied more broadly.  This would help to 
build Canada's economic union and promote the fr ee flow of people and goods within Canada. 
76. Canada provided duty- and quota-free preferentia l access to virtually all imports from LDCs 
under liberal rules of origin.  One objective of these rules of origin, under which fabrics could be 
made of yarn originating from another LDC, or from a country eligible for the General Preferential 
Tariff, was to encourage south-south trade.  Cana da had unilaterally eliminated tariffs on an MFN 
basis on a wide range of textile products during the past 18 months.  The value of this duty relief was 
almost Can$35 million annually.  The level of curre nt MFN tariffs applied on agricultural products 
reflected the results of previous rounds of multilatera l trade negotiations.  Overall, Canada had one of WT/TPR/M/179/Rev.1 
Page 22 
 
 
 the world’s most liberal market ac cess regimes:  36% of Canada’s agriculture tariff items were bound 
at duty-free;  high over-quota tariffs were limite d to supply-managed commodities.  As the supply 
management system required predictability in impor t levels, there was a need for higher over-quota 
tariffs for supply managed commodities. 
77. Canada’s decision to invoke Article XXVIII had been taken as a result of a change in the 
tariff classification of milk protein concentrates resulting from rulings made by domestic courts in 
2005 and 2006.  The renegotiation of tariff concessi ons through Article XXVIII was a long-standing 
right under the WTO.  Overall, the aim of Article XXVIII negotiations was to maintain a level of concessions not less favourable to trade than that wh ich existed prior to the negotiations.  The results 
of an Article XXVIII negotiation should therefore not  affect the overall level of Canada's existing 
WTO commitments. 
78. In response to concerns about custom delays and fees, he indicated that importers were 
responsible for the accounting documentation and pa yment of duties and taxes.  Canada did not 
require the use of customs brokers for imports.  Th e importer remained liable for all duties until they 
were paid.  In terms of the release system, the Canada Border Services Agency (CBSA) processed 
most shipments at the border point.  Importers could also have the goods released at a non-border 
office.  The CBSA could also authorize the impor ter to transmit information by electronic data 
interchange.  It was possible to fast-track the re lease of the goods by accounting and paying for them 
after their release.  To do this the importer had to post an approved amount of security.  The CBSA 
charged fees when goods were examined and re leased at non-designated customs offices or after 
normal working hours.  Carriers were responsible fo r making shipments available for examination.  
Carriers might charge importers a fee for these services.  This information was available at:  
http://www.cbsa-asfc.gc.ca. 
79. The representative noted that the drop in Cana da's anti-dumping measures was largely due to 
favourable conditions for Canadian industries.  Howe ver, Canada's effective sunset review system 
ensured that anti-dumping and countervailing measures we re reviewed periodically so that they were 
not kept in place longer than warranted.  Canadian authorities took great care in initiating and 
conducting trade remedy investigations, which complied  fully with the provisions of the WTO.  That 
some investigations did not lead to the imposition of  measures reflected the fact that Canada’s trade 
remedy authorities operated in an impartia l manner, conducting separate, but parallel, 
dumping/countervail and injury inquiries. 
80. He stressed the importance of using international standards, in line with Article 2.4 of the 
TBT Agreement.  The Canadian Food Inspection Ag ency (CFIA) had launched a regulatory initiative 
relating to compositional standards for cheese.  The objective was to contribute towards the 
harmonization of existing federa l regulations (Food and Drug Regul ations and Dairy Products 
Regulations) by providing clarification and consiste ncy on the ingredients th at may be used for the 
manufacture of cheese, and providing consumers w ith greater predictability  regarding the essential 
characteristics of standardized cheese.  The CFIA  would follow the Government's Regulatory Policy, 
which included pre-publication and consultation with stakeholders.  The proposed amendments to the 
federal regulations were anticipated to  be pre-published in Part I of the Canada Gazette  by June 2007.  
In keeping with federal Government regulatory policy and international commitments, a comment 
period would be provided prior to final publication. 
81. Regarding packaging requirements for processed  fruits and vegetables, applicants for a 
Ministerial exemption were required to provide evid ence of a shortage in supply of the product for 
which the application was being made.  If an a pplication was complete, the CFIA authorized 
applications as soon as possible.  Normally, app lications were processed and approved within two 
business days.  Delays could occur, however, if the application or supporting documentation was 
incomplete or if errors were disc overed.  While the CFIA, on behalf of the Minister, had the discretion WT/TPR/M/179/Rev.1 
Page 23 
 
 
 to reject an application for a Ministerial exemption,  there had not been a case in recent history when a 
formal application had not been authorized. 
82. In response to a concern regarding requiremen ts for baby-food containers, he noted that 
Canada had conducted a regulatory review of what was needed to modernize the Processed Products 
Regulations, which prescribed standard containe r sizes for a wide range of processed fruit and 
vegetable products, including infant food.  An initiative had been ta ken to develop proposals to amend 
the food standards, including standard containe r sizes for processed fruit and vegetable products:  
there had been consultations with all interested st akeholders, after which, the number of standard 
container sizes for many fruits and vegetables had been increased.  The proposed amendments, 
including those relating to container sizes for infa nt and junior food, had been posted for public 
consultation on the CFIA's website in 2001;  they  would allow for more packaging innovation and 
product development, and would c ontribute to consumer choice. 
83. Following the decision of the DSB in the two di spute panels on EDC fina ncing, all of EDC’s 
financing transactions, both Canada Account and Corporate Account, had been structured to comply 
with WTO obligations.  Transactions were either  structured on market terms with appropriate 
benchmarks, or in conformity with the interest ra te provisions of the OECD Consensus.  Canada was 
continuing to discuss issues related to export financing in a variety of multilateral fora. 
84. On domestic support in agriculture, recent incr eases in federal and provincial expenditures 
should not necessarily be interpreted as a trend;  higher expenditures in 2003/04 to 2005/06 had been 
triggered mainly by random, extraordinary even ts (BSE and drought), which had had a negative 
impact on farm income. 
85. Regarding government procurem ent, Canada had not made a commitment to open its sub-
federal procurement market.  As mutually accepta ble commitments had not been negotiated with 
other parties in the 18-month period between  April 1994 and October 1995, Canada had not 
confirmed any specific commitments and did not have  any commitments for sub-federal procurement.  
WTO Members could refer to the Minutes of the Meeting of the Interim Committee on Government 
Procurement of 7 December 1995 and the 199 6 Report of the Committee on Government 
Procurement.  Details were also available at:  http://www.international.gc. ca/tna-nac/entity-en.asp.  
Canada continued to seek substan tial improvements in market access in the current review of the GPA 
in sectors of priority interest to Canadian supp liers, and in security of access by circumscribing the 
use of small business set-asides and other exceptions under the Agreement. 
86. Canada’s excise tax measures introduced in the 2006 Budget were not trade distorting and 
would have no impact on imports of wine.  On aver age, imports accounted for 70% of wine sold in 
Canada.  The measures in question applied only to approximately 5% of Canadian wine production, 
and less than 8% of beer produced in Canada.  Fu rthermore, in recent years beer imports had been 
growing at more than 20% per year. These measur es had been introduced for the benefit of small 
producers, just as with similar programmes in many other countries. 
87. The Task Force proposal on the recommended fou r-stage transition of the Canadian Wheat 
Board (CWB) from one with monopoly powers to an  environment where fa rmers could sell their 
wheat or barley to any buyer, was one comprehensive model of how the CWB could thrive in a marketing choice environment.  The Government  had encouraged farmers and grain industry 
stakeholders to provide their views and reactions  to the Government on the Task Force’s proposed 
model.  No time frame had been set for the impl ementation of marketing choice.  The Government 
had recently consulted barley producers on marke ting choice through a plebiscite.  The Government 
would carefully consider the results of the plebiscite  on barley prior to deciding on its future actions. 
The Government had announced that a further plebisc ite, on the marketing of wheat, would be held at 
an appropriate time. WT/TPR/M/179/Rev.1 
Page 24 
 
 
 88. Canada recognized that some of its trading pa rtners had IPR regimes that, in some respects, 
went beyond the obligations of the TRIPS Agr eement.  An inter-departmental working group 
composed of officials from a number of different federal departments and agencies was examining options to enhance IPR border enforcement measures.  In response to how changes to data protection 
would accelerate entry of generics into the market , he noted that the amendments to the data 
protection regulations would encourage innovators to  bring new drugs to the Canadian market by 
making data protection effective and increasing its duration from five to eight years.  These amendments had been accompanied by amendments to another set of regulat ions involving patents 
that would result in earlier access for consumers to lower cost generic versi ons of patented drugs.  
Canada had been one of the first to implement the WTO Decision on the Implementation of Paragraph 
6 of the Doha Declaration on the TRIPS Agreem ent and Public Health, and therefore strongly 
welcomed the December 2005 Decision of the WT O General Council to ame nd the TRIPS Agreement 
to incorporate the August 2003 Decision without maki ng any substantive changes to the text.  Canada 
remained committed to working with Members to ensure the acceptance of  the amendment to the 
TRIPS Agreement by the December 2007 deadline. 
89. The mandatory review of Canada's Access to Medicines Regime had been launched with the 
release of a consultation paper on 24 November 2006.  Interested parties had 60 days to submit their 
views.  The Government had received extensiv e submissions from the pharmaceutical industry, 
NGOs, academia, and parliamentarians.  Th ese documents had been posted online at:  
http://www.camr-rcam.gc.ca.  Canadian officials we re reviewing the comments received to ensure 
that they were taken into account in a report to Par liament by the Minister of Industry.  The review 
process did not prevent interested parties from usi ng Canada's Access to Medicines Regime to export 
needed medicines to eligible importing countries in the interim.  While the review was under way, 
Canadian officials continued to seek opportunities to explain how the regime worked to eligible 
importing countries, manufacturers, and NGOs.  Canada remained committed to improving access to needed medicines in developing and least devel oped countries, while respecting international trade 
obligations and maintaining the integr ity of the domestic patent system. 
90. On Canada’s prohibition on impor ts of used motor vehicles, the Canada Motor Vehicle Safety 
Act was intended to reduce the risk of death, inju ry, and damage to property and the environment.  
The current Act prohibited importation of used ve hicles unless they were certified to comply with 
Canadian motor vehicle safety standards.  Vehicl es that were not originally designed, built, and 
certified by the manufacturer to meet Canadian motor vehicle safety standards presented an 
unacceptable risk to the public.  Canada had an excep tion that allowed used vehicles sold at the retail 
level in the United States to be imported into Cana da, provided they could be made to comply with 
applicable Canadian safety standards, and were s ubsequently modified to comply.  This exception 
worked well because U.S. and Canadian vehicle safety standards were largely harmonized and 
compatible.  Most U.S. vehicles could be easily mo dified to comply with Canadian requirements and 
as a consequence, there was no added risk to Ca nadian road users from the importation of used 
vehicles from the United States. 
91. The discussant
 said that the issues raised during the first day of the meeting under this 
heading included non-tariff barriers, trade remedies , taxes, government procurement, used motor 
vehicles, and intellectual property.  Regarding used motor vehicles, he asked whether a used car that 
fulfilled Canadian safety standards could enter the Canadian market, regardless of origin. 
92. The representative of China  requested copies of the bilate ral agreements between major 
exporters of alcoholic beverages to Ca nada and provincial liquor agencies. 
93. The representative of Ecuador  asked why exports of generic medicines had not taken place, 
although the Access to Medicines Regime review period had expired. WT/TPR/M/179/Rev.1 
Page 25 
 
 
 94. The representative of the European Communities  stated that the EC remained concerned 
about Canada's excise taxes on wine and beer.  Regarding government procurement, a significant 
proportion of Canada's procurement was taking place at the sub-federal level, where foreign access 
was restricted. 
95. The representative of Canada  indicated that used vehicles c ould not be imported into Canada, 
except for vehicles built to comply with Canadian saf ety standards.  A vehicle originally designed, 
manufactured and certified by the original manufactur er to comply with Canadian safety requirements 
would be acceptable. He undertook to provide Chin a with some of the bilateral agreements on 
alcoholic beverage marketing, subject to confiden tiality requirements.  Regarding Canada's Access to 
Medicines Regime, the review had been accelerated but was still under way.  No country had stated 
its intention to import medicines under the Regime, and therefore no medicines had been exported.  
The reasons were not entirely clear.  Canada wa s ready to explain what was necessary to take 
advantage of the Regime. 
(iii) Trade policies by sector 
96. The representative of Canada  noted that Canada’s supply ma nagement schemes for the dairy, 
poultry, and egg sectors had been introduced more th an 30 years ago in response to market instability 
in inter-provincial and internationa l trade, and resulting producer income instability and insufficiency.  
The schemes had contributed to ma rket stability by limiting domestic supplies, using production or 
marketing quotas applied at the individual producer level.  Imports of the products concerned were 
subject to tariffs and tariff quotas administered in  accordance with Canada’s international trade 
obligations. 
97. Technology Partnerships Canada (TPC) was a special operating agency of Industry Canada 
with a mandate to provide funding support for stra tegic research and development, and demonstration 
projects that would produce economic, social, and envi ronmental benefits to Ca nadians.  TPC's terms 
and conditions expired on 31 December 2006.  All exis ting obligations made by TPC before that date 
would be honoured.  The Government continued to c onsider options on how best to support industrial 
research and development in Canada. 
98. In response to references to maritime cabotage restrictions, he noted that cabotage included 
feeder services, empty containers, and offshore activ ities.  These activities were reserved to Canadian-
registered ships.  Foreign vessels could only partic ipate in Canada's coastwise trade if no Canadian 
registered duty-paid vessel was available or capab le of performing the activity.  However, Canada 
allowed foreign ownership of Canadian-registered ships.  Therefore, foreign shipowners could 
provide these services in Canada. 
99. Canada did not allow foreign-ow ned airlines to provi de cabotage services, and any change to 
this would require extensive review  and consultation with all stake holders to analyse the potential 
impact and balance views, recognizing that different sectors of the air industry had different interests.  
In November 2006 Canada had announced a new intern ational air transport policy, referred to as Blue 
Sky.  The policy moved from an incremental libera lization of air services agreements to a more 
proactive pursuit of open air agreements when in Canada's overall interest.  The objectives of the 
policy included increasing competition, improving mark et access for Canadian and foreign carriers, 
and allowing Canadian airports to attract additional ai r services.  Over the past two years, Canada had 
negotiated significantly liberalized agreements with  China and India, and had concluded open skies 
agreements with the United Stat es and the United Kingdom.  More recently, Canada  had concluded 
new bilateral agreements with Serb ia and Croatia, and had expanded the agreement with Japan.  The 
Open Skies Agreement between Canada and the Un ited States had entered into force on 12 March 
2007.  Section 55 of the Canada Transportation Act re quired that at least 75% of the voting interests 
in an air carrier licensed to operate in Canada, or  such lesser percent as the Governor-in-Council may WT/TPR/M/179/Rev.1 
Page 26 
 
 
 specify by regulation, be owned and “controlled in  fact by Canadians”.  In addition, Canadian 
bilateral air agreements, as all in ternational air agreements, usually  provided for nationality clauses 
requiring that designated airlines be substantially ow ned and effectively controlled by nationals of the 
designating State.  The International Civil Aviati on Organization was exploring the liberalization of 
the economic regulation of air carriers.  Canada, along with the other parties to the 1944 Convention 
on International Civil Aviation (the  Chicago Convention), was actively participating in this process. 
100. Canada maintained limitations on investment in facilities-based telecommunications service 
suppliers to address concerns over national sovere ignty and security.  In April 2005, Canada had 
asked the Telecommunications Policy Review Panel,  an independent panel of experts commissioned 
by the Government, to review Canada’s tel ecommunications policy framework and recommend how 
to modernize it.  The Panel's final report released  on 22 March 2006 included a proposal to amend 
FDI restrictions in the sector.  The Minister of Industry had indicated that any change to FDI limitations in telecommunications would need to be  examined, and would be reviewed in Cabinet and 
through the appropriate Parliamentary processes.  No decision had been made to change Canada’s 
telecommunications FDI regime.  Although Canada maintained owne rship restrictions on facilities-
based telecommunication services, 100% foreign ownership was allowed in resale of basic 
telecommunications services. 
101. The discussant
 said that Members had to keep in mind the overall picture of Canada's trade 
policies and practices.  The top ten issues for eval uation during Canada's next Review should be:  
agriculture, investment, non-tariff barriers, trade re medies, tax discrimination, public procurement, 
intellectual property, visas and working permits, us ed motor vehicles, and services.  Canada was a 
stable, multicultural, egalitarian, integrated, bilingua l, and transparent country;  it was also respectful 
of minorities.  It was a successful market economy that dealt intelligently with market failures, 
achieving good levels of distribution and environmen tal protection.  Regarding trade policies, there 
were some flaws, but Canada was taking steps to redress them. 
102. The representative of the United States  asked how the Canadian Dairy Commission set the 
target return to producers that is achieved thro ugh support prices for butter and skim milk powder. 
103. The representative of the European Communities  welcomed the recommendations of the 
Telecommunications Policy Review Panel to modern ize Canada's telecommunications regime and to 
amend FDI restrictions in this sector.  She enc ouraged Canada to consider these recommendations 
further.  Regarding courier services, Canada had ma de commitments on modes 1-3;  this covered all 
services rendered by operators other than National Post .  The Canada Post Corporation Act, in its 
English version, stressed that the monopoly covered collecting, transmitting, and delivering letters to 
the addressee within Canada, while the French version seemed to imply that the monopoly powers 
covered domestic and outbound inte rnational mail.  The deviati on between the two versions 
undermined the predictability of  the regulatory framework. 
104. The representative of Canada  indicated that details on the relationship between the support 
prices for butter and skim milk powder and the targ et returns for milk were available through the 
Canadian Dairy Commission's website .  Regarding postal and courier ser vices, he indicated that he 
was not familiar with any specific differences betwee n the English and French versions of the Act in 
question, but that differences in translation, alt hough relatively uncommon, could occur. Canada had 
clarified that its commitments did not extend to basi c postal services.  Several actions were before the 
domestic courts in respect of this matter. WT/TPR/M/179/Rev.1 
Page 27 
 
 
 VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
105. This Trade Policy Review has led to an ope n and frank discussion between Canada and its 
trading partners, and illustrated the contribution that an open and transparent trade regime can make to 
achieving and maintaining high living standards.  We owe the success of this Review to the 
participation of Director-General Salembier, Amba ssador Stephenson, and the rest of the Canadian 
delegation, the forthright and refreshing comment s by our discussant, Ambassador Matus, and the 
active involvement of many Members. 
106. Members commended Canada for its impressive ec onomic performance since its last Review 
in 2003.  They attributed this to the implem entation of sound macroe conomic policies and the 
flexibility afforded by Canada's open trade regime .  However, noting that productivity growth has 
been lagging behind other OECD economies, Members encouraged Canada to take further steps to 
eliminate remaining trade and investment barriers.  In this context, Canada indicated that it has 
recently introduced Advantage Canada, a long-te rm plan to improve its economic prosperity. 
107. Members welcomed Canada's active participa tion in the WTO, praising its constructive 
involvement in the DDA.  Canada reiterated that  the DDA remains its top trade policy priority.  
Canada was also commended for its significant cont ribution to trade-related technical assistance and 
capacity building.  Members acknowledged the value of Canada's wide-ranging unilateral initiative to 
enhance market access for LDC exports, and some asked Canada to consider extending unilateral 
preferences to other  Members. 
108. Members questioned certain aspects of Canada's foreign investment regime, including review 
criteria, ownership limitations, and residency requirements for directors.  Several specific references 
were made to foreign investment restrictions in telecommunications and air transport.  In response, 
Canada indicated that it is aware of the benefits of further libera lization and that Advantage Canada 
contemplated the reduction of investment barriers.  Some Members also made calls for Canada to 
continue to take steps to facilitate its internal  trade through increased regulatory coherence among 
different levels of government. 
109. Members commended Canada for its low tariffs overall and significant number of duty-free 
tariff lines.  Concern was expressed about tariff escala tion and tariff peaks.  Issues were raised about 
the time and requirements necessary to clear customs and obtain visas.  The reduction in the use of anti-dumping measures was seen as positive, and hope w as expressed that this trend would continue.  
Some technical regulations, for example certain p ackaging and labelling requirements, are considered 
overly onerous. 
110. Members asked Canada to ensure that intern al taxes on wine and beer do not discriminate 
against imports.  On government procurement, seve ral Members expressed interest in securing greater 
access to procurement opportunities at the sub-federal le vel.  Canada provided answers to a number of 
questions on IPR-related issues, including copy rights, patents, geographical indications, and 
enforcement. 
111. While Members commended Canada's efforts to  promote agricultural reform in the DDA, 
concern was expressed about protection afforded to certain, mainly supply-managed products.  
Disappointment was also expressed concerning propo sed changes to Canada's dairy import regime, 
which will further distance parts of the agri-food sect or from the market-based solutions that have 
worked so well in other areas.  In this respect, Ca nada indicated that the supply management system 
has served its interests well and that it has no plan s to put time limits on it.  On the other hand, 
Members appreciated recent reform proposals for th e Canadian Wheat Board and encouraged Canada 
to proceed with such reform. WT/TPR/M/179/Rev.1 
Page 28 
 
 
 112. In conclusion, this eighth Trade Policy Review  of Canada has provided an opportunity to 
revisit issues considered in earlier reviews, and di scuss the evolution of Cana dian trade policies and 
practices since 2003.  This Review has confirmed Canada's steadfast commitment to the TPRM and, 
more generally, to the multilateral trading system .  Canada's sound economic policies and outward-
oriented trade regime have allowed its economy to ad apt and prosper in the face of various external 
shocks.  However, there remain a number of areas where reforms would both be  beneficial for Canada 
and help to strengthen international trade, which Canada acknowledged is inte gral to its continued 
prosperity.  I would thus encourage Canada, and al l Members, to take further political risks in the 
DDA in order to achieve a mutually beneficial outcome to these negotiations. 
113. I would like to close this meeting by thanki ng once again the Canadian delegation, the 
discussant, and the numerous Members that took pa rt in this meeting for contributing to an 
informative and engaging review.  I would also lik e to express my appreciation to the Canadian 
delegation for the oral and written responses provi ded during the meeting;  we look forward to 
receiving Canada's outstanding res ponses within the next month. 
 
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