International Trade Committee on June 7th, 2006

[A witness]

No.

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Thank you.

[The Chair, Conservative, Leon Benoit]

Is this a point of order?

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Yes, a point of order.

In regard to Mr. Barr, I would like to clarify that he is not the person who would actually be signing.

[The Chair, Conservative, Leon Benoit]

That's not a point of order, it's a point of debate. Mr. Barr is quite capable of answering the questions put to him.

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I think we have our answer, that there aren't explicit instructions, so I appreciate that. That's important, and I understand—

[The Chair, Conservative, Leon Benoit]

Mr. Williams, did you want to add to that?

[Terry Collins-Williams]

Yes.

I think we're impinging on an area where we're being asked what is the bottom line of our negotiating instruction when we're in the middle of negotiations. I don't think officials are in a position to say in a public forum what our bottom line is going to be. The negotiations evolve, and ministers will have to be consulted constantly, and ultimately it will be a ministerial decision—it won't be an official's decision—as to what we accept or what we put on the table at the end of the day. I think that's the best answer we can give you.

[The Chair, Conservative, Leon Benoit]

Mr. Collins-Williams, thank you for that answer. I appreciate that. It's good to clarify that.

Mr. Julian, you still have a couple of minutes.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I'd like to move on to sanitary and phytosanitary rules, because of course that has an impact on health and safety regulations and rules.

I'd like to know, for the NAMA negotiating group, what is the method by which Canada participates in that? What's your sense of what is on the table in that particular area of discussion—what some people refer to as non-tariff barriers—and what consultations the ministry would be doing as we work through that process?

[Terry Collins-Williams]

As relates to phytosanitary and sanitary issues, the Doha mandate does not include SPS or technical barriers to trade agreements that are WTO agreements. Not every subject within the realm of the WTO, or every agreement from the Uruguay Round outcome of the WTO, is a part of the mandate of the Doha Round negotiations. SPS and TBT are explicitly not part of the Doha mandate, so they are not being negotiated.

I could tell you more generally how the NTB negotiations are proceeding in the NAMA context. We went through a long period of issue identification, of members identifying NTBs they wanted to see addressed. Many of these NTBs fell into other negotiating areas within the mandate, such as rules, because many of them were related to anti-dumping and countervail determination. So they would be appropriately referred to that negotiating group.

Similarly, many of them had to do with border measures, such as restrictions at the border, which are being dealt with in the trade facilitation negotiation.

There were TBT and SPS and some other measures that were identified as falling outside the negotiating mandate, and they would be referred to the regular ongoing committee work of the WTO. So there is a forum for dealing with them; it's just not a negotiating forum.

Those issues, which in some sense didn't have a home but were felt to be serious non-tariff barriers by some members, are being addressed in the NAMA negotiations. Depending on the nature of the measure and how many members' interests are involved, they might be negotiated bilaterally or plurilaterally, and then brought back to the NAMA negotiations, so that the results can be multilateralized.

Or they might be dealt with by horizontal proposals. For instance, there are proposals on export taxes and restrictions. There's a proposal from the EC for a horizontal mechanism to be an ongoing alternative to dispute settlement for dealing with NTBs.

So there are a variety of issues and of ways they're being approached. As I say, some are in negotiation, some not.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Collins-Williams.

Now to the five-minute round. If we stick to our time, all parties should get five minutes.

Mr. Temelkovski.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Thank you very much, Mr. Chair.

Thank you to the witnesses.

We've discussed this somewhat already in terms of quotas and the supply management sector. There's that appetite and desire to maintain existing tariff quotas across major farm products. It has come under criticism in Canada by different groups, especially when we have smaller or other trading countries diminish those tariffs within their own countries, such as New Zealand and Australia. How will that be impacting our negotiations, when we see other countries give up all their tariffs on these issues?

[Graham Barr]

In the agriculture negotiations, it's not really about giving up all your tariffs. I believe what you're referring to is the issue of reductions in our over-quota tariffs for our supply-managed products. The tariff reductions issue is still under negotiation.

There is a category in the market access discussions called sensitive products, which we've talked a bit about here today. And as I said, our goal is to ensure that our supply-managed products can fit inside that sensitive products category, where there will be flexibility for how members provide market access improvements for those products.

Certainly for other countries, they will choose other types of products as their sensitives. For example, in the European Union they may choose some meat products to be their sensitive products. In other countries it could be grains, oilseeds, or products that are of great interest to our exporters here.

The whole issue of sensitive products, how many you can choose, and by how much do you reduce the tariffs or expand the quotas, is one of the very key issues in the negotiations. It is not yet resolved, although there has been some progress. But there needs to be a lot more progress before we can agree on the specific rules and start implementing them.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

In your view, has the 1% rule for sensitive products been adopted? Are you looking at that seriously? When I think of the sensitive products box, with a limitation of 1% or so, it would indicate to me that to put something into the box, you must take something out of the box.

What are some of the previously sensitive issues we will be able to take out of that sensitive box in order to put something else into the box?

[Graham Barr]

The sensitive products box, as we're calling it, is a new concept. There's nothing in it now because it doesn't exist. Where the 1% comes from is in October 2005 the United States tabled a proposal that talked about the size of the sensitive products category and how that would be 1% of a country's tariff lines. That was just a proposal.

Most countries reacted rather swiftly and said “That's way too small; that's not on.” But it's a negotiation. So countries start out with certain proposals, and then you move to a different number. As we've said today, exactly where that lands has not yet been decided.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

What would be some of the Canadian sensitive items that would go in such a box? Would they fall within, let's say, even 1.5% of our trade?

[Graham Barr]

The products we would likely see in our sensitive products category are our dairy products, our poultry products, and our egg products. Altogether, their tariff lines constitute somewhere between 7% and 8% of Canada's tariff lines.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

We're fairly liberal here, I think, on this side. Let's go with 2% of what has been proposed by the Americans' sensitive box. Would that eliminate maybe two of the three items you just mentioned?

[Graham Barr]

As I said, we're not there yet, as far as what the actual number will be. But obviously there are some tariff lines that would not be able to.... If I'm saying 7% to 8% of our tariff lines are those products, and then you're saying, how would that fit in 2%, there would have to be some sort of adjustment.

We're certainly not there yet. As I said, the reaction by almost every other country to the U.S. proposal of 1% was that it's not practical. We certainly don't expect the number to be that low, by any stretch.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Temelkovski.

Now to the Bloc, to Monsieur André for five minutes.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Good afternoon. This appeared in the media this morning:

The time for talk is coming to an end at the World Trade Organization, the organization's Director General, Pascal Lamy, said yesterday. The time has come, for Canada and for the other countries, to agree to make efforts to come to an agreement or else the multilateral route will fail and might is right will win out.

Generally, when you talk about might being right, it's not about Canada or goods in relation to supply management. We don't want to wind up with an agreement like the softwood lumber agreement and be on the losing end once again.

Here we're talking about sensitive products, and I'd like to know, in the context of the negotiations, what percentage of those products is protected under supply management. I believe it's 12% or 13%. Is that correct?

[Graham Barr]

Just to be clear, in the sensitive products category, what people are talking about is the percentage of our tariff lines. It's not related to the production or income, or anything like that. As I said earlier, the way our tariff schedule currently is, our supply-managed products comprise, I think, 7.5% of our tariff lines.

[Guy André, Bloc, Berthier—Maskinongé, QC]

You're currently in full negotiation mode. According to the media, this is a culminating point. I imagine that compromises have to be made in order to achieve cuts to U.S. and European subsidies. That at least is what the head of the WTO appears to be saying.

I'd like to know what those concessions might consist of and what the negotiations on the needs of pork, beef and grain producers are about. They're apparently insisting strongly that subsidies be cut so that they can export more. They're also talking about protecting supply management. In addition, the Doha Round is going to end.

The fact is I don't really know where we stand in all these areas. So I'd like more details on the actual issues involved.

[Graham Barr]

As Mr. Collins-Williams said earlier, right now we have our position and what we're working to achieve. As to what will happen in the future, when it comes to issues of making concessions, those will be decisions for ministers, and that's certainly not something we can answer today.

We can just reiterate what we are currently seeking to achieve in the negotiations and areas where we are having success and where those ideas are picking up steam and have been adopted by other countries and appear in negotiating texts, for example, put forward by the chair. At the present time, I think we've all explained in our negotiating areas that these are the objectives we're seeking, this is what we're doing in Geneva. Absolutely, the negotiations could evolve, and at that point it will be up to the ministers to determine.