Mr. Speaker, it is a pleasure to speak this afternoon on the issue of the World Trade Organization.
The Uruguay round of multilateral trade talks under the General Agreement on Tariffs and Trade or GATT was intended to bring world trade law into the 21st century. Negotiators agreed that this could be done by taking three key steps.
First, after painstaking negotiations the means were found to resolve longstanding quarrels over the existing trade of goods including agricultural products.
A second momentous measure decided upon was the creation of a World Trade Organization. The WTO will be a permanent, effective institution to oversee world trade policy and federal disputes between nations on a multilateral basis.
Third, trade services which account for roughly a quarter of $4 trillion in global trade were brought under the purview of global trade law for the first time.
Along with these three key steps, Uruguay round negotiators agreed on more than 25 separate measures which together amount to the most significant package of new trade rules the world has seen since the GATT was created in 1947. These measures include strengthened trade rules, particularly on subsidies and countervailing duties, and a more effective system of dispute management.
New areas have also been brought into the ambit of world trade rules including intellectual property, trade related investments and services. Most of the 120 countries participating in the round have made significant commitments to lower or eliminate tariffs and other barriers to trade.
Throughout the 26,000 page text of the Final Act of the GATT and all its principles, proposals and provisions there is one key theme: multilateralism. It is because the Uruguay round puts world trade law firmly on a multilateral footing that the global marketplace will never be the same. The WTO will put a brake on the tendency of governments to use unilateral trade actions to harass trade from competing countries. That means Canada will be less vulnerable to efforts by larger competing economies to use their size and power to interfere with Canadian exports. It is difficult to overstate how important an achievement that is for Canada where one in five jobs is created by exports.
I would like to talk about the second step. The World Trade Organization or WTO will implement the achievements of the Uruguay round negotiations. By replacing the GATT secretariat the WTO will co-ordinate the functioning of its three new components: the goods council, the services council and the intellectual property council. Dispute resolutions will be accelerated with a strict time limit established for the conclusion of the process once it is under way. Members also make a commitment to avoid using unilateral retaliation.
It is important to note that the WTO administered dispute settlement process will prevent a single member from blocking the adoption of reports of trade dispute panels or on appeal of appellate bodies. This institutional provision is the cornerstone to ensure that the new multilateralism functions smoothly.
As one of the most trade dependent countries in the world, the Uruguay round of multilateral trade negotiations was vitally important to Canada in terms of expanded access to markets and stronger trade rules and institutions. While the negotiation achievement is of historic proportions, the task remains to translate the outcome into reality.
Momentum must be maintained to complete the negotiations in areas such as financial services, telecommunications and government procurement. Clearly these are areas of growing importance to world economic development. We must all strive to realize the greatest possible degree of rules based liberalization. The potential benefits to both producers and consumers should not be denied.
There is a question of accession of new members to the WTO, particularly and pre-eminently China, Taiwan and Russia. Canada is on the record as supporting in principle their accession to the WTO. Broader membership will be positive for the rules based trading system and will offer significant benefits to the countries concerned.
However accession is not a right. Countries acceding to the GATT WTO must be prepared to commit to a transparent market oriented economy, to embrace the basic principles of the multilateral trade system and to provide real improvements in market access. On the other hand we must not impose requirements for acceding countries that are more onerous than those which apply to members.
There is the question of the new trade issues: trade and the environment, labour standards, investment and competition policy. These are questions all trading nations are grappling with. They are complex and do not lend themselves to simple policy prescriptions. However we feel that certain principles must be kept in mind as they are defined, debated and developed.
First, Canada does not support the use of trade sanctions to impose standards of conduct. Quite apart from the question of fairness in a world that is becoming increasingly interdependent where the one common denominator is adherence to a market based system, the costs of authorizing any one country to use its economic muscle to impose its own standards are too high for all.
Second, we must guard against the possibility that new rules can become a vehicle for new protectionism unless they reflect a broad international consensus. In this respect we are sensitive to the concerns of countries, developing and developed alike, that fear the new rules may be aimed at directing barriers to their exports.
Third, Canada wants to ensure that the rules of the multilateral trading system are complementary to and not contrary to the attainment of broader societal objectives. In the case of trade and the environment we are committed to the goal of sustainable development. With respect to trade and labour standards we endorse the need for compliance with internationally recognized labour standards.
There is an ongoing process to determine how labour and environmental issues will be handled by the WTO. At this time Canada is working with its trade partners on these very important matters.
We feel that international bodies such as the Organization for Economic Co-operation and Development and the International Labour Organization should accelerate their studies of these issues and use their findings to help guide discussion in the new WTO. We are concerned that without that kind of background work the World Trade Organization could get bogged down before it has had a chance to establish its institutional footing.
The Uruguay round of negotiations will have a significant impact on Erie riding in such areas as agriculture and steel. The world trade talks under the GATT produced a common set of rules governing world trade in agriculture. Canada's key objective in talks dealing with trade in agriculture included improved access to markets, increased disciplines on subsidies that distort world trade, more predictable and secure border arrangements to preserve Canada's farm supply management programs, and assurance that health and sanitary regulations will not be used as disguised barriers to trade.
Agricultural trade proved to be one of the most difficult issues tackled in the seven years of negotiation under the round. At the end of the day Canada had met its goals. As a result of the round overall tariffs on agricultural goods will fall by 36 per cent and no less than 15 per cent for any specific product in six equal annual steps between 1995 and 2001.
In addition, all GATT countries will open their markets to imports by specific minimum amounts starting next year in 1995, with the level increasing by 2001. Tariffs in place of quotas will also provide the tools to maintain an effective supply management system for Canada's poultry, egg and dairy producers. Producers of red meat, pork and horticultural products will also benefit from the new market opportunities in Asia and elsewhere.
Lower volumes of subsidized exports are expected to lead over the medium term to higher prices for grains and other agricultural commodities, spurring demand in Canada and other markets for agricultural machinery and equipment.
Canada's manufacturers shipped farm equipment worth some $865 million in 1992. Exports totalled $467 million. More than 90 per cent of these exports went to the United States. The United States also accounts for the largest share of Canada's imported farm equipment.
The Canadian industry produces four-wheel drive tractors, combine harvesters, seeding and tillage equipment, hay handling and harvesting equipment, grain handling and storage equipment. This technology is at the leading edge in production of cereal grains from large farms under the dry land prairie farming conditions. Substantial opportunities for export growth exist in Australia, Mexico, Europe, Russia, Ukraine and China. The John Deere plant in my riding, a leading manufacturer of agriculture equipment, I am sure would welcome these increased trade opportunities.
In recent years the Canadian industry has been in the forefront of several technological achievements. Among these is the development of a large capacity four-wheel drive and bidirectional tractors and axial flow combines. Such advances will receive worldwide protection for the first time under the new trade related aspects of intellectual property rights under the agreement reached in the round.
Over five years beginning January 1 next year, Canada and its major trading partners including the European Union, Japan and the United States, along with industrialized countries such as
Finland, Korea, Norway and Sweden, will phase out all tariff and non-tariff barriers for key products in this sector.
Full line firms producing major items such as tractors and combines will benefit as tariffs fall to zero in major markets. Short line firms making a variety of farm implements and attachments such as cultivators, chisel ploughs, seeders and fertilizer distributors will see tariffs fall to zero as well. Both full line and short line manufacturers will enjoy improved access to offshore suppliers of key parts components.
All this levels the playing field for Canadian farm equipment makers. Before the agreement was signed Canada and the United States both extended duty free access to agricultural machinery from all most favoured nation countries under the GATT. Many of these countries maintain tariff and non-tariff barriers against imported farm equipment. Within five years under the Uruguay round agreement these barriers will be history.
Located in my riding is a Stelco plant which is one of the 15 companies operating in six provinces that make up Canada's primary steel industry. My riding also has a productive nickel refinery, Inco, nickel also being a very essential component part in the steel industry.
In 1993 steel industry sales exceeded $8.6 billion. The industry employs about 33,000 Canadians. Another 18,000 Canadians work in pipe, tube, wire and wire products industries, transforming steel into other finished products.
As a result of the Uruguay round most developed countries including the European Union and Japan, along with Korea, will phase out all tariffs on steel and steel products over 10 years.
In conclusion, the establishment of the World Trade Organization is an expression of new realities in the economic and political relationships among nations. The trading system no longer operates as the exclusive domain of a few. As the Uruguay round negotiations unfolded over a seven year period we have witnessed an evolution in the roles of key players.
I spoke about the success of the Uruguay round and how it will positively impact on my riding. In a very real way our work has only just begun. With the all important creation of the World Trade Organization we have taken the first step. Now we must begin the effort of investing this institution with the commitment necessary to take us into the 21st century.
