International Trade Committee on June 7th, 2006

[The Chair, Conservative, Leon Benoit]

Good afternoon, everyone. We're now starting our eighth meeting of this committee.

Pursuant to Standing Order 108(2) we're doing a study on the World Trade Organization and services, agriculture and non-agriculture market access.

We have as witnesses today, from the Department of Foreign Affairs and International Trade, Terry Collins-Williams, director general, multilateral trade policy bureau; Robert Ready, director, services trade policy division; and from the Department of Agriculture and Agri-Food, Graham Barr, director, multilateral trade policy division.

Gentlemen, you would have opening statements, I would imagine. We normally allow ten minutes for an opening statement, but if you need more time than that we will allow that, and then we'll go to questioning when you've completed your presentations.

Thank you very much for being here this afternoon.

[Terry Collins-Williams, Director General, Multilateral Trade Policy Bureau, Department of Foreign Affairs and International Trade (International Trade)]

Thank you, Chair.

We thought that in the interest of time we would simply introduce ourselves and our roles in the WTO negotiations, and dispense with opening statements to allow you to get directly to questions on the interests of most direct concern to you. However, if you want us to give an overview of the three subjects that are the focus of your meeting this afternoon, we can do so. We leave it in your hands.

[The Chair, Conservative, Leon Benoit]

We'll just go directly to questions, but if you'd give a little bit of background each, then that would be just perfect.

[Terry Collins-Williams]

All right.

I'm Terry Collins-Williams, director general, multilateral trade policy bureau in DFAIT. Within the WTO negotiations I'm the deputy chief negotiator and the lead negotiator for NAMA.

[Robert Ready, Director, Services Trade Policy Division, Department of Foreign Affairs and International Trade (International Trade)]

My name is Rob Ready. I'm director, services trade policy. I'm the services negotiator for Canada in the Doha round.

[Graham Barr, Director, Multilateral Trade Policy Division, Department of Agriculture and Agri-Food]

My name's Graham Barr. I'm the director of the multilateral trade policy division at Agriculture and Agri-Food Canada, and I'm responsible for the division that provides the analytical and operational support to Canada's chief agriculture negotiator.

[The Chair, Conservative, Leon Benoit]

I'd like to comment that in your hands as advisers or negotiators there's a great deal of responsibility. For the sectors that you represent, what happens at the WTO is extremely important, obviously. So I'd like to thank you for the work you've done and for your continued work in that area. We certainly recognize the importance of that.

We'll go now to the questioning, seven minutes, starting with the official opposition, the Liberal Party, the Honourable Mark Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Chairman.

I'd like to thank the witnesses for coming here today.

Brought up in the House quite a few times today was the whole situation of what's happening in Geneva and the challenge we have sometimes of making sure both sectors of our agriculture are protected here, whether it's supply management or the non-supply-management. It sometimes is a tightrope.

Right now one of the biggest issues we have is trying to make sure that our supply-management products get into the sensitive box with other countries with their products. How do you see that? That's my first question. What do you see as the likelihood of our getting it into that box? Personally, I think that's one of our best ways of protecting supply management down the road so other countries will not throw it against us.

[Graham Barr]

Thanks.

The issue you're referring to is called the selection of sensitive products, so how many tariff lines can countries designate as belonging to sensitive products. You're right, this is one of the key issues that negotiators are talking about in Geneva.

Obviously, Canada's position is that for us our sensitive products are the supply-managed products, and we're pushing hard to ensure that we can include our supply-managed products into the sensitive products category. Obviously, other countries, such as the United States and even the European Union, have different positions, and they want to see the sensitive products category, if you will, smaller. This is something that's under active negotiation right now.

So we are pushing, and that's our position, to get all of the supply-managed products into the sensitive products category. But as I say, other countries have different views, and the negotiations will continue.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

So right now they're in the midst of negotiations over there, mostly at a bureaucratic level, if I have it right, and the ministers are going to come in at the end--that's my sense--and kind of give the final okay on it.

What is the sense over there now among the Americans and Europeans on subsidies? Is there a sense of them having much give on what our position is right now?

[Graham Barr]

You're raising the other key issue in the agriculture negotiations, which is the reduction of subsidies, particularly those that distort trade the most. This has been a key issue and objective for Canada, getting those trade-distorting subsidies down, particularly those in the United States, because they're our neighbour and because of our large trade dependence on them.

We're very pleased that currently the negotiations are structured around the countries that provide the highest subsidies being the ones that will have to make the largest percentage reductions, meaning the European Union and the United States. We're very pleased about that, because that will harmonize the levels of subsidies that countries can provide and will lead toward this more level playing field we've been talking about for several years as our primary objective in the negotiations.

Developing countries are obviously also looking very keenly to reduce the levels of subsidies in the European Union and also in the United States, so we're certainly not alone in pushing for that. The U.S. and the European Union have put proposals on the table that would see their trade-distorting subsidies reduced by 60%, 70%, or 75%. We think--we know--that they have room to go a bit further, and again, this is under active negotiation. We and other countries will be pushing them to go further. We'll have to see. Obviously in the United States there's a political dynamic. They have their own domestic context in which they have to play, but Canada and other countries are still pushing very hard to get those subsidies down.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Do I have more time?

[The Chair, Conservative, Leon Benoit]

You have three minutes.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Is there a sense that our negotiation position has changed over the last year because of the change of government here?

[Graham Barr]

Since the beginning of the agriculture negotiations in 2000, Canada has been pushing for a more level playing field. We've always been pushing for the elimination of export subsidies, a substantial reduction in trade-distorting domestic support, and real and significant improvements in market access. What has happened, though, is that as the years have gone by, the negotiations have gotten more detailed, so we've obviously moved from broader objectives to putting more specific ideas on the table.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

My question was whether the mandate given by the government to the negotiators has changed much in the last four months. Has it changed at all?

[Graham Barr]

The government has been reviewing Canada's negotiating position to make sure it's still appropriate to the context of the negotiations. As I say, as it gets more detailed, we obviously have to adjust in the direction of having more detailed instruction, but the overriding principle of getting a more level playing field remains the same.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

And of course, our strong stance on maintaining supply management has remained the same.

[Graham Barr]

That's right: taking a hard line on the issue of the importance of supply management hasn't changed.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Eyking.

We'll go to Mr. Paquette for seven minutes.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you, Mr. Chairman.

Thank you for being here. If my memory serves me, the Doha Round essentially concerns four matters: agriculture, services, market access and non-agricultural goods.

How are the mandates developped? Does the government give our WTO negotiators mandates in those areas? Are these mandates public? Could the committee have access to them?

Agricultural stakeholders often tell us that the negotiator's mandate will be renewed on a given date. We're not hearing about it. Maybe it's an urban or rural legend.

I'd like you to explain to us how the mandates of our negotiators to the WTO are developped and relations with the ministers and the Prime Minister's office.

[Terry Collins-Williams]

Thank you. Allow me to answer in English because I'm more comfortable with the key words and technical terms in English.

Concerning the formulation of the government's position, the government's objectives in the negotiation are in the public domain. They are set out in papers that are published on a WTO website at DFAIT, and the AFC also has a website directly relating to the WTO. They have been provided on the occasion of important stages of the negotiation such as the Hong Kong ministerial when, for instance, an MPs' kit was circulated explaining the government's objectives then and the state of the negotiations.

Our negotiating positions have been formed on the basis of extensive consultation with provincial and other sub-federal—municipal—governments as well, because there are issues in the negotiation that may be of interest to them, and with the private sector, with non-governmental organizations.

The officials formulate recommendations for our negotiating positions, and these are then, of course, sent up to ministers and cabinet.

I am not in a position to describe in detail the mandate per se. I believe that's a political question you would have to direct to ministers. But the objectives that we're pursuing in the negotiations are, I think, clear.

Mr. Barr referred to our objectives in agriculture; I'm sure Mr. Ready can do so in services. In non-agricultural market access, our objectives are to obtain the greatest reductions in or elimination of tariffs in markets of priority interest to Canadian exporters and the alleviation or reduction of non-tariff barriers.

The other major area of negotiations is trade rules, where we would be looking for improvement in the multilateral system of rules governing anti-dumping subsidies—countervail, and it also covers regional trade agreements—while at the same time ensuring that these instruments are available for legitimate use in Canada.

[Pierre Paquette, Bloc, Joliette, QC]

We've recently learned that the negotiations on services have started. That's a bit surprising because we thought that, until the agriculture issue had progressed further, there wouldn't be a lot of negotiations on services. When I went to Hong Kong, no one was talking about services. From what we were told, stakeholder groups have been created and they're working on preparing documents in that area.

Canada belongs to 11 of the 15 to 20 existing groups. It has made demands concerning the financial, telecommunications and environment sectors as well as mode 4. What will the offers that Canada is submitting in July concern? What will Canada offer to stimulate overtures, one form of liberalization or another, in the those sectors?

[Robert Ready]

Thank you, Mr. Chairman.

Once again, I'd like to answer in English because the explanations are a bit complex.

Services negotiations have been under way, frankly, since the year 2000 in the Doha Round. One of the issues is that we always seem to be working under the shadow of agriculture and non-agricultural market access, but we've been pursuing a market access agenda in services negotiations, a rules agenda in the services negotiations, as well as an agenda that seeks to ensure that developing countries are dealt with in appropriate ways in the negotiating context.

What you're referring to, I believe, are plurilateral services requests that were an innovation in the negotiating process agreed on by ministers in Hong Kong. This process and these plurilateral requests are an extension, if you will, of what has been going on for three or four years in services negotiations, which are bilateral market access negotiations and requests. The plurilateral requests and that process were designed to introduce into the negotiation a little more efficiency, perhaps a little more focus. The grid of services sectors on which the negotiations take place is pretty complex and pretty numerous, in terms of the subsectors involved, so this was an attempt to give the process a bit of focus.

Canada is a requester in this plurilateral market access process in nine sectors, we're a recipient in ten, and there's one sector where there is a request but we're neither a requester nor a recipient.

The process we're engaged in, and have been engaged in for some time, is a request-offer process to achieve greater market access. The Hong Kong ministerial conference called for a revised services offer to be put on the table in Geneva at the end of July. We're working towards that objective, consulting with provinces, territories, non-governmental groups, and other stakeholders.

[Pierre Paquette, Bloc, Joliette, QC]

Would you be prepared to submit them in July, as provided in the process?