International Trade Committee on Oct. 6th, 2009

[John Cannis, Liberal, Scarborough Centre, ON]

So in your opinion, in closing, are we ahead of the game, or are we 50/50, or...? Are we beyond the 50/50 point?

[Gilles Gauthier]

Certainly we're aiming to achieve our negotiating objective, which is to provide new trade opportunities for our exporters while at the same time protecting our defensive interests. These are our overarching negotiating objectives, and we have all reason to believe at this point that we're moving towards achieving those objectives.

[Scott Brison, Liberal, Kings—Hants, NS]

I have a question for Mr. Stephenson.

If Canada wanted to add sub-national procurement groups to the WTO GPA, how would we go about it? Does it require legislation?

[Don Stephenson]

If we wanted to offer...?

[Scott Brison, Liberal, Kings—Hants, NS]

If we wanted to add sub-national government procurement to our WTO GPA obligations, would that require legislation?

[Don Stephenson]

Yes, it would be a treaty.

[Scott Brison, Liberal, Kings—Hants, NS]

What would be some of the repercussions or potential unintended consequences of doing that? If we were to add sub-national procurement to the WTO GPA, would that automatically open up our sub-national procurement to all parties of the WTO GPA?

[Don Stephenson]

No. As I said, in the GPA the structure of the agreement is essentially a series of bilateral agreements in a plurilateral...not the full WTO membership, but a smaller group, a plurilateral group, of WTO members. Canada would be at liberty to structure its offer essentially in any way it deems fit.

[Scott Brison, Liberal, Kings—Hants, NS]

So we could potentially use the WTO GPA framework to open up sub-national procurement to just the U.S. on a reciprocal basis.

[Don Stephenson]

Yes.

[Scott Brison, Liberal, Kings—Hants, NS]

How would this work on the U.S. side? Does it require the approval of the U.S. Congress? Would they have to do the same?

[Don Stephenson]

Certainly if they were not going to change the existing obligations that they have taken and offered to other countries in their GPA offer, they would not need to go back to Congress. If they were to take—

[Scott Brison, Liberal, Kings—Hants, NS]

We've established that in the current WTO GPA obligations of the U.S. in terms of sub-national governments there are significant carve-outs. If, as part of this negotiation, we were to say that we'll open up our kimono if they open up theirs; that if we reciprocate, we need them to open up their sub-national government procurement as well, what would they have to do to level the playing field?

[Don Stephenson]

First of all, I think it would be a fairly long negotiation to deepen their GPA commitments, because it would involve obligations being taken by states and municipalities. Secondly, although I don't have an expertise in American legislative procedure, I believe they would require congressional approval to expand their coverage. But I know for sure, because we have looked at the question, that they would not require any congressional approval to take on their existing level of obligations in the GPA with a new member, Canada.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thanks very much.

I'd like to thank our guests for being here this morning. I find it's very informative and I appreciate your insights.

I keep listening to the comments back and forth about the negotiations, but it sounds more like a hockey game when you talk about your offence and defence. My Cape Breton mom always said that if you go into the corners on the ice with an opposing player, you keep your elbows up.

[Scott Brison, Liberal, Kings—Hants, NS]

Your mother must have been a hell of a hockey player.

[Ed Holder, Conservative, London West, ON]

You wouldn't want to mess with a Cape Bretoner, I can tell you.

I'm trying to get a feel for this. It doesn't feel like a negotiation to me, if our stance is so firm. It ties into my question about this whole sense of supply management. I'm trying to get my head around how we can balance a developing country's agricultural needs for markets with our very firm stance on our supply management system. Can you give me a little more insight into that, please, Mr. Gauthier?

[Gilles Gauthier]

Thank you, Mr. Chairman.

I think you've certainly raised a very good question. Our challenge is to make sure that the position we've taken on supply management prevails. As I said, this is a pretty challenging negotiating position, since essentially, as you said, we are not prepared to accept a concession in these areas.

That being said, the negotiations also involve a very broad range of issues across the agricultural sector. The interests that play are very diverse, and not only for Canada but also for the other countries. Clearly, throughout these negotiations efforts have been made to address the particular needs of individual countries. If you look at the negotiating text currently in play, there is a recognition here and there that the United States needs a special break in some areas because they face a particular problem; Norway and Switzerland need a particular deviation because they face particular issues domestically as well.

This is the process of a negotiation. How do you make sure that while you're moving forward across the board you recognize the particular needs of individual countries? It takes time, and it's one of the reasons up to now for our not being able to arrive at an agreement: simply that not all of these needs have been fully recognized.

[Ed Holder, Conservative, London West, ON]

I appreciate that. I guess this really becomes the next question. I had a sense, Mr. Stephenson, from your comments, that you have some optimism that notwithstanding.... If you will, it's a build-up of Mr. Gauthier's comments about how the process of negotiations have been slow to moribund, almost, and now there seems to be a pick-up. My sense is that you have more confidence now that this will conclude. Did I surmise correctly that you might imagine this round would be completed by next year? What's your degree of optimism? If you had to choose a “best before” date, when would it be?

[Don Stephenson]

That's a complicated question.

There is a point at which the current mandate, the mandate that has guided these negotiations since 2001, is, as you say, stale-dated, and it's no longer possible to conclude under that mandate. I don't think we've reached that point yet. There are some signals that it might happen before the end of 2010.

Your characterization of the negotiation as ice hockey I don't think quite describes it. It's more like kabuki theatre: there's an awful lot of posturing and symbolic gestures, but no movement whatsoever. Perhaps I should change my analogy to sumo wrestling: there's just one very violent moment at the end. The way the negotiations work is that members are locked into positions and remain there for very long periods of time, until the political and the negotiating moment is right. Then there is a lot of movement very quickly. The director general of the WTO refers to these as the “spasms” in the negotiations. Our former chief negotiator referred to them as when the negotiations finally “lurch” forward.

That's actually how it works. There's not movement for a long time, until there's an agreement that we're ready for a real endgame negotiation, such as there was in July of last year, when there was a great deal of movement.

[An hon. member]

And what is your level of confidence?

[Don Stephenson]

My confidence...? At the political level, there have been many recent statements of commitment to try to draw it to a conclusion. To be honest, we haven't really seen it yet at the negotiating table. I think Mr. Keddy made those remarks in Delhi: that they haven't turned into real substance, real flexibility, or a real endgame negotiation in Geneva.

My confidence? I'm not much at predicting these things, so I guess I simply won't. Leaders have indicated that they'd like to conclude. Technically I think we are close enough to conclude on the outstanding issues, if there is flexibility at the negotiating table.

[Ed Holder, Conservative, London West, ON]

I had the privilege to be in St. John's, Newfoundland, not so long ago. While I was there, I purchased a sealskin hat and coat to help the local economy, and to look very good, actually.