FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, December 6, 2001

• 0905

[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Good morning, colleagues. This morning we're going to hear from departmental officials about the consequences of Qatar and Doha.

Just tell us if the U.S. is going to get fast-tracked or not. If they aren't, let's just go home.

Mr. Stephenson. You got a wonderful tan in Doha, if I may say. I'm sure I saw you on the beach.

Mr. Don Stephenson (Director General, Trade Policy Bureau II, Services, Investment and Intellectual Property Bureau, Department of Foreign Affairs and International Trade): Mr. Chairman, I thought it might be useful if I were to make a sort of general presentation about the results of Doha.

My colleague, Suzanne Vinet, who is the chief negotiator for the agricultural negotiations at the WTO, can say a few words about the agricultural negotiations and the results in that regard. Agriculture was Canada's first priority in terms of the Doha meeting.

Then I brought a gang, a group. In case something goes to a vote, I thought I would bring some friends. Johanne Forest works at the Department of Foreign Affairs and International Trade on the environmental policy side. Tim Miller is with the Canadian International Development Agency. Development plays a very large role in the results of Doha. Darwin Satherstrom is from the Department of Finance, responsible for trade in goods. Cathy Dickson is a director from the Department of Foreign Affairs and International Trade, responsible for intellectual property, among other things. She can speak to the issue of TRIPS and health.

[Translation]

I intend to use English, which is my mother tongue, as much as possible. I moved over to International Trade only one year ago, following a career in cultural policy. Consequently, the whole area is a foreign language for me. I would be very pleased to answer any questions you may have in the official language of your choice.

[English]

The “Battle in Seattle” of two years ago had essentially three causes. The first was the lack of support of developing countries for widening negotiations or undertaking new negotiations in the WTO. They weren't satisfied with the results of the last round of negotiations, the Uruguay round, and were more interested in addressing concerns with respect to the existing agreements than negotiating new ones.

The second cause was that there wasn't a consensus among developed countries about what the negotiating agenda should include or not include. In particular, a U.S.-EU consensus was not evident, and that's where consensus among developing countries has to start, because they are the elephants, as they say, in trade.

The third cause was a lack of U.S. leadership on the agenda. The U.S. arrived in Seattle with a more domestic agenda perhaps. In any event, they did not demonstrate the kind of leadership that you need from the United States in order to make progress at the WTO.

I guess you could say that the lessons learned from Seattle were, first of all, that we needed to address the issues of developing countries. Developing countries represent three-quarters of the members of the WTO, and it's a consensus-based organization. So if you don't have their support, you are not going to make any progress.

This time, going into the meeting in Doha, the process was designed so that the participation of developing countries could be assured. It was a very inclusive and transparent process in respect of the participation of developing countries, and their issues were very plainly being addressed in the draft declaration and on the floor of the conference. At the end of the conference and prior to the Doha conference, there were congratulations from developing countries to the rest of the membership for the openness and transparency of the process.

• 0910

With respect to consensus among developed countries, or in fact the whole membership, this time going into the ministerial meeting there were political-level discussions before we got there. These were mini-ministerial meetings where representation from north-south and east-west was very carefully balanced. They occurred in Mexico City and in Singapore. This gave ministers an opportunity to focus on the outstanding issues, the problematic issues that had to be addressed in Doha.

Finally, with respect to U.S. leadership, I would say that six months prior to the conference in Doha, it was not at all clear yet that the U.S. was committed to new negotiations. However, in the last six months they demonstrated extraordinary engagement. And at the conference in Doha I would say that one of the striking features of the meeting was in fact U.S. leadership. They demonstrated early in the proceedings that they were willing to be flexible on difficult issues, including anti-dumping and the TRIPS and health debate, and set the momentum in place for us to have a successful outcome.

I guess it would be fair to say as well that the failure in Seattle and the events of September 11 and the effect they had on a slowing economy also played a large role in reaching consensus in Doha.

With respect to the results, the most important, as I said earlier.... Agriculture was Canada's first priority going into the negotiations. We wanted a strong mandate for reform in agricultural trade. We got it. The ministerial declaration makes commitments in the three key areas with respect to agricultural trade: export subsidies, market access, and domestic production subsidies. So we are very pleased with the mandate statement and the level of ambition that it represents.

I would say just in passing that Minister Vanclief, who was part of the Canadian delegation, demonstrated a lot of leadership in the agricultural discussions as a moderate member of the Cairns Group. He was in a position to try to bridge the extreme positions, and I think Canada made a significant contribution.

The second result of note, I would say, is that the rules on anti-dumping and subsidy countervail are going to be negotiated. This is an important result for Canada. It is also an important result for developing countries, who saw that as a very central priority. As you may know—and this perhaps relates to other important files for Canada on the trade front, like softwood lumber and other things—the rules around the use of anti-dumping can be subjective, can be arbitrary. These negotiations hold out the hope that we'll be able to have stricter rules on how anti-dumping is used.

With respect to non-agricultural tariffs, tariffs on other goods, we've also agreed to negotiations. This is good, because it reduces tariffs around the world on the export of Canadian goods and it opens markets for our products. We're also going to deal with the difficult issues, the issues of particular interest to developing countries with respect to tariffs, and by that I mean we're going to deal with what is referred to as tariff peaks and escalation. These are our highest tariffs on our most sensitive sectors, like textiles and agriculture. These are issues of extreme interest to developing countries because they have a competitive advantage in those sectors and very much want increased access to our markets.

The next area of particular interest in the results from Doha I would say is a breakthrough for the environment. Most of the comment from and around Doha is centred on what we did not do on the environment. I think these comments miss the point that this is a breakthrough for the environment at the WTO. For the first time, there will be negotiations on the environment in the WTO. Specifically, ministers agreed that there will be a negotation on the linkage between multilateral environment agreements and WTO rules and how these should link together.

• 0915

As well, ministers agreed to a negotiation on environmentally friendly goods and services, with respect to market access issues. Ministers mandated the committee on trade and the environment to monitor all the negotiations throughout the process and to report to the general council and the trade negotiation committee on those issues.

There is recognition in the preamble of the importance of sustainable development and the need to work with other international environment agencies in the pursuit of sustainable development.

Finally, there is a strengthened work program on difficult issues related to the environment, including the rules around labelling.

The other difficult issue not mentioned in the text from Doha, but also of concern in the working groups, will be the use of precaution in trade measures.

The next result of significance that I would point to is not otherwise related to the negotiations themselves, but is a very sensitive issue for developing countries. This result is with respect to the agreement on intellectual property, referred to as the TRIPS, the Trade-Related Aspects of Intellectual Property Rights, and whether or not the TRIPS presented obstacles for developing countries to access affordable medicines.

I would say that Canada was not ultimately one of the big players on this issue, at least not in economic terms, but we did play an important role in finding the compromise leading up to Doha and at Doha. Much of the language that was adopted in the ministerial declaration on TRIPS and health was proposed by Canada, but ultimately it came down to a compromise between the United States and Brazil. The United States was representing, in effect, the innovative industries, the companies that invest in research and development to produce new pharmaceutical products. Brazil and certain others were representing more of an interest in the generic drug manufacturing industry.

With respect to other results, I'll just mention quickly the agreement to negotiate on the operations of the dispute settlement system. This will help us improve the efficiency of the system, and also give us a forum in which to promote greater external transparency and public access to the discussions of the dispute settlement system.

First, there's the agreement on implementation issues. Implementation issues are essentially the list of concerns of developing countries in the existing Uruguay Round agreements. We agreed in Doha on how to treat some of those concerns.

The result has three parts. First of all, the developing countries have made certain concessions, in respect of transition periods and definitions and thresholds, to help developing countries implement their obligations from the Uruguay Round. Second of all, certain issues were brought into the negotiations, issues of concern to developing countries. Finally, the outstanding issues that were in neither of the first two categories will go to the existing standing committees of the WTO and be reported back to the General Council and the trade negotiation committee.

We got a timetable for the GATS negotiations. This provides a real impetus to make progress in the services discussions. We got a reaffirmation by ministers of the right of members to regulate in the public interest, in respect of services. This is a right that is provided for in the GATS, but was reaffirmed by ministers in the declaration because of public concerns around the issue of the right to regulate.

We got a focused work program to move forward on what are referred to as the Singapore issues. These are issues that were first raised in the ministerial declaration from the meeting in Singapore. They are investment, competition, trade facilitation, and transparency in government procurement. We agreed to work towards a decision at the fifth ministerial conference—which is to say the next ministerial conference—in something like two years, to proceed to negotiations on those issues.

• 0920

We got a recognition of the importance of coherence among international agencies, and Bretton Woods agencies in particular, to work on the social dimensions of globalization, including labour issues. Canada was looking for a stronger statement of the importance of making progress on labour issues than we achieved, but at least some reference was made. I would note that in the WTO there is still an agreement that we should work with other international agencies responsible for labour, the ILO in particular, to advance core labour standards.

We got a work program on electronic commerce and an agreement to continue the moratorium on customs duties on electronic commerce transactions, and we got a series of new committees, working groups, on issues of particular interest to developing countries. Trade and debt, the relationship between trade and finance and debt, is one. Another is on the relationship between trade and technology transfer. Developing countries have expressed some disappointment with the level of technology transfers to their economies, particularly in regard to what seemed to be promised in the TRIPS agreement, and which thus far has not occurred, or at least at a level of their satisfaction. So that issue will get special study.

There will be a study on the special concerns of small economies, which sometimes resemble the concerns of the least developed, poorest countries, but sometimes have their own dimensions as well. And finally there's an agreement that the committee on trade and development will also have a horizontal responsibility throughout the negotiations to monitor all issues of interest to developing countries and to the issue of development.

We got a recognition of the importance of external transparency in the declaration. I noted earlier that the WTO has made extraordinary improvements in respect to internal transparency, the transparency of the process to developing countries, to the smallest countries that are least able to represent themselves in Geneva effectively. And this process, going into the Doha discussion, provided for many opportunities. In fact, they began to complain that there were too many opportunities for developing countries to be consulted on all aspects of the agenda.

So we've made real strides in respect of internal transparency. On external transparency, there have been some improvements. I would point to the agriculture negotiations and services negotiations that began last year: proposals made by countries in those negotiations are now immediately available on the Internet. This has not always been the case, so we can point to real improvements.

On the other hand, there are improvements that could still be made, particularly with respect to the dispute settlement system. Canada believes that if the system were more transparent, we would have less, not more, concern expressed by the public on these issues. So we will continue to press that case. And I would note that the Harbinson texts, the draft ministerial declarations, were leaked more or less 30 seconds after they came off the printers in Geneva throughout this process. And perhaps that makes the point to the rest of the membership that this does no harm. In fact, this does a lot of good, and perhaps it also proves that it's easier to get forgiveness than permission in terms of making documents public.

Finally, Mr. Chairman, I would point to the major issues for the next steps with respect to the Doha development agenda. First of all, we have to meet a very ambitious timetable for these negotiations. You may have heard or noticed in the text that we are committed to a three-year timeframe for the negotiations. That's extraordinarily ambitious, and we will have to get up and running quickly in order to meet or come anywhere near that target.

Number two, I would say that there is an enormous challenge to consult Canadians in respect of the negotiations. We are now into real negotiations on a whole variety of issues, and Canadians will have to be consulted on the specifics of Canada's positions in each of those areas of the negotiation.

• 0925

The third challenge that I would point to is to deliver on the promises we made as developed countries to the developing world. Throughout the declaration that was signed in Doha we have made an enormous number of promises to provide technical assistance, to provide capacity-building support, to address the issues of concern to developing countries in the negotiations. The degree to which we honour those promises will be the measure by which we have success at the next ministerial conference, in two years. And we'll have to get busy quickly, coordinating a large number of players in respect of meeting those commitments. I would say that the participation of the president of CIDA as part of the Canadian delegation was extremely helpful in this regard, and we look forward to working very hard with CIDA on the development issues.

Mr. Chairman, with your permission, I would ask Suzanne Vinet to make a very short comment on the agricultural negotiations, because they are of such key interest to Canada, and then we would move to questions and answers.

The Chair: Thank you, Mr. Stephenson, for that very helpful overview of what was a pretty complicated set of documents. I'm sure there will be lots of questions.

Madam Vinet, you could say something on agriculture.

Ms. Suzanne Vinet (Chief Agricultural Negotiator, International Trade Policy Directorate, Market and Industry Services Branch, Department of Agriculture and Agri-food): Thank you, Mr. Chair.

Very briefly, what was really important about agriculture and having a successful outcome at Doha is that, as Don mentioned, we had started negotiations back in 2000 but we were negotiating in somewhat of a vacuum and without a deadline, so there was no real definitive outcome that we could really pinpoint our work against. So Doha was critical for us, because now with a broader agenda clearly we have a context in which to negotiate. This makes it a lot easier for a number of countries to be less reluctant to participate in the agricultural negotiations, and it also gives us the context that we needed to hope for a broader outcome or a bigger outcome in the agricultural negotiations.

We're particularly pleased with the declaration that the ministers agreed to at Doha because it really does set a very high level of ambition. It clearly gives it direction for which we're to negotiate, which is the direction of trade liberalization and continuing the reform program that we had started in the Uruguay Round. This is of significant importance to our producers, who rely so heavily on the export market. This is our chance to complete the work we had started and level the playing field, if you will, or make it a fairer world market system for our exporters.

The other thing that was really critical to us in the text was the setting of deadlines. And as Don mentioned, 2003 is a key deadline for agriculture. By March 2003 the chair of the negotiations for agriculture is expected to table modalities. What that means is that we would have a framework or a basis from which to conclude negotiations, and that framework, in March 2003, would include the new rules or changes to the current rules and the modalities of the reduction formulas that we would propose to use in establishing our commitments.

That's a very important turning point, because we feel that along with the other promises that have been made to developing countries, agriculture will be one area that is central to the developing countries' agenda. It will be our opportunity to demonstrate how serious we are about this development agenda in 2003. And also, obviously, for our own producers and exporters this will be a very important signal as to how much reform we can really expect as an outcome of these negotiations.

So 2005 is somewhat of an optimistic scenario for concluding, but it is one we're going to work very hard to try to accomplish, because the sooner the better in terms of going further in reducing, for example, trade-distorting support and in eliminating export subsidies.

The structure for us was also a welcome outcome of the Doha ministerial, in that it provides not only the context and the deadlines but the ability to make the linkages to the other sectors so that we can intensify the work in the negotiations.

• 0930

Clearly we're pleased, in particular because the initial negotiating position that had been tabled by Canada in the negotiations and presented by Ministers Pettigrew and Vanclief back in August 1999 is entirely consistent with the direction that's been established by ministers at Doha. We feel very comfortable that now all of the elements that we want to pursue in the negotiations are well covered or provided for in the declaration. We're in a very, very good position at this stage of the negotiations of putting forward Canadian ideas and hoping to have a result that will satisfy our producers.

There are some other external elements that will have a large impact on how well the negotiations proceed. There are a few that come on top of the list, and one of them is the development of the farm bill and what will happen to the U.S. farm bill. Currently, we have a House version of a farm bill and a Senate version of a farm bill, and they are cause for concern, in that the levels they are seeking to provide, in terms of support to U.S. producers, are extraordinarily high. There are also some components of the programs that are being proposed that are of great concern, because we feel it's a bit of a backtracking, in terms of the policy direction that the U.S. has been signalling in the last few years.

That being said, it still has to go to conference, and the administration is certainly signalling very strongly and overtly that they are not satisfied with the direction of the proposed farm bills from the two processes. And we're still hopeful and optimistic that the administration will prevail in terms of making sure that most of this spending will be non-trade-distorting type of spending.

The other one that will have a very important influence on the outcome of the negotiations is, obviously, the European Community's. The EU is currently undertaking the second phase of their review of the common agricultural policy. Starting in 2002, they have to review the reforms they've done to date and they have to evaluate how much further to go in this reform program. That will give us a clearer signal as to what kind of outcome we can expect in these negotiations.

Combined with the ability of the U.S. to provide the leadership—for example, if they get the TPA and the directions from the EU—within the next few months we'll get clearer signals as to the direction of the negotiations.

China will also be joining in the middle of December—next week, basically—and will become a key player in the negotiations. Although it's too early to know exactly how they will play their role, I think it's fair to anticipate that they will be a significant player.

I'd like to leave my comments at that and say that at the end of the day, we're very pleased and feel very comfortable that we're in a good position to engage the next phase of the negotiations.

Thank you, Mr.Chair.

The Chair: Thank you very much, Madam Vinet.

On behalf of the committee members, I'd like to congratulate all of our officials who were in Doha negotiating on our behalf. I think all of us who were there will agree it was a somewhat complicated and difficult climate in which to negotiate. I know there was quite a bit of stress just getting around and managing the negotiations. The fact that we got the successful outcome we did I think is testimony to the tremendous efforts all of you made for us when you were there. So thank you very much for all the work you did. We know it was hard work, because we were there to see it.

I'd like to turn first to Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Canadian Alliance): Thank you. I join with the chair.... I have to join with you; I have to agree with you. That's pretty tough, you know.

The Chair: Sometimes you simply have to take a little pain.

Mr. Deepak Obhrai: I know, I know.

Thank you very much. I was there in Doha, and you guys did a good job. Coming out of that, this is the second successful ministerial conference after the Uruguay Round.

I have a couple of rapid questions, so if you can make it short, what I'm interested in knowing is what is left over from the Uruguay Round that has fallen over, that has not been implemented. What was done in Doha? Were there any areas that were left from the Uruguay Round that have not been completed, that will be completed before 2005, and would have any spill-over effects on the Doha talks?

• 0935

Mr. Don Stephenson: I don't know if my colleagues have other thoughts, but with respect to the Uruguay Round agenda, except for the issues of implementation that were raised as concerns by developing countries and are part of what's referred to as the implementation agenda or the implementation issues, I would say there are not other issues left over.

I suppose left over on the agriculture side would be getting to real reform. We brought agriculture into the WTO and the Uruguay Round, but we didn't achieve very deep reform. So I guess you could say that was left over and is clearly part of our objectives for the new round.

With respect to services, much remained to be done after the Uruguay Round in terms of inventing the rules for services trade. In respect of the next round of discussions on the GATS, I suppose you could say that's left over.

As I noted, we didn't make as much progress on the Singapore issues—investment, competition, government procurement and trade facilitation—as we might have hoped. I suppose that Canada was already predicting, going into Doha, that we might not make progress on those issues and that a realistic result from Doha would probably not include that. Still, we would see that as unfinished business to be addressed in future negotiations.

Beyond that, I don't know what I would comment on in respect of unfinished business or unimplemented agreements with respect to the Uruguay Round.

Mr. Deepak Obhrai: So we almost have a clean slate to go ahead in this area.

Could you tell me what we didn't achieve in Doha, what we didn't get that we want?

Mr. Don Stephenson: Again, the Singapore issues. I would say that at least in respect of trade facilitation, rules for the treatment of goods and services at the border to facilitate access to the market.... Once you've negotiated access to the market, you're not finished. You still have the administration of access at the border. You also have domestic competition rules that can assist you or not assist you in respect of achieving real access. At least in respect of trade facilitation and new rules on transparency in government procurement, we thought we could have achieved an agreement at Doha to precede the negotiation, and we did not. So I guess we could say we didn't get what we were hoping for in respect to those two issues.

We were more realistic in respect of competition and investment, whether the WTO members were ready to proceed to negotiation in that area, so I would say it wasn't on our list of expectations and I wouldn't put it on the list of things we didn't get.

I guess I would say that a stronger statement in support of working on labour issues would have been on Canada's list. As well, prior to the Doha conference we had been working on trying to convince other members of the WTO to include a statement on the importance of cultural diversity. Our efforts, both in Geneva and elsewhere, were not bearing that much fruit. We had a lot of passive kinds of support. Countries would say they had no objection to such an inclusion in the text but were not going to give us their active support in the sense of them asking for such statements in the declaration.

For reasons that I can explain if you like, the Department of Canadian Heritage asked us to not pursue the language on cultural diversity in Doha. We had certainly been seeking it prior to Doha, so I guess you could say that was something we didn't get in the declaration. Otherwise, I would say we got most of what we were hoping for and can be very pleased with the results.

Mr. Deepak Obhrai: Could I have one more question?

The Chair: Yes, one more.

Mr. Deepak Obhrai: We call this the development round, so I will ask Tim over there, from the chequebook agency—I like your name, chequebook agency.

• 0940

Capacity-building has become a key issue. There's capacity-building for FTAA; there's capacity-building for WTO; there's capacity-building for China; there's capacity-building for all the least developed countries. Tell me, is there a special budget for it? And if so, how much money has been allocated for all this capacity-building that we have committed ourselves to give out? I guess CIDA is playing the important role in that one. Would we have a figure? Would we have a direction where this capacity-building direction is going? How much is committed?

Mr. Tim Miller (Trade Team Leader, Economics Policies, Policy Branch, Canadian International Development Agency): First of all, yes, the capacity-building theme is starting to permeate all trade negotiations; you're right. If you look at the Doha declaration, those commitments for the developed world as a whole are made in at least 12 places. Those aren't requirements just of Canada, but of the developed world as a whole; that is, all the donor agencies and multilateral institutions working together.

There are many commitments in these other negotiations, as well as through the WTO. We view this Doha result as a very useful sort of guidance, because developing country representatives have actually specified subject areas where they want trade capacity-building; this gives us some guidance.

We're really at the initial stages of discussing what the implications are in terms of Canadian aid policy, in terms of following up on the trade capacity commitments that were just made at Doha.

In the past, CIDA and other development agencies have been quite involved already in what you could call trade capacity-building in developing countries. To give you an example—we're trying to put together an inventory within our own system of what we've done—we're estimating since about 1992 CIDA's disbursed over $300 million on projects in the developing world of the trade capacity-building type. Right now in our inventory we've identified 198 specific projects in all three continents—Africa, the Americas, and Asia.

To give you a bit of a feel, the disbursements for these existing and past projects were, in percentage terms: about 42% went to Asia; 24% to Africa and the Middle East; and about 21% of these expenditures went to Latin America—the point being that CIDA has already been quite active in trade capacity-building over the last decade.

These are two new commitments that have been put into the ministerial declaration, so we have to continue looking at how we approach the whole issue of following up on them. I would point out that, for example, we have a WTO project in Bangladesh already. To some extent we are therefore involved in existing projects that can already help implement some of these commitments.

A final point I'd like to make is about the exercise we'll be going through in the next several months. We're going through a budgetary process. We would like a larger budget for capacity-building, but we're not there yet. Basically we're several weeks out of the Doha meeting, so we're going through that process still.

Another big element we'll be working on is what we call donor coordination—trying to coordinate the capacity-building work in the developing world throughout the whole set of OECD countries. An example is the British DFID, which is the equivalent in the U.K., is very active—more active than Canada—in trade capacity-building already, and we hope to work very closely with them in this exercise.

Thank you.

Mr. Deepak Obhrai: Mr. Chairman, can I make a request?

The Chair: Yes, you can make a request.

Mr. Deepak Obhrai: Is it possible to get CIDA to give us a comprehensive report on what projects have been done, where the money went—you have just given us some figures—and where the future direction is? Can we get a good handle on where we're headed with this capacity-building?

Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Been there, done that.

The Chair: He's asking if.... You gave it to us orally, but do you have anything members could look at on paper and say, “Well, look here: we're building capacity in the following countries, and here's what we're doing”—that sort of thing? As he says, through the FTAA we hear about this. We travel to a lot of countries. It would be interesting to know, if we go to Zimbabwe, or if we go here, or go there.

• 0945

Mr. Tim Miller: That's a very valid request. We're in the exercise of actually completing an inventory right now that we can make quite publicly available once we're....

The Chair: Thank you very much for your help.

[Translation]

Mr. Paquette.

Mr. Pierre Paquette (Joliette, BQ): First of all, I would like to thank you for your presentation. I think that this subject is an extremely important one. We are only just beginning to get to grips with the issues because we were not necessarily convinced that the outcome of the Doha meeting was going to be what it in fact ended up being. We are very pleased with the outcome.

Having said that, I would have liked for you to provide us with an overall assessment, and for you to tell us whether the events of September 11 played a role in the relatively positive outcome of this meeting, insofar as they led developed countries to pay more attention to the concerns of developing countries. I would also have liked for you to assess whether overall, these events will facilitate or enhance the resolve of a certain number of countries to accelerate the liberalization process, or not. I heard one economics Nobel prize laureate—I do not know how he got his Nobel prize, but anyway—he said that the events of September 11 would push us, as a developed country, to close our borders even more. I would like you to give us an overall assessment. Following the 11th of September, do you think that the liberalization process will accelerate or do you think that we will hit, among others, security-related problems?

Mr. Don Stephenson: Firstly, I heard many comments at Doha from member countries and ministers from all over the world on the events of the 11th of September. As a result, I have to admit that for many of them, the events and their impact greatly influenced the decision taken in Doha and also the commitment to the liberalization of international trade. Of course, there was already a downward trend in the economy prior to September 11th. The events accelerated this slowdown, if you like. As a result, I think that all member countries wanted to send a positive signal as to their commitment to the liberalization process.

It goes without saying, that in Canada, even if we do share the Americans' security-related concerns, as a country, we depend so much on international trade—three times more than Japan and four times more than the United States—and our access to the American market and indeed to all world markets is so important for us, that we have to agree.

Mr. Pierre Paquette: Thank you. You have reassured me, because that is my assessment of the situation too. However, I am aware that this issue is being discussed currently in various circles. Consequently, I am reassured by your statement.

I myself was not present at Doha, but my colleague Richard Marceau was. We have two different assessments of the attitude of the Americans in terms of agriculture. Personally, I understood that the lack of commitment by the Europeans indicated that they wanted to keep all possibilities open, whereas Richard, who was in Doha, considered that the Europeans had given in on their export subsidy policy. I would like to hear your take on the matter.

I would also like to know whether, in your opinion, the agriculture liberalization approach could challenge our supply management system in specific sectors. I have been assured that it will not, but by the same token, I find it somewhat ironic that we are attempting to open up markets while at the same time, on other issues such as dairy matters, we are retaining the option of prohibiting and limiting imports. Personally, I support the supply management system. I believe that it is a win-win system. However, I would like to know whether, in your opinion, we will be in a position to retain our supply management system if we liberalize markets. Don't you think there is a contradiction here?

I have one last very specific question. In terms of refined sugar, we are currently engaged in negotiations with three Central American countries. We have already signed a free trade agreement with Costa Rica. We unilaterally liberalized access to the refined sugar market in Canada. We are aware that the American and European markets are extremely closed. Does Canada also intend to push for liberalization in refined sugar markets?

• 0950

Ms. Suzanne Vinet: These three questions are very important.

On the issue of the language used in the text, it is important to point out that the text is consistent with what the committee chair, Mr. Harbinson, proposed in early October. The only words that were added were designed to underscore the fact that the text did not prejudge outcome of the negotiations.

The Europeans had a specific position and they did not want the Doha document to state that they intended to negotiate the elimination of export subsidies. This is what we refer to as the phased-in withdrawal of export subsidies.

The solution that we came up with was to state that this issue would be addressed during negotiations and that negotiations would be geared to implementing a phased-in withdrawal of export subsidies. The negotiators will have to work out the framework, the schedule, the whys and wherefores and the terms and conditions. This allowed the Europeans to claim that negotiations will not necessarily result in elimination of export subsidies, and it allows us to state that we intend to negotiate with the goal of eliminating export subsidies.

It was a win-win situation for everybody. Basically, no one gave in and everyone got what they needed. This was important for us because it is clear that one of our goals is to negotiate the elimination of export subsidies.

The declaration clearly states that this is one possible outcome. It is up to us to negotiate this outcome. In our opinion, this was a win-win approach, because it is clear that the outcome will be determined at the negotiations.

Mr. Pierre Paquette: A process has been triggered.

Ms. Suzanne Vinet: That is right. On this issue, things are going well.

In terms of supply management, you have raised several issues. As for the negotiating position, we consider that the way our producers choose to market agrifood products is a domestic decision. We are clear on this position. It is up to us to decide how we market our products.

When you choose to export goods, you do so within a framework of international regulations. We have international obligations and we have to export in a way which is consistent with these obligations. For instance, take the dairy panel—this has nothing to do with the marketing of our products on the domestic market, but does concern the way we do business on the export market.

Mr. Pierre Paquette: You are talking about current regulations, aren't you?

Ms. Suzanne Vinet: Yes, I am talking about current regulations.

Mr. Pierre Paquette: But potentially—

Ms. Suzanne Vinet: In terms of negotiating new regulations, Canada's negotiating position on market access, for example, was developed following nearly three years of cross-Canada consultations, in all industries and with all representatives of the agrifood industry, who represent the interests of Canadians. Our agrifood industry depends greatly on export markets, but it is clear that we also have some sensitive issues here. The approach that has been put forward is geared to maximizing market opportunities, but at the same time, taking account of the fact that there are some sensitive issues. We are not the only country in this position.

We are convinced that we have a credible negotiating position because we have adopted a diversified approach. We have put forward a negotiating proposal aimed at seeking out all possible export opportunities; this proposal has the support of the agrifood sector, both suppliers and exporters. It took us two years to develop the position that we have now adopted. This position is understood and supported by producers.

Refined sugar is one of our negotiating objectives. We are trying to improve export markets, including for refined sugar. The sugar processing industry wants access to the American market. We will see how the Americans negotiate—

• 0955

Mr. Pierre Paquette: That is among the concerns of Canadian negotiators.

Ms. Suzanne Vinet: That is certainly the case in the negotiations and the discussions.

Mr. Pierre Paquette: I would like to ask a short question about textiles.

As you know, Quebec still has a textile and clothing industry. There are 40,000 jobs in the clothing industry alone. Once again, I was not there and I am going on what I read in the newspapers, but what was agreed at Marrakech or in the original WTO agreement is expected to be implemented more fully, since developing countries were complaining that the developed countries were partially closing their market to textiles and clothing from developing countries. What is going to happen? Does this jeopardize part of our industry here, in Quebec or Canada?

Mr. Don Stephenson: A lot of pressure was brought to bear on developed countries, in particular the United States and Canada, to get them to open up their markets to those textiles immediately. In the Uruguay Round agreement, promises were made to developing countries and the industry in Canada. They were told that quotas would disappear after ten years, that only tariffs would be left and that access to the Canadian market would be based only on price.

As I have already mentioned, in Doha, a great deal of pressure was exhorted on Minister Pettigrew and on Minister Zoellick from the United States. They took the heat. They kept the promises that they had made to both the developing countries and Canadians regarding textiles. The 1995 agreement says that the quotas will be gone by 2005. Of course, in the transition period, we have managed to remove the quotas in the best way possible for the Canadian industry. Developing countries sometimes accuse us of holding on to the most difficult quotas until the very end. They talk about “back-end loading.” I think that we have gone about things in the best way possible for the Canadian industry. Promises were kept at Doha and, as previously agreed, the 1995 agreement will come into force in 2005.

Mr. Pierre Paquette: In 2005, there will still be tariffs.

The Chair: Thank you, Mr. Paquette.

Ms. Augustine.

[English]

Ms. Jean Augustine: Thank you very much.

I welcome the officials and also congratulate them for their work. I also want to follow through one of the areas Mr. Paquette raised. And I'm not going to ask questions in their direction, but I want you to know there is a sugar caucus, and we're very, very interested in the whole issue of that industry in Canada. We've been doing the best we possibly can to make sure the minister understands the issue, and we're given some assurance he's concerned.

The other issue is the business of textiles. I'm sure you know that Pakistan is looking for a quid pro quo as a result of what they're doing now after September 11, and they've been making advocacy and representations around to various MPs asking us to make sure Mr. Pettigrew understands. I have spoken to Mr. Pettigrew and know he's spoken with the minister in Doha on where that discussion is, so I'm just putting this out for information.

I was at a breakfast meeting at the Press Club where there was an African speaker—I forget his name right now—and he was talking about trade and finance and debt and small economies, etc. He said “We were not in the formal drafting of that. We were just brought into the room, and our balls were squeezed into agreements.”

An hon. member: Jean!

Ms. Jean Augustine: Excuse me. You can't say this in a committee? Erase, erase!

The Chair: I thought you were the chair of the sugar caucus and were just sugar and spice and awfully good.

Ms. Jean Augustine: No, I—

Mr. Stan Keyes (Hamilton West, Lib.): Gosh, the bell started sounding and everything.

• 1000

Ms. Jean Augustine: Red lights go on, eh?

An hon. member: I didn't know you were like that.

Ms. Jean Augustine: No, I was just repeating what I heard.

It appeared then that a number of developing countries, which make up the majority of the WTO members, were wavering in their support for either additional trade liberalization, or in terms of further goods and services, etc. They were asking for studies to be done, or they were promised that studies would be done. I'm just trying to summarize some of the discussion, some of the arguments that were made.

What I want to ask you is precisely what were the deciding factors that brought them around to an agreement on this declaration? What were some of the key ingredients, or what was put on the table that enabled them to say this is a declaration that met some of their needs?

I'd like to throw my other question on the table. It is in regard to the TRIPS and the drug patents. It seems to me we got some things, and it's all fuzzy. I just wondered if you can further explain what exactly we agreed to. When can countries drop in and override the rules, etc.? I've been following this issue, and we've been following it very closely. Can you do some clarifying as to what was said there?

Lastly, if someone can speak to this, I've been trying to get some information on this framework agreement on special and differential treatment. What is that about? Can you say that in lay person's language?

Mr. Don Stephenson: Well, I'm from the trade bureau, so I can't say anything in lay person's language, but—

Mr. Stan Keyes: Are you a lawyer?

Mr. Don Stephenson: No.

Before I ask Cathy Dickson to deal with the second issue, TRIPS, let me try to answer the first.

With respect to African countries, let me first say they were extremely active and well organized in Doha. They met daily as a bloc of countries and acted on the agenda in a very coordinated and effective fashion. I would say of particular interest in terms of getting their support for the overall declaration was something referred to as the ACP waiver. This was a waiver by WTO members for preferential access to the European market that has been in place for some time and that had to be renewed. African countries weren't given this assurance until the very end of the conference. In fact, at five o'clock on the last day of the conference this was agreed to, and in fact it played a large role in terms of their support for the rest of the agenda.

I would say the things that also drove their agreement were the same things to a large extent that drove Canada's agreement. Ultimately, there had to be enough of interest to you in the negotiations for you to agree. I would say the agriculture negotiations—for all countries, including maybe, perhaps even especially, developing countries—were extremely important. They have real opportunities to make inroads, in terms of exporting agricultural products, through those negotiations.

Second, I would say the agreement to negotiate on anti-dumping rules was of very high importance to developing countries. There were some concessions in respect of implementation issues, just enough to build confidence in that process. I would say the commitments to not begin a negotiation on Singapore issues immediately—to wait until there was further technical assistance and capacity-building—should have played a role. Obviously, capacity-building commitments in general were addressed to them.

• 1005

But overall, I would say that at the last session, in plenary, Africa expressed very great satisfaction with the result and the degree to which their interests had been addressed and their voice heard in the process. That was a statement made by the African group at the meeting.

With respect to TRIPS, I'll pass it over to Cathy.

Ms. Catherine Dickson (Director, Information and Technology, Trade Policy Division, Department of Foreign Affairs and International Trade): Thank you.

Basically, the declaration on TRIPS and access to medicines or public health confirms that if you have a disease that is of a devastating proportion, such as HIV-AIDS, malaria, tuberculosis, and other such cross-border diseases, you can take special measures such as issuing a compulsory licence of a brand name manufactured product so your country can have access to it faster than the patent term would allow. You would have to wait otherwise.

The declaration was very important because although those provisions were in the TRIPS agreement before, they were not clear, and a number of cases had taken place, most notably in South Africa, where there was some question as to whether HIV-AIDS would qualify or not. The declaration clearly confirms that a disease of that sort would qualify as a situation of national emergency, and therefore action could be taken without the member country having fear of dispute-settlement proceedings. That was a very important clarification.

As well, the declaration confirms that continued research and development work is also part of the solution, because we all know we need more, better, and easier-to-ingest drugs that will take care of the diseases more effectively.

Ms. Jean Augustine: Could I have one more question?

The Chair: Yes.

Ms. Jean Augustine: Who makes the decision that this is a national emergency? Where is that decision made?

Ms. Catherine Dickson: Individual members of the WTO can make that declaration. So if Canada declared, or South Africa declared.... There's not a formal process per se, you just make the declaration. It was a big issue before, because there was always the suspicion that maybe your disease would be considered by others as not devastating enough. But it's a self-declaring situation.

Ms. Jean Augustine: As a follow-up to the first question, where are we with the accession of least-developed countries? Do we have a number of them coming on line? Could you give some indication?

Mr. Don Stephenson: I can't remember the number exactly, but there are a couple of dozen—

[Translation]

Mr. Pierre Paquette: Twenty-eight.

[English]

Mr. Don Stephenson: There are 28 countries in line—thank you very much—to accede to the WTO. There is also a commitment from the discussions in Doha and prior to try to streamline the process of accession for least-developed countries. That's a difficult discussion, because on the one hand part of the benefit of being a member of the WTO is that you've done the work to prepare to be a member—you've established the governance systems, made changes to domestic law—

Ms. Jean Augustine: The legal framework.

Mr. Don Stephenson: —so you don't want to over-streamline the accession process. That would rob people of the benefits of being a member. But there is a commitment to try to provide increased support to the least-developed countries and to streamline the process to the extent possible.

On your third question, with respect to special and differential treatment, one of the cornerstone principles of the WTO when it was established in 1995 was that there is a single undertaking. Everybody is committed to exactly the same set of rules, rights, and obligations. That's an important principle. But obviously countries have a different level of capacity to implement those obligations, and they have different needs. The least-developed countries have greater needs in terms of building infrastructure and implementing the governance systems that will allow them to benefit from their membership. Therefore, special and differential treatment is provided for in respect of any of the agreements.

• 1010

Special and differential treatment can be longer transition periods before you have to implement your obligations, or different thresholds for—

Ms. Jean Augustine: [Inaudible—Editor]...bananas.

Mr. Don Stephenson: It's more in respect of specific rules, like to what extent you can use subsidies to subsidize your exports, and a different threshold is established for poor countries from that for rich countries. It's things like that.

The work on a framework for special and differential treatment is simply to establish a clear set of rules and almost best practices for how to implement special and differential treatment.

Ms. Jean Augustine: Thank you.

The Chair: It seems to me this special and differential treatment discussion has gone full circle, at least in my own lifetime of being engaged in trade matters.

Under the original GATT there were a lot of negotiations about treatment for developing countries and why they should be allowed to do all sorts of things that others were not allowed to do. Then when we got to the Uruguay Round, everybody said that wasn't working so they were going to get rid of all that and everybody was going to be treated exactly the same. Now we're at Doha and we're going back to saying we do recognize people have to have special and differential treatment.

Have we just gone around in a circle and come back to where we were 20 years ago? Is this different, or is it just new language? It seems to me it's another word for the same thing, like trade promotion authority is still fast track, whether you call it TPA or not.

Mr. Don Stephenson: And the Doha development agenda is still around.

The Chair: Yes.

Mr. Don Stephenson: I would say if you're focusing just on the debate on special and differential treatment, you might arrive at that conclusion. But I think you have to take a step back and look at the broader picture. It is the Doha development agenda. It was intended to sound different because it is different.

I think there has been an evolution in the WTO, and we can't go back. The interests and concerns of developing countries are front and centre in the WTO, and are being addressed in several different ways in the forward agenda.

I think the good old days where the quad countries—the U.S., the EU, Canada, and Japan—could effectively establish the agenda and then, by squeezing whatever it is they squeeze in the back rooms, force that agenda on the rest of the membership are pretty much over. In every discussion in the WTO the issues of developing countries are on the table and have to be addressed if we're going to make any progress, because it is a consensus organization. They have to agree.

The Chair: Are you confident that will happen? This will be quite important, I think, for our study into the G-8, because presumably these issues are related, for example, if the agenda of the G-8 is going to focus on Africa to some extent as the largest conglomeration of developing countries, some of them with the biggest problems.

I'll throw out an idea. Going back to textiles, which Mr. Paquette was asking about, I remember the multi-fibre arrangement, again around 25 years ago, was supposed to address the developing countries' concerns. We were going to actually establish a fair regime for textiles. That was 25 years ago, and they still don't have access to textiles markets, and that was what was talked about at Doha. So what confidence could they have that they really are going to get anything from textiles out of this agreement other than what they've got in the past, which is a lot of stuff on paper and no real market access?

Look at the issue of non-tariff barriers, particularly anti-dumping and countervail, which the developing countries.... Canada is very concerned, because the United States is the largest user of anti-dumping. I know we use it too. But if you're looking at it as a market-access-denying instrument, which is what it is, it's very clear from what the Senate declared—for Mr. Zoellick's benefit—that whatever they may have said about the negotiations, they have no intention whatsoever of constraining themselves in respect of anti-dumping. So why would the developing countries or Canada believe this will really happen?

• 1015

When we entered into an agreement in NAFTA with the United States ten years ago, we thought there was going to be some constraint on anti-dumping, but we're looking at softwood lumber today, and nothing has changed.

I think this is the source of the frustration of the developing countries that I hear when I speak to people. Yes, we've been talking about this stuff, but most of us have been talking about it for our lifetimes and we haven't really seen significant progress. Now we're saying this is a development round. Is this just talk, or do you as a trade negotiator see a real opportunity to bring on the developing countries as real partners in this exercise?

Mr. Don Stephenson: What I can tell you, with respect to the seriousness of addressing these issues, is that since Doha, ministers in the quad—Minister Pettigrew, Minister Lamy, and Minister Zoellick—have already spoken about how to coordinate their efforts in meeting our commitments to capacity-building and technical assistance.

At my level, in my discussions with quad countries, we had a meeting yesterday by teleconference to begin the process of trying to coordinate our efforts in this regard. We're meeting at the end of next week with the secretary to the trade committee in the OECD, and we'll put this issue on the table about a role for the OECD in coordinating our efforts.

I say these things only to indicate that people very clearly seem to be taking these commitments seriously. Perhaps that's only because at the fifth ministerial we're going to need to be given a passing grade on those efforts, if we're going to realize our ambitions to complete the negotiations and expand the negotiations to other issues like investment, competition, and other things. Certainly there are signals that people are taking the issue seriously.

With respect to textiles, I indicated we are going to honour our commitment in the agreement on textiles and clothing. Our quotas will be gone in 2005. At that point we'll be dealing with tariffs. I noted that in the agreement in Doha, we consented to negotiations on tariffs, including what's referred to as “peaks and escalations”. That's effectively textiles and agriculture. That's where we have peaks and escalations, effectively.

The Chair: From the developing countries we speak to, Canada is a market, but the real textile markets are the United States and Europe. Again, somehow they seem to have been frustrated in their access there. Do you feel there's a serious commitment there to open those markets?

We'd be interested in opening the U.S. market to more Canadian textiles from Montreal. I'm sure Mr. Paquette, who we talked to when we talked to our own clothing manufacturers.... Even with NAFTA we find the United States market virtually impenetrable, when they want to shut it.

Mr. Don Stephenson: I remember being threatened in the magazine negotiations on wool suits.

With respect to anti-dumping, Canada's trade policy strategy has always been to prioritize new rules at the WTO, where there are now 143 partners we can talk to about what we don't like in U.S. trade law, as opposed to just one-on-one. One-on-one, it doesn't matter what we do because they're ten times bigger than we are.

That's always been the reason for our commitment to the multilateral trading system and developing rules. However it's being presented in Washington, there is a commitment to negotiate on anti-dumping rules. I can tell you that 143 members of the WTO are very anxious for those negotiations.

Maybe the 144th member is also interested in those negotiations. As it was noted by Mr. Zoellick on a couple of occasions prior to Doha, the United States has noticed they're no longer the biggest user of anti-dumping. All countries, including developing countries, are now using anti-dumping measures, mostly with U.S. lawyers. They're having more success with such cases than the United States.

• 1020

Mr. Zoellick noted—I think it was in Mexico City—they did a little calculation and noticed that the developing countries win two-thirds of their cases, whereas the United States only win half of theirs.

There was also an amusing moment at a discussion in Singapore when the South African minister for trade indicated they were having tremendous success with anti-dumping measures because they accessed some money in a U.S. technical assistance program and learned how to do it. Mr. Zoellick indicated that program would be closed, but they were taking a somewhat more balanced view of anti-dumping, as a result.

The Chair: So maybe the lawyers in Washington will go around and persuade all the other countries to adopt a Byrd amendment, so they can get a sort of ambulance-chasing benefit out of these cases. Then we'll never end it, because there will be too many vested interests in it.

What about culture? You mentioned it didn't get on the table. A lot of us are interested in cultural diversity, and as you say there's a great deal of sympathy for this position around the world, but it never seems to get into the trade agenda. It's obviously very complicated.

Mr. Don Stephenson: Canada's strategy on cultural diversity is to try to build a consensus first among ministers of culture on exactly what we feel we have to protect and preserve, as authorities, to take measures in support of, or to protect our ability to preserve our own cultural expression.

We are making progress in those discussions. An increasing number of countries are joining Minister Copps' international network on cultural policy. Prior to the Doha conference, France, our traditional ally in cultural diversity issues, indicated its support for the development of a new international instrument, treaty, or something to preserve the right of countries to do just that.

Leading up to the discussion in Doha, France was not comfortable with the strategy of raising cultural diversity for discussion in Doha, or for that matter in the WTO at this time. They believe, as Canada does, this has to be a kind of two-step process. First, we have to get consensus among ministers of culture, then we have to get consensus on the linkage to trade.

I guess it's analogous to our position on environment. We negotiate environment agreements outside the WTO, and then we try to agree on the linkages to WTO obligations. I don't think anybody in the cultural sector would seriously wish for ministers of trade to negotiate a cultural diversity agreement, more than they would have them negotiate environment agreements.

That's essentially the process Canada sees as we move forward. As I say, we are making progress in the international discussions on culture and cultural diversity, but we have not yet begun to make inroads on the trade side.

The Chair: Thank you very much.

Mr. Duncan, sir.

Mr. John Duncan: I just want to comment on your comments about anti-dumping. The WTO has just released a summary of all the worldwide anti-dumping investigations that were initiated in the first six months. The numbers were quite dramatic, from the standpoint that they were up close to 50% this year over last year. The vast majority, somewhere around two-thirds, were still initiated by the developed countries.

I think we have to take Mr. Zoellick's comments with a little bit of a grain of salt, because in real terms you'll see that the number of complaints emanating from his country are up. Actually, it might be worth the committee's reviewing those statistics. I don't know if I got those from you or the clerk or if my own researcher dug them up, but they're certainly available.

• 1025

The Chair: I'd be interested in seeing them.

Mr. Don Stephenson: With respect to access to the statistics, the WTO publishes an annual report.

Mr. John Duncan: It's on their website.

Mr. Don Stephenson: It would be due, I think sometime soon, where they total the anti-dumping cases and list where they come from. That would be a source of interesting information for the committee.

I must say that when Mr. Zoellick made these comments, I believe he was referring to developing countries being a bigger user of anti-dumping per capita. I think what he meant was that in absolute numbers the U.S. is still a very large user indeed. In last year's annual report the EU had in fact launched more cases than the United States, so it's clearly not just the U.S.

I would certainly agree that we have to take the U.S. comments in this regard with a grain of salt. I think that trade defence law in the United States comes close to religion in terms of being deeply held. We look forward to the negotiations in this regard.

[Translation]

The Chair: Mr. Paquette.

Mr. Pierre Paquette: With respect to culture, I had understood that Canada did not want that to be on the agenda at Doha. I know, among other things, that people were counting a great deal on the Francophonie Summit to produce the consensus to which you are referring, but the fact that the summit was cancelled reduced the chances of Canada, Quebec and France reaching a consensus position.

I would like to come back to the investment issue. When Mr. Pettigrew came before the committee, he told us that Canada wanted that to be identified as a negotiation issue, but that he was not very optimistic about that happening. The final declaration says that negotiations are intended, but the language is still fairly timid. It talks about defining a certain number of things. I would like to hear your views on that.

With respect to the role of parliamentarians in the current negotiations, we know that parliamentarians have often complained that they are not sufficiently involved in the overall process. We are often more like spectators than anything else. I would like to know whether that has been discussed. It seems to me that it has been, but I would like you to tell us exactly what role parliamentarians should play, not only in Canada—we already have our problems here—but in the overall process.

Mr. Don Stephenson: With respect to the discussions on investment, in the months leading up to the Doha meeting, the countries supporting negotiations on an investment agreement were proposing approaches to the other members, and those approaches were becoming increasingly timid, as you say. As the discussions went on, people became less ambitious about the negotiations. Approaches were also proposed that would help make developing countries more comfortable with the negotiations, among other things, opt-in and opt-out approaches. In other words, countries could take part in the negotiations, but decide in the end to sign or not to sign, or to sign later.

Of course, Canada was not very comfortable in those discussions. To begin with, we want an ambitious agreement, one that contains usable rules to protect investors. As well, for Canada at least, it is the participation of developing countries, and not OECD members, that is important, since it is in dealing with developing countries that our investors need clear and transparent rules.

• 1030

I would say that Canada is not uncomfortable with the decision made in Doha. In other words, we still have two years to become comfortable and to make developing countries more comfortable about the substance of an investment agreement. That is perhaps a better result than if we had negotiated an unambitious agreement at Doha. In the end, it may be a better result for Canada.

As far as the role of parliamentarians is concerned, your chairman was at Doha and took part in discussions on the issue, and he might be in a better position than I am to answer your question. I would only say that Canada supports parliamentarians who want to play a role in the process and take part in discussions around the WTO. We do, of course, have to keep in mind the sensitivities of all countries, but in particular developing countries, since they insist a great deal on the intergovernmental nature of the WTO and would not want any other processes to reduce their authority or power in the WTO discussions. Your chairman took part in those discussions at Doha.

Mr. Pierre Paquette: Before you answer—

The Chair: We are very grateful to the government and especially to Mr. Pettigrew, who was the first minister to propose that a group of parliamentarians be involved in the ministerial work. Canada proposed that, and Mr. Lamy then supported that proposal, if I understood the process correctly. So for the moment, at the ministerial level, the only two voices who supported the idea of any official involvement, without specifying the exact nature of that involvement, are Canada and the European Union. Mr. Zoellick, as far as I understand, had no instructions and therefore was not in a position to say whether he was in favour or not, but my own sense is that this idea has a great deal of support in the developed countries and a lot less support in the developing countries, on political grounds and for a lot of other reasons.

Mr. Pierre Paquette: Concerning services, I read that specific requests from countries had to be submitted no later than June 30th, 2002. Canada has already made its position known regarding the General Agreement on Trade in Services. Does that mean that Canada will have to resubmit its position or that it intends to add to it?

Mr. Dan Stephenson: Canada has tabled its initial positions. Canada made very broad proposals for the negotiations.

By the 30th of June, Canada will make very specific demands to specific countries, especially within the framework of bilateral discussions, with a view to obtaining access to such and such a market in such and such a country. This is what we refer to as requests. Once we have examined all the requests put forward by all countries who wish to do so, Canada will table its offers in a year's time.

Consequently, the Canadian position deals with broad issues, such as our commitment to utilities, health, education and culture. We have already indicated to the other members that we do not intend to make requests or offers in these areas. We have expressed very broad interests in specific sectors, including small and medium business. We will have to pay specific attention to small and medium business. This is a fairly forward-looking proposal which raised a great deal of interest from various countries during the discussions.

• 1035

Mr. Pierre Paquette: Therefore, Canada tabled its requests on June 30th and put forward its offers on March 31, 2003.

Mr. Don Stephenson: That is right.

Mr. Pierre Paquette: I just wanted to know the time scale so that I will be able to harass Mr. Pettigrew.

[English]

The Chair: Mr. Obhrai.

Mr. Deepak Obhrai: Yes. Now it's time to move into the future out here. We have done Uruguay. We have done Doha. Transparency is the big issue.

As we go into these negotiations and agreements and the 2003 ministerial conference—where is that being held, by the way?

Mr. Don Stephenson: There's a proposal from Mexico to host the next ministerial conference. That's the only formal proposal.

Mr. Deepak Obhrai: Let's talk about transparency in all these negotiations as we go on here. What is the department going to do to make it as transparent as possible? What is your game plan over there? We have the concerns Canadians do have, and parliamentarians always have a concern about the transparency issue, the secret negotiations. You know all that; you've heard enough of that and seen enough demonstrations going on over there. How is the department going to address the issue of transparency? What's coming on the table?

Mr. Don Stephenson: The department has not yet put specific proposals before the minister in terms of the consultation process. We expect to do that perhaps in the first weeks of January.

I can only answer the question in general terms. I would say that certainly we see that a very aggressive, comprehensive consultation program must be ensured. We have provided on our website access to Canadian proposals in respect of the agriculture and services negotiations and so have been fully transparent in respect of the positions Canada has been taking in that regard. All our positions on issues related to the negotiations in Doha are available on our website.

As we go forward and those positions change through the consultation process or for other reasons, that information will be updated consistently. The effort at consultation and transparency will have to be at several levels. I think that among other things Canadians want access to their parliamentarians in that debate.

An interesting study was done on the Seattle conference by the Institute for Research on Public Policy, a study that was done by Dennis Stairs on the consultation effort. One of the principal conclusions was that Canadians want to have access to two different debates. One is on the political-level policy decisions and goes to access, therefore, to politicians and to parliamentarians. At another level, they want to have access to a debate of a more technical nature, and that's more with officials.

These processes often get confused. It's never possible to completely eliminate the one discussion from the other, but we have to ensure that the debate occurs at both levels to provide for the needs of Canadians to express themselves on the issue. It's an interesting conclusion, and certainly one the department supports. I would say that at least at the level of policy and the technical aspects of our positions, we need to consult.

We also need to involve the provinces in the consultation effort. It falls to the provinces to actually implement much of our international negotiations, certainly in the areas I'm particularly responsible for, namely services, investment, and government procurement. These fall to another order of goprenment—or to other orders of government, because municipalities as well are implicated. That level of consultation has to be assured as well.

We have to make sure to consult both with direct stakeholders, either industry stakeholders or special interest groups and NGOs with particular interests, and also with the average Canadian through various processes. That would perhaps be through calls for submissions, perhaps through a formal process like a Canada Gazette announcement, or perhaps through a series of consultations across the country where individuals are invited to present themselves to speak to either parliamentarians or officials. It can be all these things, but it has to cover each of those levels, I would suggest.

• 1040

We have been asked to present recommendations to the minister, perhaps in December, perhaps early in January, for how we will proceed. I would say that we don't have that much time, either. We would have to, as noted by one of the members of the committee, present our requests for the services negotiations by the end of June. I would say that it will have to get a quick start in the new calendar year for us to engage in those consultations.

That having been said, I just don't want to mislead you. There are consultations underway already in respect of services and in respect of agriculture. They have been underway, those negotiations, for a year. It's not as though none of this is in fact already engaged. We have a significant challenge to meet in the new calendar year in respect of consultation and transparency.

Mr. Deepak Obhrai: The same question goes to CIDA. What plan does CIDA have to make the issues transparent the way you are? We're talking about two different departments, as you know. Also, that goes from the trade department, from CIDA.

Mr. Tim Miller: You're talking in terms of trade negotiations?

Mr. Deepak Obhrai: Yes, I'm talking about trade.

Mr. Tim Miller: The mandate for trade negotiations is with the Department of Foreign Affairs. We aren't trade negotiators at CIDA.

Mr. Deepak Obhrai: You have been brought in. This is a new phase since your president went to Doha, so you have been brought in now.

Mr. Tim Miller: Absolutely, and basically, in terms of consultation for trade negotiations and the trade negotiators at Foreign Affairs, our plans and transparency in trade negotiations will directly follow the plans of the Department of Foreign Affairs.

Mr. Deepak Obhrai: I have a final question.

The Chair: I just want to remind members that the bells are now ringing. It's a 30-minute bell. We have to adopt our report and deal with a few other procedural matters, so maybe if we could wrap up our questions quickly with this group, then perhaps we could move—

Mr. Deepak Obhrai: With regard to trade disputes and the WTO, the trade dispute mechanism is becoming extremely complicated. You require tons and tons of lawyers and trade experts, you name it. It's becoming extremely costly for every country. We talk about capacity-building and we talk about helping all these things, but at the other end it's getting to the stage where you need documents, documents, and everything. Can you perhaps give us a quick idea of whether there's a movement in the WTO to simplify that dispute mechanism so it's not so costly and is easily accessible. I think that's one area where, if it's not looked into, all the deals we sign are going to fall through the cracks.

Mr. Don Stephenson: I think the fair answer to your question is no, but with explanation. There is not a consensus or a movement in the WTO to simplify or streamline the dispute settlement system. There are certain administrative improvements that have been proposed, but I would not say that they would greatly shorten or lighten the process. We are as well trying to open up the process to more public scrutiny, to have access to documents on a more timely basis, and that sort of issue.

I would say that there are interesting debates about the effectiveness of the dispute settlement system. For example, there have been decisions that certain countries have refused to implement or that have taken so long to implement that the benefit of the system has not been obvious to all members.

As well, there is the difficulty of the way the current system works in the sense that when you win a dispute settlement case in the WTO, you are given the right to retaliate by measures of equal economic effect. But in a sense, you have to shoot yourself in your own foot in order to retaliate against the other country. You have to put tariffs on goods entering the country, thereby increasing the costs for your own consumers. It's not a trade-enhancing solution to the problem.

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There is a discussion in the WTO about whether there are alternatives. Some have proposed that we take trade-enhancing approaches to penalties for failure to live up to your obligations. In particular, what I'm talking about is either financial compensation being paid from one country to another or having to liberalize trade—provide increased market access in some other place—rather than to impose tariffs on trade as an alternative.

All of those things will be discussed in the negotiations on the dispute settlement system that we've agreed to in Doha.

Mr. Deepak Obhrai: Thank you.

The Chair: Thank you very much, Mr. Stephenson.

Thank you very much, all of you, for coming. There are a lot of questions I'm sure we could ask you. I hope we'll have an opportunity to pursue them again. Congratulations again for the work you did. I know, Ms Dickson, the work on the TRIPS agreement was controversial. I think we have a good agreement to the benefit of the whole global system. So overall we're launched.

Ms. Jean Augustine: Mr. Chairman, it's good to put faces on the people too.

The Chair: Speaking for myself, I think a three-year agenda, given particularly the agriculture issues in Europe and the American problems, is pretty ambitious, but we'll see.

Thank you very much for coming.

Now, colleagues, we have 22 minutes to do three things. I hope the first two will only take one minute each and then we'll turn to our report.

First, because of this meeting, the Canadian Council for International Cooperation, speaking for NGOs, have asked if they could come and speak to us on Tuesday about the developing countries' concerns arising out of Doha. That would be this coming Tuesday. Otherwise, this matter can be dealt with by the trade committee or something. But I'm wondering whether there is an appetite in the committee, since this is fresh in our minds, to hear from NGOs, even if there's just a small group of us here on Tuesday.

Ms. Jean Augustine: I think we should, because it's an umbrella group.

Mr. Pierre Paquette: Which one?

The Chair: CCIC, Canadian Council for International Cooperation.

[Translation]

We just want to hear some comments on what took place at Doha. It should take about an hour and a half at most.

[English]

It will be an hour and a half maximum, but we'll be hearing witnesses, so it doesn't have to be everybody. A quorum for hearing witnesses is three, so we'll be all right. They'll have to recognize that it's the last week of Parliament—the second-last day. Everybody's going to be quite distracted by a lot of other issues, but we'll do our best to accommodate them.

Secondly, colleagues, you've seen a letter that I received from Mr. Pettigrew and you've heard what Mr. Stephenson said about public consultations. There's going to be a big challenge to consult Canadians. We've agreed that the main committee is going to be doing both G-8 and going across the country on our Canada-U.S. study. So I would recommend to the committee that we instruct the trade subcommittee to take up the issues raised in Mr. Pettigrew's letter, and that the trade subcommittee do the consultation process for the WTO.

[Translation]

Mr. Pierre Paquette: It is only the April 2002 deadline which does not seem to me to be realistic.

The Chair: I am sorry?

Mr. Pierre Paquette: Mr. Pettigrew has asked that recommendations be made by April 2002. That does not seem to me to be realistic.

The Chair: Exactly.

Mr. Pierre Paquette: Do we intend to refer that to the sub- committee?

The Chair: Yes. It goes without saying, that if we do the work ourselves the timetable is quite unrealistic. However, if we refer to the subcommittee it is within the realm of possibility, isn't it? In any case, you are a member of the subcommittee and I wish you well.

Mr. Pierre Paquette: Thank you.

[English]

The Chair: We're referring that to the trade subcommittee then.

Now the report. Mr. Obhrai, as you're still in the room....

Mr. Deepak Obhrai: John Duncan gave it to you.

The Chair: I think Mr. Paquette had some objections the other day. I hope they've been addressed by our researchers. They did their best to do that.

Mr. Duncan drew to my attention two objections he had. One was on page eight in paragraph 17: he didn't have any problem with the last sentence, but he felt it should be somewhere else in the report. He couldn't tell me where, so I have some problem with that.

Then on page 24, he feels—and I hope I'm not putting words in his mouth, but I think it's accurate—that the last sentence of that recommendation, in bold type, paragraph 43, should come out, because it looks as if we are actually endorsing the proposal that the G-8 examine this, whereas in fact we're just about to go into our G-8 study. He feels that it's premature to make a conclusion as to what we're likely to conclude. He would be happier if we could take out the last sentence in paragraph 43. As long as we leave in the fact that we're looking at it, that's fine by me. So we'll take out the last sentence.

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Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): So moved.

The Chair: Okay.

Mr. Pierre Paquette: It's the last sentence.

[Translation]

The Chair: Yes, just the last sentence.

Mr. Pierre Paquette: I was told that it was the entire paragraph.

The Chair: No, just the last sentence.

Mr. Pierre Paquette: Great.

[English]

The Chair: Colleagues, could I have a resolution that the committee adopt the report that you have before you?

Mr. Stan Keyes: The amended draft report.

The Chair: Yes, the amended draft report. And that we're authorized to make the editorial and typographical changes, that a thousand copies be printed in bilingual format, and that I am authorized to present the report to the House on Monday.

Some hon. members: Agreed.

The Chair: Okay. Now, we'll issue a press release, but we're not going to issue the big fancy press release, because it costs a lot of money. It's on budget day, and somehow this report, while important, might just escape the attention of people on budget day.

Mr. Stan Keyes: In all likelihood.

The Chair: That's possible.

Thank you, colleagues. We're adjourned.