18 December 1998
POLICY REVIEW BODY: REVIEW OF CANADA
TPRB'S EVALUATION Back to top
The Trade Policy Review Body of the
World Trade Organization (WTO) concluded its fifth review of the trade policies of Canada
on 15 and 17 December 1998. The text of the Chairperson's concluding remarks is attached
as a summary of the salient points which emerged during the discussion. The review enables
the TPRB to conduct a collective examination of the full range of trade policies and
practices of each WTO member country at regular periodic intervals to monitor significant
trends and developments which may have an impact on the global trading system.
The review is based on two reports
which are prepared respectively by the WTO Secretariat and the government under review and
which cover all aspects of the country' trade policies, including its domestic laws and
regulations, the institutional framework, bilateral, regional and other preferential
agreements, the wider economic needs and the external environment. A record of the
discussion and the Chairperson's summing up together with the reports will be published in
due course as the complete trade policy review of Canada and will be available from the
WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following
reports have been completed: Argentina (1992),
Australia (1989, 1994 & 1998), Austria (1992), Bangladesh (1992), Benin (1997),
Bolivia (1993), Botswana (1998), Brazil (1992 & 1996), Burkina Faso (1998), Cameroon
(1995), Canada (1990, 1992, 1994, 1996 & 1998), Chile (1991 & 1997), Colombia
(1990 & 1996), Costa Rica (1995), C˘te d'Ivoire (1995), Cyprus (1997), the Czech
Republic (1996), the Dominican Republic (1996), Egypt (1992), El Salvador (1996), the
European Communities (1991, 1993, 1995 & 1997), Fiji (1997), Finland (1992), Ghana
(1992), Hong Kong (1990, 1994 & 1998), Hungary (1991 & 1998), Iceland (1994),
India (1993 & 1998), Indonesia (1991, 1994 & 1998), Israel (1994), Jamaica (1998),
Japan (1990, 1992, 1995 & 1998), Kenya (1993), Korea, Rep. of (1992 & 1996),
Lesotho (1998), Macau (1994), Malaysia (1993 & 1997), Mali (1998), Mauritius (1995),
Mexico (1993 & 1997), Morocco (1989 & 1996), New Zealand (1990 & 1996),
Namibia (1998), Nigeria (1991 & 1998), Norway (1991 & 1996), Pakistan (1995),
Paraguay (1997), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992),
Senegal (1994), Singapore (1992 & 1996), Slovak Republic (1995), the Solomon Islands
(1998), South Africa (1993 & 1998), Sri Lanka (1995), Swaziland (1998), Sweden (1990
& 1994), Switzerland (1991 & 1996), Thailand (1991 & 1995), Trinidad and
Tobago (1998), Tunisia (1994), Turkey (1994 & 1998), the United States (1989, 1992,
1994 & 1996), Uganda (1995), Uruguay (1992 & 1998), Venezuela (1996), Zambia
(1996) and Zimbabwe (1994).
TRADE POLICY REVIEW BODY:
REVIEW OF CANADA
CONCLUDING REMARKS BY THE CHAIRPERSON Back
The fifth Trade Policy Review of
Canada was conducted by the TPR Body on 15 and 17 December 1998. These remarks, prepared
on my own responsibility, are intended to summarize the main points of the discussion;
they are not intended as a full report. Further details of the discussion will be fully
reflected in the minutes.
The discussion developed under three
main themes: (i) economic and institutional environment; (ii) trade measures; and (iii)
Economic and institutional
Members praised Canada's strong
economic performance since the last Review, an outcome due to Canada's macroeconomic
discipline and continued efforts towards trade liberalization and domestic deregulation.
Unemployment had fallen steadily, although it remained relatively high. Members noted,
however, the vulnerability inherent in the level of economic integration with the United
States, with the U.S. share of Canada's merchandise exports now at 83%.
Participants recognized Canada's
efforts to further increase transparency in policy-making, and asked about the role of the
TPR in helping Canada formulate domestic policies. Members noted the progress made in
removing inter-provincial trade barriers under the Agreement on Internal Trade, but
expressed concerns about remaining provincial measures in areas such as standards,
alcoholic beverage marketing, government procurement and subsidies.
Canada's continued commitment to
strengthening the multilateral trading system was fully acknowledged, but Members were
concerned that the growing number of preferential arrangements might cause trade
diversion. Some Members suggested that Canada consider extending on a MFN basis the
bilateral and regional preferences already covering most of its imports. Questions were
raised about Canada's market access for exports from developing countries.
In response, the representative of
Canada confirmed that the TPR had contributed to better public understanding of, and had
helped build support for, Canada's trade policy. The recent tariff simplification exercise
was a concrete example of the positive influence of TPR discussions.
Canada did have a heavy reliance on
the U.S. market but this was seen as representing opportunity rather than vulnerability.
On the multilateral/regional relationship, Canada considered regional and multilateral
liberalization as complementary and sharing the same ultimate end; regional initiatives
could allow moving ahead more quickly. On developing countries issues, the representative
described several Canadian initiatives which had resulted in a growth of imports from
developing countries into the Canadian market, with the trade balance in their favour.
The representative drew attention to
a number of general points concerning federal-provincial relationships, including the
legitimate and increasing provincial interest on the broader international agenda,
especially trade. The status of the Agreement on Internal Trade, of which the Federal
Government was but one of 13 parties, did not affect Canada's ability to meet its WTO
obligations. Further answers to questions on the AIT would be provided in writing after
the appropriate consultations were undertaken. Canada was of the view that it had met its
obligations under the WTO Government Procurement Agreement.
Trade policies and measures
Members welcomed the autonomous
liberalization and rationalization of Canada's tariff, but noted that the tariff structure
remained uneven, with tariff peaks still affecting items such as food products, textiles
and clothing, footwear, and shipbuilding. Certain import regulations could favour selected
trading partners, for example rules of origin or mutual recognition agreements on
standards. The number of anti-dumping measures in force had fallen, but certain concerns
remained both about their concentration in the steel sector and the duration of orders.
Information was also requested on
recent amendments to the Patent Act , and on Canada's regulations covering parallel
imports, particularly of books, levies on blank tapes, and trademarks. Questions were also
asked regarding Canada's foreign direct investment rules.
In response, the delegate from
Canada stressed that Canada had actively pursued the reduction of MFN tariffs, notably on
pharmaceutical and information technology products. Rules of origin had no effect on the
MFN import regime. Details were given of proposed amendments to the legislation on trade
remedies, including with respect to transparency of procedures, public interest inquiries,
and lesser-duty provisions; these are expected to enter into law in the new year. To date,
provincial governments had not advised that they maintained any notifiable subsidy
programmes. The investment screening mechanism was fulfilling its established objectives.
Answers in writing had been provided to questions regarding intellectual property rights,
except on those associated with the Patents Act which touch on matters currently on the
agenda of the Dispute Settlement Body.
On agriculture, Members welcomed
reductions in public financial support, including to exports, but were concerned that the
supply management regimes for dairy, poultry and egg products still restricted foreign
access. Members also questioned the high out-of-quota rates, and the administration of
quotas including the reserved access for preferential suppliers. It was recognized that
Canada had gone beyond the requirements of the WTO Agreement on Textiles and Clothing but
several Members noted that high tariffs and tariff escalation continued to restrict market
access in this area of interest to developing countries. Members also noted the
differential tariff on assembled cars applied to imports by Auto Pact and non-Auto Pact
On services, participants commended
Canada for making commitments during the 1997 Financial Services negotiations to allow
foreign bank branching, and enquired about the timeframe for implementation. The recent
liberalization of telecommunications was also welcomed and Members asked whether
restrictions on foreign investment might be lifted in this area. A number also asked about
the prospects for harmonizing provincial regulations on professional services, and for
providing greater market access to foreign suppliers. Members took note of the importance
Canada attached to protecting its cultural identity, emphasizing however that this should
be done in the least trade restrictive manner.
In response, the delegate from
Canada noted that since 1995 Canada had eliminated agricultural export subsidies and
significantly reduced trade-distorting domestic support to agriculture. Current commodity
markets had made the recent emergency assistance necessary, but Canada was seeking ways to
assist farmers without distorting world trade; support levels, however, were low and could
even fit within Canada's AMS commitment. Detailed written replies had been provided to
questions regarding agricultural measures, including tariff quota administration, domestic
support, specific food safety and plant and animal health issues.
Canada had gone beyond its
obligations under the Agreement on Textiles and Clothing, and reduced MFN tariffs on these
products; it remains fully committed to the integration of the sector into GATT by January
2005. The Auto Pact was consistent with Canada's WTO obligations and Canada was prepared
to consider further liberalization through mutually beneficial negotiations in this
sector. Policies and practices on marketing of alcoholic beverages were determined by
provincial liquor boards, were based on market considerations and did not discriminate
against foreign products.
On financial services, the
representative indicated that legislation on foreign bank branching would be introduced
soon, and that the Financial Services Agreement would be ratified before the end of
January 1999. He noted that Canada was implementing its commitments under the Basic
Telecommunications Agreement on or ahead of time, and had announced steps to end the last
telecoms monopoly on schedule in March 2000. In professional services, Canada had
eliminated a number of discriminatory measures, and intended to pursue broader market
access results in the next round of negotiations.
In conclusion, it is clear that this
Body appreciates Canada's commitment to a strong rules-based multilateral trading system,
demonstrated through its active and constructive participation in all aspects of the WTO
work. They welcome Canada's commitment to contribute to international economic
stabilization by keeping its markets open. Delegations fully acknowledge Canada's efforts
during the past two years to move forward internal deregulation, enhance transparency,
rationalize its import regime and generally further its integration into the global
It is also clear, however, that a
number of concerns evident in earlier Reviews remain. These include high dependence on a
single market, complexities arising from the federal-provincial division of
responsibilities and the possible trade diversion inherent in Canada's preferential
arrangements. Concerns also persist on market access for developing countries as well as
trade and investment barriers in sensitive sectors, particularly in certain areas of
agriculture and textiles and clothing. Welcoming what has been achieved, delegations
continue to signal the scope for further improvements commensurate with Canada's
leadership role in the multilateral system.