Trade Policy Review: Canada
This ninth Trade Policy Review of Canada has given us a better understanding of the country's recent economic, including trade, policy developments and enabled us collectively to measure the challenges Canada currently faces in maintaining its economic prosperity. Our candid discussion has proved more engaging thanks to the full and open participation of the Canadian delegation, led by Mr. Robert Ready, Director‑General of the Intellectual Property Office and the Office for Trade in Services, Department of Foreign Affairs and International Trade, and by the insightful remarks made by the discussant, H.E. John Adank of New Zealand, as well as active participation by numerous Members.
Canada's sound economic policies and its outward-looking trade regime have enabled it to successfully weather the global financial crisis and the ensuing economic recession. Members congratulated Canada on its economic performance, welcomed the sustained reduction in the use of trade remedies, and praised its unilateral trade liberalization initiative in the manufacturing sector, as well as its efforts to streamline national regulations. They recognized that such reforms would contribute to greater competitiveness of Canadian products. Nonetheless, given Canada's sluggish productivity growth compared to other OECD economies, various Members urged Canada to continue liberalizing its trade and investment regime, at both federal and provincial levels.
Members appreciated Canada's active participation in the WTO and the constructive part it was playing in the DDA; they also commended Canada for its significant contribution to trade-related technical assistance and its non-reciprocal preferences for the developing countries.
The numerous statements, questions and replies voiced in the course of this Review have highlighted the fact that there is room for further streamlining of Canada's trade and trade‑related policies. There are in fact a number of areas where reforms could be both beneficial to Canada and would help strengthen its international trade, which Canada itself acknowledged as being integral to its continued prosperity. The Canadian authorities might give thought to improvements that could be made in the following spheres:
- Domestic market fragmentation: Members mentioned a series of matters subject to provincial jurisdiction which impact on investment and trade, and expressed concern regarding transparency and domestic market fragmentation, particularly in areas such as sub‑federal state enterprises, financial incentives, and financial and professional services.
- Tariff structure: Despite Canada's relatively low overall level of tariff protection, Members saw room for simplifying its tariff structure in the agricultural sector through the reduction of tariff peaks, the conversion of non-ad-valorem rates to ad valorem duties, and the elimination of inconsistencies between the bound and the applied rates.
- National treatment: Members recommended that Canada eliminate discriminatory internal taxes in order to fully comply with the WTO principle of national treatment.
- Agricultural products: Members asked Canada to consider replacing its supply management system with less market‑distorting alternatives, and to reform the management of its MFN and preferential tariff quota schemes in the interests of greater transparency.
- Investment: Members welcomed the streamlining of review thresholds in Canada's foreign investment regime, but questioned some aspects such as the criteria for qualifying net benefit as proof, the limitations on property, the residence requirements for managers, the national security review provisions and the role of provincial governments. They expressed the hope that Canada would consider further liberalization of its investment regime, inter alia, by eliminating local content requirements used for the purpose of incentives. Canada demurred.
- SPS and TBT: Members highlighted a number of weak points noted in connection with Canada's technical regulations and sanitary and phytosanitary prescriptions, including risk assessment, accreditation criteria and insufficient coverage of sub‑federal regulations in notifications to the WTO. They requested greater transparency in Canada's SPS and TBT regimes.
- Intellectual property rights: Members encouraged Canada to modernize its intellectual property rights regime, particularly copyright.
- Government procurement: Members took note of the public procurement agreement concluded between the United States and Canada and enquired about plans to extend access to opportunities for sub‑federal procurement on an MFN basis. They also encouraged Canada to develop uniform standards for MASH sector and Crown Corporations procurement.
In conclusion, this Review has confirmed the important role played by Canada in the multilateral trading system, as evidenced by the large number of advance questions and statements made. Once again, I thank the delegation of Canada, the discussant and Members for contributing to an informative and interesting review. I also wish to express my appreciation to the delegation of Canada for its oral and written responses during the meeting. We look forward to receiving Canada's outstanding responses within the coming month.