OTTAWA--A continued lack of support from the Canadian business community makes it hard for the government to push for progress on a new negotiating round at the World Trade Organization, Deputy International Trade Minister Robert Wright said March 27.
Although provincial governments support the federal government's trade agenda to varying degrees, the business community has been virtually absent from the debate for about the last year, Wright told a symposium on the WTO dispute settlement mechanism sponsored by the Centre for Trade Policy and Law and Foreign Affairs and International Trade Canada. "They haven't been pushing us. It hasn't been like at the Tokyo Round or the Uruguay Round," he said.
Business apathy may be a reflection of the continued strength of North American markets, with the economies of Canada and the United States growing at annual rates of 3 percent to 4 percent in recent years, and because the success of the North American Free Trade Agreement has provided unprecedented access to the U.S. market, he said.
Combined with the factors that led to the failure of the Seattle WTO ministerial meeting, including the East-West split on agriculture, the North-South split on the WTO agenda, U.S. domestic politics, and the new involvement of civil society groups, there is little hope for reviving the prospects for a new negotiating round until at least 2001, he said.
The business community's lack of engagement also makes it more difficult to deal with the attacks of civil society groups on the WTO process, he said. The opposition to further trade liberalization is small, but extremely vocal, media savvy, and better able to make its points than WTO proponents, he said. "Absent a strong business voice, their arguments are going largely unchallenged," he said.
Despite the poor prospects for progress in the short term, Canada remains fully committed to the WTO process, as it represents a better option than regional alternatives such as the nearly-complete negotiations with the European Free Trade Association countries and the ongoing Free Trade Area of the Americas talks, Wright said.
There is a major risk of U.S. unilateralism and a further withdrawal by the United States from its traditional leadership role in trade liberalization, and that the current strength of the U.S. economy will falter, with potentially drastic consequences for Canadian exports, he said. "If the U.S. economy ever slows down, and it will eventually, this will become an issue of some sensitivity," he said.
It is clear that the United States is increasingly preoccupied with security and border issues, leading to a reduced emphasis on the multilateral trade agenda. A key bellwether is the consideration by the U.S. Congress of China's accession to the WTO, which, in the wake of the Seattle ministerial, is unlikely to be resolved in the near future, he said.
But in spite of its lack of WTO membership, China is already starting to wield considerable real influence at the WTO, and its participation in the multilateral trading system will have a "profound" impact on the future of the WTO, he said. "We will never see another major decision at the WTO without the strong influence of China," he said.
Canada Wants More WTO Transparency
Wright stressed that the Canadian government will continue to push for significant improvements in the transparency of the WTO dispute settlement process. Greater transparency would provide a significant boost to public support of the WTO system without changing the essential government-to-government nature of the dispute settlement process, he said.
"I see nothing to hide in the way the dispute settlement system operates," he said. "I don't see why we can't shed more sunlight on how that system operates."
But he conceded that it is difficult, even in Canada, to win support for an open WTO dispute settlement process, and it will be even more difficult to overcome the "knee-jerk" reactions of virtually all other WTO member countries, who claim they do not want to open the system of "voyeurs" watching over their shoulders.
Wright cited as another potential "cloud" on the horizon for the WTO dispute settlement system its difficulty in implementing a number of tough rulings, specifically in the U.S.-EU dispute over bananas, the U.S.-EU and Canada-EU disputes on beef hormones, and the EU-U.S. dispute on Foreign Sales Corporations. Any flouting of those rulings, or attempts to pay compensation rather than eliminate the non-WTO-compliant practices, would be very dangerous for the future success of the WTO system, he said.
By Peter Menyasz
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