A parliamentary delegation representing
the Canadian Section of the Inter-Parliamentary Forum of the Americas (FIPA)
participated in FIPA’s Regional Trade Workshop for Parliamentarians, “The Doha
Development Round: Challenges and Opportunities for the Region”, held in Mexico
City, Mexico from May 20-22, 2010. The delegation was led by the Chair of the
Canadian Section of FIPA, Mr. Randy Hoback, MP. Also participating were the
Honourable Céline Hervieux-Payette, PC, Senator, and Mr. Peter Goldring, MP.
The Canadian delegation was assisted by Mr. Leif-Erik Aune, Secretary to the
Delegation, and Mr. Michael Holden, Library of Parliament Analyst.
The Regional Trade Workshop in Mexico
City was the sixth such event presented by FIPA and the first to incorporate a
hemisphere-wide focus since the inaugural Trade Knowledge Workshop, held in
Ottawa in March 2007. Attendance at the Mexico City workshop was high and
reflected the growing recognition within the hemisphere of the value of these workshops
to parliamentarians. While 16 parliamentarians from eight FIPA member countries
were present at the Ottawa workshop in 2007, the event in Mexico City was
attended by 39 parliamentarians representing 16 countries across the
hemisphere.
FIPA places a great deal of importance
on international trade, given its role of international trade in generating
economic growth, prosperity and development, it is critical for
parliamentarians to have sound knowledge of international trade rules and
negotiations as well as of their wider policy implications. Through workshops
such as these, FIPA has made it a priority to help parliamentarians from across
the hemisphere build their technical capacity in matters of international trade
and trade policy. By participating in this regional workshop, the Canadian
Section hoped to advance that goal.
The regional trade workshop was a
three-day event, consisting of an opening ceremony, which took place in the
Central Courtyard of the Senate of Mexico, eight working sessions and two
roundtable discussions among parliamentarians. The event was hosted by the
Senate of Mexico and coordinated by FIPA and the World Trade Organization
(WTO), which provided several speakers for the working sessions.
THE REGIONAL TRADE WORKSHOP FOR PARLIAMENTARIANS
A. Opening Ceremony
The Regional Trade Workshop for
Parliamentarians of the Americas began with an opening ceremony held at the
central courtyard of the Senate of Mexico. Four speakers gave presentations at
the ceremony. Senator Adriana González Carrillo (Secretary of the Foreign
Affairs Committee (North America) of the Senate of Mexico and Member of the
Executive Committee of FIPA) outlined some of the areas in which she thought
progress was needed at the Doha Round. These subjects included equitable trade,
labour rights, poverty and labour mobility. The second speaker, Maria
Pérez-Esteve (Counsellor, Information and External Relations Division,
Secretariat of the World Trade Organization), summarized the objectives of the
workshop: to increase knowledge of the multilateral trading system; to provide
an update on the progress of the Doha Round; and to discuss the rise of
regional trade agreements and other policy issues related to trade
liberalization.
The third speaker was Ambassador
Eréndira Araceli Paz Campos (Director General for Regional and Multilateral
Economic Organizations, Ministry of Foreign Affairs of Mexico). Ambassador
Araceli talked about the importance of the WTO as an instrument to facilitate
the opening of markets, and its value in creating disciplines against
unilateral trade actions and in ensuring compliance with the agreed-upon rules
of trade. He noted that the WTO is the only multilateral organization with a
true enforcement mechanism, one that includes the possibility of sanctions
being levied against countries found to have violated WTO rules.
The final speaker at the opening
ceremony was Eduardo Javier Ramos Dávalos (Head of the International
Negotiations Coordination Unit, Ministry of Economy of Mexico). He spoke about
Mexico’s participation in the WTO negotiating process and the importance of
trade liberalization for Mexico, both in terms of the value of advancing
multilateral negotiations at the WTO as well as of Mexico’s concurrent policy
of pursuing bilateral and regional trade agreements.
B. Workshop Sessions and
Roundtable Discussions
The sessions of the first day of the
regional trade workshop were intended to provide parliamentarians with
information on the role and function of the WTO and to update those present on
the current status of Doha Development Round negotiations. As such, the three
workshop sessions focused on each of the three main subjects of the Doha
Development Round of negotiations: agriculture, services and non-agricultural
market access. Sessions on the second and third days were devoted to broader
trade-related policy issues.
1. Session 1: The Doha
Development Agenda: Current State of Negotiations (including Agriculture)
The first workshop session started with
an opening presentation by Roberto Zapata (Director General for Multilateral
and Regional Negotiations, Ministry of Economy of Mexico). Mr. Zapata began his
discussion by setting out the context in which the Doha Development Round of
multilateral trade negotiations are taking place; he provided a summary of the
timeline and contents of the previous eight negotiating rounds of the General
Agreement on Tariffs and Trade (GATT). In particular, Mr. Zapata highlighted
the outcomes of the 1986–1994 Uruguay Round of GATT talks, including – most notably
– the creation of the WTO.
Mr. Zapata also summarized the agenda
of the ongoing Doha Development Round of WTO negotiations. He noted that a
particularly important feature of the current negotiations is that WTO members
agreed to negotiate using a “single undertaking” approach; that is, the entire
Doha agenda would be negotiated concurrently and nothing would be agreed upon
until everything is agreed upon. This approach, Mr. Zapata stated, could be
considered an advantage or a constraint: a constraint because it prevents
agreements from being reached on less controversial subjects, and an advantage
because it allows for negotiation and compromise across a range of subjects.
Most of Mr. Zapata’s presentation
focused on the current state of agriculture negotiations at the WTO. He
provided an overview of the negotiations to date, including a discussion of the
WTO Ministerial meetings as they related to agricultural issues, and the
progress and setbacks which have arisen in agriculture negotiations since the
Doha Development Round began in 2001. Mr. Zapata gave a detailed analysis of
the state of negotiations in each of the three “pillars” of agriculture
negotiations: market access, export subsidies and domestic supports.
On the subject of market access, Mr.
Zapata noted that, while there is a general desire to open agriculture markets,
many countries have specific sensitivities or concerns that greatly complicate
market access negotiations. These sensitive areas include: the issue of special
and differential treatment in agricultural market access; the proposed
stratified tariff-reduction formula, whereby higher tariffs would be subject to
larger reductions; allowances for “sensitive” products in each country;
“special products” in developing countries which may be important for food
security or rural development; and safeguards against a sudden increase in
imports that damages local producers.
Concerning export subsidies, Mr. Zapata
indicated that there is agreement among WTO members to reduce export subsidies
by 50% by 2010, and to eliminate them completely by 2013. However, given the
precarious state of WTO negotiations generally, and the fact that negotiations
are taking place as a “single undertaking,” parliamentarians heard that it is
far from certain that this agreement on export subsidies will be implemented.
Finally, on the issue of domestic
supports, Mr. Zapata stated that, while considerable challenges remain in
reaching an agreement, there is general consensus on a proposed system of
reducing domestic supports according to three distinct bands: one for the
European Union; one for the United States and Japan; and the third for all
remaining developed and developing countries.
Mr. Zapata ended his discussion with a
brief look ahead at the future of agriculture negotiations at the WTO. He noted
that, although meetings continue to be held, it is unlikely that a deal can be
reached by the end of 2010 because of the considerable political roadblocks and
challenges that need to be overcome.
Following the presentation,
parliamentarians were invited to ask questions of the speaker. A number of
parliamentarians expressed their concern about the lack of progress in
agriculture negotiations and suggested that more effort was needed in order to
achieve meaningful progress. Some speakers focused their remarks on the
importance of establishing a sense of fairness in agriculture trade; in their
view, market access barriers in developed countries, including domestic price
supports, need to be removed in order to allow developing countries to benefit
from freer trade in agricultural products. Other subjects that were discussed
included non-tariff barriers to trade and issues such as food safety,
transportation, the environment and genetically-modified organisms, and aid-for-trade.
2. Session 2: The Doha
Development Agenda: Current State of Negotiations – Trade in Services and the
Mexican Position
The workshop’s second session began
with a presentation by Guillermo Malpica Soto (Director General of Negotiations
in Services, Ministry of Economy of Mexico). Mr. Malpica spoke about the
history of services trade negotiations at the WTO, described the current status
and nature of services trade negotiations, and discussed the importance to
Mexico of making progress in this area of WTO talks.
Mr. Malpica observed that the chief
difference between goods trade and services trade is that services, unlike
goods, cannot be accumulated. There are essentially four kinds of services that
can be traded: those for which the transaction is completed without the
physical movement of any person or object (for example, the outsourcing of
medical interpretation and diagnostic services); those for which the consumer
moves (such as medical tourism); those for which the service provider establishes
a physical presence in another country (for example, a bank or a hospital); and
those for which the person providing the service moves to another country (a
doctor, for example).
Mr. Malpica noted that the mandate to
negotiate services trade liberalization did not come from the Doha Development
Round itself, but was a direct commitment made by WTO members at the completion
of the Uruguay Round of negotiations. Services trade liberalization is
negotiated at the WTO according to a “positive list” approach; only those
services expressly identified by member countries are open to negotiation (by
contrast, a “negative list” approach would be one in which all services were
subject to negotiation, save those included on a list of exceptions).
Mr. Malpica also spoke about Mexico’s
policy regarding services trade liberalization and its negotiating priorities.
Mexico places a high importance on making progress in services trade
negotiations and has been an active participant in WTO services-related working
groups. Mr. Malpica stated that there is considerable potential for developing
countries to benefit from services trade liberalization. In particular, he
highlighted the fact that, in many countries, domestic regulations can be a
considerable barrier to services trade; negotiating disciplines on those
regulations is a priority for Mexico.
In spite of the fact that the mandate
to negotiate services trade liberalization dates to 1994, Mr. Malpica noted
that little progress has been made in negotiations to date. He stated that
countries’ initial offers for their “positive lists” were modest and that
progress in negotiations has suffered because services are considered to be the
third priority in Doha Development Round negotiations, behind agricultural and
non-agricultural market access.
While the general format of workshop
sessions allows time for parliamentarians to ask questions of the speakers and
to exchange views on what they heard, the workshop was behind schedule at this
point and the question-and-answer period for the session on services trade was
abbreviated. A delegate from Peru informed the group of impending legislation
in his country that will increase access to Peruvian services for international
suppliers. Some parliamentarians also expressed their concern at the lack of progress
in services trade negotiations at the WTO. It was suggested that issues such as
remote work (tele-commuting) as well as software services and support should be
included in any future WTO agreement on services.
3. Session 3: The Doha
Development Agenda: Current State of Negotiations – Non-Agricultural Market
Access
The final session of the first day of
the regional trade workshop focused on the third of the three primary
negotiating subjects at the Doha Development Round: non-agricultural market
access (NAMA). Josep Bosch (Counsellor, Information and External Affairs
Division, WTO Secretariat) began the session with the observation that the key
challenge facing multilateral trade negotiations is that the WTO is a
member-driven, consensus-based organization and, as such, does not impose
decisions on member states. In his view, this fact, combined with the decision
to approach the Doha Development Round as a single undertaking, is a major
reason why progress on NAMA and other negotiating subjects has been so slow.
Mr. Bosch gave a detailed overview of
the status of NAMA negotiations and provided information about the issues
surrounding non-agricultural trade negotiations and some of the solutions that
have been proposed by WTO members. He noted that the primary goal of NAMA
negotiations is to achieve a meaningful reduction in bound tariffs. A “bound
tariff” is the maximum allowable tariff a country may apply on a given product
and remain in compliance with its WTO commitments. Frequently, countries’ “applied
tariffs” (those actually in place) are considerably below the bound tariff
rates. Mr. Bosch stated that by negotiating reductions in bound tariffs and not
applied tariffs, WTO members are able to preserve some flexibility in terms of
the actual tariffs levied.
Parliamentarians heard that NAMA
negotiations have progressed to the point of arriving at a proposed formula for
tariff reductions. However, since the Doha Development Round is a single
undertaking, no agreement on NAMA or any other subject is truly reached until
such time as the entire Round is concluded.
The proposed formula, initially put
forward by Mexico, calls on developed countries to reduce their bound tariffs
on all NAMA goods to 8% over a period of five years. For their part, developing
countries could choose to lower their maximum allowable bound tariff rates to
20%, 22% or 25% over a ten-year period. As an incentive to choose a lower bound
tariff rate, developing countries would be able to exempt a certain percentage
of tariff lines from any reduction in bound tariffs. If a developing country
agreed to lower its bound tariffs to 20%, it would be allowed to exempt 14% of
tariff lines from its tariff-reduction commitments. A country choosing the 22%
bound tariff rate would be allowed to exempt 10% of tariff lines, while no
exemptions would be allowed at the 25% bound tariff rate.
Mr. Bosch also provided an overview of
some of the other negotiating priorities and proposals related to NAMA. These
included: a proposal for a higher level of liberalization in certain
non-agricultural goods (such as fish products); special consideration for
certain regional blocs, like the Southern Cone Common Market (MERCOSUR) and the
South African Union; and the possible inclusion of an “anti-concentration clause”
that would prevent countries from using the exemptions described above to
protect entire sectors from tariff reductions. He also called attention to a
number of other suggested provisions that, if adopted, would offer special
consideration to developing countries, over and above the proposed differences
in tariff-reduction schedules described earlier. Special considerations are
being proposed for: countries with already-low indices of bound tariffs; small
and rural economies (those comprising less than 0.1% of global trade);
recently-acceded WTO members; least-developed countries; and those poor
countries for which a new deal on NAMA would erode their existing preferential
access to certain rich markets (for example, special market access concessions made
by the United States to goods originating in Afghanistan).
Following Mr. Bosch’s presentation,
parliamentarians were given the opportunity to make observations and to ask
questions on the subject of NAMA. In the discussions that followed, some of the
topics included: the issue of tariff peaks and tariff escalation, and their
importance in encouraging secondary industrial production in developing
countries; and the relationship between the WTO and the International Labour
Organization (ILO), especially as it relates to the potential for abuses of
workers in certain countries. Parliamentarians also discussed how to
incorporate environmental disciplines in WTO agreements, although it was noted
that it is not the role of the WTO to determine environmental conservation
policies, as well as issues such as resource scarcity and food sovereignty.
Parliamentarians also touched upon issues such as the power imbalance between
large, rich countries and small, poor ones when disputes arise between the two.
The final question put to Mr. Bosch was
in regard to periodic cases of overproduction of agricultural and agri-food
products in some countries, and how those goods could be exported to countries
where food shortages exist without violating the WTO’s anti-dumping provisions.
It was suggested that two scenarios exist in which such deliveries would be
exempt from a potential anti-dumping charge. First, if the food product in
question was not produced in the country to which it would be exported, or if
local industries were not harmed by the export, then no dumping could be
considered to have taken place. Second, any delivery of food that was
classified as aid and not a normal business transaction would also not be
subject to dumping charges.
4. Roundtable Discussion: Day 1
At the end of the first day of the
workshop, time was set aside for a roundtable discussion among parliamentarians
to provide them with the opportunity to discuss, at length, some of the issues
addressed earlier in the day, particularly those related to the multilateral
trading system, and to exchange ideas and concerns regarding the scope, content
and progress to date at the Doha Development Round of WTO negotiations.
Participants touched upon a wide range of subjects during these discussions,
many of which related to the particular challenges facing smaller countries,
especially those in the Caribbean.
These challenges included the fact that
tariffs are an important source of income for small countries. Moreover, in
some cases, high tariffs can be used as a prohibition against the importation
of undesired goods. Some parliamentarians also suggested that the track record
of the WTO suggests that it has not been a friend to smaller countries in the
past. In their view, it is impossible for a country like Antigua and Barbuda,
for example, with a population of only 40,000, to compete in international
markets with a country of 300 million. They argued that the WTO’s Special and
Differential Treatment (SDT) provisions, intended to address such imbalances,
are not equal to the task. This statement started a debate among
parliamentarians about the effectiveness of SDT provisions and about the fact
that many small countries appear eager to join the WTO in spite of the
reservations expressed by some.
Members also spoke about the importance
of making progress on eliminating agricultural subsidies at the WTO. It was
noted that, given the lack of progress in Doha Development Round negotiations,
countries are increasingly turning to regional and bilateral trade agreements
to pursue their trade liberalization agendas. However, these bilateral and
regional agreements typically avoid the issue of agricultural subsidies. In the
view of some parliamentarians, countries are using the impasse in the ongoing
WTO negotiations in agriculture as an excuse for not making any commitments to
address agricultural subsidies in regional and bilateral agreements.
Parliamentarians also discussed the
issue of trade and gender. It was observed that trade provides opportunities
for both men and women, but there is a need to incorporate gender
considerations at every level of the process of negotiating and implementing
trade agreements. Discussions on this topic were relatively brief, however,
because trade, gender and poverty were scheduled to be the subject of a later
workshop session.
Parliamentarians also talked about the
importance of including special consideration for trade in environmental goods,
services and technologies in any Doha Development Round agreement. Several
believed that free trade in such products has the potential to improve
environmental conditions by making it easier to obtain pollution-reducing
technologies and other environmental products. In addition, it was suggested
that free trade in environmental goods would encourage the development of such
products.
5. Session 4: Agreement on
Dispute Settlement: Introduction and Current State of Negotiations
While the first day of the regional
trade workshop focused on the three major subjects of negotiation at the Doha
Development Round – agriculture, NAMA and services – the second day’s sessions
looked in more detail at specific trade-related issues. The first of these
sessions was on the subject of dispute settlement. It included presentations by
two speakers: Jorge Castro (Counsellor, Legal Affairs Division, WTO
Secretariat); and Carlos Vejar Borrego (Director General of Legal Advising on
Negotiations, Ministry of Economy of Mexico).
Jorge Castro began his presentation
with an overview of the guiding principles of the GATT, which established the
rules-based trading system which forms the basis of the WTO today, and then
provided a detailed overview of the WTO dispute-settlement mechanism (DSM). He
noted that the purpose of the DSM is to provide certainty and predictability to
WTO rules. The first path in the process is one of diplomacy; countries are
encouraged to attempt to resolve their disagreements through bilateral
consultations. Should such consultations fail, however, countries have recourse
to an independent and impartial legal process to settle disputes. This
dispute-settlement mechanism includes, as a last resort, the right to impose a
temporary suspension of trade benefits (i.e., the right to apply retaliatory
tariffs) in cases of continued non-compliance with DSM rulings.
Mr. Castro noted that about one half of
all disputes brought to the WTO are settled amicably without recourse to the
DSM. Of the approximately 50% of cases which do proceed to the DSM, compliance
with legal decisions is the norm; penalties for non-compliance are applied in
only a small fraction of cases. In the 409 cases brought before the WTO since
1995, penalty tariffs have been applied in only 17 instances.
Although the WTO DSM allows countries
to impose retaliatory tariffs in cases of non-compliance with WTO rulings, Mr.
Castro stressed that the WTO does not have any direct enforcement capabilities.
It cannot impose legislative changes on member governments.
Mr. Castro acknowledged that, in spite
of the fact that the WTO operates an impartial DSM and that it has a fund to
help offset the costs to poor countries of acquiring legal assistance with the
dispute-settlement process, concerns remain about asymmetries in disputes.
Larger and wealthier countries have access to a more developed legal framework
and more legal resources compared to smaller countries. Furthermore, smaller
countries may not have the financial or economic capacity to absorb the costs
associated with imposing trade restrictions on larger economies in cases of
non-compliance. According to Mr. Castro, one proposed solution to this ongoing
issue during the Doha Development Round of trade negotiations is to enable
countries to transfer, to a third-party country, the right to impose punitive
measures in the event that they consider themselves unable to do so. This
proposed solution, in his view, may not eliminate asymmetries between rich and
poor countries, but has the potential to mitigate them.
Carlos Vejar, the second speaker during
this session, covered four points in his presentation: the Doha Development
Round negotiations as they pertain to the DSM process; WTO member countries’
experience to date with the DSM as it exists at present; the importance of
countries developing a robust national legal framework to assist with
trade-related disputes; and the issue of retaliation/suspension of benefits.
Most of Mr. Vejar’s presentation
focused on the existing DSM and proposed improvements to that mechanism. Mr.
Vejar noted that the experience to date with the existing mechanism has
generally been good, although there are significant concerns about the length
of time required for the dispute-settlement process to run its course. He
stated that the issue of timely dispute settlement is a subject of negotiation
at the Doha Development Round.
On the subject of potential
improvements to the existing DSM, Mr. Vejar observed that, notwithstanding
concerns about the length of time for the process to run its course, some
countries prefer that changes to the mechanism not be made because, in their view,
the DSM is working reasonably well. Moreover, many countries are reluctant to
propose changes to a dispute-settlement process without knowing the result of
Doha Development Round negotiations in other areas; it would be imprudent to
make changes to a dispute-settlement mechanism when the subjects it will be
adjudicating are not yet known. However, some modifications are being
considered, including providing compensation to countries for damages resulting
from violations of WTO rules by other member countries.
Following the two presentations,
parliamentarians asked questions about the specifics of the dispute-settlement
process and its appeal process, and about the possibility of creating a
provision that would allow a quick assessment to determine whether a country
was in clear and explicit violation of WTO rules. Another question related to
currency manipulation and whether the WTO considers such manipulation to be an
actionable offence in dispute-settlement cases. The session moderators noted
that the GATT does acknowledge that currency manipulation could potentially
trigger a trade dispute, but that it is difficult to prove that currency
manipulation is taking place, and even more difficult to prove that it is
taking place for the purpose of extracting an unfair competitive advantage in
export markets.
6. Session 5: The Multilateral
System and New Regional Trade Agreements
The second session of the second day of
the regional trade workshop addressed the recent rise in regional and bilateral
trade agreements. The session began with a presentation by Dr. Gustavo Vega
Cánovas (Director of the International Studies Centre, Colegio de México). He
spoke about the debate surrounding the impact that the proliferation of these
bilateral and regional trade agreements has had, and is having, on multilateral
trade negotiations at the WTO.
For some, there is an incompatibility
between multilateral and regional/bilateral trade liberalization. Regional and
bilateral agreements create preferential trading arrangements between partner
countries which, by their very nature, discriminate against non-participants,
whereas the multilateral process is non-discriminatory across 153 member
states. While regional and bilateral agreements promote trade and lower
barriers to the free flow of goods and services, they may not give preference
to the most efficient global producers, but rather to those producers in
partner countries which have a tariff advantage resulting from the bilateral
agreement. It was suggested that regional and bilateral agreements complicate
and fragment the global trading system because they create a “spaghetti bowl”
of overlapping agreements which vary in scope, comprehensiveness and even trade
rules in some cases. These differences can complicate international commerce
because businesses have to adapt to different conditions depending on the
country from which they are importing or the country to which they are
exporting.
On the other hand, parliamentarians
heard that, in addition to the drawbacks to regional and bilateral agreements
mentioned above, there are benefits to those trade agreements as well. To the
extent that such agreements generate wealth through increased trade, that
wealth could be used to increase trade with third-party countries. It was also
suggested that regional and bilateral agreements are easier to negotiate when
compared to multilateral agreements because fewer countries are involved. In
addition, regional and bilateral agreements can, in some cases, lead to
advances in, or act as a precursor to, broader negotiations at the multilateral
level. For example, it was noted that the Canada–US Free Trade Agreement
included a number of Uruguay Round issues that other countries were, at the
time, reluctant to include in the multilateral agreement. Dr. Vega was of the
opinion that, on the whole, regional agreements are useful, provided that they
are WTO-compliant.
The remainder of Dr. Vega’s
presentation focused on Mexico’s experience in multilateral, as well as
regional and bilateral, trade agreements. He provided a chronology of Mexico’s
participation in trade agreements, starting with its accession to the GATT in
1986, and gave an overview of the impact that increased trade has had on the
Mexican economy. He noted that, while Mexico’s trade has grown, diversified to
new markets and helped to develop new domestic industries, there remain a
number of restricted sectors in Mexico that prevent the country from further
capitalizing on the benefits of free trade. In particular, he highlighted Mexico’s
closed oil and gas sector as one which could benefit from increased foreign
direct investment.
Dr. Vega concluded his remarks by
stressing that Mexico places a high priority on a successful outcome at the
Doha Development Round. He stated that it is at the multilateral level where
progress is most likely to be made on issues such as trade in services,
agricultural subsidies and dispute settlement. He also stated that trade
liberalization alone is not sufficient to ensure economic development in countries
such as Mexico. Such agreements must be coordinated with complementary domestic
policies such as agriculture reforms, the absence of which, in his view, are
preventing Mexico from more completely realizing gains in trade, rural
development and poverty reduction.
In the question-and-answer period
following Dr. Vega’s presentation, parliamentarians asked about Mexico’s
policies regarding foreign direct investment (FDI) and, specifically, the
countries from which Mexico is looking to attract such investment. They also
discussed the fact that some regional agreements incorporate non-trade
provisions, highlighting MERCOSUR as an example of an organization that
includes social, political and cultural components as well as a common external
tariff. Parliamentarians also spoke about the basic conditions required to
attract FDI, as well as issues such as the appropriate domestic policies and
reforms needed to translate the benefits of trade liberalization into economic
development and poverty reduction.
7. Session 6: Competition
Policy and the Multilateral Trading System in the Context of the International
Economic Crisis
The final session of the second day of
the regional trade workshop was on the subject of competitiveness and
competition policy. Eduardo Pérez Motta (President of the Federal Competition
Commission in Mexico) was the speaker for this session. His presentation was
shortened, however, as a result of delays in the previous sessions.
In his address, Mr. Pérez spoke about
the relationship between competition policy and trade, with specific reference
to Mexico’s experience in that regard. He noted that Mexico has well-documented
structural competitiveness problems which have limited domestic economic
growth; Mexico scores below average in most international competitiveness
indicators.
According to Mr. Pérez, Mexico’s lack
of competitiveness is not only hindering the country’s economic growth
potential; it is also a contributing factor to its persistent and growing
income disparities, and is leading to a growing lack of trust in market-based
economic policies in Mexico. In his view, appropriate domestic competition
policies are critical to extracting benefits from multilateral trade agreements
as well as to building a strong and vibrant domestic economy. He stated that
the absence of a competition policy in Mexico is a major factor underlying that
country’s relative lack of international competitiveness. In his opinion, not
having an appropriate competition policy in place imposes high costs on
domestic manufacturing sectors and leads to political pressure to withdraw from
multilateral trade agreements because of fear that the country’s businesses
will be unable to compete with foreign producers. Mr. Pérez noted that
international trade agreements are an important trigger for domestic
competitiveness, but that they alone are not sufficient. Such agreements should
act only as a supplement to appropriate domestic competition policies.
In the somewhat abbreviated
question-and-answer period following Mr. Pérez’s presentation, parliamentarians
discussed issues such as the WTO’s position regarding competition in industries
like processed foods, sugar, oil and mining, which are restricted or heavily
subsidized in many countries. They also spoke about the specific challenges
facing small-scale producers in international markets and what assistance
countries could give those producers to ensure that they are able to
participate in global markets. As well, they commented on the need to ensure
that consumers have all of the information needed to make informed decisions in
the international marketplace. Finally, they highlighted the need to eliminate
certain non-tariff barriers to trade as part of the process of encouraging
greater competition. In particular, parliamentarians raised issues such as the
need to eliminate certain customs procedures as well as barriers to the
assignment of patents.
8. Roundtable Discussion: Day 2
Because of a lack of available time,
the roundtable discussion at the end of the second day’s sessions was limited
to very few interventions. Parliamentarians debated the issue of why strong
trade growth in Mexico since the 1990s, combined with a large trade surplus,
has not led to higher economic growth in that country. It was noted that trade
can be a tool to generate economic growth but is itself not sufficient to
guarantee economic prosperity in the absence of appropriate domestic reforms
and a suitable competition policy. The issue of small businesses competing in
international markets was also raised again, with the specific example of small
producers of high-quality organic coffee in Peru and their difficulty in
penetrating international markets.
Other subjects raised by
parliamentarians included the need for an effective and expedited dispute-resolution
mechanism at the WTO and the benefit of alternative regional agreements that
include non-trade components. On the latter point, some parliamentarians
pointed to the Bolivarian Alliance for the Peoples of our America (ALBA) as an
example of an alternative agreement which has a strong social component and
through which countries work cooperatively for mutual benefit rather than
compete with each other.
9. Session 7: Development
Challenges and Trade Liberalization: Poverty and Gender Issues
The seventh session of the regional
trade workshop featured a presentation by Alma Espino (President and
Coordinator of the Gender and Development Unit, Inter-Disciplinary Development
Studies Centre, Uruguay). However, the Canadian delegation was unable to attend
this session because of a previously scheduled meeting with the Canadian
Ambassador to the United Mexican States, Guillermo Rishchynski.
10. Meeting with Ambassador
Rishchynski
The Canadian delegation had a positive
and informative meeting with Ambassador Rishchynski, discussing a wide range of
subjects related to the Canada–Mexico relationship and to the two countries’
mutual relationship with the United States. Among the subjects covered during
the meeting were: the recent oil spill in the Gulf of Mexico and the potential
implications for the Mexican economy; the importance of the oil and gas sector
to Mexico, especially as a source of government revenue; Mexico–US border
issues, especially related to worker migration and the transportation of goods;
the importance of the Canada–Mexico economic relationship; the recent mutual
imposition of visa requirements on travellers between Canada and Mexico, and
the potential impact of those requirements on relations between the two
countries; the need to improve labour mobility across North America, in part to
address growing labour shortages in Canada; and the then-upcoming official
visit of Mexican President Filipe Calderón to Canada. The Canadian delegation
appreciated the opportunity to meet with Ambassador Rishchynski and to engage
in a full, open and honest discussion of Canada–Mexico relations and other
issues relating to the North American economic space.
11. Session 8: The Parliamentary
Dimension of Trade
The final session of the regional trade
workshop focused on the role of parliamentarians in trade policy. The format of
this session differed considerably from that of previous sessions. The session
began with a brief opening statement by María Pérez-Esteve. In her commentary,
Ms. Pérez-Esteve asked the parliamentarians to consider the role for
parliaments in trade policy as it relates to three specific themes:
1. What role could or should
parliamentarians play in order to:
• take advantage of the
policy space that results from the WTO Agreements in order to reach national
development objectives;
• raise citizens’ awareness
on trade policy-related issues and effectively convey their interests; and
• monitor the implementation
of trade agreements?
2. What has been your
parliament’s experience to date with regard to trade-related matters and WTO
negotiations?
3. What practical measures,
including those taken at the national level or through various international
fora such as FIPA and the WTO, would help you to take a more active role in
this area?
Parliamentarians were invited to break
into two groups – one of English-speaking participants and one of
Spanish-speakers – for a free and open discussion of these three topics. With
the aid of a rapporteur, each group then presented its findings to the entire
group.
The discussions in the English-speaking
group, in which all members of the Canadian delegation participated, were
wide-ranging. Several parliamentarians noted that issues such as WTO
negotiations are seldom discussed at the parliamentary level and that, in many
cases, parliamentarians have a poor understanding of the WTO and multilateral
trade issues generally. It was suggested that parliamentarians have an
important role to play in informing citizens of the potential impacts of trade
agreements and that more work is required to ensure that parliamentarians are
well-informed about activities at the WTO as well as about the potential
implications of WTO agreements and developments for their constituents. Members
agreed that there is considerable extant information on the WTO and its
activities, but that more work is needed to ensure that this information is
transmitted to parliamentarians. For many, access to information is a
significant priority because parliamentarians need to have a good understanding
of trade rules and the limitations they impose on domestic policies in order to
ensure that they do not put forward legislation that may be in violation of
international trade agreements.
It was generally acknowledged that
parliamentarians cannot be technical experts in matters of trade. Nor, in the
view of many participants, is it the role of parliamentarians to advocate on
behalf of the WTO to their constituents. Several argued that doing so would be
a considerable challenge, and could be perceived as campaigning against those
local industries that want to be protected from foreign competition. Rather,
parliamentarians believed that they needed to be in a position to understand
the impact of trade agreements and the implications for different aspects of
their domestic economies.
While the Canadian delegation found the
entire trade workshop to be useful and informative, it was generally agreed
that this final session was the most beneficial in that it offered the best
chance to exchange ideas, issues and concerns with other parliamentarians from
across the hemisphere. Parliamentarians took the opportunity to share their own
views and to learn from those of their counterparts, many of whom had
considerably different perspectives given the size, location and relative level
of economic development in their countries.
CONCLUSION
The Canadian Section of FIPA has sent
delegations to several of FIPA’s trade workshops in the past. In all cases,
parliamentarians have returned to Canada with a greater understanding of the
multilateral trading system and complex trade policy issues. This regional
workshop was no exception. The presence of experts from the WTO and the Mexican
government provided the delegation with valuable insight into the current state
of negotiations at the Doha Development Round as well as considerable and
detailed information about the various negotiating topics.
In addition, the Canadian Section
benefited greatly from the opportunity to meet with parliamentarians from other
FIPA member countries who share an interest in international trade and
trade-related policy issues. The exchanges between and among parliamentarians
gave the Canadian delegation insight into the perspectives of other countries,
especially those with very difference economic, social and geographic contexts.
The Canadian
Section of FIPA believes that these regional trade workshops are an important
tool in building trade knowledge capacity among parliamentarians across the
Americas. Consequently, these regional workshops are of considerable value and
the Canadian Section feels that FIPA should consider holding such regional
workshops on a more frequent basis.
Respectfully submitted,
Randy Hoback, M.P.
Chair, Canadian Section
of the Inter-Parliamentary Forum
of the Americas (FIPA)