Canada to turn to bilateral agreements after WTO trade talks collapse

July 30, 2008, Ottawa, Ont. — Canada will move aggressively to
negotiate individual country-to-country trade deals to protect its
economic interests amid an abrupt collapse of global talks in Geneva,
Trade Minister Michael Fortier said.

July 30, 2008, Ottawa, Ont. — Canada will move aggressively to negotiate individual country-to-country trade deals to protect its economic interests amid an abrupt collapse of global talks in Geneva, Trade Minister Michael Fortier said.

Canada would be at the table whenever talks resume, but is not waiting for a multi-national agreement, Fortier said.

"We are a trading nation. We depend on the ability for exporters to access markets worldwide and in particular markets in emerging and developing economies," he said in a conference call from Geneva.

Fortier is most interested in reaching agreement with countries in the Americas, noting recent successful talks with Peru and Colombia, as well as in emerging markets such as China and India.

Canada has free trade agreements in place with the United States, Mexico and Chile. It has recently negotiated an agreement with Iceland, Liechtenstein, Norway and Switzerland, and is seeking deals with South Korea and Europe, among others.

But the Canadian Chamber of Commerce questioned whether the country could get the same concessions from other countries in bilateral agreements that could have been won at the WTO.

"We had a real potential to see some significant gains in (exports) in agriculture and services and some limited gains in tariffs, and now all of that is off the table," said Shirley-Anne George, the chamber's head of policy.

"This is not good for Canada because we don't have the economic might to force what we need in bilaterals the way the U.S. and Europe does."

The Canadian Agri-Food Trade Alliance has estimated that a breakthrough in the agricultural sector of the talks, known as the Doha development round, could potentially mean $3 billion in additional exports for Canadian farmers.

The farm trade alliance said in a statement Tuesday that a new deal was needed "not just to increase our access to world markets, but to maintain what we got."

But the bigger losers, said trade alliance president Darcy Davis, are the world's poor countries, which stood to gain greater access for their farm exports into the developed world, and protection from subsidized imports from countries such as the United States and Europe.

"This is the development round," he explained in a telephone interview from Geneva. "This was supposed to bring trade and lots of good things for developing countries. If we can get rid of export subsidies that hamper the ability of subsistence farmers to make a living, that would have been good."

Fortier and Agriculture Minister Gerry Ritz were cautiously optimistic WTO chief Pascal Lamy could kick start a resumption of talks soon, but they admitted there were obstacles.

Ritz said several countries were entering election cycles, which could mean some of the players at the table in Geneva in the past nine days will likely not return.

As well, although some progress was achieved, the hurdles remain "significant."

Officials in Geneva said talks broke down over a demand by developing countries, particularly China and India, to unilaterally impose higher emergency import tariffs to protect domestic farmers against cheap imports.

The United States and several other industrialized countries opposed the measure.

The failure of the Geneva talks does not mean the Doha round has ended, nor that the trading rules have changed from the status quo – although some analysts speculated it could give rise to protectionist pressures.

Canada was criticized in some quarters for entering the talks seeking to protect its supply-managed dairy and poultry sector, which impose tariffs as high as 298 per cent on over-quota imports, while urging other countries reduce subsidies and export tariffs on a wide range of agricultural products.

Fortier and Ritz defended the position, saying many countries also insisted on sheltering their sensitive sectors.

"No one was there without something in their hip pocket that they were asking for," said Ritz, adding that the talks failed before the issue could be seriously discussed.

But George said that Canada was likely excluded from the group of seven countries doing the heavy work in the negotiations because of its decision to bring a "status quo" negotiating stance.

"Our position was divided at best," Davis agreed. "I'd like to see Canada take a singular approach where we are pro trade and work toward a more liberalized trade environment for the world."