Post-Cancun Assessment by Canada: Trade Policy Challenges for North America -- a roundtable discussion --

Len Edwards opened the discussion about current Canadian trade policy by remarking that the current climate is the busiest period of trade policy discussions—ever. He stated categorically that Canada prefers a rules-based approach to its multi-layered trade policy.

Edwards commented on the stalled WTO Cancun talks, noting that he was not surprised that the Cancun talks produced very little. He felt that Cancun was not a failure but rather another step in the direction to concluding multilateral negotiations. Edwards did say that there were "missed opportunities" at Cancun due to the "divergent levels of ambition" and the focus on the Singapore issues as opposed to agriculture. He said that the 2005 deadline may now be too optimistic a deadline for the talks, noting, however, that there is already an effort underway to get the negotiations back on track in Geneva.

Edwards outlined Canada's current trade policies on regional and bilateral levels. On the regional level, attention has been shifted to the upcoming Free Trade Area of the Americas (FTAA) talks in Miami following the stalled talks at Cancun. Canada continues to be a strong believer in the FTAA and that it is integral to the broader Canadian trade program. While the Brazilians question whether or not the FTAA deadlines in Miami may be too ambitious, Canada remains steadfast that the negotiations continue at the current pace. Canada looks at bilateral agreements as stepping stones to a full FTAA; it has signed bilaterals with Costa Rica and Chile, is currently negotiating with the other "Central American Four" countries, and is in exploratory discussions with the Dominican Republic, the Andean and CARICOM countries.

Canada has also entered into discussions with Singapore and the European Union. Edwards stated the current free trade negotiations between Singapore and Canada are an attempt to reach across the Pacific to continue to build Canadian trade relations around the world. He also discussed Canada's goals for new negotiations with the EU that will address market access and non-market regulations such as technology transfers and investment. He said that the framework of the "Trade and Investment Enhancement Agreement" will not be a traditional trade agreement but may serve as a potential new model for approaching future negotiations.

Edwards addressed the importance of the North American trade relationship under NAFTA to Canada. Mexico is becoming increasingly important to Canada, and he stressed that the United States, Canada's number one trade partner, is also Canada's number one trade policy priority. He quoted statistics and figures supporting the growing interdependence between Canada and the United States regarding to trade, industry, and natural resources.

He highlighted six goals that Canada has for further improving trade relations with the United States:
1. Continue to expand trade
2. Promote increased two-way investment
3. Increase regulatory cooperation
4. Re-examine the necessity for trade remedy (Edwards questioned the need for trade remedy with 60% of bilateral trade now intra-corporate trade)
5. Improve border relations
6. Expand Canadian representation in the United States.

Within these six goals, he pegged four priority areas:
1. The management of issues on a day-to-day basis (softwood lumber, wheat, BSE)
2. The Smart Border Accords ("if the border doesn't work, trade doesn't work")
3. The expansion of representation in the United States, with new consulates and engaging honorary consuls (in order to be in the "localities of America" where things are happening), and
4. Moving ahead with NAFTA (Chapter 11, transparency, etc.)

Claude Carrière and John Gero fielded questions on various trade discussions underway, as well as several dealing with agriculture, noting that the European Union was the main stumbling block on those issues. They stressed that while the FTAA was important, it was also critical to be at the table in Geneva in order to engage with the "main subsidizers" of agriculture. Gero, Carrière and Edwards discussed the backlog of bilateral requests, how Canada might be a bridge to Latin America where the concept of free trade is suspect.

Drafted by Melanie Wolfe
David N. Biette, Director, Canada Institute
202-691-4133