An important role of the WTO is to house negotiations on trade liberalization. WTO Members have a standing mandate for multilateral negotiations under the Doha Development Agenda, and are also pursuing plurilateral negotiations where subsets of the Membership are interested in specific areas of liberalization, such as information technology and environmental goods.
- Doha Development Agenda
- WTO Agreement on Trade Facilitation
- Information Technology Agreement
- Environmental Goods Agreement
Doha Development Agenda
The WTO Doha Round of negotiations was launched at the 4th WTO Ministerial Conference in Doha, Qatar, in November 2001. One of the fundamental objectives of the Doha Round is to improve the trading prospects of less developed countries, thus it is often referred to as the Doha Development Agenda. The mandate for the negotiations provided by the Doha Ministerial Declaration included negotiations on agriculture, services, non-agricultural market access, trade-related aspects of intellectual property rights, WTO rules (e.g., anti-dumping, subsidies), dispute settlement, trade facilitation, and trade and environment, among others. The broader Doha Development Agenda negotiations have been at an impasse since 2011. However, at the Ninth Ministerial Conference in Bali in December 2013, Members concluded negotiations on a key element of the Doha Development Agenda – an Agreement on Trade Facilitation.
Canada views the WTO as the best forum for achieving broadly-based trade liberalization, and supports the goal of better integrating developing countries into the international trading system. For more information, please see the Doha Development Agenda.
WTO Agreement on Trade Facilitation
The World Trade Organization (WTO) Agreement on Trade Facilitation (TFA), which entered into force on February 22, 2017, contains binding commitments for the 164 WTO Members to modernize and simplify border procedures. It is the first multilateral Agreement concluded since the creation of the WTO in 1994. A list of WTO Members which have ratified the TFA is available on the WTO website.
Most economic gains will flow to developing countries. The WTO estimates that the full implementation of the TFA could boost global merchandise exports by up to $1 trillion, with up to $730 billion accruing to developing countries and reduce trade costs by an average of over 14 percent, with average reduction of nearly 17 percent for least developed countries.
The TFA provides a new approach to implementation by developing countries. It allows developing countries to self-determine implementation timelines for each provision, and to indicate whether technical assistance will be required in order to implement. Developing economies benefit from flexibilities under which commitments are not binding until they acquire the capacity to implement.
Some developing countries will need assistance to implement the reforms necessary to bring their border procedures into compliance with the TFA’s provisions. Mechanisms are in place to assist developing countries implement the TFA. One example is the Global Alliance for Trade Facilitation, a public-private partnership which brings together donor countries, global businesses and international institutions to assist developing countries in the implementation of TFA reforms. Canada contributed $10 million to this Alliance over seven years (2015-2022).
The implementation of the TFA will benefit Canadian traders by expediting, streamlining and enhancing the predictability of customs and border procedures for their exports to developing countries, which translates into lower trade costs. The benefits are expected to be most significant for small- and medium-sized enterprises (SMEs), for whom trade costs are disproportionately high. The implementation of the TFA by developing countries could help Canadian SMEs increase their export presence in emerging markets, from Latin America and the Caribbean, to Africa and South and Southeast Asia.
Canada’s implementation of the TFA
On December 12, 2016, An Act to Amend the Food and Drugs Act, the Hazardous Products Act, the Radiation Emitting Devices Act, the Canadian Environmental Protection Act, 1999, the Pest Control Products Act and the Canada Consumer Products Safety Act and to make amendments to a related Act(the “Act”) was enacted. This legislation enabled Canada to ratify the Agreement on Trade Facilitation (TFA) on December 16, 2016.
The legislative amendments contained in this Act relate to two specific provisions of the TFA:
- Article 10.8.1: Importers may return to exporters goods rejected on account of their failure to meet certain health and technical requirements, unless an alternate way is provided for in laws and regulations.
- Article 11.8: Technical regulations may not be applied to goods moving through the territory of a WTO Member from a point outside its territory to another foreign point (i.e. goods in transit).
The legislative amendments do not limit the government’s ability to protect the health and safety of Canadians as well as the environment.
The impacts of the legislative amendments contained in the Act are described below.
The Food and Drugs Act (FDA)and its regulations give the Minister of Health, Health Canada, and the Canadian Food Inspection Agency the authority to regulate food, drugs (including natural health products), cosmetics, and devices.
Key amendments to the FDA provide for the following:
- An importer of non-compliant foods, drugs, cosmetics, or devices may be offered the option of returning those products to the sender or re-consigning them to a third-party outside of Canada. If the products pose a risk of injury to health or safety, then the products could be subject to measures, including seizure.
- Packaged foods, drugs, cosmetics and devices which are manufactured or prepared outside of Canada may be imported solely for the purpose of export provided that they are not sold for consumption or use in Canada. This provision will come into force on a date to be fixed by the Governor-in-Council.
- Packaged foods, drugs, cosmetics and devices manufactured or prepared in Canada for export only will be required to comply with requirements in the FDA, generally targeting deception, unsanitary conditions and products posing a risk of injury. However, these requirements will not apply to natural health products within the meaning of the Natural Health Products Regulations.
The Hazardous Products Act (HPA) and its regulations give the Minister of Health and Health Canada the authority to regulate the sale and importation of hazardous products intended for use, handling or storage in Canadian workplaces.
Key amendments to the HPA will allow hazardous chemicals that are found to be non-compliant with the HPA to be returned or re-consigned to the sender, unless other measures are required for health or safety reasons, in which case they may be seized and not returned.
The Radiation Emitting Devices Act (REDA) and its regulations give the Minister of Health and Health Canada the authority to regulate the sale, lease, and importation of radiation emitting devices. REDA regulates devices that emit radiation in the form of electromagnetic energy (e.g. x-rays, microwaves, radiofrequency (RF) waves, infrared (IR), visible light and ultraviolet (UV) light) or acoustical energy, as well as any component of, or accessory to, such devices. It does not regulate devices that are subject to the Nuclear Safety and Control Act nor devices covered under the Motor Vehicle Safety Act.
Key amendments to REDA will allow an importer of non-compliant radiation-emitting devices be offered the option of returning or re-consigning them to a third party outside Canada. If the products pose a risk of injury to health or safety, then the products could be subject to other measures, such as seizure.
The Canadian Environmental Protection Act, 1999 (CEPA) and its regulations gives the Minister of Environment and Climate Change and Environment and Climate Change Canada the authority to prevent pollution and protect the environment and human health. Section 117 of CEPA prohibits the import (which includes transit) and manufacture for use or sale of cleaning products or water conditioners that contain prescribed nutrients in excess of prescribed values.
The amendment to CEPA provides the regulation-making authority to exempt cleaning products and water conditioners under Part 7, Division 1 of CEPA, such as those in transit through Canada, from the prohibition in Section 117 and to make distinctions based on any factor.
The Pest Control Products Act (PCPA) and its regulations give the Minister of Health and Health Canada the authority for the oversight of pest control products, including an assessment for value, health and environmental risks before a product may, among other things, be imported, distributed or used in Canada. In satisfying its administrative mandate, Health Canada engages in compliance activities to mitigate health and environmental risks from pest control products.
Key amendments to the PCPA provide for the following:
- An importer of non-compliant pest control products may remove the product from Canada or forfeit it. Authority is also given to an inspector to prevent the return of non-compliant products that would endanger human health or the environment.
- Authority to exempt goods in transit from the prohibition against importing and transporting unregistered products while maintaining safeguards protecting the environment and the health and safety of persons who may come into contact with such goods.
The Canada Consumer Product Safety Act (CCSPA) and its regulations give the Minister of Health and Health Canada the authority to protect the public by addressing or preventing dangers to human health or safety that are posed by consumer products.
Key amendments to the CCSPA allow consumer products that are found to be non-compliant with the CCPSA to be returned/re-consigned to the importer, unless other measures are required for health or safety reasons such as the seizure of products that pose a danger to human health or safety.
On April 29, 2016, Global Affairs Canada, in collaboration with Health Canada (HC) and Environment and Climate Change Canada (ECCC), hosted an online technical briefing on the WTO Agreement on Trade Facilitation (TFA) and An Act to amend the Food and Drugs Act, the Hazardous Products Act, the Radiation Emitting Devices Act, the Canadian Environmental Protection Act, 1999, the Pest Control Products Act and the Canada Consumer Product Safety Act and to make related amendments to another Act.
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The WTO Information Technology Agreement (ITA) is a tariff liberalization agreement agreed in 1996 through a “Ministerial Declaration on Trade in Information Technology Products”, signed initially by 29 WTO members; participation in this plurilateral agreement has consistently increased since then. It requires each participant to bind and eliminate customs duties for all products specified in the Agreement, and the tariff elimination is implemented on a most-favoured nation (MFN) basis. The ITA covers a large number of high technology products, including computers, telecommunication equipment, semiconductors, semiconductor manufacturing and testing equipment, software, scientific instruments, and their parts and accessories.
In light of new technological developments, some WTO members agreed that the current product coverage of the ITA should be expanded and in June 2012, an informal process was initiated towards launching negotiations for the expansion of the product coverage of the ITA. This process led to the establishment of a technical working group of Members, including Canada, meeting outside of the formal framework of the WTO ITA Committee. Negotiations to expand the ITA are ongoing.
On July 8, 2014, Canada joined a number of other World Trade Organization members, including China, the European Union, Japan and the United States, in launching negotiations toward a new WTO plurilateral agreement on environmental goods. Such an agreement would eliminate tariffs on a range of environmental goods. More open trade would create new markets for Canadian manufacturers, provide incentives for Canadian businesses to develop new products to protect the environment, and increase the availability and lower the cost of environmental goods for Canadians. For more information, including periodic updates and statements by Minister Fast, please see the Plurilateral Environmental Goods Agreement.
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