Canada’s 2019 Trade Policy Review opening statement
June 12, 2019
Thank you, Chair.
Mr. Chairman, I am very pleased to be here to represent Canada at our 11th WTO Trade Policy Review. Canada thanks everyone that has taken part in this important process.
Canada also warmly thanks Ambassador Juan Carlos Gonzalez, Permanent Representative of Colombia, whom we are honoured to have as our Discussant. And we thank all Permanent Representatives and delegates participating here today.
I would like to acknowledge the WTO Secretariat for its hard work in producing a very thorough and detailed Secretariat Report. Consistent with past reviews, we appreciated the opportunity for frank and productive discussion with your dedicated team throughout this important trade policy review process.
Trade drives Canada’s economy. While Canada represents just 0.5% of the world’s population, we account for 2.4% of global trade in goods and services. One in six Canadian jobs is linked directly to exports.
Spurred by an international trade policy framework that prioritizes trade diversification and inclusion, two-way trade in goods and services accounts for almost 66% of Canada’s GDP.
Canada is proud of the role that it has played in helping to build a multilateral trading system that is based on the rule of law and has resulted in the creation of freer and more open trade.
At the time of Canada’s last trade policy review in 2015, the financial crisis and ensuing global downturn, including the decline in the price of important commodities such as oil, dampened Canada’s economic prospects.
Canada made a choice at that time to re-invest in its people and in innovative practices that included improved skills-training for workers, increased infrastructure spending, and fostering science and research. Canada has also continued to pursue open and liberal markets through comprehensive free trade agreements, support for the rules-based trading system at the WTO, and various types of unilateral liberalization measures.
The result of these efforts is clear:
- Canada is now the10th-largest economy in the world. According to the OECD, Canada’s average annual real GDP growth from 2015 until 2018 ranked high among G7 countries and is forecast in 2019-2020 to be the second highest in the G7. Since 2015, Canada has created more than 1 million new jobs—over 950,000 being full time jobs. By the end of 2018, Canada’s unemployment rate reached 5.6%.
Despite the global rise of protectionism and growing trade tensions, which have added uncertainty to the global economic environment, Canada continues to voice support for the rules-based multilateral trading system, seek new trading partners, and remains committed to helping its businesses take advantage of opportunities in new markets abroad.
Support for the multilateral trading system
The WTO constitutes a critical part of Canada’s international trade policy engagement. As Canadians, we believe stronger trade deepens trust and friendship between countries and shrinks the distance between us.
That is why Canada’s Minister of International Trade Diversification has convened a small group of 12 other diverse, but like-minded, members to discuss pragmatic and realistic ideas to modernize and strengthen the WTO, now known as the “Ottawa Group”. Since last October, Ministers have met three times, most recently in Japan on June 9th
Beyond the Ottawa Group, Canada is working to update the WTO’s rule-book to ensure that the rules reflect 21st century realities. For example, Canada is advancing negotiations on fisheries subsidies and agriculture and is engaged in all of the Joint Statement Initiatives, including discussions on e-commerce and domestic regulation of services.
Canada has also sought to play a leading role in supporting a more stable and open trade and investment environment through other multilateral entities, including our engagement at the G20, APEC, and the OECD.
Canadians have shown themselves united in confronting the challenges of growing protectionism. Our efforts signal to the world that trade matters, that rules matter, and that we will not be drawn into the world of protectionism.
Canada has also pursued an ambitious trade diversification agenda, including through the negotiation of comprehensive free trade agreements. This has resulted in a few notable accomplishments including provisional application of CETA — Canada’s free trade agreement with the European Union, which marked its one year anniversary this past fall; bringing into force the CPTPP with key Asia-Pacific trading partners; and signing the Canada-U.S.-Mexico Agreement, or CUSMA, which will modernize NAFTA once it enters into force.
Last fall, we welcomed our Ukrainian counterparts to Ottawa for the inaugural Canada-Ukraine FTA Joint Commission, which celebrated the first anniversary of our free trade agreement.
This past February, Canada brought into force a modernized and inclusive free trade agreement with Chile, making Canada the first G20 country to adopt a Gender chapter in a free trade agreement.
And, last month, Canada ratified its modernized and inclusive FTA with Israel – improving on what was already a great trading relationship. The updated agreement brings this FTA up to standard with Canada’s more recent trade agreements by addressing non-tariff barriers, and includes new chapters on trade and gender, small and medium enterprises, labour and environment, as well as a new provision on corporate social responsibility.
Finally, Canada is actively pursuing opportunities in other important and fast-growing markets and is making inroads: Canada is engaged in FTA negotiations with partners in South and Central America—the Pacific Alliance and MERCOSUR—and is exploring possible FTA negotiations with ASEAN.
Taken together, Canada now has 14 FTAs in force covering 51 countries, connecting our businesses to 1.5 billion of the world's consumers and two thirds of global GDP.
In addition to including investment chapters in its FTAs, Canada negotiates stand-alone bilateral investment treaties that we refer to as FIPAs, or Foreign Investment Promotion and Protection Agreements. These investment treaties aim to provide greater predictability and certainty for Canadian investors considering investment opportunities abroad.
Following public consultations, Canada is currently in the process of modernizing its FIPA model to bring it in line with the government’s inclusive trade and investment agenda.
While this degree of market access is impressive, Canadians understand that market access alone does not guarantee jobs and prosperity. Encouraging Canadian businesses of all sizes and all sectors to become global exporters is a national priority.
Canada’s trade diversification agenda aims to ensure that we are maximizing growth at home by fully capitalizing on emerging economic opportunities abroad.
To that end, the government has launched a Trade Diversification Strategy aimed at helping Canadian businesses take advantage of hard-won access to overseas markets.
The Strategy sets an ambitious target of increasing overseas exports by 50 percent by 2025, and aims to position Canada as an even more globally-connected economy in the years ahead.
In Canada’s previous trade policy review, the WTO noted that removing additional barriers to investment would reverse the trend of Canada’s declining share of FDI. We have taken steps to address this. In fact, 2018 marked a 60% increase in FDI flows to Canada at a time when global capital flows into OECD countries dropped by 23%.
In March 2018, the Government of Canada created Invest in Canada, an agency whose focus is to streamline and encourage global investment into Canada by providing services that make it easier for global companies to choose Canada for their next business expansion.
While Canada remains a staunch defender of the multilateral trading system, we also recognize the concerns that drive protectionist thinking and rhetoric - notably, that the benefits of trade are not being distributed fairly.
Canada is advancing an inclusive approach to trade that seeks to ensure that all segments of society can take advantage of the opportunities that flow from trade and investment agreements.
This approach includes increased public engagement on trade policy; seeking provisions in our trade agreements to protect and strengthen labour rights and the environment; advancing gender equality and women's empowerment through increased involvement in international trade; in addition to fostering opportunities for traditionally underrepresented groups, such as small and medium enterprises (SMEs) and Indigenous peoples, to engage in international trade.
For example, we believe that the link between trade and gender is an important consideration, and that is why Canada has sought gender provisions in our newest FTAs. Canada also has a long-standing Business Women in International Trade program - or BWIT - which provides targeted support and services to export-ready and export-active women-owned businesses to better exploit supplier-diversity and other global commercial opportunities. Over the past decade, more than 1,500 women-owned businesses have participated in BWIT-led trade missions and initiatives.
Canada is spearheading similar work here at the WTO, where we actively championed the WTO Joint Declaration on Trade and Women's Economic Empowerment, which was endorsed in December 2017 by over 120 WTO members and observers. In this regard, we were pleased to organize the very first workshop, on trade and gender-based analysis, to be held under the auspices of the Declaration.
On a more personal note, in my role as Director General of the Trade Negotiations Bureau at Global Affairs Canada, I am responsible for ensuring that all of Canada’s international trade and investment agreements are subject to a comprehensive analysis of gender impacts through Gender Based Analysis Plus (GBA+) assessments. As some of you will know, this is no small feat and we are interested in learning from others that may be exploring this.
Acknowledging the link between trade and gender is not just good policy, it is also good for prosperity. A 2017 study by the McKinley Institute has shown that addressing gender equity has the potential to add $150 billion to Canada’s GDP by 2026.
Canada has also prioritized its relationship with Indigenous peoples based on recognition of rights, respect, cooperation, and partnership. Advancing an inclusive trade agenda that includes Indigenous peoples in Canada is a part of this relationship. During the review period, Canada has sought to increase the opportunities for Indigenous people to benefit from international trade and investment, while preserving their constitutionally protected rights.
Canada has also sought to include SMEs in its inclusive approach to trade. SMEs comprise 99.7% of Canadian businesses. However, as of 2017, only 11.7% actively export goods and/or services.
Canada aims to boost FTA utilization by SMEs through the inclusion of dedicated SME chapters that contain general provisions that recognize the importance of SMEs to the economy and facilitate cooperative activities and information sharing. The CPTPP, CUSMA, and the modernized Canada-Israel FTA all contain SME chapters.
Since our last Trade Policy Review, Canada has undertaken a number of important trade-related changes to our domestic regime. These include Canada’s ratification and accession to several important multilateral IP treaties such as the World Intellectual Property Organization (WIPO) Marrakesh Treaty and the WIPO Hague Agreement, as well as implementing certain IP provisions in trade agreements like CETA and CPTPP.
Canada has also taken measures to modernize our sanitary and phytosanitary (SPS) approach, moving towards a more preventive and systems-based approach - which will allow for better adaptation to emerging risks and global and scientific trends – while improving client access through electronic services and information on regulatory compliance. And, seeking to avoid barriers to trade and the promotion of regulatory cooperation, Canada has set out guidance for regulators to take into account international trade considerations when reviewing or developing regulations.
Finally, the Canadian Free Trade Agreement, or CFTA, entered into force in July 2017 and introduced important advancements to Canada’s internal trade framework that have enhanced the flow of goods and services, investment and labour mobility within Canada. The CFTA also better aligns Canada’s domestic trade commitments with those in its international agreements, such as CETA.
In conclusion Mr. Chairman, in the face of global uncertainty, the Government of Canada has prioritized pursuit of trade diversification and free trade in order to drive continued global economic growth, rather than turning inward and retreating to protectionism. This approach is reflected in Canada's role on WTO reform as well as its successes in pursuing ambitious and comprehensive free trade agreements with new partners.
At the heart of Canada's trade policy is a desire to protect and build global confidence in the benefits of liberalized trade and the multilateral system that supports it, safeguarding the economic health of all trading nations.
Canada will continue to work with partners bilaterally and through multilateral forums to build the trust and collaboration needed to solve challenges that matter to all our citizens, so they can make the most of the opportunities that come from globalization.
I recognize that many here have questions about our policies. More than 600 questions have already been posed to Canada, and we have provided answers to all of them. I expect even more questions after opening the floor to all of you here today. I welcome this engagement and your valuable contributions to Canada’s review.
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