Robert Wolfe | December 27th, 2013
Canadian trade negotiators have a busy year ahead, and not just because new trade agreements were among the key priorities in the Harper government’s trade strategy announced last month.
The government’s focus will be on finishing the text of the bilateral Comprehensive Economic and Trade Agreement (CETA) with the European Union, and efforts to conclude the regional Trans-Pacific Partnership (TPP) negotiations. The preferential trade agreement negotiations under way with another 12 partners, notably Japan, and India, are not progressing quickly, but also demand attention from stretched trade officials, as does ongoing defence of Canada’s interests in trade monitoring mechanisms and dispute settlement proceedings under existing agreements.
The new agreement that is front of mind for the Harper government is CETA. The technical summary of the deal announced in October suggests that when completed it will be a significant accomplishment, if not necessarily Canada’s biggest trade deal ever. While NAFTA is broader, covering our largest trading relationship, CETA may go more deeply into policies that restrict trade.
The summary is tantalizing, but in a saying beloved by trade negotiators, the devil is in the details, and we haven’t seen many yet. I am especially interested in the CETA institutional arrangements, an area where NAFTA is weak. What provisions will be subject to investor-state dispute settlement? Will the regulatory co-operation chapter go beyond existing mechanisms for consultation between the parties?
The twelve oddly matched participants in the TPP negotiations, from the United States to Vietnam, had been aiming for an agreement this year, but once Japan joined the negotiations in the summer, that target became unlikely. At their December meeting in Singapore, TPP ministers are reported to have discussed ambitious objectives going beyond WTO disciplines on intellectual property rights, state-owned enterprises, food safety, and electronic commerce, among many others.
Given the diverse set of economies included in TPP, ambitious results will be difficult. If South Korea asks to join, the process could be slowed again. After their four days of talks in Singapore, the ministers admitted that any TPP conclusion will only be reached in the first part of next year. And a deal may not be possible at all if the U.S. Congress does not grant President Obama renewed “trade promotion authority”, the so-called fast track provision for voting up or down on trade agreements without endless amendments.
Despite the gloomy prognosis beforehand, the WTO’s Bali ministerial meeting earlier this month was a great success, concluding the most significant multilateral trade agreements since 1994. Since the Doha Round was launched in 2001, many commentators say that the Bali package is thin gruel, but the package is a tangible result, which is more than can be said for many of the bilateral and regional negotiations under way. And it leaves the door open to reconfigure the remaining Doha Round issues into a new WTO agenda to be developed early in 2014. The willingness of the major players to compromise in Bali, even India in the end, allows for some optimism about the prospects for further multilateral trade agreements in the WTO.
The biggest uncertainty concerns China, a trade behemoth whose institutional role is not yet commensurate with its weight in the world economy. Negotiations on China’s application to join the plurilateral (limited membership) WTO Government Procurement Agreement have been disappointing so far. Updating the 1996 Information Technology Agreement is urgent, given the pace of technological change. Negotiations among the 78 participants collapsed last month, largely because of Chinese sensitivities about including some products, with no date set for resumption.
China has signalled an interest in joining Canada, the U.S., the EU and other advanced economies in the negotiations for a new Trade in Services Agreement (TiSA), but whether interest will translate to serious engagement is not clear. Meanwhile the Canada-China Economic Complementarities Study released in August, 2012, languishes with no apparent efforts under way to move toward some sort of closer trade relationship.
If the devil is indeed in the details, here is one detail that might indicate China’s intentions. The highlight of the Bali package was the trade facilitation deal. Developed countries must implement all of the agreement’s provisions as soon as it enters into force. During the process of completing the legal text in the next few months, developing countries, including China, may choose which provisions will be implemented immediately, and which ones will take more time.
If China puts most of its implementation in the immediate category, that would be an encouraging sign that the country is ready to play a role of responsible, multilateral leadership.
Robert Wolfe is professor at the School of Policy Studies, Queen’s University, an associate of the International Institute for Sustainable Development, and research fellow at the Institute for Research on Public Policy. This comment is based on his paper “First diagnose, then treat: what ails the Doha Round?”