WORLD TRADE
ORGANIZATIONTN/MA/W/9
15 October 2002
(02-5583)
Negotiating Group on Market Access Original:  English
WTO NON-AGRICULTURAL MARKET ACCESS
Communication from Canada
The following communication, dated 8 October 2002, has been received from the Permanent
Mission of Canada.
_______________
Introduction
1. Over the course of the last eight Rounds of multilateral negotiations, we have seen that the
reduction and/or elimination of tariffs and non-tariff barriers delivers major economic benefits,
including the reduction of poverty.  We now have another opportunity for progressive tradeliberalization which can benefit all Members.  In this paper, we enunciate our goals for this
negotiation and put forth our views on some of the issues before us.
2. Canada has been encouraged by the participation of numerous Members, representing the full
spectrum of development, in the discussions in  the Non-Agricultural Market Access Negotiating
Group.  It is our hope that all Members will actively engage in order to benefit from the increased
opportunities and welfare gains that are generated through liberalization.
3. Economic development for all Members depends largely on investment, both domestic and
internationally based.  In turn, the extent to which international investment can be attracted to any
country depends in large part on the degree to which our trade regimes are characterized by
transparency, predictability, efficiency and effective access for imports.  Members whose tradepolicies have followed these principles have seen their economies prosper, while protectionist
approaches have been relatively less successful.
4. We note that some Members have suggested that the level of ambition in this Round should
be greater than in the Uruguay Round, while others have questioned whether all Members should beparticipating in or contributing to this negotiation.  However, a clear commitment to liberalization was
made by all our Ministers last November, when they agreed to undertake a broad and balanced work
program based on enhanced market access, balanced rules, and well-targeted, sustainably-financed
technical assistance and capacity-building.
5. With respect to technical assistance and capacity -building, Canada is ready to address specific
needs, recognizing that meaningful participation by developing countries will be an indispensable
ingredient in a successful negotiation.
6. Canada’s objectives for the tariff negotiation include reducing and binding applied tariff
levels which are not yet bound, reducing high bound rates and re-binding them at lower rates, andTN/MA/W/9
Page 2
expanding the scope of duty-free trade.  In addition, we favour eliminating “nuisance” tariffs and
maximizing the use of ad valorem  rates.
7. In cases where there are substantial gaps between bound and applied rates, even large
percentage cuts in bound rates can frequently result in  little or no reduction in applied rates.  In this
context, we will not agree to bind valuable real cuts in our applied rates in return for purely pro forma
liberalization, i.e. where cuts in high bound rates result in no decrease in applied rates – in other
words, no improved market access.
Modalities
8. It is our view that, in order to best meet the interests of all Members, a combination of
approaches will be needed, including sectoral agreements (both zero-for-zero and harmonization),
formula-based approaches and the request/offer process.
9. With respect to formula-based approaches, these should be sensitive to the varying
circumstances of Members.  Some have suggested that it would be wrong to differentiate amongstMembers according to the levels of development and tariff structures of various Members.  On the
contrary, Canada believes it would be unfair to use a “one-size-fits-all” approach where there are
clearly differing levels of development and different tariff structures in place.  Some countries, for
example, already have relatively low applied and/or bound tariffs compared to some of their
counterparts at the same level of development.
10. In addition to credits to be gained for liberalization during this negotiation, we support the
concept of giving credit for prior autonomous liberalization which goes beyond existing Uruguay
Round commitments.  This is on the understanding that credit would be given only in those cases
where changes have been bound, or will be bound as a result of the current negotiations.
11. With respect to the existing sectoral agreements, we believe that expanded membership would
have positive spin-off benefits for all.  In addition to broadening membership, we may also wish to
expand product coverage within some of those agreements.  Membership in these sectoral agreements
contributes a valuable degree of certainty and predictability to our trade regimes, and thus acts to
focus private sector attention and attract trade and investment flows.
12. Canada also supports the negotiation of new “zero-for-zero” (duty-free) sectoral agreements
to include sectors of interest to both developed and developing countries.  We would support new
agreements for sectors such as fish products, forest products, fertilizers, energy-related equipment and
non-ferrous metals.  Additional sectors might also be of interest, and we will be considering with an
open mind the proposals made by others.
Environmental Goods
13. Some have questioned the priority to be given to environmental goods, and have also
questioned whether liberalization in this area should go beyond the average ultimately achieved in theNAMAN.  We find these views difficult to understand, given that Ministers at Doha specifically
singled out environmental goods for special attention.  For Canada’s part, we would support a zero-
for-zero agreement in this sector.  As for product coverage, we agree with other Members who have
commended to the NAMAN Group and the Committee on Trade and Environment in Special Session
the work produced by APEC, which in turn took in to account other international sources, including
the OECD.  The APEC product coverage, a list of HS  tariff items, is based mainly on the principle of
“predominant end use”, an approach we favour; we see concepts such as “sustainable materials” or
“production characteristics” as difficult to operationalize and administer.  However, this is not to say
that we regard the APEC list as “closed”; we are open to product additions.TN/MA/W/9
Page 3
Non-Tariff Barriers
14. In Canada’s view, WTO Members should make further efforts to reduce or remove existing
NTBs which act to unduly restrict trade, and to discourage or prevent the introduction of new ones.Our overriding aim should be to curtail unnecessary barriers, while retaining the right of governments
to apply measures in support of legitimate objectives, regulating in the public interest in the least
trade-restrictive manner possible.
15. However, it will be important to avoid duplication with areas which are already covered in
existing Agreements, or which are being addressed elsewhere.  In some areas progress should be
made by improving the implementation of existing agreements – for example, the Agreements onTechnical Barriers to Trade and on the Application of Sanitary and Phytosanitary Measures.  In
addition, it would appear that a number of significant issues being raised by many of our respective
exporters and importers might be properly addressed within the trade facilitation context.
Operational Issues
16. Canada urges those who have not already done so to complete their submissions to the
Integrated Data Base.  With respect to the base year for the negotiation, this will depend to a large
degree on the state of the IDB submissions, but in principle we should use the most recent year in
which data are available for the majority of Members.
17. Canada agrees with many Members that bound rates should be used as the basis for
negotiation, bearing in mind our requirement that th ere must be significant narrowing of the gap
between some bound and applied rates.  In those cases where rates are not bound, the applied rate in
place at the beginning of this Round should be the basis for negotiation.
Staging
18. On the question of a phase-in period for the results of the tariff negotiation, we consider that
in general a five-year time frame would be the most reasonable.  This should be combined with the
use of linear cuts, so as to provide greater simplicity and predictability.
19. Members would be free to make a case for longer or shorter transition periods,  depending
upon the circumstances.  In cases where zero-for-zero or tariff harmonization agreements are reached,
implementation periods could be set on a case-by-case basis according to the situation in each sector,
and could also include some country-specific flexibility.
Conclusion
20. It is evident that, while much progress has been made in the last eight Rounds, there remain
significant barriers in numerous markets and in many sectors of export interest to all Members.  There
are still many high rates and, in addition, many tariff rates remain unbound.  There are also manylarge gaps between bound and applied rates.  These facts combine to create a scenario in which
excessive unpredictability and uncertainty discourage flows of both trade and investment.  It is our
conviction that further trade liberalization would play a significant role in promoting economic
expansion for all Members, at all levels of development.
__________