FAIT Committee Report

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EXECUTIVE SUMMARY

CANADA AT THE WTO:
ADVANCING A MILLENNIUM AGENDA IN THE PUBLIC INTEREST

Over the past decade... Canadian participation in the global trade regime has reached a new level of maturity. Canadians have become more prepared to pursue opportunities and less reluctant to accept some of the risks of a more open economy. They successfully convinced the global community to adopt a stronger institutional basis for multilateral trade cooperation, and they are at the forefront in ensuring that the WTO evolves into a forum for the governance of the global economy.

For Canadians, the need to be active in the further developments of the multilateral system cannot be overemphasized. Canada depends on and benefits from an effectively functioning trade and payments system. Its ability to play a constructive role is equally clear. But the ability to ensure that Canadian values and priorities are reflected in the evolving regime requires that Canadians analyze the issues and make their contributions early in the process. As a relatively small player, that is where they are most likely to influence the content and course of a negotiation. In short, Canadians need to be quick, early, and creative.

Michael Hart
"Canada at the Millennium Round: Forging Global Rules for a Global Economy"
(Submission, April 26, 1999, Vancouver)

The Committee's Report on Canada and the Future of the World Trade Organization: Advancing a Millennium Agenda in the Public Interest is the culmination of the most extensive parliamentary consultations ever conducted across Canada on the direction of multilateral trade and investment policies. The Committee's deliberations were in response to a formal request from the Minister of International Trade that we canvass the views of Canadians on issues related to the work of the World Trade Organization (WTO) and the agenda of its forthcoming Third Ministerial Conference to be held in Seattle in late 1999. It is significant that this process of parliamentary and public engagement has taken place months prior to firm decisions being taken on the scope, content and duration of actual negotiations. Indeed, in undertaking this study, we were being asked to contribute to the determination of Government policy at a stage when Canadian positions are being prepared to take forward to this pivotal WTO conference at which it is widely expected that a major new round of multilateral trade negotiations may be launched.

For Canada's economic well-being as a whole, it is clearly vital that Canada be well prepared to participate in the WTO's decision-making processes, and to exercise leadership wherever possible to bring about appropriate improvements. Canada, as the most trade-oriented G7 country, has compelling reasons to pursue Canadian interests in continuing the development of an effective, transparent, and accountable multilateral trade framework, based on clear rules that are applied fairly and equitably. Even those who are sharply critical of the WTO system and of how it has operated to date, and who therefore have strong reservations about entering into new negotiations, will agree that it is more important than ever to improve public understanding of that system, to carefully consider its impacts - increasingly reaching into domains of domestic regulation and of daily life - and to deliberate as a society on the kinds of multilateral economic governance institutions that will be needed entering a new millennium.

This is, of course, a work in progress, and the Committee's Report is but one step along a journey of furthering democratic engagement on these issues. Nevertheless, we have tried to be as inclusive as possible in listening to the views of Canadians, and as comprehensive as limited time and resources would permit in terms of our coverage of what is at stake for Canadians at the WTO level. The Report and its conclusions and recommendations therefore address not only sectors of established or potential negotiating interest from a commercial perspective, but also the broader issues - sometimes of a highly complex and contested nature - relating to institutional and process reforms, and to the cultural, social, environmental, human rights and other values-based dimensions of a globalizing trading regime. In effect, we are compelled to talk about more than just "trade" as that has been narrowly understood, but also about shaping what former senior trade negotiator Michael Hart refers to in the opening citation as an evolving "forum for the governance of the global economy".

Canadian businesses and industries involved in both established and emerging areas of trade and investment activities clearly have a primary interest in specific future negotiations within the WTO. At the same time, it is also true that the nature of the WTO system and the results of such negotiations raise major public-interest policy questions affecting the whole of Canadian civil society. Moreover, if so far public participation in trade policy processes has been weak, and sustained parliamentary attention lacking, now is the time to remedy this situation and to put in place constructive channels for representation and dialogue which will be accessible and of benefit to all Canadians.

The Report's Introduction faces that public challenge head on. In the context of a new international political economy of trade negotiations and of debates over globalization, we need to develop open and transparent processes which will also have to be more inclusive than ever before in terms of both the issues addressed and the actors represented at the table. Within Canada, this means finding imaginative ways to build common ground that allows both the private sector to prosper and progress to be achieved on the social dimensions of trade. Multilaterally, it means reforming and reinforcing institutions like the WTO, so that the less well off members of the international community are not marginalized, and so that the democratic accountability of policy structures is strengthened.

In listening to a wide cross-section of Canadians - whose voices appear in the "What Canadians are Saying" sections that begin every chapter of this Report, the Committee was impressed by the evidence of growing citizen engagement across the spectrum of trade and investment-related issues. Many people were motivated by public-interest concerns. There was also little complacency among those who were more confident about the recent direction of trade and investment liberalization policies. Because the issues go beyond better market access for Canadian exports, which have enjoyed a decade of record growth; they are also about building a better and sustainable global trading system over the longer term from which all can benefit.

While there are obviously differences of views, which were sometimes passionately expressed, we found some common themes resonated throughout the testimony. The Report articulates these as 10 "principal and principled public messages" as follows:

• Getting the international rules right matters but is no simple matter.
  Trade rules must strive for fairness and be arrived at democratically.
• Process counts at all levels.
  We need trade policy forums that encourage public participation and foster social consensus.
• Values are important.
  We need to work towards an international trade system that supports standards of social justice, environmental sustainability, and human rights.
• Promotion of trade interests must be in the public interest.
  The pursuit of exports and commercial opportunities needs to be combined with appropriate protection of consumer and other public interests.
• Policy choice matters.
  There needs to be space within the trade rules to allow for an appropriate exercise of democratic judgement on matters within the public interest.
• Preparation matters.
  Sufficient time is needed for public input and for establishing a clear mandate for Canadian negotiators.
• Negotiations must be conducted in a fair and accountable manner.
  The interests of all countries need to be taken into account and there should be appropriate provisions for public scrutiny of negotiating processes.
• Transparency and predictability are critical to the functioning of the system.
  All participants need to have access to accurate information and to have confidence in the application of the rules.
• Trade impacts should be subject to regular reviews and evaluation.
  Better knowledge in this area is needed in order to inform better policies for the future.
• Effective enforcement of and coherence among international obligations will be essential.
  There is a need to ensure compliance with the rules and to clearly define the WTO's mandate in relation to other international bodies in order to avoid costly overlaps, gaps or conflicts.

A first priority that the Committee perceives will be to institute a long-term public and parliamentary process that is capable of providing the democratic oversight that is needed over an expansive range of trade and investment policy issues in which complexity and change are a given. Accordingly, the Committee's first two recommendations are designed to address that fundamental requirement: both to improve the representation of civil society within trade policy development processes, along with the means of regular dialogue and feedback, and to ensure that Parliamentary institutions are sufficiently able to examine the results of international trade and investment negotiations before any binding agreements that Canada enters into take effect within domestic legislation. In short, consultation in future must involve adequate public preparation, public knowledge, and public consent exercised through the role of elected representatives.

The Committee then turns its attention in Part I of the Report to the general framework issues of the multilateral trading system, the context for pursuing Canadian negotiating objectives, and the structures for the implementation of obligations and the settlement of disputes. Chapter one of the report focuses on the governance institutions of the WTO system. We heard from supporters as well as critics of the WTO about a number of deficiencies and areas in which structural and process improvements could be made to increase the WTO's effectiveness, transparency and public accountability. Others also addressed the "constitutional" nature of the WTO's mandate and how far it should extend into matters which involve domestic regulation and often, too, the jurisdiction of subnational governments. The legal powers of the WTO regime compared to the weaker GATT system which it succeeded are attractive from the standpoint of greater enforceability of international commitments. However, this is also a problem for those who question the dominant free-trade premises of the system. The Report considers some important constitutional principles which should be the subject of explicit review by WTO members: namely "sovereignty' and `subsidiarity' in defining the future scope and limits of the WTO's rule-making mandate; `universality' in terms of the accession of new members and application of global standards; `transparency' and `accessibility' to open the system to the public; `contestability' and `sustainability' as norms to govern the behaviour of global markets; `coherence' to coordinate the work of the WTO with the functions of other parts of the multilateral system.

The Committee believes that Canada should take a leadership role at the Seattle Conference in promoting attention to systemic reform issues. To that end, we recommend that a high-level process be established to make concrete proposals to the next biennial WTO Ministerial Conference, in time for these to be considered prior to the conclusion of any prospective new round. Chapter 1 also examines in detail the need for specific improvements to the WTO's governance structures, including the creation of an executive committee that would be broadly representative of the membership. The case is made for strengthening the capacities of the institution to manage a growing burden of demands, and also for assistance to the least developed countries to allow them to participate more fully. The Report agrees that relations with non-governmental organizations (NGOs) also need to be further developed as part of improving public access and accountability. Democratic parliaments, precisely because they are elected to represent the interests of their societies, ought also to have a greater presence and role in achieving a collective oversight of the WTO and its activities. The Report therefore recommends that, as part of an overall institutional review, high-level consideration be given to the idea of creating an associated parliamentary mechanism - a Standing Conference of WTO Parliamentarians - which could be composed of representative delegations from the parliaments of member countries.

Chapter 2 of the Report surveys the multilateral process currently underway leading up to the possible launch of a new WTO negotiating round when ministers from at least 134 countries (probably more, and perhaps including China) meet in Seattle in December. Reviewing the changing international context and the many elements at play in regard to scope and timing of negotiations beyond those already mandated on agriculture and services, the Committee suggests the following as elements to guide a strategic approach to advancing Canadian interests within the WTO negotiating process:

• As a first priority, seeking improved access to world markets for all Canadian goods and services and to high technology and knowledge-based products, innovations and services that will enhance the productivity and globally competitive position of diversified Canadian enterprises, including small business exporters, and bearing in mind that merchandise and services trade are also closely linked to investment flows.
• Working with other countries to ensure that existing WTO Agreements are clarified where necessary and made as transparent as possible and that any regional trading arrangements are fully consistent with the WTO.
• Pursuing improvements to the WTO dispute settlement system, while safeguarding its integrity, preventing overload, and taking care not to compromise its effectiveness.
• Remaining flexible on the questions of the scope and timing for a possible new round, but being prepared to engage in the ongoing discussions of all of the items which may potentially be involved.
• Giving careful consideration to proposals being brought forward in the context of the broad-based negotiation favoured by Canada's main trading partners and which appears to offer the best possible avenue for Canada to achieve a balanced outcome in forthcoming negotiations covering the "built-in agenda" as well as non-tariff measures and possible new issues.
• Adjusting strategy to meet the evolving concerns of domestic constituencies through improved mechanisms for close, regular consultations with all stakeholders and with civil society along the lines recommended earlier in the Report.

Of course negotiations will serve little purpose if the resulting commitments are not implemented, and if conflicts arise over the rules which threaten to overwhelm the system or erode confidence in it. The Committee observes in Chapter 3 that the effectiveness and credibility of the WTO depends in large measure on all members respecting their obligations to other members, and working to solve problems cooperatively. In particular, there is a recognition that many developing countries, and in particular the least developed, will require increased technical assistance in order for them to acquire the capacity to carry out existing undertakings under the Uruguay Round agreements, much less to assume new ones if a new round is launched. A number of witnesses urged that Canada consider carefully the needs of the South in this regard. There were also recommendations to make better use of the WTO's Trade Policy Review Mechanism (TPRM) in order to thoroughly evaluate country situations and encourage remedial action. With respect to implementation issues within Canada, the Committee emphasizes the need to consult closely with the provinces and other levels of government.

The WTO's dispute settlement system is considered one of the crowning achievements of its establishment in 1995; however, critics of its record since that time have a number of complaints, notably in regard to its lack of transparency and its impact in ruling against domestic policy measures in certain countries including Canada. Cases involving culture, environmental and public health considerations have been particularly controversial. Contentious matters include the scientific basis of certain product standards, whether rules favouring liberalized trade should have paramountcy over other normative standards, whether non-governmental third parties should have access to panel processes, and potential conflicts over the interpretation of various agreements and their applications. While the system is in many ways an improvement over the GATT and is still young, the Committee recommends consideration of further reforms.

Part II of the Report moves on from these broadly systemic and institutional questions to address some principal areas of negotiating interest for Canada going into the Seattle Comference. The first chapters focus on areas which have already been established as priorities for negotiation. The later chapters enter the more uncertain territory of some of the new and emerging issues on which there may, or may not, be agreement to include within a future negotiating agenda.

Chapter 4 on agriculture and agri-food issues observes that the promise of the Uruguay Round's breakthrough Agreement on Agriculture remains in many ways unfulfilled, notably in regard to market access, export subsidies, and non-tariff barriers linked to sanitary and phytosanitary (SPS) measures. The Committee's hearings confirmed that Canadian agricultural groups want to see these problems rectified before undertaking new commitments. The Report also underlines a number of Canadian negotiating objectives: elimination of export subsidies; greater transparency in the rules governing market access; opening up of markets on the basis of the "zero-for-zero" option for industry sectors which can take advantage, such as grains and oilseeds; a ceiling on domestic support; increased transparency of state-trading enterprises; and an objective scientific basis for SPS measures, particularly in regard to genetically modified organisms.

While differences persist among different sectors of the industry, the Report notes that there is a convergence of view on many objectives as indicated above, and that consensus-building will be further enhanced by a consultation process which permits all sectors to continue to analyse and refine the Canadian position throughout the forthcoming negotiations. Canadian agriculture has made important strides in adapting to a liberalized trading environment. On that basis, Canada can take a forceful position into the WTO negotiations, focusing on achieving realistic results prior to the expiry of the "peace clause" in 2002. The Report recommends ways to advance the interests of all parts of the industry, building on the solid preparatory work which has already been done by agricultural and agri-food groups..

In Chapter 5, the Committee examines ongoing market access issues as they relate to trade in goods other than agriculture and encompassing a wide variety of both tariff and non-tariff issues including most of the agreements on non-tariff measures (NTMs) that were negotiated in the Uruguay Round. The Report calls for close consultations with all stakeholders, including provincial governments, in order to identify as quickly as possible those markets, products and trade barriers which Canada should target for improved access negotiations in a forthcoming round, which ideally would be broad-based and reflect a large consensus among WTO members. The Report identifies a number of areas where Canada must begin, in cooperation with the Canadian export community, to fine-tune our negotiating objectives, giving particular attention to unresolved issues in commercial relations with the European Union, Japan and other principal non-NAFTA trading partners. Among the sectors highlighted by witnesses are fish and seafood products, non-ferrous metals, wines, and wood products. On the import side, in a balanced negotiation, developing countries will be among those seeking as much free access as possible to the markets of developed countries including Canada. While the views of import-sensitive industries will need to be canvassed, in principle the Committee supports the appeals made by some witnesses for Canada to open its markets to aid in the development process.

Observing that all of the Uruguay Round non-tariff agreements are potentially subjects for negotiation, the Committee concludes that Canada's goal should be to ensure that existing WTO Agreements are clarified where necessary and made as transparent as possible. Any new agreements which may be reached in a future round should likewise be clear, precise and free from ambiguity. Furthermore, many of these issues require an approach that seeks the full cooperation of all levels of government within Canada (provincial, local, and aboriginal) prior to any negotiations, since they may be expected to implement any new commitments. A particular caution flag was raised in regard to the area of government procurement.

Chapter 6 on services issues focuses on the operation of the General Agreement on Trade in Services (GATS) which governs trade in services and was one of the major accomplishments of the Uruguay Round. Most views presented to the Committee looked for a new round to lead to further liberalization and expansion in sector coverage under the GATS and argued that Canada should be prepared to take a major role in this exercise. The Report urges completion of work which is already underway to identify, in close collaboration with service industries and provincial governments, Canada's specific priority interests in export markets in terms of countries, types of services, methods of delivering a service, movement of people, and impediments or barriers to doing business (both private and governmental). This exercise should also be used as an opportunity to review Canada's current reservations with the aim of identifying items of particular sensitivity or areas where differing provincial requirements might be reduced, as well as to review the schedules of other countries to identify items where improved market access for services might be sought. In this context, the Committee's recommendations stress the need to identify the linkages that exist between the various services sectors, the need for further work on mutual recognition agreements, subsidies and safeguards and for the development of better statistics relating to services trade.

In Chapter 7 on cultural issues the Committee turns to an exploration of one of the most sensitive areas approaching possible new negotiations at the WTO level. The Report takes as a point of departure the February 1999 Report of the Cultural Industries SAGIT which set out four possible approaches for the treatment of culture in future trade negotiations and supported the option of creating a special instrument on cultural diversity. Witnesses before the Committee were generally agreed that the previous policy approach of pursuing an exemption for culture in trade agreements was no longer feasible and therefore supported the SAGIT's proposal. The Committee concurs with that analysis and recommends that Canada seek allies among other countries to promote the idea of a new international instrument on cultural diversity, if feasible within the WTO framework.

The point is also made that culture has linkages with a number of other trade issues, discussed elsewhere in the Report, such as electronic commerce, the Internet, new media, basic telecommunications services and intellectual property. Indeed Canada has already initiated discussions with other countries on cultural trade. These issues will need to be part of the continuing discussions in the development of new terms and conditions to be included in a new cultural instrument, whether that can be accomplished within or remains outside of the formal WTO framework.

Chapter 8 on emerging technology-driven issues outlines how rapid developments in information technologies are defining a range of issues, often referred to in connection with the Internet, electronic commerce, and new media. The WTO already has agreements that relate to trade in goods, trade in services, basic telecommunications services, information technology and intellectual property - all of which are relevant to these issues of the future. Until further research has been done, for example on whether electronic commerce involves trade in goods, trade in services or both, the Report suggests that it would be advisable to continue to explore ways of handling the Internet and electronic commerce within the framework of existing agreements rather than to contemplate developing a special agreement. At the same time, it will be important to build on the progress made in liberalizing trade in telecommunications, the agreement on information technology and intellectual property, all of which touch on these new aspects of information technology; some relating to delivery mechanisms and others to the content of what is distributed.

Chapter 9 of the Report on intellectual property issues observes that the introduction of an agreement on the trade-related aspects of intellectual property rights (TRIPS) as a result of the Uruguay Round negotiations had as a principal objective to provide a mechanism for the enforcement of commitments which countries had made in numerous other accords on this subject. Developing countries have been given longer periods for phasing in the implementation of various obligations. The TRIPS agreement, like the GATS and many other parts of the GATT/WTO framework, is very much a work in progress. It also contains some potentially vast and extremely complex aspects, including controversial outcomes which drew fire from some witnesses, notably in regard to rights being accorded to large transnational corporations that may not serve the public interest or protect human rights. The Report considers that more intensive consultation is needed with all stakeholders within Canada in elaborating a coherent national policy which could then form the basis of a sound position for international negotiations.

The last Chapter in this part of the Report, Chapter 10 addresses the future place of investment and competition policy issues, observing that since the demise of the Multilateral Agreement on Investment (MAI), proposals have been made to renew these negotiations in the WTO. While there has been only tentative support for such a move, some witnesses recognized that commitments on investment are already part of the WTO, especially throughthe agreement on Trade Related Investment Measures (TRIMS) and in the commercial presence provisions of the GATS. At the bilateral level, Canada has more than twenty bilateral investment treaties. The NAFTA also has a chapter devoted to investment which was the object of many concerns raised by witnesses in regard to its investor-state provisions. The Report recommends that these problems receive serious attention and not be repeated in other agreements. As well, in moving to the multilateral level, rather than develop a comprehensive agreement on investment at this time, the Committee believes that a preferrable and more realistic route would be to absorb, refine and build on the WTO commitments already made on investment.

The Report observes that competition policy addresses private actions by firms that lead to restrictions on international as well as domestic trade. These may result from mergers or restrictive business practices such as cartel agreements, abuse of dominant position in the market, and exclusive distribution arrangements. Trade agreements to date have dealt primarily with actions taken by governments that restrict trade. Competition policy is seen to be complementary to trade policy in achieving greater trade liberalization in the context of internationally contestable markets, and attention is now required to incorporate competition policy in the WTO. While the Committee agrees that it may be premature to introduce a special agreement in this area, witnesses proposed a series of steps that need to be taken in order to build on the cooperative arrangements that exist between competition authorities in different countries. At the same time, those countries without competition laws should be encouraged to introduce them.

Part III of the Report contains three of the most challenging chapters in the Report which enter into the often highly sensitive linkages to the "social dimensions" of trade and investment. The Report fully acknowledges the powerful criticisms which have been levelled at the existing trade policy frameworks and structures in this regard. We heard from a number of witnesses who accused the WTO system of reinforcing a dominant ideological orientation that has been detrimental to social and environmental goals in particular. Yet the Committee is also realistic enough to recognize the many obstacles which will have to be surmounted in order to make actual and not simply rhetorical progress in advancing these other goals within the multilateral system - not the least of which will be the resistance of many developing-country governments and others who remain suspicious of good intentions as a potential disguise for protectionism that may be of doubtful public benefit. Moreover, no analysis that expects to be taken seriously, however philosophically or morally compelling on the surface, can ignore the details of how to incorporate these dimensions within the trading system in ways that are both appropriate and potentially capable of being negotiated by agreement among a large number of countries. There are legitimate reservations as well about the proper role for the WTO, even if reformed along the lines suggested earlier in the Report, in making and/or enforcing rules in areas which may be only indirectly related to trade. While Canada should actively seek to ensure that trade and investment policies do no harm, the use of trade measures for non-trade purposes may be a very limited and blunt instrument of redress. Clearly these are large problems which do not permit the illusion of simple solutions.

Chapter 11 provides an initial response to the concerns expressed by many witnesses that there must be a much greater integration of universal values that are important to Canadians -- for example, environmental protection and resource sustainability, public health and safety, food security, social justice, gender equity, respect for all human rights, including that of democratic participation. It also points out that most WTO members are also members of other international standard-setting organizations (for example, all are members of the ILO which is also headquartered in Geneva), and have already agreed to multilateral obligations in all of these areas. The Report suggests a way forward to begin to integrate normative principles which are universally-based into the WTO regime; as a first priority to ensure that trade rules and practices do not conflict with but are instead mutually supportive of major multilateral obligations in the areas of environmental and health protection, labour rights, and human rights generally; over the longer term to develop mechanisms that would involve the WTO in promoting positive compliance with multilateral obligations that are central to the social dimensions of trade.

Chapter 12 addresses in detail the linkages to trade of environmental and health matters, and the ongoing attempt to incorporate sustainable development principles within the mainstream of the WTO framework. Although the decisions which led to the establishment of the WTO also created a Committee on Trade and Environment, it is widely seen as having underachieved. Moreover a number of key issues remain unresolved: for example, compatibility between the obligations in multilateral environmental agreements and GATT/WTO rules, and conflicts over the interpretation of key exceptions to the general national treatment principle which permit discriminatory environmental, health and conservation measures under certain conditions. Many critics point to several controversial GATT/WTO disputes panel rulings against such measures as revealing that the system is badly biased and flawed.

The Committee clearly recognizes that there is much work left to do and reviews a number of proposals for reform, with particular appreciation for the comprehensive agenda presented by the Winnipeg-based International Institute for Sustainable Development. The Report also sees opportunities to take advantage of Canadian environmental expertise and capacities for leadership, to promote the export potential of Canadian environmental industries, and to use market-based incentives to support sustainable development goals. In approaching future WTO negotiations, the Committee recommends further national consultations and use of the Environmental SAGIT to build common ground around a proactive agenda to take to Seattle. That agenda should include elements to: give high-level attention to sustainable development within the WTO's structures; strengthen environmental impact assessement through creative use of the TPRM; reduce distorting subsidies; clarify rules and improve transparency within an open disputes resolution process; uphold multilateral environmental obligations under WTO rules and improve multilateral disciplines for trade-related environmental measures concerning process and production methods (PPMs); establish bridges between the WTO and international bodies with environmental and health protection mandates; involve the WTO in coordinated multilateral action to strengthen the capacity of poorer countries, especially the least developed to meet higher environmental standards.

Chapter 13 turns to the even more contentious issues of labour standards, and human rights generally, which a majority of the WTO's members have yet to accept as forming part of its agenda. The Committee notes that there is an emerging international consensus around a core list of international labour standards which embody universal human rights principles, and that all WTO member countries have already accepted to work toward increased compliance with these ILO standards through their adoption at the ILO's June 1998 plenary conference of the Declaration on Fundamental Principles and Rights at Work. The key problem, as many witnesses pointed out, is a continued lack of enforceability of ILO obligations compared to those of the WTO. Such weakness, along with North-South divisions and suspicions over protectionist motives, has long bedevilled advocacy of a "social clause" within the WTO framework. The Report considers ways to get beyond that stalemate and move forward several options for Seattle. The practical challenge is how to make concrete collaboration with the ILO on the trade-related aspects of international core labour standards part of the WTO's working agenda. As a step forward, the Committee urges Canada to work with like-minded countries to build up WTO-ILO cooperation in regard to implementation of the 1998 Declaration, use of the TPRM to assess labour rights impacts, and improved ILO representation within WTO processes, utilizing its expertise, advisory and technical assistance functions.

This Chapter of the Report also addresses the larger questions of how universal human rights standards as a whole should be recognized by the WTO's constitutional framework. While the WTO's mandate is trade, in a coherent multilateral system WTO rules and practices should at least not be at odds with efforts to advance the observance of internationally-recognized human rights obligations. A seminal and very thorough presentation to the Committee by the Montreal-based International Centre for Human Rights and Democratic Development argued forcefully the case that such obligations ought to have paramountcy in international law. Many other witnesses wanted to see Canada adopt a progressive agenda which could turn the WTO from being part of the problem to becoming part of the solution. The Report recommends that Canada assess the human rights impacts of trade and investment commitments and negotiations, and seek to ensure that there are no conflicts with measures to protect and progressively realize international human rights, while also encouraging other countries to do the same.

Finally, the chapters in Part IV of the Report address several key issues for the future of the multilateral trading system in terms of: development equity, the role of regionalism, the relationship to financial stability, and, ultimately, the place of the WTO within a more coherent, sustainable and democratic system of global economic governance.

Chapter 14 considers the aspirations and changing role of developing countries within the the international trading system and specifically the WTO framework, reporting on the impact of the Uruguay Round on these countries, the main issues raised at the most recent WTO symposium on trade and development, and the relationship of regionalism and multilateralism. The Report notes that developing countries now comprise about 80 percent of WTO membership and, as such, constitute a formidable bloc within the WTO. Accordingly, any future WTO round will need to include a focus on meeting the concerns of these countries within its agenda. Many witnesses made reference to those concerns and urged Canada to adopt multilateral trade policies, especially for the least developed countries, supportive of equitable treatment and development outcomes. The Report concurs with that view and recommends that the Government study the proposals put forward in this regard and examine the results of these studies with interested domestic stakeholders in formulating Canadian policy positions.

The concluding Chapter 15 brings together the issues of trade liberalization and financial stability in the search for a new approach to governing the global economy of the next millennium that completes the vision first outlined at the Bretton Woods Conference over a half century ago. In the wake of the fallout from the Asian crisis and spreading effects of financial market turbulence, this Chapter also refers back to the diagnosis and proposals in the Committee's 1995 Report on reforming international financial and monetary systems, and which now appear more relevant than ever. A number of witnesses argued the need to rethink existing approaches to global economic management, both to preserve an appropriate scope for democratic policy choice within countries, and to begin to construct an coherent and accountable institutional "architecture" among nations that is capable of achieving the multilateral cooperation that is now vital in so many areas. The WTO, the International Financial Institutions, and the United Nations system, however flawed and in need of reform in each of their parts, must begin to work together more closely in order to coordinate a process of institutional improvements to the multilateral system as a whole.

The Committee urges Canadian leadership in advancing contructive ideas in this regard, while suggesting that Canada's own international policy instruments would also benefit from more coordination and coherence. Leading up to the Seattle Conference, the Report calls on Canada to support increased participation by appropriate UN bodies and UN-recognized civil society organizations in major discusssions surrounding that event and flowing from it throughout forthcoming negotiations. The Report also welcomes former WTO Director General Renato Ruggiero's call to use the UN's planned Millennium Summit in the year 2000 as an occasion to launch a serious effort to address global governance challenges and to consider how globalizing and liberalizing forces might be made supportive of sustainable human development goals.

Ultimately, the Committee comes back to the sentiments expressed at the beginning of this summary and carried through our Report - which is that advancing a WTO millennium agenda in the public interest challenges Canada and Canadians as never before in terms of: building a more open and democratically accountable public process; reforming the institutions of the international trading system along similar lines; putting forward clear negotiating positions in an expanding number of established and emerging areas; integrating core universal social and human rights values into the framework of the trade regime; and, not least, working towards a coherent design for the kind of multilateral governance that will be increasingly necessary in the next century.

In conclusion, Canada's interests are best served by seeking an innovative leadership role in shaping the international agenda and in participating in the negotiation of future international economic agreements from a standpoint of Canadian public values. Recognizing that, as the editors of a just-released volume on Canadian foreign policy affirm: "What influence Canada has must be exercised early and must rely on superior preparation, far-sighted analysis, inspired ideas, and skilful coalition- building."¹ The Committee's Report will have served its purpose if it stimulates efforts in that direction. We have reason to be confident because we believe Canadians are up to the task.

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1^# Fen Osler Hampson, Michael Hart, and Martin Rudner, eds., Canada Among Nations 1999 A Big League Player?, Oxford University Press, Toronto, 1999, p. 23. Six of this volume's chapters bear directly on matters discussed in the Committee's Report.