FAIT Committee Report

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TRADE, FINANCE AND GLOBAL STABILITY - IN SEARCH OF A NEW "BRETTON WOODS"?

"What Canadians are Saying"

Providing global governance is no longer good enough, however, if it is not transparent, if people cannot see it going on, and if it is not done under democratic control. These objectives require agreements in Geneva that allow scope for policy choice at home. They also require active public consultation on global issues.

Public discourse on global governance issues is perceived to be dominated by transnational corporations, officials of national governments and faceless international agencies. Accompanying this growing governance agenda, there exists also a global `democratic deficit'

Democracy must be the cornerstone of any future trade agreement. Nation states must be allowed to respond to the values, cultures, needs and desires of its citizenry as well as protecting the environment for future generations. The rights of the individual and sovereign nations must always come ahead of corporate interests.

It's important to remember that the WTO is but one key instrument in the emerging architecture of global governance and global economic management. This wider picture must guide the committee as it makes recommendations for Canadian priorities for the WTO agenda in the coming year. Other key institutions include the United Nations and other Bretton Woods institutions; the ILO conventions; the Universal Declaration on Human Rights; the Rio Declaration on Environment and Development; the Beijing Declaration on Women; and the Copenhagen Declaration on Social Development. There are many others as well, yet it is the WTO alone that has been given the power of enforcement, able to prevail over agreements, to strike down national laws protecting the environment and social rights, and to set the patterns of international interaction. It is as if the WTO has become a powerful `fifth wheel' of the multilateral system, working apart from the historic United Nations framework and distorting its path, which is rooted in humanitarian values.

We should be seeking trade policies in the WTO that are coherent with our aid policies and reduce global poverty.

...the post-war Bretton Woods system sought to avoid the financial crisis of the twenties and the economic depression that followed through a measured opening of trade combined with tight controls on private financial flows. The goal of the system was not to maximize the flow of trade, per se, and certainly not capital flows, but rather it was a means to maximize international economic stability and national prosperity. The current agenda is driven by the notion that maximizing trade and capital flows is the goal, and it is taken for granted that national prosperity will follow. The current decade has, or at least should have, put to rest any claim to the validity of this thinking. You may be aware that the G-7 has just set up its financial stability forum to strengthen supervision and surveillance. This exclusive club is chaired by the head of the BIS, the world central bankers' club, and has representatives from the G-7 central banks as well as the finance ministries-not from the foreign affairs or trade ministries. It also has representation from the IMF and the World Bank and the OECD, but none from the WTO. Participation from emerging market countries is by invitation only.

Globalization and liberalization have great merits explains Lamberto Dini, a former executive director of the IMF. He was speaking to the United Nations. He went on to say, "...but a global market requires some measure of global government built on the knowledge that the wealth of single states cannot be separated from the welfare of the international community and a government whose strength rests on the democracy of institutions."

The recent and still deepening global economic crisis [in East Asia] has underlined the importance of maintaining national controls on both inward and outward flows of `hot money.'

Negotiations for the improvement of trade and financial relations should be conducted in United Nations forums and subject to UN protocols such as conventions on human and societal rights, environment and labour. Canada should promote international regulatory instruments like the Tobin tax to secure responsibility of private actors.

Trade, Finance and Global Stability - In Search of a
New "Bretton Woods"?

A half century ago, the statesmen who designed the postwar system - the United Nations, the Bretton Woods system, the GATT - were deeply influenced by the shared "lessons" of history, even if their politics or outlooks differed. All had lived through the economic chaos of the 1930s - when turning inwards had led directly to the breakdown of international trade, the Great Depression, and ultimately to world war. All - including the defeated powers - were agreed that the only route to reconstruction and peace lay with building an entirely new architecture - one rooted in the values of freedom, openness, and interdependence.

The end of the Cold War produced no similar demand for a new international system. On the contrary, the triumph over Soviet communism tended to reinforce the status quo. It encouraged the belief that we had reached the "end" of our policy debates - if not the end of history. And that foreign policy could be forgotten in the face of more pressing domestic concerns. The result is a certain sense of paralysis in the face of the many challenges of globalization - a consciousness of the enormous tasks confronting us, and yet an inability so far to marshal the collective vision and leadership to move forward.

Today we face a new reality. If the challenge of the past fifty years was to manage a divided world, the challenge of the future is to manage an interdependent world - and our institutional and mental landscapes must change. Events of the past year, and especially of the past few months, clearly illustrate that the status quo is no longer good enough. That in this increasingly globalized and borderless global economy - where trade, technology, and information move ever-more instantly and effortlessly across the planet - we cannot rely on our old policy tools and our old approaches. Events are passing us by. Today we need to respond to the challenges before us with the same vision and imagination that inspired the architects of the post-war system over fifty years ago.

Former WTO Director General Renato Ruggiero,
"Beyond the Financial Crisis," Address to the Council on
Foreign Relations, New York,
October 5, 1998

Trade Liberalization, Financial Stability, and the Public Good

Four years ago, in advance of the G-7 Summit being hosted by Canada in Halifax, the Committee tabled an important Report which made the case for a series of reforms to the Bretton Woods twins, the International Monetary Fund (IMF) and the World Bank, and to the international financial system as a whole.¹ At the time, we also took note of the creation of the WTO a few months earlier, and expressed the hope that it might evolve into the third pillar which would finally complete the vision of a liberal global economic order that motivated the prime movers (among them John Maynard Keynes) of the 1944 Bretton Woods conference and laid the foundation of postwar reconstruction and development.

The concerns raised at mid-decade by the aftershocks from the Mexican peso crisis now seem to pale by comparison with the hindsight of the Asian financial meltdown, remarkable for its unexpected rapidity and scale, and its continuing contagion effects on volatile emerging markets from Russia to our own hemisphere. There are many different factors in play in these varied circumstances; however, the cumulative impact has been to destabilize currencies, deflate commodity prices, unsettle financial markets, shake investor confidence, and retard global growth prospects. It has also refocussed renewed attention by political leaders - especially those who will gather for the G-8 Cologne Summit this June - on many of the issues of international financial surveillance, institutional reform, systemic stabilization, improved mutilateral governance and democratic oversight, on which we have the impression of being ahead of our time in the measures we called for in our 1995 Report.

The evidence is clear that the increasing and deepening integration of markets globally, combined with the speed of financial flows which now dwarf total trade transactions, pose new challenges for policymakers, as was pointed out by witnesses from across the country (for example, in Halifax, Gilbert Winham of Dalhousie University; in Ottawa, Bruce Campbell of the Canadian Centre for Policy Alternatives; in Toronto, Sylvia Ostry of the University of Toronto's Centre for International Studies; in Saskatoon, Malcom Matheson of the Canadian Union Of Public Employees; in Vancouver, Michael Hart of the Centre for Trade Policy and Law). The latest figures released from the Swiss-based Bank for International Settlements (BIS) on 10 May 1999, report the daily volume of foreign-exchange transactions having risen to U.S.$ 1.5 trillion. About U.S.$ 60 billion worth of Canadian dollars - equivalent to nearly one-tenth of Canada's annual national economic output - are traded every day. The vast majority of all these transactions, perhaps 95% or more, are of a speculative nature rather than to finance international exchange necessary for trade and long-term productive investment.

Moreover, we are witnessing how a crisis or financial panic in one area can quickly spill over into another. As noted in this Report's introduction, while Europe and North America seem to be weathering the storm well, the WTO's 1998 Annual Report blames the Asian slowdown for cutting world trade growth in half from the previous year and forecasts this hangover to last through 1999. Beyond the negative effects on global economic growth, the social costs are also unacceptably high. Indeed in calling for a "fundamental rethinking of global economic management by the WTO and the International Financial Institutions (IFIs)", the submission of the Canadian Council for International Cooperation pointedly observed:

Recently, during a civil society and parliamentary mission to Southeast Asia organized by the CCIC [note: in which several members of the Committee participated], we saw first hand how countries that had been heralded as success stories in development over the last 30 years are now facing a tragedy of staggering proportions. Massive unemployment, worsening health care, urban strife, and environmental degradation are the local manifestations of the Asian crisis which in turn has triggered other crises around the world. These countries were once prime examples of the liberalized trading and financial system promoted by the WTO and the international financial institutions - they had done things "correctly", opening their markets, privatizing services, and emphasizing trade. Yet many economists now realize that rapid, unregulated financial liberalization was itself one of the main causes of the Asian collapse. ... The Asian crisis illustrates the profound failure of international institutions to protect and support human development.²

Supporters of continued liberalization of trade - including in financial services under the terms of the WTO Agreement on Financial Services which took effect earlier this year -acknowledge that: "Financial instability and debt raise the question of whether further liberalization is the correct action to take in the world economy at this time." (Evidence, Gilbert Winham, Meeting No. 107, Halifax, March 24, 1999) Yet they argue that an open trading regime that provides access to foreign markets and foreign exchange earnings is especially vital to countries in times of economic distress. Jeffrey Schott of the Washington-based Institute for International Economics raised the response to the global financial crisis as his first reason for favouring a Millennium Round, telling the Committee that: "WTO negotiations are needed to promote medium-term growth prospects in emerging markets and to forestall a protectionist backlash in the United States and Europe against increased imports from those countries." (Evidence, Meeting No. 135, May 12, 1999) Institute Director C. Fred Bergsten has argued that international monetary and macro-economic conditions - in particular, leading to huge American trade deficits and an overvalued U.S. dollar - have been a central factor in launching every major modern multilateral trade negotiation. "The logic behind this linkage is clear: the onset of large trade imbalances, though driven primarily by macroeconomic forces, leads to strong political pressures for protectionism that can only be resisted by renewing the momentum for trade liberalization."³

Proponents of financial services liberalization have portrayed it as positive evidence of a resolve to reform and strengthen financial sectors on an open non-discriminatory multilateral basis, withstanding the protectionist pressures arising from many countries' financial difficulties. Rules-based liberalization, WTO studies argue, can proceed in a way that creates security and predictability in the marketplace, though they acknowledge that without a strong policy and regulatory framework undergirding a stable macro-economic environment, "liberalization can perpetuate problems in the financial sector of the economy".⁴

This kind of financial-sector services liberalization is properly distinguished from the wider systemic issues of managing short-term capital and currency movements, about which there has been vigorous debate in recent months over proposals, including from Canada's Minister of Finance, for redesigning the international financial "architecture".⁵ Nonetheless, the WTO is very much implicated in the larger issue that is at stake of how to fashion a virtuous circle of financial stabilization and forward momentum for trade liberalization. Or as former WTO Director General Ruggiero has put it: "There can be no solution to global financial instability unless we keep world markets open and the multilateral system strong. Yet, at the same time, our ability to maintain an open world economy will depend on our ability to increase stability."⁶ The Asian crisis and its aftermath, by exposing gaps in domestic regulatory frameworks and in the international governance of markets, could provide an opportunity to strengthen the overall structure for an integrated trade and financial system - to complete the design begun at Bretton Woods over 50 years ago - in order to prevent future crises, or at least to reduce their scope and severity.

But what should be the premises of this new global economic governance system? There are many who have doubts that the prevailing fashion of global market-driven liberalization across the board (the so-called "Washington consensus") is leading down a path to good, or sustainable, economic management. That includes strong supporters of an open world economy who see the merit of taking collective measures now to stabilize and reform global finance. Bruce Campbell cited for the Committee the strong views of prominent Columbia University trade economist Jagdish Bhagwati to the effect that "the merchants of free capital mobility have `hijacked the ideology of free trade'".⁷ Harvard University economist Dani Rodrik, whose latest book The New Global Economy: Making Openness Work was cited by the North-South Institute's submission, has written that: "As long as capital flows remain large relative to liquid assets held by national governments and are easily reversible, the international economy will be hostage to spectacular boom and bust cycles. Indeed by focussing attention on internal structural reforms in the developing world, the current approach leads to complacency on short-term capital flows, and could increase rather than reduce systemic risks."⁸ Witnesses such as the Canadian Labour Congress argued that the actual development experience of countries must be taken into account in determining appropriate capital market regulation and any multilateralization of investment rules. (Submission, Toronto, April 27, 1999, p.5-6)

The criticisms may be having some effect as the IMF now seems to be taking a more cautious approach to capital account liberalization.⁹ Surveying some of the wreckage from the record of the IFIs' policy prescriptions, Rodrik argues that national policy heterodoxy guided by democratic judgements would probably have produced better results in societal terms. It is not only critics who are searching for approaches which better serve the public good. World Bank President James Wolfensohn has been stirring things up in Washington and other capitals with provocative calls for radical and comprehensive change, telling a recent Trilateral Commission gathering that: "The sense of warning is valid. At the level of people, the system is not working."¹⁰ Ann Weston of the North-South Institute put it to the Committee that: "If developing country governments - and especially their citizens - are to remain confident in the economic merits of an outward orientation, and thus to stay engaged in the WTO, let alone embark on new negotiations, there must be parallel efforts to reform and strengthen the rest of the global architecture", a process in which "Canada should lay a leading role". (Submission, March 18, 1999)

Other witnesses before the Committee who addressed these issues called for fundamental reforms to the "structural adjustment" policies which have been imposed on many debt-budened developing countries in particular. They also wanted to see stronger actions by leading industrialized countries like Canada to offer substantial debt relief with appropriate conditions, and to work within the G7/8 context and with other like-minded countries to promote ideas, not only for the better supervision of international capital movements, but also for their moderation through measures such as the so-called "Tobin tax", named after the Nobel prize-winning economist James Tobin who first suggested this approach to curbing excessive and damaging foreign-exchange turbulence in the 1970s. The Committee discussed the concept in its 1995 Report cited earlier, and the debate has since resumed with renewed interest. Some witnesses referred positively to the discussion in Parliament around a motion passed at the end of March calling on the government to consider enacting "a tax on financial transactions in concert with the international community".¹¹ Proponents of the initiative have pointed out that an additional benefit could be to raise significant sums for global sustainable human development purposes.

Towards a Coherence of the WTO within a New Global Governance Architecture

First, we must move towards a more collective leadership - one that reflects the reality of a multipolar world, and especially the emergence of new developing-country powers. ...

Second we need to look at the policy challenges we face as pieces of an interconnected puzzle. We can no longer treat human rights, the environment, development, trade, health, or finance as separate sectoral issues, to be addressed through separate policies and institutions....

Third, we new a new forum for the management of these complex issues: One that is truly representative of global realities. ... The Millennium Summit, recently decided upon by the General Assembly of the United Nations, could be the appropriate occasion to improve the global architecture we need for managing globalization.

Last but not least, we need a clear mandate from the world's leaders to promote a common global strategy and common global actions. A common strategy - among international institutions, national administrations, civil society - for strengthening the international rule of law, eradicating poverty and reducing world-wide inequities within a set period of time. A common strategy to achieve a sustainable environment - in developing and developed countries alike. A common strategy to eliminate the greatest part of global trade barriers - at least by reflecting on a multilateral level, what governments have already agreed in regional arrangements. This strategy must be focused on people and values - more than governments - harnessing interdependence and globalization to address today's challenges. An annual report to the world's leaders should indicate the progress we have made towards meeting these common goals.

The choice we face is certainly not between this new global system and national sovereignty. On the contrary, greater global cooperation, strong international organizations, and consensus-based multilateral rules only extend sovereignty beyond borders. In today's interdependent world it is only by remaining isolated - by turning away from international cooperation - that countries surrender their sovereignty.

Former WTO Director-General Renato Ruggiero, "Beyond the Multilateral Trading System", Address to the Institut pour les hautes études internationales, Geneva, 12 April 1999

What is the place of an evolving WTO system within a coherent structure of global institutions capable of meeting the governance challenges of the new millennium?

Since Bretton Woods, the building of a liberal international trading regime has been closely allied with an orderly payments system based on convertible currencies, supported and watched over by the Washington-based international financial institutions (IFIs). Even though the ITO failed, GATT indeed played an important role in lowering barriers, keeping markets open, and assisting the integration of Germany, Japan, and a growing number of developing countries into the international economy. GATT rules also recognized that in the special circumstances of countries encountering severe balance-of-payments problems, temporary trade restrictions might be legitimate. Following the period of wartime reconstruction, these exceptions have been primarily invoked by developing countries. However, it has been misalignments in the current-account balance of the world's economy, that of the United States, that have had the greatest systemic impact. Indeed when the Nixon administration imposed a unilateral surcharge on imports in the early 1970s, it provoked a GATT crisis and fatally undermined the Bretton Woods system of fixed exchange rates.

Since that time, as Sylvia Ostry's seminal submission observed, the agencies of international economic management have been attempting to glue various of the pieces of Bretton Woods back together, and increasingly poaching on each others' territories, while talking a lot about the need for "coherence". Of course almost everyone agrees in principle that better coordination among the GATT/WTO, the IMF and the World Bank, based on greater coherence in the design and application of economic policy reform measures, would be desirable. An October 1998 Joint Statement by the heads of these three leading international economic organizations solemnly pronounced that "pursuit of policies facilitating a return to more orderly financial markets and exchange rate stability are the immediate requirements for recovery." Ostry recalls that at

the conclusion of the Uruguay Round, the FOGS group on systemic reform had come up with a "largely rhetorical" Ministerial Declaration on the Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking. However, as she so astutely analyzes, there has been little progress in practice in overcoming the "coherence deficit", even though the viability and sustainability of both domestic reform and liberalization processes increasingly requires it. She suggests that the accession framework for China leading into a new WTO round could provide a key testing ground for moving forward in a truly coordinated way.¹²

As was impressed upon the Committee by many witnesses, the realities of market integration combined with public questioning of globalization are leading to a search for new modalities of multilateral cooperation and new political-economic strategies that incorporate sustainability, equity, and good governance norms.¹³ The push for convergence is happening in virtually every domain of commercial activity. For example: "All of the international fora dealing with liberalization and regulation of financial services are in the process of adapting or expanding their roles to deal with the challenges associated with the globalization of financial activity and new policy needs. ... There is considerable scope for developing creative interaction among the various fora [WTO, IMF, World Bank, BIS, etc.] to produce greater policy coherence, short of cross-conditionality. At a minimum, they should reinforce and facilitate each other's work".¹⁴

In an overall global economic governance sense, the challenge ahead is to complete the postwar foundation that was left unfinished, finally achieving an integrated mutilateral economic regime that is fully cognizant of and coherent with the universal goals of human security, human rights, and sustainable human development. Such a project may appear unrealistic at the moment, but as one scholar of international economic law put it in reflecting on the partial achievements of the GATT/WTO's first half century - "really it is only an updated version of John Maynard Keynes' vision for government of the system of international economic relations after the Second World War. At that stage, a less ambitious compromise was imposed at the Bretton Woods Conference by the United States and matters went on as we have seen in the past 50 years: cooperation endlessly divided, variable geometries, duplications and conflicts of competencies, and the absence of a unifying plan."¹⁵

In the post-Cold War era, as the WTO becomes a more universal organization and as it responds to the challenges of globalization as outlined by its first Director General, the issues of how best it can work with other global institutions, in particular those of the United Nations system, have also become more pressing. In the Committee's first roundtable, Robert Wolfe referred to UN Secretary General Kofi Annan's address to this year's World Economic Forum in Davos, Switzerland, concluding that: "The trading system can and must balance social and economic objectives, but sometimes that will require deference to action taken in other formal and informal organizations, or within states." Michael Hart testified in Vancouver about the need for better "bridges" connecting the WTO to UN agencies like the ILO, and similar "crosswalks" to the IFIs. The attraction, of course, in terms of bringing sustainable human development goals into a still-emerging WTO/Bretton Woods regime is that these bodies actually have "teeth". As Hugh Kindred remarked to the Committee in Halifax, compared with all of the UN agencies: "The WTO is the one body that if you join, you're forced to comply or things happen to you. That makes it so totally different." (Evidence, Meeting No. 107, March 24, 1999, Halifax)

It also makes a lot of our witnesses nervous. Does the WTO have the right corporate culture, or the kind of capacity, that would be required to make the leap to the kind of global governance role which is being indicated for it? This goes back to some of the outstanding issues of "constitutional" and structural reform which we addressed in Chapter 1. Some of those who testified would clearly prefer global trade and financial negotiations to be moved into strengthened UN forums. Indeed Kofi Annan himself has been insistent that the UN must be centrally involved. As he wrote in a recent essay:

... the UN is the one true global institution to which we all belong. It must have a seat at the table. Economic and financial strategies will succeed only if they are applied within a clear political framework [which] will command much wider support if, through the UN, all affected countries have a part in working it out. (...)

The UN has a responsibility, as the universal institution, to insist on the need for worldwide solutions that are fair to all. It is our job to ensure that nations do not react to this crisis [of globalization] by turning their backs on universal values. In such crises, we must come together to find solutions based on the founding principles which all our member states have in common: those of the UN Charter and the Universal Declaration of Human Rights. In particular, we have a special responsibility to speak up for the victims or potential victims.¹⁶

In regard to that mission, Errol Mendes proposed to the Committee that the WTO should be involved in finding constructive alternatives to labour exploitation and that "Canada could propose a world conference in the millennium, sponsored by the ILO, the United Nations, the World Bank and the IMF, to look at how trade standards and the international financial system are impacting on children. For example, there could be a motion to make bonded and forced labour of children a crime against humanity. I suggest that Canada can have a very focused approach, not try to take on everything ... to achieve very defined results in this very complex area." (Evidence, Meeting No. 102, March 18, 1999)

No doubt there are other areas of opportunity where a difference could be made by the kind of compelling international leadership which Canada exhibited in achieving a global ban on antipersonnel landmines that entered into legal force earlier this year. We will never succeed if we do not try. But as that example also showed, and as the submission from the Canadian Council for International Cooperation underlined in its concluding recommendations to the Committee, no institution, country or government can do this in isolation, and no part of the system should be exempt from the reform challenge. At the multilateral level, this will mean working in common to develop democratic coalitions that strengthen public participation and parliamentary oversight roles, and that build the capacity of all societies to have their interests represented when trade and investment matters are discussed in international forums and decided at negotiating tables. Within Canada, a similarly inclusive participatory process must be developed to prepare, as CCIC put it -

... a coherent Canadian agenda for reforming the international economic system, including the WTO, through a multi-staged planning and policy making process involving the Ministries of Finance, Foreign Affairs, International Trade, International Cooperation, and the Environment, with the goal of policy coherence for human security, including strengthening the enforcement machinery of international agreements on human rights, labour rights, environment, gender equality and social development.¹⁷

The Committee agrees that Canada will hardly be in a position to advance an agenda within the WTO or elsewhere calling for greater coherence in international governance structures and processes if we ourselves have not put in place a coherent approach to the foreign and domestic policies that are needed to respond to the challenges of globalization. We need to include within that approach democratic participatory and deliberative processes which empower citizens, which make more effective use of parliamentary institutions, and which forge new connections among governments, the private sector, and civil-society actors at all levels, in order to mobilize actions that serve the greater public good of all countries.

As Mr. Ruggiero's parting reflections to the General Council of the WTO attest, and to which the Committee's attention was drawn by Canada's Ambassador John Weekes in one of the last meetings of this study, the future of the multilateral trading system is about a lot more than just balance sheets and commercial rules, as important as those are. Ultimately, the question which resonated in the testimonies of many of our witnesses, and with which we must contend in the development of a fully coherent foreign policy, is the following: What kind of society do we want to leave to our children, within what kind of global society?

The WTO, as Robert Wolfe reminded the Committee at the start of our parliamentary study's journey, is "a process not a destination". But it is crucial that there be public control over this process, and over the direction in which it is leading. Indeed we might say the same thing of the preparations for the forthcoming negotiations which are expected to be launched at the Seattle Ministerial Conference later this year, and in which, we have argued throughout this Report, Canada, and Canadians as a whole, must be ready to engage constructively and democratically in our best interests.

That, in sum, is the challenge, the opportunity, and the promise of advancing a millennium agenda at the WTO that helps to make globalization more governable, - so that in a few years we will be able to say with confidence: We have achieved something that is good for all Canadians and which truly contributes to the global public good.

Recommendation 44

The Government should, on an ongoing basis, explore policy options related to the future place of the WTO within a reformed multilateral framework of global governance, in particular its relationship to the Bretton Woods International Financial Institutions (the IMF and World Bank) and to the United Nations system.

Recommendation 45

Canada should work with as many WTO Members as possible, in line with the reforms recommended in this Report, to seek institutional improvements for the purposes of achieving greater coordination and coherence among the activities of the WTO and those of other international organizations.

Canada should, in addition, support increased participation by appropriate United Nations bodies and UN-recognized civil-society organizations in the major discussions leading up to, during, and following the WTO's Third Ministerial Conference in Seattle. Canada should also seriously examine former WTO Director General Ruggiero's call for the UN's Millennium Summit to be an occasion for re-examining the international architecture overall and for adopting a global plan of action to harness the positive momentum of globalization and freer trade to the goals of sustainable human development for the benefit of a better common future.

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1^# From Bretton Woods to Halifax and Beyond: Towards a 21^st Summit for the 21^st Century Challenge, Report of the House of Commons Standing Committee on Foreign Affairs and International Trade on the Issues of International Financial Institutions Reforms for the Agenda of the June 1995 G-7 Halifax Summit, Ottawa, May 1995.

2^# "Bringing the WTO Back to International Humanitarian Values", Ottawa, 18 March, 2-3. See also the Report of the in common Canadian Civil Society and Parliamentary Mission to South East Asia, 1-14 September 1998, Asian Meltdown, Human Crisis: Global Lessons for Sustainable Recovery.

3^# Bergsten, "The International Monetary Scene and the Next WTO Negotiations", in Schott, Launching New Global Trade Talks (1998), 39-46.

4^# Masamichi Kono, Patrick Low, and Mukela Luanga, Opening Markets in Financial Services and the Role of the GATS, World Trade Organization Special Studies, Geneva, 1997, 35.

5^# For some useful surveys and critical assessments see Barry Eichengreen, Towards a New International Financial Architecture: A Practical Post-Asia Agenda, Institute for International Economics, Washington D.C., February 1999; Jan Teunissen, ed., Regulatory and Supervisory Challenges in a New Era of Global Finance, The Hague, FONDAD, 1998; "Global Finance: Time for a Redesign?", The Economist, 30 January 1999, Survey, 3-18.

6^# Ruggiero, "Moving Towards Global Stability", Address to the Institute of International Bankers, New York, 11 January 1999.

7^# Campbell, Ottawa testimony of 18 March 1999, Meeting No. 102-1010; quoting from Jagdish Bhagwati, "The Capital Myth: The Difference between Trade in Widgets and Dollars", Foreign Affairs, May/June 1998.

8^# Rodrik, "Governing the Global Economy: Does One Architectural Style Fit All?", Paper prepared for the Brookings Institution Trade Policy Forum on Governing in a Global Economy, Washington D.C., 15-16 April 1999, 3.

9^# See, for example, a recent article in Finance & Development by Manuel Guitian, former Director of the IMF's Monetary and Exchange Affairs Department, ("Economic Policy Implications of Global Financial Flows", March 1999, 26-9), which acknowledges that the "orderly liberalization of capital flows" needs to address "the development of norms and procedures that all countries agree upon and that are flexible enough to cover all potential country situations", including in this regard: "a provision to allow countries a measure of flexibility [in how they liberalize]...according to their individual circumstances; a set of common prudential norms...; a principle of temporary acceptance of restrictive measures ... when these are necessary for balance of payments or macroeconomic management reasons; and a provision to allow countries to resort temporarily to controls in emergency situations."

10^# Quoted in Jim Hoagland, "Is the Global Economy Widening the Income Gap?", The Washington Post, 27 April 1999.

11^# The motion, M-239, was passed in the House of Commons on 23 March 1999 by a vote of 164 to 83, and received support from all parties, including from Finance Minister Paul Martin.

12^# "Future of the WTO", Paper for the Brookings Trade Policy Forum and presented to the Committee in Toronto, 27 April 1999, 22ff.

13^# Cf. Brigitte Lévy, "Globalization, Regionalization and Good Governance: Policy Implications for the Third Millennium", (University of Ottawa, Working Paper September 1998), Proceedings of the Tenth International Conference of the Association for Global Business, New Orleans, November 1998.

14^# Sydney Key, "Trade liberalization and prudential regulation: the international framework for financial services", International Affairs, Vol. 75, January 1999, 74.

15^# Alberto Tita, "Globalization: A New Political and Economic Space Requiring Supranational Governance", Journal of World Trade, June 1998, 54.

16^# Kofi Annan, "UN Must be Part of the Solution", New Perspectives Quarterly, Fall 1998, p. 53.

17^# "Bringing the WTO Back to International Humanitarian Values", Ottawa, March, 18, 1999, p. 7.