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CME on WTO Negotiation Issues Essay

The forthcoming WTO round table negotiations to be held in Doha, Qatar will help to open up the international market, thereby ensuring increased export and import of goods and services. As such, manufacturers and exporters in Canada are convinced that the participation of Canada in the WTO negotiations is a very crucial decision. More than ever before, businesses in Canada are today enjoying friendlier rules and regulations on investment and international trade.

Since 1989, Canada has witnessed a two-fold increase in the dollar value of goods and services exported (Canadian Manufacturers and Exporters 5). 1989 is an important milestone for the Canadian Manufacturers and Exporters (CME) because in this year, the Free Trade Agreement between the country and its neighbor, the United States, was launched. It is also important to note that at the moment, Canadian exports are enjoying a three-fold rate of growth, in comparison with the country’s rate of economic growth.

On the other hand, manufacturing production in Canada is mainly export-oriented, and has witnessed a two-fold rate of growth in comparison with the country’s Gross Domestic Product, a clear indication that the Canadian economy is rapidly relying on a secure and open access to the global market.

This is a further justification that indeed, Canada needs to engage in the international trade in order to sustain the growth of its export/import sector. In addition, Canadian organizations have lately been seen to invest more in their abroad markets. This has seen an increasingly larger number of Canadian companies opting to open up and expand their operations in the international market (Canadian Manufacturers and Exporters 5).

What this means is that there shall be an increase in foreign direct investment flowing from Canada to the international markets where the various Canadian companies have made their investments. This is bound to increase Canadian’s export opportunity in the years ahead. In addition, this is also a chance for the various businesses in Canada to assume a participatory role in ensuring that their investments in the international markets are not subjected to discriminatory and unfair treatment.

The forthcoming WTO negotiations are being held at a time when the global economy is recovering from a period of economic slowdown. As such, the new round of WTO talks is important in helping to promoting economic recovery and growth. The WTO negotiations are aimed at reducing distortions and trade barriers in as far as international trade is concerned. This is an important undertaking because it will help to improve the living standards of not just the developed nations, but also the developing ones.

Will the expansion of free trade would be beneficial to the Canadian economy?

The expansion of free trade would be beneficial to the Canadian economy because of the revenues generated though the sale of goods and services to consumers across the globe. This will translate into good-paying jobs and as a result, the living standard of the Canadians shall also improve. The Canadian’s economy largely depends on the ability of the country to manufacture and sell its goods and services all over the globe (Canadian Manufacturers and Exporters 5).

Even among the Canadian population, the importance of trade in elevating their economic well-being is well understood. For example, according to the results of a poll survey commissioned jointly by both the departments of International Trade and Foreign Affairs, and which was undertaken by EKOS Research Associates Inc., it emerged that 85% of Canadians are of the opinion that international trade contributes greatly to the country’s economy.

68% of the respondents to the same poll were also optimistic that when there is an increase in trade, this usually results in better paying jobs for the Canadian workforce. Canadian’s exports account for 45.6% of the country’s GOP, and this represents a 25% increase as recorded in 1990 (Canadian Manufacturers and Exporters 6).

What this indicates is that Canada’s exports relative to the country’s GOP are four-folds those of the United States and three times that of Japan. As such, this is a clear indication that Canada is an export-oriented nation. Besides the apparent growth in Canada’s exports, there has also been a change in terms of their composition, largely because the country has now embraced the concept of a knowledge-based economy.

Although such commodities as minerals, timber and grains are still important components of Canada’s merchandise exports, nonetheless, in recent years, Canadian companies have been seen to shift towards the provision of financial, environmental and engineering services, and are now regarded as global leaders in the provision of these services.

Consequently, such non-resource categories as equipment, machinery, as well as high-voltage products now account for over two-thirds of the merchandise exported from Canada (Canadian Manufacturers and Exporters 7). As such, the WTO negotiations shall enable Canadian companies to fully benefit from new opportunities emerging in the international market, and more so in the field of service provision.

However, CME is fully aware than open trade due to free trade in the international market shall impact positively and negatively on the country’s export and import market. Once of the issues that the CME needs to take into account is the issue of competition. Nonetheless, the CME need not fear being faced with competition. This is because the uninterrupted flow of capital, goods and service across the Canadian borders shall ensure that the Canadians benefits fully from the international market.

Access to the international market shall enable the Canadians to access the best goods and services from all over the world. In addition, Canadian exporters shall have the chance to sell their goods and services to the most promising markets across the globe. For example, they shall be in a better position to choose the best partnership and investment opportunities, effectively enabling them to access a poll of capital from across the world.

When the Canadian market is opened to foreign competition, this shall help to boost the living standards and productivity of the Canadians in a number of ways. To start with, imports penetration shall force the Canadians to concentrate on the comparatively productive exporting sectors and abandon the less productive ones.

This is bound to raise Canada’s overall productivity (Canadian Manufacturers and Exporters 7). On the other hand, domestic suppliers may opt to resist import penetration and as a result, they will be in a better position to improve the quality of their products and services, reduce costs, and enhance their productivity.

Therefore, although foreign competition may not actually result in an increase of the market share, nonetheless, the ensuing spur in competition shall act to sharpen the innovative spirit of the Canadians at home. Therefore, in contrast to the trade negotiations logic, there is need for nations to open up their markets for purposes of economic interest.

Would alternative strategies be suitable?

If at all the world trade is to benefit from multilateral expansion, there is need to consider alternative strategies, for example, by ensuring that rules and regulations relating to the multilateral trading system are followed. This will ensure the expansion of the Canadian export and import industry and by extension, the country’s national economy.

Embracing of the WTO system would ensure impartial and automatic resolution of all forms of controversies that falls under the WTO agreements. Moreover, the system also ensures that the requirements to the agreements are clear, and those who seek to violate them are subjected to the full trade sanctions consequences.

Liberalization of trade, as opposed to imposing of sanctions, would be more suitable in helping to enhance the established mechanisms for settling disputes. In addition, governments should be in a position to impose and improve their own standards, according to the situations facing them (Canadian Labour Congress 5). In addition, the interest of the general public needs to take precedence over the interests of the private sector.

As a member of the WTO, the Canadian government should endeavor to pursue an agenda aimed at zero rating tariffs on services and goods used in pollution control devices. This is a welcome respite that demonstrates that the manufacturing sector in Canada is not just concerned with profits, but is also concerned with helping to reduce environmental pollution.

Trade barriers should also be reduced on the agricultural and energy products. The issue of imposing trade sanctions against some of the WTO member countries who have failed to implement some fundamental labor standards is likely to feature in the next negotiating round table (Canadian Labour Congress 6). Towards this end, the CME has appealed to the Canadian government to oppose any move to impose labor standards sanctions.

The use of trade sanctions as a weapon of punishing poorer countries only acts to cripple the ability of such countries to enhance their domestic labor standards, in the long-term. In addition, in order to ensure the success of the new round of negotiations, it is important for the developing countries to possess the necessary training tools so that they can participate in a more meaningful way.

In this regard, Canada could assume the leadership role by way of hosting/funding projects. In addition, Canada can assist the governments in the developing countries to draft and implement regulatory and economic reforms.

Works Cited

Canadian Labour Congress. Current Multilateral Trade Negotiations: The Need to Reassess Canada’s Priorities. 2002. 02 March, 2011. Web.

Canadian Manufacturers and Exporters. A CME Perspective on WTO Negotiating Issues. 2002. 02 March, 2011 Web.

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IvyPanda. 2019. "CME on WTO Negotiation Issues." May 28, 2019. https://ivypanda.com/essays/cme-on-wto-negotiation-issues/.


IvyPanda. (2019) 'CME on WTO Negotiation Issues'. 28 May.

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