The World Trade Organization

What is the WTO?
Many Canadians may be aware of the World Trade Organization (WTO), but few likely understand the enormous influence this institution has on our communities and everyday lives.

The WTO was established in 1995 as the supra-national institution that governs and negotiates the world’s trade and investment rules. Currently, 134 countries -- including Canada -- are members.

The WTO agreements include the 1947 General Agreement on Tariffs and Trade (GATT), which focuses largely on the trade in goods, and a new General Agreement on Trade in Services (GATS), covering areas such as telecommunications, banking and transportation. As well, there are agreements governing trade-related intellectual property rights (TRIPS) and trade-related investment measures (TRIMS).

Together, these agreements are far-reaching, covering food and environmental standards, government regulation of services, farm policy, cultural protections, copyright and patent law, tax subsidies, and more.

Enforcing the Rules
The WTO can enforce its rules with economic sanctions. Disputes between nations are brought before tribunals which hear cases in secret. Submissions from the public or non-governmental organizations are accepted only if endorsed by a government -- something that rarely happens. As an unnamed WTO official confided, "The WTO is the place where governments collude in private against their domestic pressure groups. Allowing NGOs in could open the door to ... all kinds of lobbyists opposed to free trade."

If a government loses a case, it is faced with three stark choices: conform to WTO requirements, pay permanent compensation to the winning party, or face stiff trade sanctions.

The WTO and the MAI
Since the demise of the MAI, supporters have been pressing to move negotiations to the WTO. In January 1999, Japan and the European Union proposed a millennial round of WTO talks to expand the existing TRIMS into a more comprehensive investment treaty like the MAI. Negotiations are to be completed by 2003.

The threat of the MAI resurfacing at the WTO raises serious concerns. Unlike the OECD, which has no authority to enforce agreements, the WTO has considerable legal muscle.

The WTO versus the Public Interest
The WTO has already overturned domestic laws designed to protect clean air, endangered species, food safety, cultural diversity, public health and human rights.

Recently, for instance, the European Union was ordered to lift its ban on beef containing artificial hormones. The WTO ruled the ban, designed to protect public health, is an illegal barrier to trade. Even the powerful U.S. government was forced to withdraw provisions of its Clean Air Act when the WTO ruled that gasoline cleanliness standards Washington had set violated trade rules.

And in Canada, a WTO panel struck down measures Ottawa took to protect our magazine industry from "split-run" American publications. Split-runs are "Canadian" editions of American magazines with virtually the same content. Because there are few extra editorial costs involved in producing a split-run, the magazine can offer substantially cheaper advertising rates than its Canadian counterparts. The WTO, however, ruled that a tax Canada placed on split-runs to discourage them was a discriminatory trade practice. The government was forced to rescind its legislation. Ottawa is proposing new measures to help our magazines, but Washington is already threatening retaliation, using the WTO ruling as its excuse.

In short, the philosophy of the WTO is that all social and environmental goals must be set aside in favour of greater trade and investment liberalization. This certainly benefits large transnational corporations, but runs against the public interest as governments are forced to redesign all their laws and regulations to comply with the edicts of the WTO.

Canada and the Post-War Trading System: A Chronology

Date	Event
1947	Twenty-three countries, including Canada, sign the General Agreement on Tariffs and Trade (GATT)
1948	GATT comes into force on a provisional basis. Trade representatives draft a charter (Havana Charter) for the International Trade Organization (ITO) that was to incorporate and oversee GATT
1948	Canada and the United States reach a tentative agreement establishing free trade, Prime Minister William Lyon Mackenzie King refuses to ratify the deal
1950	The U.S. administration abandons efforts to win Congressional approval of the ITO Charter
1957	The Treaty of Rome establishes the European Economic Community (EEC)
1964	The United Nations Conference on Trade and Development (UNCTAD) is created to promote trade measures that will benefit developing countries
1964	The Kennedy Round of GATT negotiations begins (concluded in 1967)
1972	Ireland, Denmark and the United Kingdom join the EEC
1973	The Tokyo Round of GATT negotiations is initiated (concluded in 1979)
1976	Canada and the EEC sign an economic cooperation agreement
1986	The Uruguay Round of GATT negotiations begins (concluded in 1994)
1987	Canada and the United States conclude negotiations for a comprehensive free trade agreement
1989	The Canada-U.S. Free Trade Agreement comes into force
1989	The Asia-Pacific Economic Cooperation forum (APEC) is created to promote trade liberalization among its members, including Canada and the United States
1990	At GATT negotiations, Canada formally introduces a proposal to create an international trade organization to cover agreements of the Uruguay Round
1991	Trilateral free trade talks between Mexico, the United States and Canada begin
1993	The Masstricht Treaty comes into force, creating the European Union (EU). The Treaty establishes a single European market among members and provides for monetary union by 1999
1994	The North American Free Trade Agreement (NAFTA) is implemented
1994	The World Trade Organization (WTO) is created and embodies the results of the Uruguay Round
1995	Members of the Organization for Economic Cooperation and Development (OECD), including Canada, begin negotiations to establish a Multilateral Agreement on Investment (MAI) intended to liberalize foreign investment rules and regulations
1997	Canada negotiates free trade agreements with Chile and Israel
1998	Representatives of North and South American nations begin discussions in Santiago, Chile aimed at drafting a Free Trade Area of the Americas (FTAA)
1998	MAI talks are suspended in the face of growing public opposition
1999	The EU adopts a common currency - the ‘Euro’
1999	Preparations begin for the millennial round of WTO talks