Canadian Trade Minister Ed Fast sees an ad hoc effort to reduce barriers to trade in services as the jolt it might take to revive the comatose Doha Round of global trade negotiations.
The effort is called the International Services Agreement, an initiative of a couple of dozen rich countries that tired of locking horns with big emerging market countries to expand the World Trade Organization’s remit via the Doha talks. Canada is among the vanguard, as the Harper government puts freer trade at the centre of its economic agenda.
Also among the breakaway group is the United States, New Zealand and the members of the European Union. Their goal is to agree on a set of rules that would make it easier for banks, insurers, engineering firms and other service providers to win business in the participating nations.
The stakes could be significant. Data on services trade aren’t as plentiful as measures of trade in goods. However, services account for 68 per cent of global gross domestic product, according to a report by the Peterson Institute for International Economics. In the case of Canada, services account for 71 per cent of GDP and four of every five jobs, Mr. Fast told a conference in Washington Wednesday.
“We need this sooner rather than later,” Mr. Fast said in an interview later. “All of our economies need that boost that the elimination of barriers within services that trade represents. Timeliness and ambition are the two important factors as we move forward.”
Mr. Fast declined to suggest a timeframe for completing talks on services. That could be because negotiations remain at an early stage. Trade ambassadors at the Geneva-based WTO got the idea off the ground early this year, yet they still are working on draft agreement that could be used as basis for more formal negotiations. The effort also faces opposition from countries such as China, India and Brazil, which accuse Canada and its partners in the International Services Agreement of undermining multi-lateral negotiations.
Mr. Fast insists Canada remains fully committed to the WTO.
“The hope is, once concluded, our services agreement can form the basis of attracting the remaining members of the WTO family to join that agreement,” he said. “What we see happening is this agreement will lead the way.”
But he little regard for the Doha talks as they stand now, suggesting there’s too little at stake to motivate countries to set aside domestic agendas in favour of a greater good. Mr. Fast insisted that the International Services Agreement must aim higher.
“What we don’t want to do is repeat the experience we’ve had within the Doha Round, where, because of a lack of ambition amongst the partners, very little if any progress has been made for many, many years,” he said in the interview. “The partners we have at the table right now…all share a very high level of ambition and also commitment to getting a deal done quickly.”