Question Period Note: Canada's WTO Reform Initiative

What is the status of Canada's initiative on World Trade Organization (WTO) reform?

• Canada is committed to safeguarding the multilateral trading system, including an enforceable, two-tier dispute settlement system, and is at the forefront in providing leadership on the urgent need to reform the WTO.

• Trade creates wealth, jobs and prosperity, and WTO rules provide the necessary certainty that businesses require.

• We have convened a group, known as the "Ottawa Group", of diverse like-minded countries to identify tangible ways to strengthen and modernize the WTO.

• Momentum is building. For example, steps are being taken in areas such as e-commerce. Canada is also leading on efforts to innovate WTO processes to improve its day-to-day functioning.

Canada is taking a leadership role in efforts to improve the functioning of the WTO. All three main functions of the WTO are under stress: (i) the monitoring of existing commitments is not providing needed transparency; (ii) with the continued block by the U.S. on new appointments to the Appellate Body, the two-stage dispute settlement system struggles to cope with demand; and (iii) limited progress on longstanding negotiations that seek to reflect modern economic realities. These issues are underpinned by the rise of new actors (e.g. China and other developing countries), as well as growing protectionism that puts the multilateral trading system at risk.

The impasse over the WTO's Appellate Body (AB) is coming to a head. The U.S. has long expressed concerns about the functioning of the AB, and in past years they have blocked the process to name new members to the AB. If the impasse is not resolved by December 11, 2019 the AB will no longer have enough members to hear cases, and the body will cease to function. Given that a losing WTO member can appeal a panel decision to the AB, a dispute could fall into the void if there is an appeal to a non-functioning AB. This impasse runs counter to the interests of many other WTO members (including Canada), and would be a serious blow to the rules-based trading system.

In October 2018, Canada hosted a ministerial meeting of a small group in Ottawa on WTO reform. This group of 13 WTO members (the "Ottawa group"), is diverse in geographical representation and levels of development. While the group has been kept small to allow for a meaningful exchange of views, it is meant to begin a broader discussion involving all WTO members. The joint communiqué that resulted from the Ottawa ministerial identified concrete actions for the group to pursue in three areas: 1) improvements to the efficiency and effectiveness of the WTO's monitoring and transparency function; 2) safeguarding the WTO's dispute settlement system; and 3) updating the WTO agreements to reflect 21st century realities. Ottawa Group (OG) Ministers have met three times (October 2018, January 2019, May 2019).

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