1. Geoffrey Hale Political Science 3170 The University of Lethbridge October 14, 2010

2. What is the WTO Organizational Structure and Governance Facts, myths, and theoretical insights. Canada’s Evolving Role at the WTO Trade “Clubs”, Canada and the WTO

3. Other major governance issues Budget – distributed in proportion to member countries’ share of global trade – EU > 40%; US: 13.5%; China: 5.9%; Canada 3.36% Total Budget - 189 MM CHF  $C 180 MM. Decision-making By consensus – not unanimity (except for changes to general principles guiding WTO), but not against opposition of major trading power. Usually requires “log rolling” among major nations, coalitions ¾ vote on interpretations of WTO rules, waiving disciplines against members. Two-thirds vote for technical rule changes, approving “accession” of new members.

4. WTO Accession Process Applicants must agree to WTO processes, make binding undertakings re: own trade and related policies. Must negotiate entry with existing WTO members who may negotiate specific terms in return for approving accession. Negotiations typically “asymmetric” Negotiations have become more demanding with growth, diversity of existing WTO membership.

5. WTO Facts and Myths WTO is intergovernmental organization Members determine start (and terms) of new negotiating rounds National governments broker level and terms of autonomy on specific rule clusters Medium-sized and smaller countries benefit from “club rules” capacity to cooperate in rule enforcement WTO is not international trade constitution – precluded by detailed negotiations on rules. Still major power asymmetries. Rule commitments are cumulative. Medium-sized, smaller countries cannot compel compliance of large countries, although international coalitions help.

6. Other useful policy insights (per Froese) Political institutions still matter as much as economic ones in trade policies National / regional decision-making structures determine terms and context of participation, negotiating positions, especially of larger, medium-sized trading countries. National sovereignty not incompatible with global governance Governments still retain capacity for policy discretion within boundaries of international, regional agreements. Policy “realism” heavily circumscribed by realities of interdependence for large, small countries alike. WTO embedded within complex networks of international, regional and sectoral agreements with interconnected implications.

7. Canada’s Evolving Role at the WTO Canada still 5 th largest trading country in world 11 th or 12 th largest if individual European countries and/or Hong Kong included But – no longer one of “inner core” players in global negotiations Reflects shift in power of different “trade clubs” at WTO

8. Factors in Canada’s declining role at WTO In ternational Emergence of large developing countries (e.g. China, India, Brazil) has broadened “inner circle” at WTO Australia now playing leading role as leader of agricultural exporting countries Growing important of regional and bilateral trade agreements Canada-related issues “trivial” to WTO outcomes (per Wolfe. Domestic Canadian domestic trade options constrained by persistence of minority governments, related salience of regional issues (e.g. protection of supply management) Growing impact of competitive liberalization, pursuit of regional trade deals on Cdn. priorities. Post-2004 division of Commons’ Foreign Affairs / Trade ctees. Relative decline of DFAIT influence within fed. gov’t?

9. The Politics of Trade Clubs (per Wolfe) Wolfe – “group of states associated for a particular purpose” Potential roles: “Analytical burden sharing” – coordination of national strategies May involve log-rolling among members with complementary trade priorities. Keohane & Nye – “places where ‘insiders’ know the rules and ‘outsiders’ have limited influence Proliferation of issues under review at multiple WTO committees requires all but largest states to focus efforts on areas of key importance.

10. Features of major trade clubs Common characteristics e.g. region or level of development Common objectives Reduction of barriers to agricultural trade (e.g. Cairns Group) Protection of domestic farm sectors (G-10, G-33) “Bridge clubs” – organized to broker differences among competing positions.

11. Factors contributing to “club” growth Growing number of members Networking through clubs critical for smaller countries to exercise any influence over trade negotiations WTO tradition of consensus decision-making Clusters of states more likely to secure accommodation of positions or provide blocking coalitions until accommodation secured. WTO tradition of “single undertaking” “nothing is agreed until everything is agreed”

12. Implications for WTO Processes Emergence of negotiations through “series of nested ‘concentric circles’” WTO Plenary Meetings (formalities) Informal Plenaries Technical experts’ meetings “Green Room”  inclusive core group representing key trade clubs relevant to issue. Wolfe notes Doha roadblock between Brazil, India-led groups, US, EU  attempted bridging by G-4 (US, EU, Brazil, India), G-6 (+ Australia, Japan)