FINANCIAL REPORTING MAKES GAINS AMID HEATED TRADE TENSIONS
Global efforts on other issues progressing while NAFTA drags on,
As international trade frictions heat up, with NAFTA and Brexit topping the list of concerns, many other countries are continuing their efforts to increase access to economic markets and close remaining regulatory gaps in global financial reporting standards.
Right now, the focus is on recasting the North American Free Trade Agreement — a goal President Donald Trump hammered home during and after the U.S. election campaign.
The fifth round of negotiations is to begin this week in Mexico City — but there are scant signs these talks will show much progress on sticky trade issues for Canada, ranging from autoparts to softwood lumber to dairy-product quotas, when this leg of talks wraps up Nov. 21. Two more meetings on the future of the 23-year-old trade deal are scheduled before the original end-of-year deadline, although the U.S. has indicated talks could continue through March or beyond.
Meanwhile, the makeup of the Trans-Pacific Partnership — the world’s largest trading bloc, finalized in 2016 — seemed in doubt after Trump earlier this year pulled out of the 12-nation group in favour of the U.S. seeking separate regional agreements. But trade ministers in Vietnam said Saturday they have reached a basic agreement on the Pacific Rim trade pact without the U.S. A statement issued in the early hours of Saturday said an accord was reached on “core elements” of the 11-member group.
Still uncertain is the ongoing fallout from the June 2016 referendum result in favour of Britain exiting the European Union — a decision that will require Canada to work on a separate free-trade agreement with the U.K. — while carrying on with other signatories to the full Comprehensive Economic and Trade Agreement (CETA), ratified in September 2017.
“In the seven years it took to negotiate the CETA, both sides were inventing new things and new approaches, and looking at issues that had never been looked at in that way before,” said James Ogilvy, a former member of the Canadian International Trade Tribunal and an adviser to the Alberta government during the CETA negotiations. “Also, the EU team knows the U.K. well, so they will not have to go through all the same learning phases they had to with Canada,” said Ogilvy, who authored the report “CETA, Brexit and Beyond” for the accountancy body ICAS, based in Edinburgh.
“It’s a real success for the CETA that, for Canada and the EU, the great majority of tariff lines have simply been eliminated.”
Meanwhile, improving and unifying accounting standards around the globe has been a long process, stretching back decades. That work is still going on, with the three main international accounting regulatory bodies overseeing the sector’s attempt to move closer to a unified approach.
“I think we’ve had a lot of successes on improving financial reporting across the globe and narrowing differences,” said Connecticut-based Russ Golden, chair of U.S. Financial Accounting Standards Board.
“In 2018, we expect companies to implement a substantial improvement across the world (on) revenue recognition. And that is, perhaps, the most important metric in a number of industries. I believe that will be a line substantially across the globe. That’s a tremendous success for global financial reporting.”
Those efforts moved to Toronto for a two-day International Financial Reporting Standards (IFRS) Conference, hosted by the Chartered Professional Accountants of Canada.
“Canada is a very important constituent for us,” said Hans Hoogervorst, chair of the International Accounting Standards Board, based in London, which operates under IFRS guidelines.
“We have 126 countries around the world having adopted the IFRS. But Canada was one of the first. And the fact that Canada is so highly integrated with the United States economically made it extra special that they chose (to use) IFRS.”