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MARKETS AND OPPORTUNITIES ABROADIn commerce, as in all areas of human endeavour, relationships count. Business ties flourish where knowledge and trust are the rule. A multicultural, open society like ours, boasting strong connections with all parts of the world-one in five Canadians was born abroad-enjoys a considerable advantage. We are actively involved in cultural, commercial and educational communities abroad-ties that deepen the relationships and sustain our prosperity. To build on these assets, the Government will concentrate on building solid government-to-government relationships from working level contacts right up to leaders' meetings and formal agreements, and it will foster the development of business-to-business and other non-governmental ties. It will not limit itself to traditional bilateral relationships: increasingly business requires support at a regional level, especially in the trilateral North American economy. Commerce, as distinct from trade or investment, embraces the full range of international business activities-from exporting and importing, through two-way investment, to licensing, partnering, management contracts and more. This means the Government must offer its support across a wider spectrum. As long as governments continue to direct procurement, set tariffs and regulations, and otherwise shape commerce, there will be agreements and understandings that underpin good commercial relations, sometimes in areas related to economic activity (e.g. trade, fisheries, environmental cooperation), sometimes in areas further removed (e.g. cultural agreements, understandings on human rights). Formal agreements are the foundation of mutually advantageous and stable relationships. As Canadians trade internationally, they may encounter roadblocks such as tariffs that make exchanges artificially uncompetitive, different regulatory approaches that add compliance costs, and a lack of respect for intellectual property rights. By negotiating multilateral, regional or bilateral agreements, the Government helps Canadian exporters, small and medium-sized enterprises in particular, to overcome these barriers. The objective is to encourage openness, predictability, order and a more level playing field in business dealings, and reduce or eliminate the frictions that arise from different interests, cultures or customs. Open and predictable international policies are as important for modern business as advances in communications and transportation. The counterpart of building the right relationships internationally is grounding them domestically in a sustained consultative dialogue with partners in business, interested citizens, communities, and other orders of government, who share a stake in Canada's international success and in the domestic conditions that sustain it. THE WORLD TRADE ORGANIZATIONThe rules-based multilateral trading system embodied in the World Trade Organization underpins our commercial relations with its 147 other members. At their 2001 meeting in Doha, Qatar, trade ministers from WTO members adopted the Doha Development Agenda of trade negotiations. This Agenda calls for putting the interests and needs of the developing countries, the vast majority of the membership, to the fore, consistent with the overall objective of the WTO to increase economic growth and raise standards of living by making trade more free and predictable. A successful conclusion of the Doha Agenda negotiations would be a significant boost to Canada's international commerce strategy and to the development prospects of most of the WTO membership, and achieving agricultural trade reform is at its heart. It is only through the multilateral forum of the WTO that we can hope to address the highly trade-distorting subsidies offered by a small handful of countries. Not only do our producers, and those from around the world, need a level playing field on which to compete, but we must also expand market opportunities for developing countries. We also seek greater market access for our exports: Canada is the world's fourth-largest agri-food exporter. Canada, like many other WTO members, will face considerable challenges in this round of negotiations. While the Government will vigorously defend the interests of all of our stakeholders, we are well aware of our domestic sensitivities. In the agri-food sector we will press hard for an equitable outcome for all countries, one that puts producers from around the world on the same footing. We will continue to aggressively defend the ability of Canadians to choose how to market their products, including through orderly marketing structures such as supply management and the Canadian Wheat Board. At the same time, Canada will seek greater market access for non-agricultural products and services, and better rules to reduce unfair anti-dumping and countervail actions that limit trade, and that meet the special needs of developing countries. The Government will:
OTHER TRADE, INVESTMENT AND RELATED COMMERCIAL AGREEMENTSBilateral agreements can take us further than the WTO by introducing liberalization in areas that some members of the WTO may not be ready to discuss. We have bilateral and other regional agreements in place or under negotiation with a number of other countries that set new benchmarks in such key areas as market access for goods and services, investment protection, transparency and subsidies. In addition to broad-based agreements, issue-specific agreements can also be significant for businesses, on matters as varied as landing rights for increased air passenger service, dual taxation accords, bandwidth allocation in telecommunications, mutual recognition of technical standards, and science and technology cooperation. Some agreements-fisheries or educational exchanges, for instance-can help to maintain good ties and mutual understanding with certain countries, while multilateral agreements such as those related to the environment or cultural diversity also have implications for trade and commerce. And since modern commerce typically involves the movement of people, from managers to researchers, support focused on the individual (e.g. consular services, academic exchange programs) is increasingly relevant to the needs of business. Agreements are not pursued for the sake simply of having them; they are intended to respond to particular needs to harmonise, facilitate or regulate commercial transactions which arise naturally between countries and companies. And just as the growth and development of these commercial relationships reflect the particular nature of the countries involved, so too must the Government's approach to foster these relationships. LATIN AMERICA AND THE CARIBBEANCanadians have many historical, cultural and personal ties to Central and South America and the Caribbean. The development of regional trade and market groupings has driven Canadian companies-already active in resource sectors-to seek new opportunities in the region. Trade and investment ties with the Americas are a significant element in Canada's commerce strategy, especially as Brazil's powerful economy grows and diversifies. Canadian companies have long been present in the region, but in limited numbers. NAFTA's success has helped inspire additional Canadian exporters and investors to venture further south, and the free trade agreements that Canada has signed with Chile and Costa Rica have accelerated this trend. But we are still missing opportunities that our neighbours are seizing. Mexico is highly integrated into these economies, and the United States has recognized new opportunities in the Caribbean basin and Central America. Canada needs to keep pace, or our businesses will lose ground to competitors in these growing regional value chains. The Government will step up its commercial efforts in support of Canadian business. The Government already maintains a full suite of business development services in Latin America and the Caribbean, and we conduct high-profile trade missions such as the one to Brazil in November 2004. Free trade negotiations with the Central America Four countries-El Salvador, Guatemala, Honduras and Nicaragua-are well advanced and we hope to conclude an agreement in the near future. We will work to implement the Prime Minister's commitment to undertake free trade negotiations with the 15 members of the Caribbean Community (CARICOM). We are also exploring the possibility of negotiations with the Dominican Republic and the five nations of the Andean Community: Bolivia, Colombia, Ecuador, Peru and Venezuela. Free Trade Area of the Americas Our interests in Latin America and the Caribbean depend on the peace, political stability and economic prosperity of the region. For this reason, Canada's top trade policy objective in the region remains the Free Trade Area of the Americas (FTAA), which involves the 34 democratic countries of the hemisphere and is an integral part of the broader Summit of the Americas process. The FTAA would build on Canada's existing free trade ties and holds the potential to create the world's largest free trade area-more than 845 million people and a combined gross domestic product of $18.8 trillion. We support the continuing efforts of the U.S. and Brazilian co-chairs of the FTAA process to resolve the issues outstanding and resume negotiations. Commercial Relations with Brazil Brazil exerts substantial economic and political influence throughout South America, and is a leading member of the World Trade Organization. Brazil holds special interest for Canada, both because of its strong anchor role with Argentina, Uruguay and Paraguay in Mercosur and because its fastest growing sectors are areas in which Canada excels. But our overall relationship with Brazil has suffered in recent years as a result of disputes in certain areas, notably regional aircraft. Canada must have a stable, robust relationship with Brazil-one that can overcome the inevitable difficulties of the increased competition between our economies, and that can develop new areas of collaboration and commercial advantage. In this regard, we will continue to negotiate an agreement with Brazil respecting regional aircraft subsidies. Brazil and Canada enjoy mutually advantageous two-way investments. Canada's direct investment in Brazil has increased 280% in a decade; from $2 billion in 1993 to $7.6 billion in 2003 (roughly 10 times Brazil's investment in Canada). Canadian companies are increasingly taking a long-term view of Brazil and examining investment and partnering options as effective ways to penetrate the market. Export Development Canada has opened two new offices in the country, and we have added trade commissioners to assist Canadian businesses. We will continue to encourage more Brazilian investment here in Canada. Recently Canada and Brazil have undertaken to rebuild our relations with common economic and social goals. In November 2004 the Prime Minister and President da Silva agreed "to promote the expansion of trade relations between Mercosur and Canada, by negotiating enhanced market access in the areas of goods, services and investment, in the context of the creation of a future FTAA." The leaders' joint declaration demonstrates that Canada and Brazil (along with its Mercosur partners) are committed to helping the FTAA negotiations move forward. The governments will also strengthen cooperation in education and R&D.; High-level political contact and trade and investment missions will play a major part in building this relationship. Our overall objective is to surpass $2 billion in exports to Brazil by 2010. The Government will:
ASIA During the past two decades, Asia has come to occupy a central role in global commerce. Asian economies have become significant participants in world trade, finance and investment, and more sophisticated manufacturers of consumer and capital goods. The pace of growth and the region's rapid integration into the global economy make the region vital to Canada's economic success. Canada has tapped into East Asian value chains directly through two-way investment and indirectly through North American supply chains. This has meant greater choice for Canadian consumers and greater access to low-cost inputs, improving our competitiveness. At the same time, it has also given rise to strong Asian competitors, both at home and in our export markets. Today, few Canadian companies can expect to succeed without an Asia strategy. Despite these realities, Canada's engagement within the region has lagged behind the pace of economic growth in Asia, and behind our competitors' performance. As a destination of direct goods exports, the region accounts for less than 10% of our global total. Canada's share of regional imports has scarcely risen above 2% in the past 15 years, and Asia consistently represents less than 2% of our inbound and outbound direct investment. This is a situation that must change.
Helping Canadian Business Succeed Success in Asia depends on aligning our domestic and international efforts to strengthen wealth creation and build competitiveness. Our strategies for the region will capitalize on our assets-from capital and skilled labour to our coveted natural-resource endowments-to create sustainable long-term relationships. Business and government efforts must be better coordinated to take advantage of the region's huge demand and production opportunities (especially in physical and financial infrastructure), and to influence the evolution of the underlying rules and relationships. Adapting Canadian infrastructure to match Asian opportunities is a major task of the federal government, in partnership with the provinces, territories and municipalities. We will support the Asia-Pacific Gateway strategy announced by the government of British Columbia in February 2005 to create a competitive and full-service corridor between Asia and North America. This is a major undertaking to capitalize on our west-coast ports and airports, and the road and rail links between them and North American markets. Likewise, we are pursuing other means to bring Canada closer to Asia. We are improving air services agreements with China and India, and to take advantage of Canada and China's agreement regarding making Canada an Approved Destination Status for Chinese travellers, we are reviewing our air services policy and infrastructure to increase the frequency of air connections. Canada will pursue targeted strategic trade and investment agreements in the region, such as negotiating foreign investment promotion and protection agreements with key Asian partners. Canada's role in the Asia Pacific Economic Cooperation (APEC) forum offers us the opportunity to engage senior Asian leaders on bilateral and regional issues, as do networks such as the APEC Business Advisory Council and Study Centres. Businesses also need sectoral approaches that deepen cooperation in sectors where Canadian firms have an edge. During the Prime Minister's visit to China in January 2005, for example, Mr. Martin and Premier Wen signed a memorandum of understanding on energy cooperation to establish a Canada-China partnership in clean energy development. We are pursuing an arrangement to develop science and technology collaboration with India to give Canadians a mutually advantageous access point to India's burgeoning knowledge-intensive sector, and a solid basis for future trade and investment growth. Client-oriented support for export promotion will remain paramount. The Government will consult on how new programming, could improve delivery of specialized advice and assistance to business-inward and outward investors, those seeking R&D; partners or licensing arrangements, and those in search of competitively priced inputs. The Government will adjust its business programming to reflect the new realities of global and regional value chains, and the new role of long-term creative alliances in finance, investment and knowledge. The Government will also increase significantly informative messaging to businesses and stakeholders regarding the region's opportunities and challenges. The Government is making a sustained effort to reach out to Canadian communities, in particular the cross-cultural and entrepreneurial capacity of our Asian ethnocultural communities. The Government is also working closely with business organizations, national and sectoral organizations, and centres of learning and research such as the Asia-Pacific Foundation. Such widespread public consultations are critical to guide priorities and programming. Accordingly, a consultation process began in early 2004 on emerging opportunities, including those in China and India, with a variety of stakeholders, including provinces and territories, business associations, academics and civil society. The Government will continue to work in partnership with stakeholders to ensure that our strategy contributes to the realization of real opportunities in the region and around the world. In Asia there is a premium on tailored approaches: one size does not fit all, whether by market or by sector. In addition to more general efforts targeting the entire region, we will also leverage our assets in the following countries that are critical to regional success. China Canada enjoys strong and deep ties with China. Today, there are over one million Canadians of Chinese descent. Our relationship is nurtured through extensive educational ties and strengthened by the individual experiences of Canadian tourists in China and by the over 100,000 Chinese who visited this country in 2004. China has emerged as the world's fourth-largest trader and second-largest destination of foreign direct investment. The country has become an economic power with impressive global reach, averaging over 9% growth in real GDP for each year of the past decade, fuelling enormous demand for inputs and sophisticated consumer imports, as well as access to world markets. The sheer scale of change in China affects worldwide supply and demand. The country's manufacturing productivity has driven down the world price of many goods, while Chinese-dominated Asian demand has substantially shifted energy and other commodity prices upward, a dynamic that will mark world trade in resource-based commodities for decades. While China's remarkable strength as a manufacturing base has riveted attention worldwide, it is also training knowledge workers with scientific, engineering, medical and technical skills at a pace that is already showing in the increasing sophistication and quality of its manufacturing. China has huge regional economies clustered on the coast (such as Hong Kong, gateway to South China) and in a limited number of inland regions. On a sectoral basis, remarkable and diverse opportunities exist in agri-food, resources and related technology and services, engineering and construction, information, telecommunications, environmental and clean energy technologies, and educational services. The Government will actively work with Canadian companies to make the most of these realities. Alliances with Asian partners will be important in preserving our competitive standing with those U.S. and other foreign-controlled enterprises that already have such partners operating out of China. Moreover, growing Chinese demand is not entirely about inputs or current consumption. China's needs for infrastructure of all kinds, whether in energy, transportation or financial services, can only be met from outside. We will use existing and new channels to advance official relations with China. A Strategic Working Group supports regular bilateral consultation on important political and economic issues, and stronger exchange and coordination on broader issues of common concern. High-level events such as the January 2005 Canada Trade Mission to Shanghai, Beijing and Hong Kong, led by the International Trade Minister, also raise Canada's profile, enabling significant progress on bilateral issues and allowing Canadian companies to clinch commercial agreements with Chinese partners. There are already over 1,900 Canadian companies active in China, 400 of them through local offices. The Government supports them with more trade officials than in any other single market except the United States, in partnership with the Canada-China Business Council. We have also relaunched negotiations with China on a foreign investment promotion and protection agreement to improve the climate for Canadian investors. Through this and other initiatives, we aim to double the level of Canada's trade and investment relationship with China by 2010. Japan Japan remains the region's largest economy by a substantial margin, the most important investor in Asia, its financial hub, its leading industrial power, and a world leader in R&D.; Japan is Canada's second largest export market and our largest source of investment from Asia. Canada's longstanding participation in the Japanese market gives us a strategic partner in accessing regional trade and investment markets: no lasting success can be achieved in China and other dynamic Asian economies without involving Japan. Prime Minister Martin and Prime Minister Koizumi therefore agreed in January 2005 to develop a new Canada-Japan Economic Framework to address strategic economic priorities and emerging challenges and opportunities. Canada and Japan will promote economic cooperation through policy and business development initiatives. We will focus on enhancing our mutual capacities in innovation and in knowledge-based industries through regulatory cooperation, science and technology cooperation and investment promotion. A key component of the framework is a joint study on the benefits and costs of further promotion of trade and investment and other cooperative issues. The Government will work aggressively with Japan to complete this innovative framework, which will serve as a stepping stone to additional bilateral efforts and to realizing the full potential of our economic relationship with Japan. Republic of Korea The third key member of the northeast Asian growth triangle is South Korea, with whom we already have a special partnership. Our relationship is strong, as is proven by the fact that South Korea is now the leading source of foreign students in our educational institutions. Prime Minister Martin and President Roh agreed in November 2004 that we would begin exploratory talks on a potential free trade agreement, a clear indication that we are ready to see our relationship grow and deepen. While free trade would create pressure in certain Canadian sectors, notably shipbuilding, it would also present opportunities for traditional Canadian exports, value-added manufacturing and service sectors such as finance, insurance, and educational services and investment. As in Japan and China, the Government will assist Canadian businesses to respond nimbly to market developments by providing them with the practical support that will allow them to build long-term relationships with confidence-direct air links, favourable market access, and intellectual property and investment protection. India India and Canada share a mutual commitment to democracy and the rule of law, and to the better integration of developing countries into the multilateral trading system. We also share a language, a connection through our Commonwealth heritage, and similarities in our legal, financial and political systems. More than 700,000 people of Indian descent live, work and study in Canada, of whom over 300,000 were born in India. Despite these strengths, our relationship with India has underperformed in the past. The entrepreneurial skills and educational and scientific links of our Indo-Canadian community, however, coupled with reforms taking place in the Indian economy, are giving us a new edge on which we are now starting to capitalize. With market liberalization continuing and infrastructure development an ever-present priority, India offers Canadians more and more opportunities in biotechnology and health, information and communications technology, engineering and construction, oil and gas, energy, and environmental and financial services. India is also a very important potential partner in the areas of science, technology and education: it is consciously building its economic future on the skills of its people, seeking out strategic partners to further its development. Unlike East Asia, however, India is not yet a major player in supply chains. Its size and emerging outward orientation make it an awakening giant that will rival China in the foreseeable future. The growth of the Indian middle class is also redefining opportunities for Canadians, from producers of consumer goods, to our tourism industry, to our post-secondary institutions. In January, the Prime Ministers of Canada and India issued a joint declaration to build upon the substantial progress in the bilateral partnership achieved during the last year and to enhance the architecture of the Canada-India partnership. Responding to these opportunities, and building on the Prime Minister's visit in January 2005, the Minister of International Trade led a Canada Trade Mission to India in April 2005 which included a significant focus on science and technology. Canadian companies pursued opportunities in a range of areas, including transportation, energy and information and communications technology infrastructure, agri-food, and financial services. Our aim is to surpass $2 billion in exports to India by 2010. To this end, the Government has restarted discussions with India toward a foreign investment promotion and protection agreement and has made significant progress toward concluding a science and technology cooperation agreement with India to support partnership building in the very near future. To support this initiative, the Government will dedicate funding received in the 2005 Budget to establish a platform program to promote collaborative research between Canadian and Indian scientists and technologists in a variety of areas, leading to the development, production and commercialization of new technologies. This will further Canada's penetration into new international markets, creating Canadian jobs, fuelling industrial investment and strengthening domestic science and technology through access to global research capacities.
Other Asian Partners Many of the smaller emerging economic powers that are members of the Association of Southeast Asian Nations (ASEAN) have shown similar trends to those in China and South Korea. They are taking part in regional and global economic integration, and investing in their people and their legal and physical infrastructure. In particular, Singapore, with which the Government is negotiating a free trade agreement, remains a regional hub for banking, wealth management and insurance services, and Canadian financial institutions are present in Indonesia and other countries of the region. Vietnam, too, is emerging as a major international player. Canada is using Vietnam's WTO accession negotiations not only to ensure it has a legal system compatible with the development of long-term relations (e.g. through respect for intellectual property) but also to pursue specific interests in goods and services trade. At the same time, the tragic tsunami of December 2004 was only the most recent in a series of reminders that many of these countries are still developing and vulnerable-and that our political, security and humanitarian interests are engaged there too. The Government will:
EUROPE Our shared history and culture still shape our relationship with the European Union, our second-largest trade, investment and innovation partner-roughly equal to all the Asia-Pacific region put together. While we interact directly and often with the European Union, it is not synonymous with the broader European economic space: other countries, notably Switzerland and Norway, share the continent, while Europe's "near abroad" of the former Soviet countries, the Middle East and North Africa is also increasingly tied into Europe-centred value chains. The federal government's strategy recognizes this reality and builds on our strengths. The European Union The European Union is the world's largest single market, with a population of over 450 million and, following its expansion in central and southern Europe in 2004, a gross domestic product that rivals that of the United States. Its member state governments are focused on creating a European future, and its rich and sophisticated business sector is the leading global investor and one of its leading sources of technology and innovation. The countries of the EU shape global and regional commerce, presenting Canada with intense competition and significant concerns as we work to keep our relationship up to date. The Government is advancing stronger Canada-EU ties through many channels. It is guided at the highest levels through summits between the Prime Minister, the President of the EU Commission, and the President in Office of the European Union. In March 2004 Prime Minister Martin hosted the summit that re-energized the relationship through the launch of the Canada-EU Partnership Agenda; this agenda provides for bilateral cooperation on security, global economic prosperity and other major issues. To improve our commercial links and support the Canadian business community, we are designing a forward-looking Trade and Investment Enhancement Agreement (TIEA) with the European Union. The agreement will support economic growth and improvements in productivity, and has specific provisions aimed at facilitating bilateral trade, investment and technology transfer between Canadian and European Union SMEs. The TIEA will move beyond traditional market access considerations, anticipating future challenges such as the need for greater cooperation on regulatory issues. The Government has agreed to develop a voluntary framework for regulatory cooperation with the EU to enhance the use of best practices, improve the effectiveness of regulatory initiatives and facilitate trade and investment. In the realm of science, technology and innovation, the Government is focused on intensifying our cooperation by organizing thematic workshops to explore new collaborations and partnerships. Our association with public and private EU research programs-as partners, subcontractors and informal network players-has confirmed Canada's reputation as home to cutting-edge research partners. Indeed, Canada-EU trade in R&D; services, patents and licensing fees exceeded $2.1 billion in 2002. This burgeoning relationship with EU institutions does not, however, encompass our full relationship with Europe. Canadian businesses export to Britain, France, Italy and Poland-not Europe as an entity. They seek investments and technology in Spain, Germany, Sweden and Ireland, in sectors as diverse as aerospace and processed foods. In fact, Canadian companies established in the European Union sell four times as much there as they export from Canada. And within individual countries there is often greater focus on cities, regions and sectors. Distinct regions within the European Union (e.g. the Nordic countries) require specific strategies, as do science parks (e.g. Sophia Antipolis on the French Riviera), or distinct poles of growth such as the "four motors" of Lombardy, Catalonia, Rhône-Alpes and Baden-Württemberg. In support of these business strategies, we will devote more effort to promoting and encouraging business-to-business contacts. We will also support and encourage the facilitative role of the Canada-Europe Round Table as a valuable forum for our business community on both sides of the Atlantic. Our European engagement must broaden beyond Brussels and national capitals, to include individual markets, communities and sectors. Our trade resources and activities must be better aligned with Canadian business interests throughout the European Union. While we work to maintain and improve Canada-EU relations, we do so fully cognizant of potential impacts on our relationship with the United States. We must ensure that U.S. and European approaches to commercial issues, especially in the area of standards and regulations, are compatible. Because Canadian companies are highly active in both of these key markets, we must avoid situations in which compliance with the approach of one partner will mean a loss of opportunities in the second market. The U.S.-EU dynamic is also highly relevant to our current goal of positioning Canada aggressively as the gateway for European companies seeking to establish themselves in North America. We will monitor other developments closely. The current EU-U.S. discussions on civilian air transport, for instance, could provide the first step toward a more open trilateral regime that would provide more options to international travellers and shippers. Outside our ongoing close collaboration at the WTO, civilian air transport is one of the few areas where trilateral governmental action is contemplated. In the defence sector, by contrast, we must react more strategically to nationally oriented procurement policies that encourage reciprocal investments that often cut out Canadian suppliers. Other European Partners Outside the European Union, Canada has strong investment and trade links to the four members of the European Free Trade Association: Switzerland, Norway, Iceland and Liechtenstein. Their modern economies offer state-of-the-art technology and significant market potential for Canadian companies, especially in the energy and natural-resource-based sectors. To support Canadian businesses, we will continue to pursue a free trade agreement with the Association, which would provide a strategic platform for expanding our commercial ties in the Nordic countries and Central Europe in particular, and the EU in general. The Government will:
OTHER KEY MARKETS While the Government focuses on Canada's largest economic relationships, it will not neglect other commercially significant markets that may be crucial to individual Canadian firms' or sectors' global strategies. Australia and New Zealand Australia and New Zealand are increasingly important strategic players in Asia-Pacific value chains. New Zealand is the first developed country to explore free trade with China. Australia has already achieved free trade with the United States. Not only does this further Australia's natural economic interests in the world's biggest importer, but it fits very well into its strategic pursuit of Asian (especially Japanese) investment in sectors that will benefit from this new access. Both countries have free trade agreements with some ASEAN countries (e.g. Singapore and Thailand), and are jointly negotiating a regional free trade agreement with all ASEAN countries. Our flourishing two-way trade (around $4 billion with the two partners in 2004), and our developing investment relationship, promise to expand not only in traditional agricultural or resource-based sectors but also in high-tech areas such as the biotech, communications and medical equipment sectors, where we can leverage their positioning in East Asia. The Government is actively pursuing Canadian interests in both countries through the WTO and our trade team has streamlined operations to provide "one-stop-shopping" for Canadian exporters looking to do business in the region. Russia Russia has tremendous stores of physical and human capital but is still struggling to cast off the remnants of Soviet-era economic mismanagement. Despite this, it holds particular promise for Canadian companies, which have invested in natural resources, infrastructure and industrial development, and in the high technology and agri-food sectors. In relation to the Northern Dimension of Canada's Foreign Policy, Russia is our most important bilateral partner, and is central to all circumpolar initiatives. Cooperation with Russia on Arctic economic development is a priority area of mutual benefit. To build for the future, the Government is participating actively in Russia's negotiations to accede to the WTO-both to advance specific market access interests for our goods and services, and to seal the wholesale modernization of Russian economic law. At the company level, businesses receive financing support from Export Development Canada, whose annual business volume in Russia has been multiplying. Investment, protected through our investment protection agreement and programming, is particularly important: resource- hungry Asian countries such as China and Japan are ready customers for Canadian companies and Canadian-Russian joint ventures exploiting Siberia's vast natural resources. The Middle East and North Africa Canadian business has paid less attention to the opportunities in the Middle East than have their American or European competitors. Nevertheless, there are good prospects for long-term relationships. The nations of the Gulf Cooperation Council-Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain-are the most prosperous grouping in the Middle East, with a collective economy that is one of the fastest growing in the world, and increasingly diversified. This trend is expanding Canadian business prospects, beginning with petrochemicals but moving far beyond. In particular, regional hubs are deliberately positioning themselves as strategic entry points to Middle Eastern, South Asian and East African markets, a market of approximately 2 billion. Canada is using the WTO (including accession negotiations with Saudi Arabia) and high-level visits to position our commercial interests to advantage. Assisted by a free trade agreement, Canada enjoys a robust trading relationship with Israel. The provisions of this agreement have been extended to the Palestinian Authority (PA) and the Government supports the plans and priorities of the PA in the areas of security, governance and the economy. The Government is studying how products from the Israeli settlements are treated under this agreement. Canadian commercial ties to the region are also enhanced through the Canada-Israel Industrial Research and Development Foundation (CIIRDF), which promotes collaborative R&D; between firms in both countries. We will continue our substantive commercial engagement in the region by seeking to renew our support for the CIIRDF. We will seek out new opportunities in our fast-growing trade with Jordan, and promote the expansion of commerce with Lebanon through support for its accession to the WTO. North African regional markets present interesting opportunities given their rapidly growing populations and location as offshore manufacturing centres for Western Europe. Although developments such as the U.S.-Morocco free trade agreement are heightening competition, North Africa offers Canadian companies future prospects for food and consumer products as well as infrastructure goods and services. Besides negotiating with Algeria and Libya at the WTO, which they seek to join, the Government is offering direct high-level support to Canadian business in the region. The Prime Minister visited Libya in December 2004 to support Canadian companies engaged in civil engineering, aerospace, oil and gas, telecommunications and other promising sectors in that country. The Parliamentary Secretary to the Minister of International Trade led a trade mission to the region in the same month, in conjunction with the Canada-Arab Business Council to pursue opportunities in these sectors and in education and training. We remain open to more formal rules-based trading and investment relationships as opportunities present themselves, including specific and meaningful accords in areas such as investment, regulatory cooperation, travel and visas, taxation and air services. The Government will:
International Commerce and Development The connections between our commercial strategy and international development are many. We offer one of the most generous market access programs in the world, with duty-free access on most exports from least-developed countries and limited technical restrictions. We are working in the WTO to devise new rules to take account of the interests of developing countries. We are promoting corporate social responsibility, both as good global citizenship and as sound business practice. We are extending trade-related technical assistance that complements broader support for good governance and the rule of law, from best practices in customs administrations through to veterinary inspection models. And we are stimulating African and foreign investment through the creation of the Canada Investment Fund for Africa, a joint public-private sector fund designed to provide risk capital for private investments in Africa that generate growth. Its aim is to channel at least $200 million in additional investment into Africa, half from the Government and half from private sector partners. The fund, which will start up later this year, will operate in a commercially viable manner and will demonstrate good corporate social responsibility practices in all its operations.
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