SPEECHES
April 19, 2005
OTTAWA, Ontario
2005/17
CHECK AGAINST DELIVERY
NOTES FOR AN ADDRESS BY
THE HONOURABLE JIM PETERSON,
MINISTER OF INTERNATIONAL TRADE,
ON THE OCCASION OF TRADE POLICY DAY
I will say a few words today about Canada’s State of Trade, which the department
released this morning, and about Canada’s agenda for global commerce, part of
Canada’s International Policy Statement, which was also released this morning.
Last year, our trade surplus was $56.1 billion, up from $47.3 billion in 2003. Combined
with our seventh straight fiscal surplus, 255,000 new jobs last year, and a reduction in
the debt from almost 70 percent of GDP 10 years ago to just under 40 percent this
year, Canada’s is the best-performing economy in the entire G7.
Both our exports and imports reached record levels last year. All seven of our major
commodity export groupings posted increases, as volumes were up and the terms of
trade were favourable. All this in spite of our high dollar, which was up 7.9 percent in
2004, more than a third higher than its recent low of 61.99 U.S. cents in January 2002.
The numbers indicate that each of you has met the tougher competition from the high
dollar. The traded goods sector responded with a strong surge in 2004. This continued
in January and February of this year, when a 9-percent increase in exports over last
year was recorded. This response is exactly what is needed and must be sustained.
Our services imports reached record levels in 2004, and our services exports were up
substantially too—4 percent for the year. This involved all our major trading partners,
especially the European Union, which accounted for 40 percent of the gains. While
Canada is one of the world’s leading services providers, our commercial services
exports—which include everything from management services to financial services and
even legal services—are not up to G7 standards. Services form the largest component
of our economy and increasingly drive knowledge-intensive economic activity.
We will continue through the WTO [World Trade Organization], and through our
bilateral and regional trade initiatives, to seek greater access to foreign markets for
Canadian service providers.
As the State of Trade report suggests, Canada is poised for continuing economic
success, but we will have to actively earn our way. The world in which we trade and
invest is changing—changes we must embrace and take advantage of to shape a more
prosperous future. Our national advantage is not a given: it must be enhanced through
the right business environment at home, and through the right strategies to deal with
risks and capitalize on opportunities abroad.
This morning, along with my colleagues Ministers Pettigrew, Graham and Carroll, I
released Canada’s International Policy Statement. It sets the direction to meet the
challenges of a rapidly changing world in diplomacy, defence, development and
international commerce.
In terms of trade, our resources are limited compared to many of our competitors. This
means tough choices. We must work smarter than the competition to ensure that our
trade and investment activities have the maximum impact. We must focus on the
priorities in our commercial relationships.
Our number one priority remains the United States, but much has changed since 9/11.
Security is now an ever-present priority. While the border must be open to trade, it must
be closed to terrorists. Within three months of the terrorist attacks, we entered into the
Smart Border Accord with its 30-point action plan, and we have continuously updated
its provisions.
This March, the Prime Minister, President Bush and President Fox signed the Security
and Prosperity Partnership of North America. Among other things, it aims at enhancing
our collective competitiveness and productivity through increased regulatory
compatibility, including mutual recognition of professional qualifications, convergence of
product standards and improved cooperation in agri-food sectors.
While over 96 percent of our trade with the United States is dispute-free, we will
continue to seek more effective means of dispute resolution. Issues such as BSE
[bovine spongiform encephalopathy] and the swine and softwood lumber disputes hurt
both partners.
With respect to softwood lumber, we will continue with our three-track approach of
negotiation, litigation and pursuing retaliation. Paul Tellier and Gordon Ritchie have
joined our team as Special Advisers. I am pleased to have their experience and wisdom
on our side. I am also pleased that discussions toward a long-term resolution, based on
the framework we proposed, are ongoing.
The most egregious of our outstanding issues with the United States is the so-called
Byrd Amendment. It has rightly been declared illegal by the WTO, but continues to be in
force, subjecting our producers to double jeopardy and encouraging U.S. producers to
launch trade actions. Canada, in coordination with the European Union and others, has
unfortunately had to take retaliatory measures. Retaliation is not our preferred option,
but it is a necessary action. International trade rules must be respected.
It is important that Canada have a strong presence in the United States. We have
opened seven new consulates, upgraded two and appointed 20 new consuls. We are
now serving Canadians in the United States from 23 different bases. We’ve also
opened a Secretariat in Washington to coordinate the efforts of Canada’s provinces,
territories and parliamentarians.
On March 1, I led a delegation of more than 30 of my parliamentary colleagues,
provincial counterparts and industry representatives on an Advocacy Day in
Washington, D.C. I am grateful to all parties who accompanied me to Washington, and
I am committed to future visits.
While the United States is an important market, Canada can’t afford to miss the
opportunities in emerging economic powers. As this year’s State of Trade report shows,
these markets have incredible potential for growth, and Canadians are
under-represented in them. Although Canada accounts for almost 4 percent of world
trade, we represent only 1.4 percent of Brazil’s trade, 1.3 percent of China’s and less
than 1 percent of India’s. Clearly we have some work to do.
Over the past four and a half months, I have led trade missions to Brazil, China and
India, seeing first-hand the amazing opportunities for Canadian business. Brazil is the
leading economy in Latin America, and we share a long history of commercial
engagement. India is an economic powerhouse whose economy is growing 8 percent a
year. It is turning out about two million university graduates a year, 380,000 of whom
are engineers. China has driven down the cost of manufactured goods and become the
workshop of the world. Countries such as China and India present enormous
challenges and opportunities for Canadian business. Canadian companies have to link
into these global value chains. They ignore having a China and India strategy at their
own peril. Canadian jobs and prosperity depend on Canadian businesses being globally
competitive. I ask for your help in carrying the message to all Canadian businesses, big
and small, that our economic future depends on our ability to compete globally.
I know you are the ones that are taking the risk and doing the work, but we can help
you capitalize on opportunities in emerging markets by providing the right services, at
the right time, in the right places. We are expanding Export Development Canada
representation in priority countries, while retooling the Trade Commissioner Service with
an increased capacity to provide better market intelligence, risk analysis and local
knowledge.
To help facilitate investment in India and China, we are negotiating foreign investment
promotion and protection agreements.
In India, we just signed a Joint Declaration on Science and Technology promoting
collaboration, exchanges, and the development and commercialization of new
technologies.
Two weeks ago we successfully negotiated an expanded air transport agreement with
China to strengthen commercial ties and improve tourism and educational links. The
new agreement provides for a threefold increase in permitted passenger and cargo
flights to be operated by more airlines between more cities.
While a coherent approach to emerging markets is essential, I recognize that one size
does not fit all. We have to pick the right tool for the right job. That is why in Japan,
which is already our largest export market in Asia, our largest source of investment from
Asia and a financial hub in the region, we are working within a new Economic
Framework to improve economic relations in areas such as regulatory cooperation and
investment promotion as a stepping-stone to additional bilateral liberalization.
We are pursuing a free trade agreement with South Korea, and we have reactivated
discussions with:
• the European Free Trade Association;
• the CA4 [Central America Four];
• CARICOM [Caribbean Community]; and
• Mercosur, within the context of the Free Trade Area of the Americas.
I disagree with the Sutherland Report conclusion that regional and bilateral trade
agreements detract from the Doha Development Agenda. By promoting liberalization,
they assist us in achieving more ambitious outcomes at the WTO.
Make no mistake about it: the Doha Round is critical to our future because it is our only
hope for eliminating export subsidies, substantially reducing trade-distorting domestic
support and significantly increasing market access. We need a level playing field for
Canadian agricultural producers. We need to open up the world of trade to developing
countries and allow them to compete on a non-subsidized basis. Moving forward with
trade deals will involve hard choices, but we cannot afford to stand still.
Our efforts to create the right strategies to deal with risks and capitalize on opportunities
abroad will never succeed if we do not have the right business environment at home.
We engage the outside world to improve our international competitiveness and
productivity, but we must also look within our own borders. We must continually strive to
make Canada even more attractive for investment, innovation and value-added
production. Canada must be a nation that is home to more and more global
corporations. We want more Canadian companies that are global champions.
This is a big agenda—and it reflects a new way of thinking and of acting. Delivering on
this vision will require a sustained dialogue with all of you. We need your help to deliver
on this vision. We are establishing a formal consultation process to get your feedback
and make the new agenda for international commerce a living document that is
responsive to your priorities. I am looking forward to hearing what you think.
We live in a world of daunting challenges, but it is important to remember that we did
not transform a vast wilderness into a leading G7 nation by being passive. We did it by
harnessing the ingenuity of Canadians who came here from around the globe. We did it
by attracting strategic investments into Canada and creating a competitive environment
for business. We did it by meeting the demands of consumers worldwide; by providing
high-quality goods and services; by building a framework of forward-looking trade
agreements; and by working to create an economic environment in which Canadian
business can prosper and flourish. In today’s fiercely competitive new commercial
environment, the onus is on Canada to step up its game once more.
I am ready; I know you are too.
Thank you.
Backgrounder
State of Trade 2005 shows that our exports of goods and services rebounded sharply in
2004, reversing a three year decline. Canada’s current account balance widened by
$10 billion to a record $33.8 billion surplus in 2004 that, combined with the fiscal
surplus, is the best among G7 countries. For more information, please visit the following
Web site: http://www.dfait-maeci.gc.ca/eet/trade/state-of-trade-en.asp.
Canada’s International Market Access Priorities 2005 (CIMAP) underlines the
pre-eminence of the Canada-United States trading relationship, with $1.9 billion in
goods and services exchanged on a daily basis. Among other key objectives for 2005,
Canada is working with emerging markets, such as Brazil, China and India, to advance
Canadian competitiveness through expansion of Canadian exports and enhanced
access to competitively priced inputs. CIMAP also reiterates our ongoing efforts to
improve market access for Canadian exporters through negotiations in the World Trade
Organization. For more information, please visit the following Web site:
http://www.dfait-maeci.gc.ca/tna-nac.cimap-en.asp.
Trade Policy Research 2004, which contains articles written in the authors’ personal
capacity, focuses on the World Trade Organization and multilateral trade issues. It
includes the perspectives of developing countries on the development aspects of the
Doha Development Agenda. It also addresses topical issues bearing on Canada’s
participation in the trading system. These include a description of Canada’s approach to
trade policy formulation and stakeholder consultations, and a major review of the
potential impact of the General Agreement on Trade in Services on Canada’s ability to
manage its health, education and social services. For more information, please visit the
following Web site: http://www.dfait-maeci.gc.ca/eet/research/trade_reseach-en.asp.
The Survey of Decision Makers: Trade and Social Values, which was done among 400
decision makers and leaders, is a study concerning trade and social values with regard
to promoting Canada's economic interests abroad and the government's role in doing
so. Results reveal that the decision makers support the government's efforts to promote
and facilitate potential business between Canada and foreign countries. For more
information, please visit the following Web site:
http://www.dfait-maeci.gc.ca/tna-nac/Consult6-en.asp.
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