NEWS RELEASES

May 1, 2001 (12:30 p.m. EDT) No. 53

REPORT OUTLINES CANADA'S EXCEPTIONAL PERFORMANCE

IN 2000

International Trade Minister Pierre Pettigrew today highlighted Trade Update 2001: Second Annual Report on Canada's State of Trade at a luncheon co-hosted by the Canadian Manufacturers & Exporters and the Canadian Chamber of Commerce. This report was tabled earlier today in Parliament.

The Report, which outlines Canada's trade and investment performance last year, notes that Canada's exports in 2000 increased by nearly 15 percent and now represent close to 46 percent of gross domestic product. Overall, Canadians traded a record $2.5 billion with the world, on average, each and every day of the year. Canada also attracted a record $93.2 billion in new foreign direct investment, a massive vote of confidence in the country's economic future.

Mr. Pettigrew welcomed the news of yet another record-setting year. "Our remarkable success in global markets is fuelling even greater innovation and financing the country's evolution from a reliance on primary resources to a more knowledge-intensive economy. It is also a key reason why our jobless rate has declined 4.6 percentage points since 1993."

The Report also further documented the evolving nature of Canada's economy and exports. High technology exports rose 30 percent in 2000, nearly twice the rate of overall exports. The exports of knowledge-intensive services, in particular, are the fastest growing segment of the country's services trade and now represent more than 50 percent of services exports.

"No other industrialized country depends more on trade than Canada does. And, none of them does it better than we do," said Perrin Beatty, President and CEO of Canadian Manufacturers & Exporters. "Our exporters make a vital contribution to the well-being of every Canadian family. As this report demonstrates, Canadian exporters are leading the world by knocking down trade barriers and expanding foreign sales of services and high-technology manufactured goods."

"This report underlines just how essential trade in goods and services is to Canada's economic growth, and to the creation of employment across the country," said Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce. "Canadians have reason to be proud of the contribution that their local exporters make to the economic and social well-being of their communities and their country."

The Trade Update 2001 report is available on the Department of Foreign Affairs and International Trade Web site at: http://www.dfait-maeci.gc.ca/eet/state-of-trade-e.asp

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A backgrounder is attached.

For further information, media representatives may contact:

Sébastien Théberge

Office of the Minister for International Trade

(613) 992-7332

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

Carolyn Conner

Canadian Manufacturers & Exporters

(613) 238-8888 ext. 222

Robin Walsh

The Canadian Chamber of Commerce

(613) 238-4000, ex. 231

Backgrounder

• Canada's trade and investment reached record levels in 2000, which marked the ninth consecutive year of economic growth, the longest and most stable expansion since the 1960s.

• In 2000, 319 000 full-time jobs were created. The unemployment rate fell from 7.6% in 1999 to 6.8% in 2000, the lowest level since 1974.

Trade

• Trade performance in 2000 capped a decade of exceptional growth, continuing its trend as the driving force for Canada's economic growth. Real gross domestic product (GDP) grew by 4.7% in 2000, the fastest in the last decade.

• Exports of goods and services increased by nearly 15% to reach $473.9 billion which represents 45.6% of Canada's GDP, up from 25% in 1991. This percentage is by far the highest among all G7 economies.

• Imports of goods and services increased by 10.8%, to reach $426 billion, equivalent to 41% of GDP.

• In 2000, Canada's trade balance with the world improved substantially, with a current account surplus of $18.9 billion -- four times the size of the previous record established in 1996. The merchandise trade surplus increased to $54.5 billion from $33.8 billion in 1999.

• In 2000, Canada's two-way trade in goods and services averaged $2.5 billion of business every day of the year, of which $1.9 billion per day was with the United States.

Investment

• Canada attracted a record $93.2 billion in foreign direct investment in 2000, an increase of 150% over 1999. Canadians also doubled direct investment abroad to a record flow of $61.7 billion in 2000, largely through acquisitions of foreign companies in the computer industry in the United States and in Europe.

• Canada's net external indebtedness fell rapidly from 44.7% of GDP in 1993 to 23.5% in 2000, reflecting in part the substantial reduction in government debt, much of which was held by foreigners.

Trade by sector

• Re-engineering of Canada's industrial structure has led to further significant shifts in Canada's exports away from resources and toward high-tech products.

• Exports are dominated by manufactured goods, as resource exports as a share of total merchandise exports declined to 34% in 2000, from 60% in 1978.

• By contrast, exports of high-technology products have risen to about 30% of our merchandise exports in 2000, up from 14% in 1992. Exports of knowledge- intensive services have grown rapidly to represent more than 50% of total exports of services.

Trade by destinations

• The U.S. remains a strong trade and investment partner with Canada. In 2000, two-way trade in goods and services grew by 11.7%, jumping from $626.7 billion in 1999 to $700 billion in 2000.

• The U.S. accounts for 82.9% of Canada's exports of goods and services and 72.1% of Canada's imports.

• Exports to most major Latin American destinations recovered in 2000, reflecting an improvement in general economic conditions in the region.

• Exports to Canada's current and new free trade partners in the region staged impressive gains, with Mexico up 26.5%, Costa Rica up 25.2% and Chile up 23.6%.

• Exports to Japan increased by 7.4% in 2000, a reversal of the steady decline observed between 1995 and 1999. Japan accounted for 2.4% of Canada's goods and services exports in 2000.

• The strong economic rebound in Southeast Asia in 2000 was reflected in a general recovery in Canada's exports to the region. Exports to China increased sharply by about 40% to a record high in 2000, while exports to Hong Kong and Taiwan posted smaller gains of 17% and 4%, respectively.

• Sales to the European Union picked up momentum in 2000 as growth improved in major Western European economies such as Germany and the U.K.