NEWS RELEASES

October 8, 1999 (12:30 p.m. EDT) No. 222

CANADA AND THE UNITED STATES RESOLVE DIFFERENCES OVER INTERNATIONAL TRAFFIC IN ARMS REGULATIONS

Following a meeting today between Prime Minister Jean Chrétien and President Bill Clinton, Foreign Affairs Minister Lloyd Axworthy announced that an agreement-in-principle has been reached on the main elements required to resolve problems resulting from recent changes in the U.S. International Traffic in Arms Regulations (ITARs).

"I am pleased that this agreement has been reached," said Minister Axworthy. "It will serve to maintain the close bilateral defence relationship we have had with the United States for many years. This success will enhance our co-operation in addressing broader security concerns."

In view of the complexity of the issue involved and the intensive negotiations required, there was an additional time beyond the initial 120-day period that was required to complete the task. This agreement will fulfill the commitment made by Mr. Axworthy and Mrs. Albright when they met on April 27, 1999, to ensure that our joint objectives will be reached in a mutually satisfactory way and ensure that the ITARs will be implemented in such a way as to mitigate the effects on the North American defence and aerospace industry.

The resolution was reached after several weeks of intensive bilateral consultations and negotiations between Canada and United States government officials, including several discussions between Minister Axworthy and U.S. Secretary of State, Madeleine Albright.

This agreement aims to preserve the traditional bilateral licence-free access to defence and aerospace technology between the two countries and to facilitate the continued exchange of technical data between our respective industries. Canada and the United States will proceed immediately to resolve remaining details with a view to implement the necessary regulatory changes.

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The Joint Statement on Defence Export Controls and North American Defence Industrial Base is attached.

For further information, media representatives may contact:

Debora Brown

Office of the Minister of Foreign Affairs

(613) 995-1851

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

JOINT STATEMENT BY

CANADA'S FOREIGN AFFAIRS MINISTER LLOYD AXWORTHY

AND U.S.SECRETARY OF STATE MADELEINE K. ALBRIGHT

ON

DEFENCE EXPORT CONTROLS AND

NORTH AMERICAN DEFENCE INDUSTRIAL BASE

Since April, our two governments have engaged in extensive consultations to address our mutual security interest in a strong North American perimeter for defence export controls. We share a common commitment to protect against illegal retransfers of controlled U.S. and Canadian defence technology from North America. We also share a very strong commitment to maintaining the unique, integrated North American defence industrial base which has served both our defence and security interests so well since WWII. We have reached substantial agreement in principle to implement steps that will allow our two countries to advance both objectives.

We have worked to ensure that the defence trade control regulations, practices and enforcement of both nations continue to provide harmonized control of defence technologies both nations require to be controlled.

• Canada has proposed a regulatory approach that would strengthen its own defence export controls, similar to the U.S. licensing controls under its International Traffic in Arms Regulations (ITAR). Under this regulatory approach, Canada would control all items on the U.S. Munitions List.

• The U.S. will revise its own defence trade control regulations to permit the export to Canada of most defence technology without a license. In fact, should U.S. defence trade control concerns be fully met by Canada, the U.S. is prepared to reinstate many of the provisions affected by its April 12 ITAR amendment and, in some cases, enhance the Canadian exemption to permit additional exports without a licence, beyond those impacted by its April 12 ITAR amendment.

In this manner, our two governments believe they will successfully continue to protect the integrity of the North American defence perimeter while strengthening the North American defence industrial base.

Agreement in principle bas been reached on most issues under negotiation. Expert-level work is continuing in order to resolve the key details that remain, in an expeditious manner. Both our governments are committed to reaching full agreement, consistent with our respective national laws and policies.