I want to say how pleased I was to hear about these two organizations -- the Diplomatic Press Attachés Network and the Ottawa Diplomatic Association. As someone with a lot of experience in the international field, I know how important it is to have forums like this to build personal relationships and to discuss issues of international significance. Canada is proud of its friendly relations with the rest of the world community, and I am especially pleased to see so many of our friends here today.

I recognize that most of you spend a large part of your lives away from home in the service of your country. I consider that we are fellow "nomads" since my role as Minister for International Trade also takes me away from Canada quite frequently -- indeed, frequently enough to share your appreciation of the fact that travelling and experiencing other cultures as we do is a learning experience. It stays with you and gives you a much deeper and broader appreciation of our shared humanity and of the international relationships that bring us closer together.

One very important aspect of those relationships, of course, is international trade.

In recent years -- and particularly in the past few months -- we have heard a great deal about the energetic debate on trade and about globalization generally -- in the media, and even on the street!

I think that this is very healthy, and I welcome it.

I welcome it because I think that, eventually, the more we talk about it, and the more we discuss it, the more we go over all the pros and the cons, the more chance we will have of improving our understanding of the forces at work, and of agreeing on how to shape them.

There are those, of course, who believe that the suspension of the World Trade Organization [WTO] talks in Seattle meant a very serious reduction -- if not the end -- of our attempts to complete the unfinished work of the General Agreement on Tariffs and Trade [GATT], and to continue to harness the rules-based trading system to achieve world prosperity and security.

That is not the case at all. Just as we survived the Y2K scare, we survived Seattle!

Lessons are being learned and applied. The work continues.

And in fact, that work has become even more important because we are now into a new era of trade discussions. It is an era that I would call "trade-plus" -- trade plus labour, trade plus the environment, trade plus democracy, trade plus reform.

All of these issues must be part of the discussion, because they are vitally important to our citizens. The debate that has been building over the last 10 years or so is not just about trade and investment: it's about what societies want to become, and what they want to remain, in an era of accelerating change. Technology, trade, investment -- these are just the agents of change. Ironically, those who fear the dark side of change are "throwing the baby out with the bathwater": they are forgetting that these same forces can -- and do -- bring jobs, development, poverty reduction, rising environmental and labour standards, and a host of positive changes that no one wants to undo. So, as the debate rages, let us not forget two fundamentals: first, the trade agenda, at heart, is about economic prosperity; and second, it is an integral part of a broader socio-economic agenda -- within our countries, and across borders -- that embraces the range of economic, social and political realities that we face together, ranging from environmental management to cultural diversity to human security.

This is just the latest chapter in a book begun over half a century ago.

Markets don't exist in a vacuum! Our current international trading system is rooted largely in the hopes of the World War II generation. They wanted to build a more stable, more predictable, and ultimately, a more peaceful world.

That was the sentiment that inspired the GATT -- of which Canada was a founding member -- and it is the same sentiment that drives the WTO.

As governments, we have to remind our citizens of the historic benefits that more open markets have given the world over the past half century. They have contributed enormously to the prosperity and growth of both developed and developing countries. In Canada, the benefits of trade have flowed to every part of society.

At this juncture, we must present a plan for the future that explains how we can build stronger economies and create jobs through trade while still leaving room for national communities to be what they want to be.

This has a special meaning for us in Canada, because, as you know, Canada is now, proportionately, one of the largest trading nations in the world.

Seven years ago, about 30 percent of our gross domestic product [GDP] was trade-related, and today that figure is over 43 percent!

Compare that to the United States, for example, which exports only 11 percent of their GDP. Proportionately, it's four times less than Canada.

Compare that to Japan, which exports only 15 percent of their GDP. Proportionately, it's a little more than a third of what we do.

Nearly one third of all jobs in Canada depend on trade!

And it is not all commodities either. Commodities represent only 32 percent of our exports. So, we are becoming a knowledge economy, exporting our services, our expertise, and a lot of other things as well.

I know that a myth still exists in some parts of the world that the success of the Canadian economy is dependent on the export of commodities. It is certainly true that, over the years, our natural resources have been a tremendous source of wealth for our people. In fact, they still account for about 32 percent of our exports, and thus represent an important and valued source of export revenue to the Canadian economy.

But, it is also important to recognize that this is about half what it was in 1980. And if commodities now account for less than one third of Canada's exports, that means more than two thirds are non-resource based. So, it is very clear that the Canadian economy has changed!

Most of our exports are now high value-added goods and services -- Canadian companies are world leaders in telecommunications, aerospace, software, environmental technologies, and other areas of the new economy. Anyone who has visited the high-technology companies around this city, for example, will know what I am talking about.

Don't misunderstand me -- we are very proud of our image as a country with vast forests; abundant energy; mineral wealth; agricultural products; and a natural beauty that draws tourists from all over the world. But we also want the world to know that the greatest resource in Canada today is its people. That is why we have a high-tech, knowledge-based economy -- one that wants to share its technological leadership and goods and services with countries and business partners everywhere -- one that has built this modern economy firmly on its strengths.

All these positive statistics about Canada's export activities serve to underline the fact that, if protectionism arises around the world again as it has done regularly in the history of humanity, we'll be in much more trouble than some of the larger economies.

What this means is that a country like Canada needs a rules-based international trading system and, as a government, we are completely committed to helping to build a better, more secure and more predictable system.

We benefit enormously from more open and more secure markets, and we will always promote the freer flow of goods, services and people across all borders around the world.

Lessons from recent travel

Since Canada and, I believe, the world, has a lot to gain from the strengthening of the rules-based international trading system, I have devoted a considerable amount of time over the past three months to discussing the challenges that came to the fore in Seattle. I am by no means of the view that the setback in Seattle was due to what transpired in the streets. Rather, I believe it was entirely within the walls of the Convention Centre.

Even so, I think we must all recognize that many people have serious, and often quite legitimate, concerns about the relationship of international trade agreements to other areas of importance such as the environment, culture, and labour and human rights. But, even though I think we cannot dismiss these concerns, I do feel that the WTO cannot be relied upon to solve all of these problems. Nor do I think trade has created these problems. Indeed, the bulk of the evidence suggests that trade advances social development.

I have met recently with representatives of the International Monetary Fund [IMF], the World Bank, the International Labour Organization [ILO], and the UN Conference on Trade and Development [UNCTAD], as well as with my trade counterparts from the United States and many European countries, including France, Britain and Switzerland. I have also spoken by phone with many other of my international counterparts. In these discussions, I have dealt with several of the key challenges facing us as trade ministers -- challenges that belong in that broader international agenda I mentioned earlier.

I have been stressing the importance of ensuring coherence between the activities and policies of these and other international institutions. I have also highlighted the need to bridge both the north/south divide and United States-European Union differences, which are major in the area of agriculture. Both divides go to the very heart of what the WTO should be taking on at this time. To help address north/south issues, I have proposed a two-pronged approach focussed on capacity-building and confidence-building measures. I believe that these messages have struck a resonant chord.

My objective is to pursue agreement on the management of the WTO post-Seattle agenda in both the short and longer terms. We need steady and visible -- but not precipitous -- progress. We must build a broader consensus on the way ahead, engage other international organizations in a coherent approach, and develop agreement on a package for developing countries.

Our approach

These discussions have helped me begin to flesh out a general approach that I think will meet with broad support. Our plan is to work in several different areas at once to achieve our goals. In the shorter term, I think we should focus on what I call confidence-building measures that will set the scene for constructive dialogue and consensus-building. These measures include:

• getting on with the agriculture and services negotiations, as agreed last week in Geneva;

• making progress on other elements of the WTO's ongoing work, such as built-in reviews and accession negotiations; to this I would add agreeing on practical means of handling continuing discussions on specific implementation issues, for both developed and developing members;

• developing ideas on how we might reform the WTO to ensure that it becomes more efficient and transparent; and

• developing bilateral and regional trading relationships.

Another set of activities has both a short- and a long-term component. For our purposes, I'll call it capacity-building, and it includes:

• creating greater coherence and better co-ordination among international bodies in addressing the broad challenges of sustainable development; and

• meeting the needs of least-developed countries.

As I am speaking to a knowledgeable audience, I hope you will permit me to spend just a minute or two on each of these areas to tell you more about what I mean.

Agriculture and services

WTO members agreed last week to launch the built-in negotiations aimed at further liberalizing trade in agriculture and services at the end of this month.

We have a vested interest in helping to make sure that the talks on agriculture go well. Canadian farmers are suffering because of subsidies paid to the agricultural sectors of many of our trading partners. Strong progress on agriculture would be a powerful incentive to begin a broader-based round of negotiations a year or so down the road; broader negotiations, in turn, would help the agriculture talks.

Progress on services would also be an important sign that global trading rules are evolving to meet the demands of a new world economy increasingly based on rapid technological change.

Canada has made it clear that the General Agreement on Trade in Services (GATS) must remain a "bottom-up" agreement -- an agreement that allows countries the flexibility to liberalize services they feel will benefit their societies, while keeping the right to preserve their vital social interests.

Getting on with other WTO work

You are all aware, I am sure, that the regular work of the WTO is already of staggering breadth and complexity. There are built-in reviews in such areas as technical barriers to trade; there are constant trade disputes; there are examinations of members' trade policies; there are accession negotiations ranging from China to Vanuatu. The Organization is alive and relatively well: we must use it to good effect. In particular, there is a clear need for a two-track approach to implementation issues -- and despite my experience at Seattle, I will not use the "i-word" only to mean developing countries' concerns, for they are broader. The tracks are, on the one hand, political oversight of how members are dealing with the Uruguay Round commitments; and on the other, maintaining steady progress in Committee examinations and discussions of members' implementation of commitments.

Reforming the WTO

The World Trade Organization is indispensable. It cannot be allowed to stagnate and become irrelevant. But, just as the GATT evolved into the WTO, the WTO itself must continue to change -- both internally and externally -- if it is to remain an effective international trade mechanism.

WTO membership has grown enormously in the past 15 or so years, from about 90 members to 135. China and other members are poised to join. The burden of dispute settlement cases continues to grow. This places strains on its organization and its decision-making processes.

Internally, the WTO needs something to bridge the gap between the inclusiveness of the General Council, with all the members, and the efficiency of smaller but necessarily exclusive groupings. This could come in the form of a guiding council or committee that could include members from both developed and developing countries. This new structure would make the WTO look more like the world, and would make the world feel more at home in the WTO. It could also serve as a vital co-ordinating body and sounding board that would identify obstacles and solutions at an earlier stage of discussion. Fleshing out these and other issues will take much reflection by ministers, and their advisors.

Externally, the WTO must become more open and transparent, particularly in the dissemination of information to its members' citizens. Our citizens have high democratic expectations, and the Internet and modern communications make it easier than ever before to get information out to people around the world.

To passive communication we must also add active outreach, dialogue and education by member governments, as well as by the WTO and other relevant international organizations. I know there are practical and philosophical objections to greater external transparency, but I think it is a real challenge for all of us to overcome them: it does no one any good to fuel fears of the "black box of trade policy."

Developing bilateral and regional trading relationships

The WTO is essential, but we also have to continue to work on regional and bilateral trade agreements that give countries the flexibility to build stronger links with specific trading partners or with whole regions.

We believe that as long as these agreements complement the WTO, they should be pursued.

Canada, for example, is a member of the North American Free Trade Agreement [NAFTA] along with the United States and Mexico. But we also have free trade agreements with Israel and Chile, and are negotiating a hemispheric free trade pact, the Free Trade Area of the Americas [FTAA]. In addition, we continue work on an agreement with the European Free Trade Association [EFTA] and have begun consultations on negotiating a free trade agreement with Costa Rica. And we are, of course, members of the Asia-Pacific Economic Cooperation [APEC] forum.

Let me turn briefly to what I termed capacity-building activities:

Creating greater coherence and better co-ordination among international bodies

Too often, countries are caught in a bureaucratic tug-of-war between the widely divergent, often contradictory policies of key international organizations. We have heard of far too many instances in which the IMF, for example, tells a country to do one thing while the WTO tells it the opposite.

That is why Canada has argued for both coherence and co-ordination among our many international organizations. We have to ensure that the WTO works in co-ordination with the IMF, UNCTAD, the ILO, the UN Environment Program [UNEP], and others.

It is vitally important that the international system work as a true system, not as a collection of disparate, unco-ordinated bureaucratic empires. It is equally important that policies be co-ordinated, both domestically and internationally: vast problems demand equally broad-ranging responses.

There are hopeful signs on this front. The recent agreement on a biosafety protocol is a very positive sign that all the nations of the world can work together and make progress on trade while protecting our global environment. Let's hope that this is a harbinger of things to come.

Meeting the needs of Least-Developed Countries

For many years, Canada has played an important role in easing or eliminating tariffs for the world's least-developed countries.

We believe that they must be given adequate time to retool and to prepare for the demands of greater competition within a global system. This requires a mix of measures, going beyond market access to trade-related technical assistance. Coherent efforts to help the poorest countries realize growth through trade are promoted by exercises such as the Integrated Framework, which Michel Camdessus of the IMF and others are committed to re-energizing.

As chairman of the Working Group on Implementation at the Seattle Ministerial, I am pleased to report that we made important progress on further moves to ease the burden on least-developed countries in a variety of ways. I am hopeful that, along with Quad members, we will make further headway in this area this year. In mentioning the Quad, I do not restrict my ambitions: I think that helping the poorest is the duty of all our countries.

Conclusion

We saw in the lead-up to Seattle that many members considered that a persuasive case had not yet been made for a broader negotiation. You may have noticed from my comments that Canada is still in favour of such a negotiation, but we acknowledge that the case has to be built: our public and our trade partners both demand it. The thrust of our approach, and of a great deal of domestic activity besides, is to restore confidence and to build that case. I want to conclude by telling you that despite some of the gloom of the past few months, I am very optimistic that we will have made a great deal of progress on these issues by the end of the year -- we Canadians, and we the members of the international trading community.

I also want to say that I am very confident that Canada -- the country that I am so proud to represent -- is well-positioned to succeed in the age of globalization. We have a knowledge-based economy. We have experience with diversity. We build partnerships. And, we have a plan, of which open dialogue with our international partners is a key part.

In fact, Canada itself is proof that opening yourself up to the world and recognizing and celebrating the diversity that comes with it pays many dividends, both economic and social.

I strongly believe that our openness is one of the main reasons that we have become one of the strongest societies and one of the strongest economies in the world, despite our relatively small population.

I can also tell you that, as a government, we intend to keep promoting our agenda for a better, fairer and more open trading system that benefits people around the world.

That is the message we took to Seattle, and that is the message we will continue to deliver every chance we get!

I am pleased to have had the chance to be here today, and I want to say that I am very supportive of my department's work to build the dialogue with the diplomatic community within Canada too.

Thank you.

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