NEWS RELEASES

April 5, 2000 (11:00 a.m. EDT) No. 62

REPORT PROFILES SIGNIFICANT MARKET-OPENING RESULTS AND OUTLINES CANADA'S TRADE PRIORITIES

International Trade Minister Pierre S. Pettigrew today released the government's annual report on Canada's priorities for 2000 to improve access to foreign markets. The report also highlights significant market-opening results achieved by the government in 1999 to benefit Canadian exporters.

"With exports of goods and services now accounting for 43 percent of gross domestic product, it is clear that trade is a vital tool for our prosperity," said Minister Pettigrew. "Trade is the engine of Canada's economy and has helped to create thousands of jobs. Canada will continue to build on our success in the international market place and ensure our economic prosperity."

The report, Opening Doors to the World: Canada's International Market Access Priorities - 2000, outlines the federal government's strategy for achieving improved access for goods, services and investments in key foreign markets. Canada will pursue this objective through multilateral and regional forums such as the World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), bilateral trade agreements with Chile and Israel and the proposed Free Trade Area of the Americas (FTAA). In addition, Canada will seek to finalize a free trade agreement with the countries of the European Free Trade Association (EFTA).

The report notes major trade policy agreements reached in 1999 that will provide new opportunities for Canadian companies in world markets. These include a major agreement with China related to China's accession to the WTO; an agreement with Chile to accelerate the elimination of tariffs on a selection of products; and the Canada-Korea Telecommunications Equipment Agreement that puts Canadian suppliers on an equal footing with global competitors.

"We have made good progress on a number of fronts, however there is still a lot of work to do," said Minister Pettigrew. "This report identifies Canada's priorities in 2000 for improving access to key markets. We will pursue these priorities in full consultation with Canadians."

This year's report also includes a new section entitled Focus on Atlantic Canada, the first in a series that will profile the regional economies of Canada.

The report is available on the following Web site:

http://www.dfait-maeci.gc.ca/tna-nac/access2000

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A backgrounder is attached.

For further information, media representatives may contact:

Sylvie Bussières

Office of the Minister for International Trade

(613) 992-7332

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

Backgrounder

OPENING DOORS TO THE WORLD:

CANADA'S INTERNATIONAL MARKET ACCESS PRIORITIES -2000

With exports of goods and services now accounting for 43 percent of gross domestic product and trade accounting for one in every three jobs, Canada is reaping the benefits of increased international competition and the removal of trade barriers.

To help ensure continued prosperity and secure predictable access to the world for Canadian traders and investors, the government continues its efforts to bring down barriers in key markets.

The report, Opening Doors to the World: Canada's International Market Access Priorities -- 2000, describes significant market-opening results over the past year and outlines the government's priorities for 2000 to further improve access to foreign markets. It sets out the range of initiatives that the government will pursue this year at the multilateral, regional and bilateral levels, as well as details on specific obstacles to be tackled in several markets. The report also includes a section entitled Focus on Atlantic Canada, the first in a series that will profile the trade impact on the regional economies of Canada.

MARKET ACCESS RESULTS IN 1999

World Trade Organization (WTO)

New negotiations were launched in agriculture and services aimed at achieving progressively higher levels of liberalization.

Accession negotiations were concluded with three countries -- Latvia, Estonia and Jordan -- bringing the WTO membership to 136.

Canada and the other members of the WTO Agreement to Eliminate Duties on Specified Pharmaceutical Products implemented the third tranche of tariff cuts associated with this agreement. This phase included 639 additional products, including inputs.

North American Free Trade Agreement (NAFTA)

Total two-way merchandise trade with NAFTA partners reached $570 billion with 86 percent of Canada's merchandise exports destined for NAFTA countries.

NAFTA ministers completed an operational review of the structure, mandates and future priorities of the NAFTA work program. The review succeeded in reinvigorating the implementation of NAFTA and securing a management structure to better oversee co-operative efforts.

United States

Anti-dumping and countervailing duty cases against live cattle launched by the U.S. Department of Commerce concluded with neither resulting in duties on Canadian cattle.

An agreement-in-principle was reached on the main elements required to resolve problems resulting from changes to the U.S. International Trade in Arms Regulations (ITARs).

Michigan amended its Single Business Tax legislation, significantly reducing it's impact on Canadian companies.

Seven long-standing U.S. anti-dumping and countervailing duty orders were revoked.

Free Trade Area of the Americas (FTAA)

At the November 1999 FTAA Ministerial in Toronto, ministers agreed to adopt eight measures to streamline and simplify customs procedures and ten measures to enhance the transparency of government rules and regulations affecting trade and investment.

European Union (EU)

Canadian and EU authorities signed an agreement permitting information exchange and co-operation in the area of competition policy and law.

The EU established tariff rate quotas that will enable European food processors to import at least 5000 tonnes per year of cooked and peeled shrimp through 2002.

The EU agreed to allow the importation of Canadian seed potatoes until March 31, 2002.

Other Major Markets

Canada and China reached agreement on a wide range of market access issues related to China's accession to the WTO. The comprehensive agreement covers agricultural products, industrial products and services sectors.

Korea and Canada signed the Canada-Korea Telecommunications Equipment Agreement that puts Canadian suppliers of telecommunications equipment on an equal footing with their U.S. and European competitors.

Canada and Chile agreed to accelerate the elimination of tariffs on a selection of products. Tariffs on most other industrial and resource-based goods will be phased out by 2003.

New Japanese standards and procedures have improved access conditions for Canadian building products, particularly plywood.

Japan approved the import of all varieties of Canadian tomatoes and agreed to discontinue variety-specific testing for Canadian tomatoes.

Substantial reform and deregulation of Japan's financial services sector resulted in Canada's largest-ever single investment in Japan.

Canada and Mexico signed a satellite services agreement to facilitate the provision of services via commercial satellites licensed by the two countries.

Thailand, in response to representation by Canada, reduced the tariff on canola meal from 10 percent to 5 percent and reduced the tariff on alfalfa from 30 percent to 5 percent.

CANADA'S MARKET ACCESS PRIORITIES FOR 2000

World Trade Organization (WTO)

Canada will pursue Canadian objectives in the ongoing agriculture and services negotiations aimed at further liberalizing international trade in both these sectors. In agriculture, Canada will seek the elimination of export subsidies, the reduction of trade distorting domestic support, and enhanced market access for Canadian exports. In services, Canada will pursue greater market opportunities for Canadian services suppliers, and better access for Canadians to world-class services which will enhance the competitiveness of the Canadian economy. Canada will safeguard our freedom of action in key sectors including health, education and culture.

Canada will work with its trading partners to develop support and momentum for broad- based WTO negotiations. A key factor in achieving this will be to address the concerns of developing countries. Several issues for least developed countries (LDCs) require immediate attention, including improved market access and expanded capacity building (including trade-related technical assistance and a reinvigorated Integrated Framework).

Canada will pursue improvements to the WTO itself by supporting greater transparency, both in ongoing WTO activities such as dispute settlement, and in the conduct of future multilateral trade negotiations. Canada will also work to improve coherence among international trade, financial, economic and social policies to further strengthen markets and promote economic growth and sustainable development.

North American Free Trade Agreement (NAFTA)

Canada will continue to further facilitate trade and investment by ensuring the effective implementation and operation of NAFTA. Canada will also work with its NAFTA partners to clarify NAFTA Parties' understanding of the provisions of the NAFTA investment chapter and increase procedural transparency.

United States of America

Canada will continue to build on its success in the United States, our most important market. We will ensure that the U.S. respects fully its international trade obligations under the WTO and NAFTA as well as safeguard Canadian interests against U.S. actions that impede access for Canadian goods and services.

European Union

Canada will continue to work closely with the EU to implement trade liberalization steps agreed to under the EU-Canada Trade Initiative (ECTI) which gave particular emphasis to the removal of regulatory impediments to trade. In the agriculture sector, Canada will continue to seek the elimination of export subsidies and the reduction of production-distorting domestic support through multilateral negotiations.

Free Trade Area of the Americas (FTAA)

Canada will seek to ensure implementation by all countries of the customs facilitation measures agreed to by ministers in Toronto and pursue a collective process of consultation with civil society in the Americas.

Mexico

Canada will seek improvements in access for exports of seed potatoes, dry beans, frozen french fries and mozzarella cheese. We expect to complete negotiations on fixed and mobile satellite services protocols to the 1999 Canada-Mexico Agreement on Satellite Services and we will continue to monitor closely Mexico's implementation of its commitments under the WTO Agreement on Basic Telecommunications.

Asia-Pacific Economic Cooperation (APEC)

Canada will seek development of a comprehensive initiative to strengthen trade facilitation in APEC consistent with the direction provided by APEC leaders in Auckland. In addition, Canada will continue to strengthen APEC's policy dialogue and capacity building in the area of social policy and structural adjustment.

Other Major Markets

Canada will:

• encourage Canadian and Chilean professional service providers, particularly engineers, to continue work on developing mutually acceptable standards and criteria for licensing and certification of professionals. Canada will also monitor Chile's implementation of the WTO liquor tax panel ruling.

• seek the reduction on duties applied by Japan to vegetable oils (particularly canola), processed foods, forest products, red meats, fish, non-ferrous metals and leather footwear.

• seek the elimination of specific technical and regulatory barriers in Japan to facilitate Canadian exports in priority sectors such as agri-food and building products.

• press Korea to maintain its applied tariffs on an open-ended basis and to lock in tariff reductions

• press India to respect it's Information Technology Agreement (ITA) commitments, particularly for telecommunications.

• ensure Indonesia maintains equitable access for Canadian wheat sales, especially in the face of aggressive U.S. wheat competition and subsidized EU flour entering the Indonesian market.

• ensure full implementation and enforcement of intellectual property rules in accordance with Thailand's WTO obligations.