CANADIAN CHAMBER OF COMMERCE
2001/11 CHECK AGAINST DELIVERY
NOTES FOR AN ADDRESS BY
THE HONOURABLE PIERRE PETTIGREW,
MINISTER FOR INTERNATIONAL TRADE,
AT THE "TRADE POLICY DAY"
ORGANIZED BY THE
CANADIAN CHAMBER OF COMMERCE
OTTAWA, Ontario
March 12, 2001
(11:40 a.m. EST)
I want to begin by thanking the Chamber of Commerce for organizing today's events. This
morning, some of my Department's most senior and knowledgeable officials outlined for you the
key trade priorities for Canada. I would like to take this opportunity to say a few words about
international trade with the Americas and the upcoming Summit in Quebec City, as well as make
some brief comments on our multilateral agenda.
Since the December 1999 meeting of WTO [World Trade Organization] ministers in Seattle, I
have visited communities across Canada to talk about my mission as Minister, discussing
emerging international trade prospects with businesses, encouraging them to export and generally
explaining the benefits to Canadians.
We know, for example, that our trade success has led to jobs and prosperity, and has contributed
to our social well-being. It is also the path to continued growth in the competitive,
knowledge-driven global economy of the 21st century. This is what I have been saying to people
as I have visited cities from coast to coast.
Mission Is Trade Development
So, what is the mission I have mentioned? Well, I have defined my mission in a simple way, as
one of "trade development." Obviously, businesspeople such as yourselves understand and share
this mission, and are already out developing trade every day. And most are enjoying considerable
success.
The way we, as a government, help you in business to develop trade is through trade policy and
trade promotion efforts. You already know about the many aspects of our trade promotion efforts,
such as our 530 trade commissioners around the world, our market studies and Web site, our
financing facilities and our promotional fairs. Today, I am here to update you on our trade policy
work, but I promise to keep my comments brief so that we can have plenty of time to interact
afterward.
Importance of Trade to Canada
First, though, I want to quickly look at some key statistics, to remind us of how important trade is
to Canada in the macro sense. The most impressive fact, to me, is that exports now account for 45
percent of our GDP -- up from just 25 percent in 1990. This means that, as a percentage of GDP,
we export about four times as much as the United States and three times as much as Japan. In
fact, we are by far the most export-oriented country in the G-8.
But, of course, Canada's trade is about more than just our exports. To get a proper understanding
of the role of trade to our economy, we have to look at the entire story. So what do the numbers
tell us? They tell us that our two-way trade with the world averaged almost $2.5 billion worth of
goods and services -- every day -- last year.
We also know that the nature of our economy is changing. We used to be almost exclusively an
exporter of raw materials, natural resources. Now, more than two thirds of Canada's merchandise
exports are in non-resource categories, such as machinery, equipment and other high-value-added
products. As we become a knowledge-based economy, we are increasingly exporting services and
skills.
Canada, for example, excels in providing key services for modern business -- such as
telecommunications, financial services and engineering services. In fact, Canadian firms are now
global leaders in telecommunications, aerospace, computer software, environmental technology
and many other sectors of the new economy.
International trade has been the engine powering Canada's economy for much of the past decade.
Roughly 80 percent of the two million new jobs created since 1993 have been related to our trade
growth. And one in three jobs is now tied to our trade activities. In other words, it is largely your
success, your ingenuity and risk-taking that have helped to create the prolonged period of
prosperity and growth that all Canadians now enjoy.
Trade Policy Work Is Key to Overall Trade Development
As I mentioned moments ago, trade policy is a key aspect of my mission. Indeed, with our
economic success so tied to trade, Canada's continued prosperity depends on an open world
economy.
While the benefits of our negotiating efforts are often longer term and less apparent, they are
critical to Canada's success in global markets. When our companies go abroad, they must be able
to count on rules that are fair, markets that are open and access that is secure.
Employees of companies in communities across Canada, especially small and medium-sized
firms, depend on trade for their livelihood and quality of life. Canadian consumers and producers
end up with a broader choice of cheaper and better goods and services. In other words, freer trade
is not just a mantra -- our continued prosperity depends on it.
That is why Canada is such a strong supporter of the WTO and why we are working with our
trading partners around the world to launch expanded trade negotiations that meet the needs of
the modern global economy.
Over the coming months, we will have the chance to speak again of the specific opportunities and
challenges in preparing for the WTO meeting in Qatar in November 2001. Until then, there is
much to be done. Later this week, for example, I will unveil Canada's initial negotiating position
with respect to the WTO negotiations on the General Agreement on Trade in Services [GATS].
Importance of the GATS and Services Trade to the Canadian Economy
The GATS is critical to Canada's economy. As I mentioned earlier, the service sectors --
particularly knowledge-based industries such as information technology and telecommunications,
banking and insurance, professional consulting services and e-commerce-related services -- are
the fastest-growing segment of Canada's economy. In 2000, fully 90 percent of Canada's 320 000
new jobs were in service sectors.
We have world-class companies specializing in engineering, financial services, information
technology, telecommunications and tourism, and many of these firms are already exporting.
About 95 percent of them are small or medium-sized businesses, and their vital area of growth is
overseas markets.
Canada's policy objective in the GATS negotiations will be to develop the international, rules-based system for these service sectors. Some may argue that the GATS already has a regime of
basic rules dealing with equal treatment, transparency and other principles.
However, the services sector is relatively new and constantly changing. Canada must take a lead
role to ensure that barriers to trade are removed, that all parties act fairly and openly, and that
Canadian consumers and producers have access to the best prices and the best opportunities
possible.
Many of you are in a better position than I to speak publicly about the advantages that can be
seized from a rules-based level playing field in these sectors. I welcome your ongoing input as we
proceed with these negotiations.
At the same time, we are also aware of the opportunities for building trade momentum in regional
and bilateral forums. This is why we have signed free trade agreements with our NAFTA partners
and with Israel and Chile.
This is also why we are negotiating free trade agreements with Costa Rica and other Central
American countries, and exploring similar free trade initiatives with the Caribbean Community
countries and Singapore. It is why we are exploring, in consultation with the private sector, ways
to revitalize our trade and economic relationship with Japan, our second-largest trading partner.
FTAA Goal -- Rules-Based Trade for Our Hemisphere
That is also why another policy objective is to improve our access to the markets of Latin
America. The proposed Free Trade Area of the Americas [FTAA] represents a historic
opportunity to unite this hemisphere as never before. It is a vote of confidence in the region's
future, reflecting a belief that the countries of the region offer market opportunities and make
good economic partners for Canada.
The Summit of the Americas in Quebec City in April -- where the FTAA will be a key theme of
discussions under what we call the "prosperity basket" -- will provide an occasion for Canada to
strengthen its engagement in the hemisphere, to link economic growth to social development
throughout the Americas and to increase trade opportunities for Canadians in all sectors.
Taken together, the 34 FTAA countries form a region with a population of nearly 800 million and
a GDP of roughly US$12 trillion. With a market that size, the potential for Canadian exporters is
enormous. And I am confident that once the barriers come down and predictable access is
assured, Canadian firms will be very successful in these new markets.
But with our history -- our unique social diversity and political openness -- I believe that
Canadians understand, more than any other nation, that true prosperity and the quality of life we
wish for ourselves and future generations is not about trade alone. Indeed, perhaps just as
important is the exchange of ideas and values that enriches two cultures when they trade. I
believe that Canadians understand and appreciate the fact that international trade allows us to
project Canadian values and democratic principles around the globe.
Doing Business in the Americas
I mentioned earlier the $2.5 billion-a-day figure that represents our trade with the world last year.
You know that Canada and the United States are each other's largest trading partner. We sold
more to the United States in 2000 than any other country did. For example, we sold 57 percent
more to the United States than Japan did. In fact, our trade with the United States amounted to
$2 billion per day, which is double what it was before the Free Trade Agreement was extended to
Mexico in 1994.
Just as impressive is the fact that, since the NAFTA came into force, our bilateral trade with both
the United States and Mexico has expanded more than 10 percent each year. Mexico is now our
fourth-largest trading partner. And, as it turns out, our success in the U.S. and Mexican markets
has proven to be our stepping stone to the world. Canadians are now competitive enough and
confident enough to go anywhere.
One of the first places Canadian exporters have looked toward with the increased confidence
inspired by success in the U.S. and Mexican markets is the other countries of the Americas.
Canada now exports nearly $6 billion in goods and commercial services annually to countries of
the Americas, not including the United States and Mexico. Canadian exports to South America
grew 13 percent in 2000 to over $3 billion. Export growth of close to 20 percent was recorded to
Chile, Colombia, Peru and Venezuela. Our exports to the largest economy in South America,
Brazil, remained strong at over $1 billion.
Canada also continues to be a major investor in South America, particularly in the
telecommunications and natural resources sectors. Agreements such as the Canada-Chile Free
Trade Agreement, the Canada-Andean Community Trade and Investment Co-operation
Agreement and the Canada-Mercosur Trade and Investment Co-operation Arrangement have
improved the commercial opportunities for Canadian companies throughout South America.
Export Awards -- Nomination Period Ends March 31, 2001
Before I wrap up, I want to mention that the nomination period for Canada Export Awards 2001
closes at the end of this month. Canadian firms in all sectors of the economy that have been
exporting for at least three years are invited to register for this prestigious program. Past
recipients have indicated that the Awards have helped them in their export campaigns.
The award recipients will be honoured at a ceremony held in conjunction with the annual
convention of the Canadian Manufacturers & Exporters, which this year will take place on
September 24 in Montreal. I encourage you to look into this program.
Conclusion
To conclude, let me reiterate that progressive and forward-looking trade policies are an integral
part of maintaining and enhancing our current prosperity. We in this room understand the benefit
of clear and enforceable international trade rules.
I will continue to work hard to ensure that when you seek out international markets, you will find
doors that are open, policies that are fair, and playing fields that are level. And I will continue to
resist those voices that would limit our horizons by limiting freer trade.
Keeping Canada competitive in an ever-changing international marketplace is a responsibility for
all of us. When we succeed, we reap great benefits: financial stability, economic strength, a
diversified economy and technological progress. We enrich our partners, too.
I believe that together we can create a future that is attractive both for business and for people --
a future where society and the economy thrive hand-in-hand -- a future where the world is our
market, and Canada continues to be the place to live, to work and to invest.
And I believe we must be more forceful and compelling in demonstrating the case for expanding
trade and for improving the rules of the trading system. We must reiterate in clear terms to
Canadians that international economic institutions -- even with their flaws -- are crucial to the
stability of the global community.
As host of the Summit of the Americas in Quebec City next month, Canada will have the
opportunity to convey a strong commitment to negotiation of a hemispheric trade agreement.
You, the business community, have a voice and an instrumental role during and after the Summit.
Those of you who are attending the Americas Business Forum in Buenos Aires in April will have
the chance to talk about the potential. You can explain first-hand the benefits of trade for your
firms, for your suppliers, and for your communities here at home.
You can relate how companies can and do make important contributions to the prosperity and
development of communities where they operate abroad. You have helped create an environment
where all Canadians can be more prosperous. You can also help to dispel the misconceptions and
unfounded concerns that cloud some Canadians' confidence in future growth. Until these
concerns are addressed, distrust of corporations and resistance to trade liberalization will fester
and flare.
I look forward to continuing to working with you in the months ahead to strengthen confidence
and conviction in that future.
Thank you.