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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. PETTIGREW - ADDRESS TO THE CANADIAN MANUFACTURERS AND EXPORTERS - EDMONTON, ALBERTA</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 2001/29 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE PIERRE PETTIGREW, MINISTER FOR INTERNATIONAL TRADE, TO THE CANADIAN MANUFACTURERS AND EXPORTERS "PROMOTING CANADA'S TRADE IN THE WESTERN HEMISPHERE" EDMONTON, Alberta August 21, 2001 (10:25 a.m. EDT) Introduction I must say that I was very happy when I found out I would have the opportunity to speak with you, in Edmonton. I admit that when it comes to promoting Canada's trade objectives, the CME [Canadian Manufacturers and Exporters] is not the toughest of crowds I have spoken to! That is because you and your hard-working employees have realized the benefits of open markets and liberalized investment. The companies that form the CME are leaders both at home and abroad, and ambassadors for Canada's commitment to trade. As Canada's Trade Minister, my job is to promote the benefits of trade to our Canadian citizens, and to explore the growth opportunities for our Canadian firms. As you can imagine, these tasks are very challenging. Fortunately, I have a lot of help from the many Canadian government services that exist to help companies such as the ones that form the CME. And I have a lot of help from your innovative practices, dynamic work environment, and excellent service. The example that your companies set helps to promote the benefits of trade to our fellow Canadian citizens. This morning I would like to speak to you about one of the projects that the Government of Canada is working very hard to conclude successfully the Free Trade Area of the Americas (FTAA). I will talk about the tremendous position that Canada finds itself in as a trading nation, and how Alberta companies have been achieving great success in Latin America and the Caribbean. First though, I would like to talk about Canada's trade advantage. Canada's Trade Advantage In Canada, we have always been well positioned to prosper because we are a trading nation. Of the G-7 countries, we are the most export-oriented, with trade generating some 45 percent of our Gross Domestic Product (GDP). That is up from 25 percent ten years ago. It means that Canada exports almost half of all goods we produce and all services we sell. What does that mean for our citizens? Well, today one in every three jobs in Canada is tied to trade. That makes my job very important! In Alberta alone, 500 000 jobs are linked to the business that you conduct abroad. In Alberta, exports account for more than one third of the province's total economic activity. And these numbers are only going to increase with the emergence of a free trade agreement of the Americas. The Free Trade Area of the Americas When completed, the Free Trade Area of the Americas will be the largest free trade zone in the world. With a population of 800 million and a combined GDP of 17 trillion dollars per year, its potential defies imagination. It is no wonder that in Quebec City last April, we had 34 democratic leaders of the western hemisphere saying, "We want in!" The leaders, whether they were from poor island nations, or strong developed countries, whether they were socialist politicians or free marketers, all spoke with one voice on at least one issue: their support for increased, liberalized trade and their belief in its benefits. The FTAA is a great market that Canadians can also tap into since we have a competitive advantage in many services and in the production of many goods. We can compete, and we do. Trade and competitiveness are inextricably connected. When we succeed, we reap great benefits: financial stability, economic strength, a diversified economy and technological progress. But we still have a lot of work to do in Canada to promote the benefits of trade and to promote exports by our companies. For example, just 50 companies account for roughly 33 percent of Canada's exports. Fifty! One of my objectives is to get more of our companies, especially small and medium-sized companies to start exporting. I'm sure I don't have to convince you that trade is beneficial, as your businesses are the front line of our trading relationship around the world. Canadian companies are investing heavily in Latin America and the Caribbean and there are many companies from Alberta in this picture. Let me point out a few examples of small, medium- and large-sized enterprises from Alberta that are at the forefront of the benefits from trade in the Americas. These companies, of course, are working without a regional free trade agreement. Without free trade, there are tariffs, red tape and investment uncertainty, which I am sure you have all experienced. It is important to note that Canada has already taken a lead in reducing these barriers to imports from our neighbours in the hemisphere: Some 94 percent of Central and Latin America's exports to Canada enter Canada duty free. Alberta Success Stories Under NAFTA and the CCFTA Consider what Alberta companies have achieved with NAFTA, which entered into force in 1994, and the often-forgotten Canada-Chile Free Trade Agreement (CCFTA), which was signed between our two nations in 1996: • Enviro FX from Calgary has been providing toxic waste cleanup services in Mexico since 1993. Through its expertise, Enviro FX is providing Mexican companies with the opportunity to be environmentally friendly. This is a solid Canadian company that is prospering outside of Canada. It is helping our environment, creating jobs (both in Mexico and in Canada) and increasing prosperity. • Matrikon Incorporated of Edmonton is a consulting engineering company specializing in Web-based products for the manufacturing and resource processing sectors. It is an active exporter worldwide, with significant experience in Latin America. The Mexican oil and gas industry is a current target market for the company. I am pleased to note that in recognition of the company's remarkable success abroad, in July Matrikon was selected as one of only 25 finalists for the 2001 Canada Export Awards, with winners to be announced at the Canadian Manufacturers and Exporters Annual Meeting in September in Montreal. • Consider an example of a company that has benefited from the Canada-Chile Free Trade Agreement: Phoenix Piston Hydraulics, from Nisku, Alberta. It initially started exporting small hydraulic parts to Chile to satisfy a local demand. In 1994 it initiated a joint venture with a Chilean company to install a small shop for repairing hydraulic pumps. After the CCFTA, the company re-thought its initial joint venture and bought its partner's shares in 1999. The firm constructed a new state-of-the-art facility in 2000. Without a doubt these companies have done well under the NAFTA and CCFTA framework. However, Alberta companies are also doing well in other countries in the western hemisphere, which highlights the importance of the Free Trade Area of the Americas. With free trade Alberta companies will flourish. Alberta Firms Investing in the Western Hemisphere In Argentina, Pelorus Navigation Systems, an Alberta company that designs, manufactures and installs aircraft navigation aids, recently won a large contract to supply their equipment for 10 Argentinean airports. They are continuing to explore opportunities to export their services to Peru and Ecuador. Canadian firms, such as Canadian Hunter Exploration and Agrium Inc., have invested more than $2.2 billion in Argentina. That is up from only $50 million in 1990. Imagine what Alberta companies could achieve with a stable, rules-based framework! Mexico, Chile and Argentina are obviously huge markets for Canada. Alberta companies invest in smaller economies as well. Ecuador comes to mind when I think of Alberta, as it demonstrates how important the Alberta Energy Corporation (AEC) is to the citizens of Ecuador, one of the poorest countries in this hemisphere. Alberta Energy Corporation has recently invested $1.5 billion in Ecuador. Not only is it the biggest foreign investor in the Ecuadorean oil sector, but it is also one of the top five corporate taxpayers in Ecuador. This should be highlighted. AEC is not only creating jobs in Ecuador and in Alberta, but it is also contributing to Ecuador's social infrastructure. This means the opportunity for better health care and education for the citizens of Ecuador. Trade is vital for Canada, but the example from Ecuador demonstrates how trade and investment are vital for the citizens of the hemisphere, and for the sustainable development equation. We must be clear. Increased trade is great for generating wealth but its primary importance is that it allows us to achieve other, more important objectives, such as the widespread respect for human rights, a clean environment, better education and improved health services. In short, a better quality of life for both the people in our country, and for the other citizens of the western hemisphere. This is the main reason our government is promoting our companies abroad. The Canadian Commitment With that goal in mind, I'll tell you what I am working on to continue Canada's commitment to free trade. First, I would like to tell you where the Canadian government is at in the negotiating process for the FTAA. In early July, the negotiating texts were made public. This was the first time in any trade negotiation that the drafts of the agreement were released for public scrutiny. This is a good thing, because by allowing civil society to consult the texts, we eliminate one of the loudest claims of the anti-globalization movement: the accusation that trade deals are shrouded in secrecy, concluded behind closed doors on behalf of transnational corporations. This new transparency is a symbol of a dawning era in trade talks and I firmly believe it holds great promise for the future. The release of the texts was a great victory for Canada. Some criticize the draft agreement, however, saying that it is very complicated, with most of the text surrounded in brackets. I agree! The brackets are annoying. But this is a reflection of what it takes to get 34 nations of the hemisphere to agree on one text. The leaders of the hemisphere set a target date of 2005 for the FTAA, and we are right on schedule for that target. I want to reassure you of Canada's continuing commitment to open markets and liberalized investment. We are seeking common provisions in the FTAA for non-discriminatory treatment of Canadian investment and trade abroad, traditional dispute settlement mechanisms, and clear and effectively enforced rules for international trade. I should also update you on what's happening at the WTO. As you may know, our next Ministerial meeting is set for November 9 to 13 in Qatar. In advance of that, I'll be meeting with a smaller group of trade ministers in two weeks in Mexico City. If we are to be successful in this new round, we'll need to resolve two key issues: the remaining differences among WTO members over the scope and ambition of the agenda; and how we can use trade to drive development, both through the current WTO agreements and through the outcomes from new negotiations. I am fairly confident, but there is much to do and it will require real political will on the part of all WTO members to overcome these significant challenges. In the next round of the WTO talks, one of our key objectives will be to improve upon the system of rules-based trade that we have developed over the past 50 years. Many will say that our softwood lumber dispute with the U.S. shows how little the rules matter. I say just the opposite is true. U.S. behaviour in this case shows the damage that politically motivated trade actions can have. And it shows how important it is that we can turn to a system of international trade rules with which all members have agreed to comply. Lest anyone think that the discipline of internationally agreed-upon trade rules is unimportant, we need only look at the impact on Canada, on our industry and workers, when the U.S. decides they will play outside the rules, even if only for a short period of time. Or when they change the rules to suit some of their own, narrow, privileged interests. When we talk of moving forward on a viable WTO agenda; when we embark on hemispheric trade negotiations, the goal is to set rules that level the playing field so that we can all benefit, not just the most powerful interests, not just those with influence and money to wield to their advantage. The softwood lumber dispute holds a number of lessons. But there's one I want to underscore for those trade critics who suggest that trade rules favour big corporate interests. Those critics who say that trade agreements harm citizens for the benefit of the few corporate elite, should look carefully at who wins and who loses when powerful countries or powerful corporate interests play outside the rules. In the softwood case, it is Canadian workers who are hurt by U.S. protectionism. It is also U.S. consumers, those who cannot afford homes now because of the punitive tariffs the U.S. wants to impose, and entrepreneurs, companies big and small in Canada, who face the negative impact of U.S. unilateralism. Canada favours a trade system where clear, equitable rules guide our trade relationships. We believe that, in this case, the rules we've negotiated under NAFTA and the WTO will show clearly that the U.S.'s allegations will not be sustained, just as they have failed to be upheld three times before. On August 10, the U.S. Department of Commerce imposed a 19.3 percent duty on Canadian softwood lumber. I am announcing today -- indeed, you are the first to hear this -- that the Government of Canada will continue to use all the tools at our disposal, including every legal measure possible under the the WTO, to fight the U.S. softwood trade action. Specifically, the Government of Canada is taking two actions today. First, we are launching a WTO challenge of the preliminary countervailing duty determination and the preliminary critical circumstances determination made by the Department of Commerce on August 10. The Government of Canada believes that the United States's action is unwarranted and punitive. We believe that the U.S. finding is flawed, as it incorrectly treats stumpage as a financial contribution. Furthermore, the U.S. uses cross-border rather than in-country benchmarks to determine whether stumpage is a benefit. These actions are inconsistent with the Subsidies and Countervailing Measures Agreement to which the U.S. is party. Second, in an effort to redress unfairness toward Canadian industry, I am also announcing that the Government of Canada will launch a WTO challenge of the expedited review provisions of U.S. countervailing duty regulations. This action will ensure that all companies requesting an individual expedited review of the duty deposit rate will receive one. This action is one of a number of measures that will involve the United States in the coming weeks and months. As you can see, we fully intend to continue to fight the U.S. trade action in every legal venue available. I intend to show, as do Canadian industry and the provinces, that we will not bend to unsubstantiated allegations based on protectionism. Our industry wants and demands free trade in softwood lumber. The Government of Canada will continue to act in the strongest way possible to ensure that the rights of our industry and the livelihoods that depend on them are not diminished. That is why we fought for the rules-based system of the WTO, of NAFTA and now, of the Free Trade Area of the Americas. My Challenge to You To increase the likelihood of success for the WTO and the FTAA, we must also work to maintain domestic support for these initiatives. Therein lies my challenge to you. I need your help to promote Canada's trade agenda. Polls tell us that most Canadians don't make the connection between our success abroad and our prosperity at home. Even when some 60 percent support the FTAA, many don't see its impact on their local communities. We can communicate better. We must communicate better. I urge you, the leaders here in Edmonton and Alberta, to spread the trade message to your communities and to encourage your chambers of commerce and your trade associations to join the effort as well. You lend credibility to the project -- as I said earlier, you are the front line of Canada's efforts to expand our trading position in the hemisphere -- and your enterprises are the leading employers in this country. Trade is vital to Canada's success. We must make the Canadian maple leaf a symbol of international trade expertise, both at home and abroad. The word "Canada" must become synonymous with innovation, dynamism and excellence. We are leaders in the western hemisphere, and we are seen to be on the cutting edge of international trade and to be competitive in the global market. We are competitive because we are a trading nation. We have solid companies with which to do business. Together we must work to promote Canada abroad. That is my challenge to you. It is a big challenge. It requires your expertise, knowledge and ability to promote our international trade agenda abroad -- along with some help from the International Trade Minister and the Government of Canada! For the benefit of all citizens of the western hemisphere, let's make our flag a banner for trade success in this hemisphere. Our citizens can only win. Thank you. </body> </html>

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