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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>CANADA AND RUSSIA FURTHER STRENGTHEN ECONOMIC TIES FOLLOWING IEC MEETING</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> June 29, 2000 (11:50 a.m. EDT) No. 168 CANADA AND RUSSIA FURTHER STRENGTHEN ECONOMIC TIES FOLLOWING IEC MEETING International Trade Minister Pierre Pettigrew today confirmed Canada's commitment to strengthening economic ties with Russia following the successful conclusion of the fourth session of the Canada-Russia Intergovernmental Economic Commission (IEC) in Moscow. Minister Pettigrew co-chaired the meeting with Russian Deputy Prime Minister Viktor Khristenko. "Canada and Russia have much in common and a great deal we can build on," said Minister Pettigrew. "While many commercial challenges lie ahead, I believe they can be overcome through further open dialogue and business forums that the IEC provides." During the IEC, the co-chairs discussed the need to improve economic co-operation between Canada and Russia in several areas, including agriculture and agri-food, aerospace, construction, mining and high technology. They also heard reports from the IEC Sub-Commission on Agriculture and Agri-Food, and from IEC Working Groups on the Arctic and North, Fuel and Energy, Housing and Construction, and Mining. "Further economic reforms in Russia will help promote current and future Canadian investments in that country and advance Russia's accession to the World Trade Organization," said Mr. Pettigrew. Minister Pettigrew also witnessed, on behalf of the Government of Canada, the signing of two Canada-Russia memorandums of understanding (MOU). The first MOU will improve co-operation in the fields of mineral exploration and development, and mining and investment, and improve rules and regulations related to Canadian trade and investment in the Russian mining industry. The second MOU will encourage co-operation in the field of geoscience, including studies and recommendations on joint activities in this area. Canada and Russia's next IEC will take place in Canada in 2001, with IEC progress to be reviewed by the end of this year. - 30 - The Joint Statement on the Results of the Fourth Session of the Canada-Russia Intergovernmental Economic Commission 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 JOINT STATEMENT ON THE RESULTS OF THE FOURTH SESSION OF THE CANADA-RUSSIA INTERGOVERNMENTAL ECONOMIC COMMISSION The Fourth Session of the Canada-Russia Intergovernmental Economic Commission (IEC) took place in Moscow on June 29, 2000. The Canadian delegation was headed by the Honourable Pierre S. Pettigrew, Canadian Minister for International Trade and IEC Co-Chair for Canada, and the Russian delegation by Mr. Viktor B. Khristenko, Deputy Prime Minister of the Russian Federation and IEC Co-Chair for Russia. The delegations included ministers, heads of government agencies, other high-ranking officials, and leading representatives of the two countries' business communities. The Co-Chairs noted the progress achieved in many areas of bilateral cooperation since the creation of the IEC in 1995, by joint decision of the Russian and Canadian Prime Ministers. 1. The Co-Chairs agreed on the need to take full advantage of opportunities for improved bilateral economic cooperation, including those relating to the diversification of current patterns of trade. They discussed the impact on Canada-Russia partnerships of domestic economic growth, fiscal and monetary policy, the knowledge-based economy, trends in global trade and investment and changing international financial architecture. They agreed that current levels of bilateral trade were well below potential and called for the removal of obstacles to the further development of trade, economic and investment links between the two countries. The Co-Chairs agreed on the importance of the World Trade Organization (WTO) in promoting international economic growth and prosperity, and expressed hope that work towards eventual accession of Russia to this organization would achieve further progress. They count on continuing, constructive bilateral discussions within the framework of Russia's accession process to the WTO. The two sides noted their strong interest in the continuation of technical cooperation provided by the Canadian International Development Agency (CIDA) through projects undertaken to support Russia's efforts to accede to the WTO. The Canadian side took note of Russia's concerns with regard to the imposition of anti-dumping duties by Canada against Russian hot and cold-rolled steel. The Russian side took note that these duties were imposed through a quasi-judicial process that is in full conformity with Canada's international trade obligations. Both sides agreed to continue discussions on this matter. The Co-Chairs agreed to renew consultations to eliminate the significant discrepancies between bilateral trade data generated by the national statistical bodies of Russia and Canada. 2. The Co-Chairs recognized the importance of foreign direct investment for the continued development of the Russian economy, and reaffirmed their intention to seek ways to boost Canadian investment into the Russian economy. In this connection the Co-Chairs agreed that officials should continue their ongoing discussions on development of an enhanced bilateral agreement for the promotion and protection of foreign investment (FIPA). The two sides agreed to intensify consultations on steps to improve corporate governance, accounting standards, contract performance, bankruptcy proceedings and further financial sector restructuring in Russia. The Canadian side expressed its satisfaction with the decision of the Government of the Russian Federation reached during the last meeting of the Foreign Investment Advisory Council (Moscow, March 13, 2000), to nominate a senior representative of the Government of the Russian Federation to help resolve investor-related issues as they arise. In addition, the Co-Chairs agreed to take a direct interest in finding mutually acceptable solutions to investor problems, particularly in the mining and oil and gas sectors, with a view to ensuring successful implementation of bilateral projects. To this end, the two Deputy Co-Chairs were instructed to review existing problems and submit a report to the Co-Chairs by December 31, 2000. The two sides agreed to encourage involvement of Russian interregional economic cooperation associations in the work to promote investment activities. 3. The Co-Chairs encouraged officials of Canada's Export Development Corporation (EDC), together with officials from the Ministry of Finance of the Russian Federation and the Central Bank of the Russian Federation, to seek effective ways to provide competitive trade and investment financing and insurance. They noted that two draft documents -- the Intergovernmental Memorandum of Understanding to Support Export of Capital Goods and Services to Russia proposed by the Ministry of Finance of the Russian Federation, and the General Transaction Support Incentive Agreement which the EDC submitted for consideration by the Russian side in August 1999 -- constitute the constructive basis on which the sides may negotiate a joint intergovernmental document to stimulate bilateral trade and investment. The Co-Chairs also pledged joint efforts to ensure the existing $20 million EDC Canada Account revolving insurance facility for agri-food and housing and building material exports to Russia was of maximum benefit in support of new transactions. The Russian side expressed hope that EDC would consider expansion of medium- and long-term project financing to Russia, while understanding the requirement for adequate security arrangements. The Russian side counts on the understanding and constructive involvement of Canada in any Russian government's future discussions with the Paris Club. The Canadian side counts on Russia meeting its financial obligations to Canada. The sides agreed to intensify bilateral cooperation in the financial and banking spheres in order to give a further impetus to the development of two-way trade and investment and to the widening of business contacts. 4. The sides reached a consensus regarding the need to ensure further progress in a number of priority areas, including housing and construction, mining, energy, aerospace, transport, telecommunications, information technology, agriculture and agri-food, and integrated cooperation in the development of the Arctic and the North. The Co-Chairs heard reports from the IEC Sub-Commission on Agriculture and Agri-Food, and from IEC Working Groups on the Arctic and North, Energy, Housing and Construction, and Mining. They also acknowledged recent bilateral contacts and initiatives on the environment and on industry development in advanced technologies, including aerospace and aviation, biotechnology, information technology and telecommunications. 5. The Co-Chairs acknowledged the inaugural meeting of the new Working Group on the Arctic and North, which was co-chaired by the Honourable Lloyd Axworthy, Foreign Affairs Minister of Canada, and by V. Goman, the Chairman of the Russian State Committee on the North. They agreed that sustainable economic development of northern regions and the promotion of commercially viable projects represent common priorities. They also agreed to focus the activities of the Working Group on the Arctic and the North on implementing projects which improve the quality of life for citizens in northern communities. The Canadian side also pledged to consider proposals made by the Russian side with respect to lending support to small entrepreneurs and medium-sized enterprises operating in the Arctic and the North, more efficient use of natural resources, introduction of advanced technologies for local agri-food processing, joint construction of low-capacity power supply systems, improvement of water supply facilities in remote aboriginal communities, and construction of single-family housing. The sides noted the potential of projects envisaging the use of transpolar air and sea routes ("Arctic Bridge"). They agreed to continue consultations on commercial usage of these routes. 6. The Co-Chairs acknowledged the excellent work done by the IEC Working Group on Housing Construction, and noted the direct involvement in its activities of the Honourable Alfonso Gagliano, Minister of Public Works and Government Services for Canada, and Mr. A. Shamuzafarov, Chairman of the Russian State Committee on Construction and Housing. The Co-Chairs reaffirmed their commitment to promote further development of housing construction in Russia, and pledged continued support to the "Ten Thousand Canadian Houses" project. The sides agreed to continue work to establish an appropriate framework of conditions that would facilitate the disbursement of export credit insurance in support of this project in Russia. They reaffirmed their resolve to continue work on standardization of construction technologies, and to disseminate Canadian experience in the area of mortgage lending in Russia, in particular through the organization of workshops in the Russian regions. The Co-Chairs supported the efforts of the sides to simplify product certification procedures and ensure their compliance with existing international standards (ISO), and to conclude certification and standardization agreements that allow national laboratories to conduct testing in accordance with international standards. The Canadian side took note of Russia's request for intensifying bilateral cooperation towards full "transport category" certification of the Russian KA-32A11VS helicopter. 7. The Co-Chairs welcomed the agenda set by the Energy Working Group at its meeting in Calgary in June 2000. The oil and gas sector remains a natural field for increased Canadian and Russian cooperation, including the supply of exploration and production equipment and services, downstream project management services, environmental equipment and services, joint and wholly owned oil production investment projects, participation in projects implemented in Russia and third countries, and the training of Russian oil workers in Canada. The sides reaffirmed their interest in continuation and further development of bilateral cooperation on utilization by Canadian CANDU reactors of Russian MOX-fuel made from plutonium declared excess to defence requirements. 8. The Co-Chairs noted the increased activity of the IEC Working Group on Mining in the course of preparation for the Fourth Session of the IEC. They stated that the latest changes in the Russian legislative and regulatory framework for mining had led to an improvement in the investment climate in this sector. The sides agreed that further bilateral cooperation to address issues raised in the 1999 Canadian policy paper entitled "Concerns About Investment in Russia: Perceptions of Canadian Mining Companies" would serve to attract and sustain further direct investment. The Co-Chairs agreed that attracting foreign direct investment into the mining industry is of paramount importance to both sides. They pledged joint efforts to put in place the requisite conditions for Canada and Russia to become strategic partners in this sector. The Co-Chairs welcomed plans for a mission to Russia in the autumn of 2000 of the Canadian Association of Mining Equipment and Services for Export (CAMESE). 9. In the area of the agro-industrial complex, both sides agreed to continue cooperation in the following directions: food processing industry; agricultural machinery; breeding of elite livestock; plant breeding; and education. The Russian side noted that a promising form of intensifying Russian-Canadian cooperation is the creation on Russia's territory of joint production involving Canadian investments. 10. The Co-Chairs noted with appreciation the two recent visits to Russia by Canada's Secretary of State (Science, Research and Development), the Honourable Gilbert Normand. They agreed to explore ways of promoting cooperation in selected high technology fields of common interest. The Co-Chairs agreed that there is potential for expanded business cooperation in the areas of e-commerce, telecommunications, multimedia, and space technologies. 11. The Co-Chairs praised the growing contribution of Russian and Canadian regions and local administrations to expansion of bilateral economic links. The Co-Chairs resolved to promote new forms of concrete cooperation among regions and communities. The Co-Chairs acknowledged the singular contribution of Russian and Canadian entrepreneurs to the development of bilateral relations and IEC activities, and expressed satisfaction that direct contacts between them were intensifying, and often resulting in the signing of individual agreements, contracts, memoranda of understanding, and letters of intent. The sides thanked the Canada-Russia Business Forum, the Canada-Eurasia Energy and Industry Alliance and the Canadian Business Association in Russia for their ongoing commitment. The Russian Co-Chair resolved to create a similar Russian organization with a view to support business ventures originating in the two countries. 12. The Co-Chairs welcomed the signing of the following documents that will facilitate business relations between the sides: • Memorandum of Understanding on Cooperation in the Fields of Mineral Exploration, Development, Mining and Investment Between the Department of Natural Resources of Canada and the Ministry of Natural Resources of the Russian Federation; • Memorandum of Understanding Between the Department of Natural Resources of Canada and the Ministry of Natural Resources of the Russian Federation on Cooperation in the Geosciences; and • Joint Declaration on Cooperation in the Area of Certification and Verification of Serviceability of Products Used for Construction Purposes in the Russian Federation. The Co-Chairs also welcomed the significant progress achieved in the preparation of the following intergovernmental agreements: • Air Service Agreement; • Agreement on the Basic Principles of Cooperation Between the Constituent Entities of the Russian Federation and the Provinces and Territories of Canada; and • Agreement on Cooperation and Mutual Assistance in Customs Matters. The Co-Chairs agreed to intensify preparations with a view to signature of these agreements in the near future. With a view to achieving IEC objectives and ensuring completion of individual work programs of Working Groups, the Co-Chairs instructed their respective deputies to submit status reports by December 31, 2000. The Co-Chairs agreed that the Fifth Session of the IEC should take place in Canada in autumn of 2001. <table width="100%"> <tr valign="TOP"><td align="CENTER">For Canada Minister for International Trade and Canadian Co-Chair of the Intergovernmental Economic Commission</td> <td></td> <td align="CENTER">For the Russian Federation Deputy Chairman of the Government of the Russian Federation and Co-Chair of the Intergovernmental Economic Commission</td></tr></table> <table width="100%"> <tr valign="TOP"><td align="CENTER">Pierre S. Pettigrew</td> <td></td> <td align="CENTER">Viktor B. Khristenko </td></tr></table> Moscow, June 29, 2000 </body> </html>

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