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<html> <head> <meta name="generator" content="Corel WordPerfect 10"> <meta http-equiv="content-Type" content="text/html; charset=utf-8"> <style> p { margin-top: 0px; margin-bottom: 1px } body { font-family: "Arial", sans-serif; font-size: 12pt; font-weight: normal; font-style: normal } </style> </head> <body> 2004/37 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE JIM PETERSON, MINISTER OF INTERNATIONAL TRADE, AT THE CANADA-BRAZIL BUSINESS PARTNERSHIP PLENARY SESSION SAO PAULO, Brazil November 22, 2004 What a pleasure it is to be here in Sao Paulo, leading a trade and investment mission of some 50 Canadian business people. While this is not my first visit to Brazil, it is my first trade mission here. Paul Martin, Canada’s Prime Minister, is also in Brazil this week—an indication of the importance Canada attaches to Brazil. We want to build on what we already enjoy with you: US$2.1 billion in two-way trade. I would like to thank Ambassador Suzanne Laporte and Consul General Ron Davidson and all our officials who had a hand in pulling this trade mission together, including Ken Sunquist and John Klassen. I’d also like to draw your attention to Ted Menzies and Johanne Deschamps, who are joining me in this mission. Finally, I would like to salute Eduardo Klurfan and James Mohr-Bell of the Brazil-Canada Chamber of Commerce for their fine work in helping to develop strong relationships between our two countries. Thanks also to Henrique Meirelles, the President of the Central Bank of Brazil, who has generously accepted to spend some time with us here this morning. We have great admiration for the courageous steps the Central Bank has taken in restoring investor confidence in Brazil, fighting inflation, stabilizing the currency and creating a strong economic environment for doing business. We are also delighted that the Sao Paulo Secretary of Science and Technology, Economic Development and Tourism, Joao Carlos de Souza Meirelles, could be here with us this morning. There are countless reasons why Canadians are so interested in Brazil. This is a dynamic country that is growing in wealth and influence. With an increasingly powerful and diversified economy, Brazil has become one of the great markets of the world. Brazil is among the top global economic priorities for Canada. Many of the areas of greatest growth here—infrastructure, telecommunications, energy and mining—are areas in which Canada excels. And there is an extraordinary match between what Brazil is looking for and what Canada has to offer. Both Brazil and Canada offer competitive and attractive locations for foreign direct investment.   Let me speak for a moment about the global environment. Like Brazil, Canada has long recognized the importance of international commerce to its growth and vitality as a nation. Trade and investment are the linchpins of a modern, progressive economy. They help create jobs domestically, spur innovation, encourage businesses to compete and expand, and increase a country’s overall prosperity. One of Canada’s most important trading arrangements is the North American Free Trade Agreement [NAFTA], arguably the world’s largest trading bloc for over a decade. And there is overwhelming evidence that trade liberalization is working well under NAFTA. Our trade with the United States and Mexico has doubled. NAFTA has contributed to the creation of almost three million new jobs—that’s close to one fifth of our overall employment. It has helped us become a perennial leader in G7 economic performance. Canada believes that a Free Trade Area of the Americas [FTAA] would provide equal benefits at the hemispheric level. While it now appears that it will not be possible to realize the benefits of a potential FTAA as quickly as initially envisioned, the vision behind this initiative remains valid. I am here today to say that Canada continues to strongly support a comprehensive, high-quality FTAA that would give way to increased trade and investment throughout the entire western hemisphere. I commend Brazil in its role as co-chair of the FTAA negotiations and pledge you our full support. Tonight I leave for Brasilia to meet with my Brazilian counterparts to discuss ways in which, together, we can work to liberalize trade and investment on both a regional and global basis. Canada wants to work with Brazil in a new era of cooperation. This might mean putting some things behind us and it might mean turning the page. It will mean addressing tough issues head-on while building on the strengths we have together. At the global level, we have been working together within the World Trade Organization [WTO] to ensure an ambitious outcome to the Doha Round of negotiations. Canada and Brazil kept the big picture in mind and contributed to the July Framework reached on August 1. This historic outcome is an important step toward reaching the full potential of the world trading system. I want to pay special tribute to your Foreign Minister, Celso Amorim. He is owed a great debt of thanks by all of us for the key role he and Brazil played. Without his leadership through the G20 and elsewhere, we would not have achieved this result. The July Framework clearly points toward progress on trade-distorting agriculture subsidies, the elimination of all export subsidies, and improvement to market access for agricultural products. The end result will help not only Brazilian and Canadian producers, but other countries—especially developing countries—who are unable to match the deep pockets of the U.S. and Europe. Let’s not forget about the non-agricultural sectors. We must work together as WTO members to also ensure progress in areas of relevance to our business communities. Real improvements to market access for industrial goods and services are essential—reducing the cost of doing business by improving customs procedures in a multilateral agreement on trade facilitation and strengthening the rules of dispute settlement. The fact is that the world that Brazil and Canada trade and invest in today is changing rapidly. There are integrated economies and value chains everywhere. We’ve each had to adjust to the new realities of international commerce. Doing so involves testing our competitiveness, finding new roles for investment and joint ventures, placing a premium on knowledge sectors and forcing our infrastructure to catch up. And we realize as well that growth faces constraints in areas such as energy, natural resources and the environment. We must seek sustainability. The new world of international commerce demands new engagement at the highest levels of our government and business communities to update our agendas. Things have become far more intricate than the straightforward buying and selling of goods and services. This world is marked by the critical nature of inbound and outbound foreign direct investment, the role of knowledge added and embedded in those investments, and the ability to direct different components of business to different corners of the world. Today, businesses can find capital in one region and build the company plant in another. They can hire labour from one country, while developing R&D and distribution capacity in another. Companies seek out global value chains in which goods and services are most competitive, and locate or purchase accordingly. Borders are no longer sacred in the quest for competitiveness. In short, the world is becoming highly integrated at a pace that very few could have imagined. That is why, working together, Brazil and Canada have so much to gain. Canadian companies are attracted to Brazil as a place to invest and, as I stated earlier, our presence has continued to increase. Conversely, foreign direct investment also plays a major role in Canada’s economy, and Canada is recognized as one of the best places in the world to invest. The 2004 KPMG international cost-competitiveness study placed Canada first among the 11 major nations surveyed. KPMG gave Canada a 5.5-percent cost advantage over the United States. This means that if you are specifically targeting the U.S., the world’s biggest market, the best place in which to locate is in Canada. The KPMG study also concluded that Canada has the best corporate tax rates for R&D operations and one of the lowest corporate tax rates for manufacturing operations. As well, the Economist Intelligence Unit ranks Canada as the best place in the world to do business for the next five years. We want Brazilian investors to be better aware of the advantages Canada offers:   •         Our growth of 3.1 percent since 1999 is the best in the G7.   •         We have had seven consecutive balanced budgets, and we are the only nation in the G7 with both a fiscal and current account surplus.   •         Rating agencies have upgraded Canada to triple-A.   •         The Organization for Economic Cooperation and Development and the International Monetary Fund forecast that Canada will be among the growth leaders for 2004-2005.   •         We are a leading-edge, technology-driven economy. Federal funding for research and innovation has gone from US$320 million in 1999 to US$1.7 billion last year.   •         The Scientist magazine just named five Canadian universities in the top 10 in a survey of the best places to work in academia.   •         Canada is a world leader in information and communications technologies due to companies like Nortel, Mitel and Research in Motion. We are a world leader in security technologies, such as communications security, identification products and face recognition technologies.   •         We are the world’s most wired country. All our schools and public libraries are connected to the Internet. We have one of the world’s leading fuel cell technologies, thanks to Ballard Power Systems. We are a world leader in geomatics. We have leading-edge pharmaceutical and biotechnology industries, and are highly advanced in animal genome research, bio-security, food safety and waste treatment. In science and technology, Canada has many areas where joint collaboration can bear significant results to our mutual benefit. A year ago, in November, Canada and Brazil organized the first roundtable on cooperation in science and technology to launch the foundation for cooperation in areas such as innovation in industry, aquaculture, biotechnology, space technology and sustainable energy. Following on the establishment of the Canada-Brazil Innovation, Science and Technology (CBIST) Network earlier this year, a joint plan of action is currently being drafted by both Canada and Brazil to set out concrete objectives and activities. Canada is pleased that Brazil considers Canada a priority partner in international science and technology collaboration, and we look forward to advancing our mutual interests in these fields. The Canadian Education Centre Network, through its office in Sao Paulo, also provides information to encourage Brazilian students to consider studies at Canadian institutions. This exchange and transfer of knowledge also serves to deepen our relationships. Where do Canada and Brazil currently stand in terms of trade and investment? Bilateral merchandise trade for 2003 was recorded at US$2.1 billion per year. Our merchandise exports to Brazil increased by 31 percent last year to US$638 million. Several hundred Canadian companies are currently involved with Brazil, and more than a hundred have established offices here. Most of you, no doubt, are familiar with the presence of major players like Alcan, Apotex, Bank of Montreal, Brascan, CAE, Celestica, EnCana, Nexen, Golder Associates, Molson, Nortel, Quebecor World and Scotiabank, to name just a few. Our export credit agency, Export Development Canada [EDC], considers Brazil a priority market and provided C$1 billion (or about US$714 million) in loans, insurance and guarantees during 2003 to help business between our two countries. Last March EDC opened its second Brazilian office in Rio de Janeiro. The recent agreement of Brazilian authorities to allow Air Canada to increase service from six to seven days a week between Toronto and Sao Paulo will reinforce closer connections between our countries. Canada also continues to be an important investor in Brazil, with an estimated total of US$5.9 billion invested as of 2003. Canadian foreign direct investment in Brazil has a long history, going back to the establishment, at the turn of the last century, of Brazilian Traction, Light and Power Company Limited (popularly known as “Light” and later, in 1969, as Brascan) and the major role it played in power generation and distribution until 1978. Last year, Brazilian exports to Canada grew by 17.3 percent to US$1.4 billion, giving Brazil a healthy surplus. Your second most important export to Canada is new passenger motor vehicles. All of the very popular four-cylinder Volkswagen Golfs on Canadian highways were manufactured in Brazil. Brazilian investment in Canada currently stands at US$596 million, principally in steel (Gerdau) and cement (Votorantim). With the major Brazilian brewer AmBev just recently acquiring control of Labatt Breweries of Canada, Brazil’s presence in our country is on the increase. While our bilateral commercial relationship is growing, and Brazil is our most important partner in South America, I know we can do much more in a number of key sectors, such as information technology, communications, agriculture, biotechnology, pulp and paper, energy, mining and the environment. In information technology, Canada is a world leader in the development and implementation of new and advanced technologies in the hardware, software and services market. Some of the areas of significant interest to Brazilian clients include management software, e-learning, security software, connectivity and e-government. The communications market in Brazil is highly developed and very competitive, but there are new opportunities for state-of-the-art value-added systems and services. Canada is a major innovator in this sector in a wide range of applications, including wireless communications and technologies. In the environment sector, where the Brazilian demand for services and technology is growing rapidly, Canada offers leading technologies in municipal and industrial water systems, air pollution control, and solid and hazardous waste management. In agriculture, Canada can help meet Brazil’s needs with crop and production control systems, irrigation technology, monitoring and quality control systems, food safety technologies and processes, livestock production and aquaculture. In pulp and paper, we have new manufacturing processes and technologies, and engineering services in technology transfer, viability studies, and environmental impact assessment. I invite you to explore Canada as a collaborator in these and other sectors. Members of our mission are here to help you explore your mutual interests. I believe the continued growth of business between Canada and Brazil is strongly in our common interest. There is tremendous potential to expand trade and investment between our two economies. There are also, as I have mentioned, outstanding opportunities to strengthen cooperation and linkages in education and in research and development. I believe the high-level political dialogue and personal contact facilitated by trade and investment missions like this one play an important part in building a pattern of success. Visits by the Prime Minister, the Minister of International Trade, other ministers and provincial leaders enable us to build relationships and leave no doubt as to the long-term nature of Canada’s commitment. Canada is also encouraging Canadian firms to take a long-term view of the Brazilian market by examining investment or partnering as an effective method of penetrating and sustaining a presence in the market. In closing, let me say that in the past there have been irritants between us. But let me assure you that there is much more to our relationship than what we might have read in the headlines or even the growing commercial ties I have mentioned today. Canadians look forward with great optimism to increasing the bonds of not only business, but also common purpose and friendship between our two great nations. We are here to build on a relationship of respect and friendship, working with you to create vast new opportunities for Brazil and Canada and a better world for all. There is so much we can achieve together. The best is yet to come. Thank you. </body> </html>

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Last Updated: 2006-10-30	Top of Page	Important Notices