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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>CANADA DEEPENS TIES WITH MERCOSUR, CHAIRS FTAA MEETING IN ARGENTINA</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> June 17, 1998 No. 160 CANADA DEEPENS TIES WITH MERCOSUR, CHAIRS FTAA MEETING IN ARGENTINA International Trade Minister Sergio Marchi announced today that Canada is demonstrating its continued leadership on trade liberalization in the Americas this week by enhancing its ties with Mercosur and by chairing the first meeting of the trade negotiating committee of the Free Trade Area of the Americas (FTAA). On June 16, representatives from Canada and Mercosur, South America's largest trade grouping, signed a Trade and Investment Co-operation Arrangement (TICA) in Buenos Aires, Argentina. Kathryn McCallion, Assistant Deputy Minister and Chief Trade Commissioner with the Department of Foreign Affairs and International Trade, signed the co-operation arrangement with Mercosur on behalf of Canada. "This agreement with Mercosur will not only help increase trade and investment between Canada and some key economies of the Americas, but will also give momentum to our shared goal of a free trade area that spans the hemisphere," said Minister Marchi. This morning, also in Buenos Aires, Canada chaired the first meeting of the FTAA's Trade Negotiations Committee, which brings together high-level officials from the 34 FTAA countries. It is the first FTAA meeting since the April 1998 Summit of the Americas in Santiago, Chile, where the talks were launched and where Canada was confirmed as chair of the negotiations in their initial phase. The meeting ends June 19. "With FTAA negotiations beginning in the fall, our main challenge at this week's meeting is to reach a consensus on specific work plans," said Mr. Marchi. "It's also vitally important to formalize fairly soon how the committee on civil society will work to ensure that our citizens are involved in the process from the beginning." Canada was instrumental in having the FTAA decide to set up a committee of government representatives that would receive input from a broad cross section of civil society, such as labour, environmental, human rights and business groups. Minister Marchi has also made it clear that Canada will have its own consultations process to ensure that citizens will have input on the FTAA and other major trade and investment initiatives. "This week's work, plus our groundbreaking agreement with Mexico through the North American Free Trade Agreement (NAFTA) and our successful free trade agreement with Chile all complement one another and lead in the same direction," added Mr. Marchi. "Bit by bit, Canada is more and more active in the hemisphere's trade and economic integration." - 30 - A backgrounder is attached. For further information, media representatives may contact: Leslie Swartman Office of the Minister for International Trade (613) 992-7332 Media Relations Office Department of Foreign Affairs and International Trade (613) 995-1874 This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca Backgrounder THE FREE TRADE AREA OF THE AMERICAS The 1994 Miami Summit of the Americas created a broad blueprint for greater economic, political and social co-operation among the nations of the Western Hemisphere. An integral part of this blueprint was the Free Trade Area of the Americas (FTAA). In April 1998, Prime Minister Chrétien and leaders from 33 other countries launched negotiations on the FTAA at the second Summit of the Americas in Santiago, Chile. Canada was chosen to chair negotiations for the first 18 months. Leaders also endorsed several important decisions reached by their trade ministers the month before the Summit: - Negotiating groups should begin their work by the end of September 1998. - Nine negotiating groups were established on: market access; agriculture; investment; services; government procurement; intellectual property rights; subsidies, antidumping and countervailing duties; competition policy; and dispute settlement. - Negotiations would proceed simultaneously in all areas. - Miami was chosen as the initial venue for the negotiations. - A consultative group on smaller economies would be created to ensure the concerns of smaller nations are taken into account in FTAA talks. - A committee of government representatives would be formed to consider submissions from civil society. - A joint government/private sector committee of experts on electronic commerce would be formed. From 1991 through 1997, Canadian exports to Latin America and the Caribbean more than doubled from $2.8 billion to $6.4 billion. Canada now exports more to Latin America and the Caribbean than to Germany and France combined. The economies of Latin America and the Caribbean have come of age, and the Americas is now a market of more than 700 million people. The FTAA would result in common rules across the hemisphere, making it easier and less bureaucratic to do business as well as discouraging corruption. It would also protect substantial Canadian investments and open new markets to Canadian goods by lowering or eliminating high tariffs or other barriers now applied to them. The FTAA would further open up the dynamic, fast-growing economies of the Americas to small-and medium-sized Canadian firms -- the source of most new jobs in Canada. The FTAA would also help countries of the region to reap the social benefits of free trade. Unlocking the potential of the region will generate more prosperity, and can help governments fund their social agendas -- education, health and the alleviation of poverty. Negotiations on the FTAA are slated to begin in the fall of 1998, and are expected to last seven years. Canada will be a leader in consulting its citizens on how the FTAA should evolve, and will only sign a good deal that has the support of the Canadian public. Canada will safeguard its vital interests in such areas as culture, health care, education, social programs, the environment, labour standards, our supply management regime and management of natural resources. The FTAA will co-exist with the North American Free Trade Agreement (NAFTA), the Canada-Chile Free Trade Agreement and other regional or bilateral arrangements. MERCOSUR The Southern Cone Common Market (Mercosur) was created in Paraguay in March 1991 with the signing of the Treaty of Asunción by Argentina, Brazil, Paraguay and Uruguay. Mercosur is an integrated market of some 240 million people. Its gross domestic product (GDP) is about $1.4 trillion, approximately one-eighth of the GDP of the NAFTA countries. Its nations' per capita income is 30 per cent higher than that of Latin America as a whole. Mercosur has reached free trade agreements with Chile and Bolivia, as well as a co-operation agreement with the European Union. Discussions are underway with the Andean Pact countries and Mexico. Mercosur is Canada's largest trading partner in Latin America. From 1994 through 1996, two-way trade with Mercosur nations increased by just over 30 per cent, reaching $3 billion. By the end of 1997, two-way trade had reached $3.5 billion, a further increase of 17 per cent. Major Canadian exports to Mercosur countries are paper, wheat, potash, petroleum products, coal, aircraft parts, machinery, telecommunications equipment, chemicals and heavy machinery. A variety of Canadian business sectors would benefit from an enhanced trade and investment relationship with Mercosur, such as agriculture/agri-food; services; and environmental technologies. CANADA-MERCOSUR TRADE AND INVESTMENT CO-OPERATION ARRANGEMENT The Trade and Investment Co-operation Arrangement (TICA) commits Canada and Mercosur to identify measures that distort or impede trade and investment, and to encourage greater co-operation at the World Trade Organization and in the FTAA. Canada and Mercosur have also agreed to form a consultative group where senior officials will meet at least once a year to discuss matters of mutual interest. The arrangement also contains an action plan that calls for work on a variety of issues, including: - the negotiation of Foreign Investment Protection Agreements between Canada and Mercosur nations; - co-operation on Customs matters; and - increased co-operation on labour and the environment, including encouraging the participation of a broad cross section of civil society in trade and investment relations. </body> </html>

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