CHECK AGAINST DELIVERY

NOTES FOR AN ADDRESS BY THE HONOURABLE PIERRE PETTIGREW, MINISTER FOR INTERNATIONAL TRADE, AT A PLENARY HOSTED BY THE CANADIAN CHAMBER OF COMMERCE IN NORTHERN MEXICO ON A NEW APPROACH TO BUSINESS DEVELOPMENT

MONTERREY, Mexico

June 5, 2002

The mission has a full and productive day ahead, which I am sure it will find interesting and rewarding. I won't take up too much of your time, but there are some points I would like to make to round out my remarks of earlier this morning at the Chamber of Commerce breakfast.

First and foremost, I would like to emphasize once again the importance of Monterrey and the northern Mexico market. Monterrey is recognized throughout Mexico for its industrial, commercial and educational strengths and is a key centre of global business. Monterrey, to some extent, represents the essence of NAFTA and continental trade--it is a true hub of not only Mexican but also North American commerce. Only two hours from the Texas border by land, it has an excellent highway system and railroad connections to four border crossings with Texas, as well as to all major cities and seaports throughout Mexico.

Since the first industry was established in the region in 1850, the state of Nuevo León has grown to have more than 100,000 firms and is the country's leading producer in many sectors. One unique characteristic of Nuevo León's economic development is the existence of what are known as the "Grupos." To give you an idea of their financial power, in 1999 the 12 largest Grupos had more than US$30 billion in revenue. The Grupos segment is one that provides Canadian companies with excellent potential for exports in the region.

For example, Grupo Imsa, which operates in four business sectors including steel, automotive, energy and plastics, already buys from a number of Canadian companies. Another example is Cemex, the world's third largest cement producer. Cemex has worked with Canadian suppliers, and EDC [Export Development Canada] has recently taken a US$15 million participation in a major loan syndication for Cemex in an effort to increase Canadian supply. Grupo Vitro is a large producer of glass, chemicals, plastics and minerals, and has expressed interest in buying from Canada. From a Canadian business perspective, the Grupo segment of Nuevo León will continue to represent major new opportunities for Canadian equipment, technology and services.

As I said this morning at the Chamber breakfast, Nuevo León is an economic powerhouse with enormous potential. Estimated economic growth for 2002 is 2.2 percent. Efficient transportation networks, modern highways and affordable, high-quality housing for workers--all essential for economic development--have been thoughtfully planned for many years.

Most important, the state has the high-tech infrastructure and human resources to give it a global competitive advantage. Nuevo León's education level is three years higher than Mexico's national average, and the state counts more than 30 higher-learning institutions, among them the prestigious Tec de Monterrey. Nuevo León's labour force of approximately 1.7 million workers is productive and quality-oriented, and the state boasts a stable working environment. In fact, the Governor recently announced that Nuevo León had reached a milestone 45 months without a single strike.

Expanding economic integration across borders is a daily fact of life here in Nuevo León. In fact, the states on both sides of the Mexico-U.S. border are working to take advantage of the opportunities brought on by transborder economic integration. In addition to national initiatives, there are locally devised plans in Nuevo León to boost the region's prospects in the context of transborder economic integration. These initiatives include investments in infrastructure, such as the Colombia International Bridge, a 332-hectare free trade zone with the capacity to process 12,000 trucks per day and with an eight-minute average time for customs clearing procedures.

Canada recognizes the region's potential for expanded trade and has carried out several initiatives to assist Canadian exporters in their market expansion plans. For example, as I mentioned at the Chamber of Commerce breakfast, Export Development Canada has experienced significant growth in its business in the Mexican market since the establishment of a permanent presence in Mexico City in April 2000. Last year, EDC supported 393 Canadian exporters in Mexico through its various risk management and financing services, a 13-percent increase over 2000.

One example of particular interest to the Monterrey region is EDC's recent participation in a US$15 million loan syndication for Nemak, a key auto sector player and a subsidiary of Grupo Alfa. This is the second financing arrangement made by EDC in support of Nemak, and the facility will support a variety of Canadian automotive equipment and services suppliers selling to Nemak.

Given the business growth that EDC has experienced and the prospects for more growth with the continued integration of Mexico into the North American economy, EDC intends to establish a regional representative office in Monterrey to better serve the needs of Canadian exporters in northern Mexico. The EDC office will work closely with the regional representative for Mexico, Marvin Hough, whom many of you have met already.

Another innovative approach to assist exporters in Mexico is the recent opening of a border clearance representative office in Nuevo Laredo, which I mentioned at the Chamber breakfast. The initiative is intended to provide a service to Canadian agri-food exporters by facilitating the border crossing procedures into Mexico.

In order to enhance our relationship with border authorities in the region, we have extended an invitation to the Head of Customs in Nuevo Laredo to visit Windsor, Ontario, to exchange ideas on best practices. This rapprochement will, we hope, contribute to solidifying cooperation between Mexican customs authorities and the new border clearance representative. As you are no doubt aware, Nuevo Laredo is the second busiest border crossing in North America after Windsor/Detroit, handling a flow of some 9,000 trucks and 1,300 rail cars per day.

I don't have to tell you that much of the growth in our exports to Mexico would not have been possible were it not for NAFTA and the resulting closer ties between Canada and Mexico. I hope you will take advantage of your stay to enhance your contacts in Monterrey. NAFTA is all about creating opportunities. In fact, there are whole new vistas of opportunity emerging in which Canadian companies can participate with enthusiasm and with every prospect of success.

And with that thought, I would be happy to take your questions.

Thank you.