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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. MARCHI - ADDRESS TO THE UNITED KINGDOM CHAMBER OF COMMERCE - LONDON, ENGLAND</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 97/59 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE SERGIO MARCHI, MINISTER FOR INTERNATIONAL TRADE, TO THE UNITED KINGDOM CHAMBER OF COMMERCE LONDON, England December 8, 1997 President Bridgeman, Distinguished Guests, Ladies and Gentlemen: I am delighted to be with you today and to visit this historic hotel. I am told that during the blitz, a bomb landed in the Strand, knocking the Savoy's piano player off of his stool. Noël Coward stepped in to play and sing the night away. Should a similar calamity befall us today, I understand that John Bridgeman stands ready to step in and take over as your speaker. So we have all the bases covered! It was 500 years ago that an Italian working for England, Giovanni Caboto, sailed from Bristol to Canada. It is perhaps appropriate that, today, a Canadian trade minister of Italian descent should come to Britain to talk about rediscovering and re-energizing the Canada-Europe relationship. Let me say at the outset that there is no truth to the rumour that I am in any way related to Caboto and that I am here today to collect his fee for services rendered! But I am here to say that, while this year's Asia Pacific designation was important for Canada, and while we build on our relations with the United States and forge forward toward a Free Trade Area of the Americas, our roots with Europe run deep. For me, these roots are personal and emotional. Ties between Canada and Great Britain are also historical and deep. Many sons of your country left to become fathers of our Confederation. We have fought together in times of war and worked together in times of peace. But if history has made us friends, commerce has made us partners. Britain is our third most important export market, after the United States and Japan. And its importance is rising: between 1993 and 1996, our exports to Britain grew by more than 40 percent. And I haven't even mentioned trade in services, where Britain is our leading offshore export destination. Then there is tourism -- more than 750 000 British tourists visit Canada each year, and over 600 000 Canadians head in this direction. So our trade relationship is very strong. But we also know that much more can be done to ensure Canada's participation in the exciting new future that is emerging for Europe, and that, equally, Europe can invest in a Canada that is truly finding its place in the world. Today, I would like to touch briefly on three elements of our strategy: First, within a North American perspective, we want to promote Canada as the place for European investment; Second, we want to accelerate progress on the Canada-EU [European Union] Action Plan, and create stronger ties with our European partners; And, third, in collaboration with Europe, we want to continue to champion liberalized trade around the globe. First, investment: I have come here today as a salesman for Canada -- not only for trade, but for investment as well. The strongest economic links between us are being forged, not through trade or tourism, but through direct investments between our two countries. Canadian companies have recognized Britain as a dynamic market and a natural gateway to Europe. In fact, Canadian businesses are now investing more in Britain than British companies are investing in Canada. While it might be said that this demonstrates how international Canadian businesses are in their outlook, it could also be argued that perhaps we need to do a better job of explaining Canada's advantages. Let me offer you some sound reasons for looking to Canada. First of all, you should know that we have undergone something of an economic renaissance in recent years. Four years ago, our government inherited a budget deficit of about $42 billion. Today, that deficit has been almost eliminated, and some economists are actually talking about a budget surplus by 1998. This achievement has not been easy. It has required tough measures, but Canadians are now reaping the benefits: interest rates at 40-year lows, inflation running at just under 2 percent and economic growth that leads all G-7 countries. Just recently, an article in the Economist described Canada as a "fiscal virtuoso" and went on to say that no other country "can boast of so much fiscal virtue or so large a swing to it, so swiftly achieved." As well, the latest Annual Report of the German Council of Economic Experts extols Canada as a model for Germany to emulate to achieve fiscal consolidation combined with strong economic growth. The big picture, economically, is very bright and very bullish. Without mentioning that for a number of years running, the United Nations has designated Canada as the best place in the world to live, its attractiveness as a destination for investment is confirmed, not just on the macro-economic and socio-economic levels, but by its micro-economic advantages as a low-cost place to do business. Just recently, KPMG conducted an exhaustive study of the costs involved in establishing new business operations in the United Kingdom, Germany, France, Sweden, Italy, the United States and Canada. It concluded that Canada offers the very best climate for new investment. In fact, Canada emerged as number one in each of the eight industries studied. We even have the lowest corporate tax rates! But nothing is harder on your laurels than resting on them, and we know that, in the world of tomorrow, success will only come to those nations that continue to innovate and adapt. This means being on the leading edge of the knowledge-based economy, because the strength of a nation today depends not upon the size of its armies, but on the quality of its ideas; not on its resources, but on its resourcefulness. Canada is responding to that challenge. We have put in place the most generous tax incentives for research and development of any industrialized country. And we are shaping our domestic policies with a careful eye to our international competitiveness. Strong economic fundamentals, a knowledge-based economy, competitive industries and a low-cost environment: all of these add up to an investment destination that is second to none. That's a great story and I hope that this Chamber will help me to tell it and sell it. The second element of our plan is to pursue closer economic relations with our European partners. This was clearly at the centre of discussions at the Canada-EU Summit in Ottawa last week. Pursuit of closer economic relations begins with making greater progress on the Canada-EU Action Plan. In particular, we want to advance the joint trade study called for by the Action Plan so that we can table a first draft at our next summit in May next year. That study will allow us to assess the concrete steps we can take to reduce or eliminate trade barriers between Canada and the EU, as well as to develop an "early warning system" for resolving our irritants in a reasonable and effective manner. As part of this effort, we need to enhance business-to-business contacts. A few weeks ago, Canada participated for the first time at the Trans-Atlantic Business Dialogue in Rome with the EU and the United States. This initiative is led by the private sector and must remain so; it must be a give-and-take session, and not a preset communiqué. In this way, the transatlantic dialogue will significantly help to reduce concerns about a "fortress Europe" or "fortress North America." As well, earlier this fall, our Prime Minister spoke to this Chamber and signalled Canada's desire to pursue a free trade agreement with the countries of the European Free Trade Area [EFTA]-- Norway, Switzerland, Iceland and Liechtenstein. As a building block toward this objective, I signed a Trade and Economic Co-operation Arrangement with Norway last Wednesday in Ottawa, and will sign one tomorrow with Switzerland in Bern. This represents for us a very tangible step toward a closer rapport with Europe. But it is also a step that makes sense. At $6 billion, two-way trade between Canada and the EFTA is already significant, and direct investment in Canada totals $4.3 billion. These figures are larger than our trade with all of South America. Canada also wants to strengthen its ties with individual European states. Although Brussels is an important front door, we must continue to work with individual countries since the side doors they offer are equally valuable and attractive. The relationship that Prime Ministers Chrétien and Blair have established underscores this objective. In the Joint Declaration they signed at the Denver Summit last June, they committed our two countries to achieving an enhanced relationship, including the promotion of new trade and investment links. The final component of our plan to reinvigorate our economic relationship with Europe is to continue to champion freer trade. Indeed, Canada and the EU were founding members of the GATT [General Agreement on Tariffs and Trade], and its successor, the WTO [World Trade Organization], because we recognize that multilateralism is the cornerstone ensuring access to world markets. After all, Canada is a trading nation. Today, more than 40 percent of our GDP [gross domestic product] and one out of every three jobs in Canada depend on exports. Canada's economic destiny lies in embracing the global economy and opening up new markets. We also know that free trade should not mean a free-for-all or race-for-the-basement standards, and that a rules-based system is necessary to provide fairness and certainty. That's why we negotiated a free trade agreement with the United States. That's why we have expanded that agreement to include Mexico. That's why we have signed free trade agreements with Israel and Chile. And that's why we are leading the way to create a Free Trade Area of the Americas [FTAA] by 2005. The delay of U.S. fast-track negotiating authority for the FTAA will not deter us from pursuing our own independent trade agenda. For example, when Prime Minister Chrétien and I visit Latin America in January on a Team Canada Trade Mission, we intend to reinforce our relationship with Mercosur, in addition to the business-to-business venture that will be signed and launched. Canada is also taking the lead in the Asia Pacific region. We have just concluded a year as chair of the APEC [Asia-Pacific Economic Cooperation] forum, which culminated in the very successful Vancouver Summit just a few weeks ago. While the currency issue loomed large, it was also a meeting that sent the right signals. In fact, I believe that the Vancouver Summit will be remembered as the moment when APEC came of age. By identifying 15 sectors for early liberalization, and accelerating 9 of these, we went further and faster than had ever been done before, and demonstrated a strong commitment to freer trade at a time when some were again calling for the short-sighted comfort of protectionism. In troubled times, APEC chose to build bridges, not walls and to look outward, not inward. Trade liberalization is an area where Canada and Britain can work together. We are both champions of freer trade in our respective regions. With Britain assuming the presidency of the European Union next month, as well as hosting the G-8 Summit, we look forward to a particularly exciting period of British leadership. It is very much in Canada's interests to see Britain back at the heart of Europe. Of course, central to the rules-based trading system is the World Trade Organization. It has had an impressive record since its creation, both in opening up new markets -- with, for example, the agreements on information technology and telecommunications -- and in settling disputes among nations. The WTO's success can also be seen in the impressive list of countries knocking on its door, wanting to get in -- countries such as Russia, China and Saudi Arabia. But we also know that the WTO's greatest challenges may still lie ahead. By the turn of the century, new WTO negotiations are scheduled to begin on difficult areas such as agriculture and services. These will test both our resolve and our commitment. But I am confident that the momentum for freer trade will continue and that the multilateral trading system will be up to the challenge. In sharing these thoughts with you today, I hope I have conveyed that Canada's trade policy is rooted in strong fundamentals at home, a low-cost environment for international investment, a strong commitment to Europe and an outward-looking approach to trade. Since we are meeting today in the Abraham Lincoln room, perhaps it is appropriate that I close with a story told about Lincoln as a small boy. He was out walking with a friend one evening when a meteor shower began. His young friend was frightened, but Lincoln told him to look beyond the meteors, to the fixed stars shining above. Today, as we look ahead, we know that we too will face challenges and uncertain seas. Some would suggest seeking refuge in ports of convenience, that we retreat into protectionist harbours to wait out the storm. But progress is never made by adhering to the certain and the safe. That was the lesson that Caboto taught us 500 years ago. Today, more than ever, we must have the courage to sail those "uncertain seas." Let us look beyond the distractions of the moment to the fixed principles we have set before us. Together, taking these as our guide, we can proceed confidently into the future. Thank you. </body> </html>

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