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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. MARCHI - ADDRESS TO THE CANADIAN ASSOCIATION OF BUSINESS ECONOMICS' 1999 POLICY CONFERENCE - OTTAWA, ONTARIO</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 99/24 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE SERGIO MARCHI MINISTER FOR INTERNATIONAL TRADE TO THE CANADIAN ASSOCIATION OF BUSINESS ECONOMICS' 1999 POLICY CONFERENCE OTTAWA, Ontario March 25, 1999 (2:00 p.m. EST) Whenever I have the opportunity to meet with economists, I always think of a quotation from Henry Kissinger. "It used to be said," Kissinger wrote, "that my knowledge of economics was an argument against universal suffrage. And I tended to believe that until I started dealing with economists." In some ways, I think "the dismal science" just suffers from bad public relations. John Maynard Keynes had the right idea when he said that "If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid." Of course, the same can be said of politicians! So as one humble, competent, dentist-like professional to another, let me say how pleased I am to be with you this evening! The theme of your conference this year could not be more appropriate. Canada in the Global Economy is not only a catchy title -- it is also an undeniable fact. Because we are in the global economy; we are connected to international markets as never before, and we must participate in the international institutions that seek to bring rules and order to international commerce. One of the key requirements for success in the global economy is access to vital markets. And I am pleased to release Opening Doors to the World: Canada's International Market Access Priorities -- 1999 this evening. This report highlights the major initiatives we have pursued over the past year in terms of access, while outlining our priorities and challenges for the year ahead. Tonight, I would like to focus on another aspect of Canada's involvement in the global economy, and that's the upcoming round of negotiations at the World Trade Organization [WTO]. And I would like to do so from four perspectives. First, it is important to recognize where the international community is coming from. As you know, the Uruguay Round of negotiations, completed in December, 1993, greatly strengthened the international trading system by expanding the rules of the game and by providing for effective mechanisms to resolve disputes. Canada has benefited from those results: first, because we are so dependent upon trade, and second, because of the benefits of operating within a rules-based system where might does not equal right. The importance of trade to our economy can hardly be overstated. More than 40 percent of Canada's GDP is generated by trade, and one in three jobs in this country is tied to our ability to sell our goods and services abroad. This is something that we need to stress. For trade is not an abstraction. It is not something that happens out there, somewhere. It produces real jobs for real people and is happening locally, in our communities and in our neighbourhoods. But while the Uruguay Round was significant and produced many real benefits for Canada, many issues remain unresolved, and these issues provide the agenda for the next round. Second, it is important to remember that, when we export our goods and services, we must continue to export our values. It has always been Canada's position that the global economy must be a humane place where good government, democracy and the rule of law ensure that the benefits of trade liberalization are shared among all levels of society. If we simply pursue markets without concern for the citizens within those markets, then we are destined to fail. More, we deserve to fail. And if we do not temper our push for progress without due consideration for the environment, we will be like the person who constructs a new foundation for their house by borrowing material from the roof: we will simply have achieved today's objectives at the expense of tomorrow's opportunities. Third, we need to recognize that trade is not just an international abstraction. Former Speaker of the House of Representatives, Tip O'Neil, used to say that all politics is local, meaning that all issues needed to be understood on the basis of how they will affect the daily lives of his constituents. Well, the same can now be said of trade. All trade is local -- it provides jobs and opportunities, not just for people around the globe, but also for our neighbours and our friends in communities and industrial parks across our nation. And the issues addressed in trade negotiations are also increasingly local in nature. As you know, trade negotiations no longer deal primarily with things like tariffs and other so-called border issues that prevent the products of one country from entering another. Today, with many of the tariff issues resolved, the focus has shifted to other impediments to trade, such as standards, licensing and approval procedures, product and professional certifications and, more broadly, the regulatory framework. All of these areas had been the purview of individual states. Now, they are increasingly linked as part of the trade spectrum and discussed in fora such as the WTO. The fact is that our participation in the world economy -- through our trade agenda -- has now become an integral part of our domestic political agenda of jobs, growth, security and social programs. Our domestic policy, then, is intertwined with our foreign and trade policies. On a growing number of issues, they are one and the same. It is more important than ever, therefore, that the people affected be the people consulted. The days of negotiating in secret are over, and we need to lift the veil on the whole trade negotiating process. If we are to enlist the public's support for further trade liberalization, I believe that we need to make the whole process more transparent. Canadians want their governments and international institutions to be more open and accountable. That is why our government has recently launched a series of national consultations with Canadians on our overall trade agenda. And I hope that many of you will participate in that process. Fourth and finally, we come to the need for a new round of negotiations. Now, I know that with all of the progress we have made, it may be tempting to pause, consolidate or take a breather. But while it would be tempting, it would also be a mistake. Not only did the Uruguay round leave many stones unturned, but we also have to ensure that the rules of trade themselves keep pace with the changes taking place in business practices, technology and social systems. We cannot proceed into the next millennium with rules that don't reflect the new realities. We also need to find ways to advance participation in the global economy by less-developed countries. And, as recent international economic upheaval has shown, no nation can restore growth solely through its own domestic market. Trade holds the potential to help solve these problems, and so we need to extend its reach. Moreover, we need further trade negotiations if we are to make the trading system truly universal by including in the WTO such major economies as Russia, China, Chinese Taipei, Ukraine and Saudi Arabia. In terms of the form these talks should take, Canada's position is that flexibility should be our watchword. As you know, some would like to see a comprehensive seven-year round, while others favour tackling issues on a sector-by-sector basis. Our view is that both options carry their own difficulties. The comprehensive approach, in trying to encompass so many divergent issues and interests, can become unwieldy and exhausting. And its dynamic of all-or-nothing leaves little room for honest differences to remain off the table. The sector-by-sector approach, on the other hand, leaves itself open to countries simply cherry-picking those sectors that work to their advantage. Such a mercenary approach does not indicate great confidence in the WTO or in its ability to create widespread agreement. That is why we have suggested dealing with clusters of sectors. This will make for a more manageable, digestible and timely approach that has something for everyone. As progress is made in these clusters, agreements could be implemented, thus detaching them from other areas where progress could be slower or more difficult to obtain. This would produce an early harvest of agreements and provide momentum at a crucial time. And I am pleased to say that this approach appears to be meeting with increasing consensus. In terms of the content of the negotiations, our view is that the negotiations should be broadly-based, both to attract support and to satisfy a wide range of interests. Ideally, this means that negotiations will extend beyond this year's mandated areas of agriculture and services. Governments might consider the following areas: <ul> <li> further reductions to tariffs on industrial goods, including the possible elimination of so-called nuisance tariffs -- those below two percent; <li> addressing non-tariff barriers, including issues dealing with standards, customs valuations and rules of origin; <li> curbing the abuse of anti-dumping, countervailing duties and safeguard actions, including how such measures might apply to services; <li> bringing services and agricultural trade more fully under the rules, including eliminating all export subsidies and advancing the liberalization of these sectors, with a particular emphasis on commercial services; <li> exploring new issues, such as intellectual property, electronic commerce, transparency in government procurement, investment and competition policy, as well as culture, environment and labour; <li> and finally, ensuring that governments retain the ability to regulate for reasons of public health, consumer safety, social policy or other legitimate public interests. I began by quoting one famous economist, John Maynard Keynes, so let me close by quoting another -- John Kenneth Galbraith. Galbraith once said that "Economics is not durable truth; it requires continuing revision and accommodation. Nearly all of its error is from those who cannot change." Of course, the imperative to change is not limited to economics or to economists. All of us must adapt to the new realities before us. And Canada is doing just that. We are embracing the opportunities afforded by liberalized trade and positioning ourselves to win in a competitive new era. We must continue down that path and bring the benefits of freer trade to all Canadians. In those efforts, I look forward to receiving your input and ideas, and I wish you all the best for a very successful conference. Thank you.</li> </ul> </body> </html>

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