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<title>PETTIGREW TABLES GOVERNMENT RESPONSE ON CANADA-EUROPE RELATIONS</title>
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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>October 31, 2001 <em>(3:15 p.m. EST)</em> No. 147</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>PETTIGREW TABLES GOVERNMENT RESPONSE </strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>ON CANADA-EUROPE RELATIONS</strong></font></p>
<p><font face="Arial">International Trade Minister Pierre Pettigrew today tabled the Government Response to 25 recommendations
made in the report <em>Crossing the Atlantic: Expanding the Economic Relationship between Canada and Europe</em>.</font></p>
<p><font face="Arial">The report was prepared by the Standing Committee on Foreign Affairs and International Trade, and tabled in
the House of Commons in June of this year. It explores Canada's economic relations with Europe, and
recommends ways to boost trade and investment between the two markets. </font></p>
<p><font face="Arial">"Many of the government's current policies and programs are in concert with the report's recommendations,"
said Mr. Pettigrew. "We recognize the growing potential of the European market for Canada, and we want to
expand our trade and political relationship with our partners there. The Government Response to the report
describes many of the innovative activities already under way to strengthen our commercial ties with Europe." </font></p>
<p><font face="Arial">The Government Response acknowledges the challenges of promoting trade and investment with Europe, and
highlights activities undertaken to better brand Canada in Europe. It also mentions the importance of reducing
trade barriers with Europe through multilateral trade negotiations. The government agrees as well with the need
for co-operation between Canada and the European Union (EU) on regulatory issues. In addition, the
Response acknowledges that a free trade agreement between Canada and the EU is an option meriting careful
consideration. A study on the effects of tariff elimination on Canada-EU trade, presented to the EU last June,
was a first step toward evaluating the benefits and costs of trade liberalization with Europe.</font><font face="Arial"></font></p>
<p><font face="Arial">The Government Response is available on the Internet site of the Department of Foreign Affairs and
International Trade at: </font></p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20070220203253/http://www.dfait-maeci.gc.ca/english/geo/europe/index.htm"><font face="Arial">http://www.dfait-maeci.gc.ca/english/geo/europe/index.htm</a> </font></p>
<p align="CENTER"><font face="Arial">- 30 - </font></p>
<p><font face="Arial">A backgrounder is attached.</font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Sébastien Théberge</font></p>
<p><font face="Arial">Office of the Minister for International Trade</font></p>
<p><font face="Arial">(613) 992-7332</font></p>
<p><font face="Arial">Media Relations Office</font></p>
<p><font face="Arial">Department of Foreign Affairs and International Trade</font></p>
<p><font face="Arial">(613) 995-1874</font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>Backgrounder</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>CANADA-EUROPEAN UNION RELATIONS</strong></font><font face="Arial"></font></p>
<p><font face="Arial">The Report of the Standing Committee on Foreign Affairs and International Trade addressed Canada's
economic relationship with all of Europe, not just the European Union (EU) and its 15 member states. The
information below concerns only the EU-Canada relationship. </font></p>
<p><font face="Arial"><strong>Economic Relations</strong></font></p>
<p><font face="Arial">With a population of 375 million and enormous market and production capacity, the EU had a 20 percent</font><font face="Arial"> share
of the world's aggregate GDP in 2000. The EU is also the world's largest trader of goods and services: in 2000
it accounted for 36 percent of global exports of goods and services.</font></p>
<p><font face="Arial">Canada's economic relations with the EU are characterized by strong two-way trade and investment flows. In
2000, bilateral trade in goods and services totalled $75.4 billion, and two-way cumulative investment reached
$134 billion. However, with Canadian exports to the EU accounting for only 6.6 percent of Canada's total goods
and services trade, there is likely to be room for growth. Our trade with the EU is not increasing as rapidly as
with other regions. As a result, the EU's share of Canada's total exports and imports has been declining over
the past decade.</font></p>
<p><font face="Arial"><strong>Trade</strong></font></p>
<p><font face="Arial"> In 2000, Canadian exports of goods to the EU amounted to $22.1 billion, and imports to $33.4 billion.</font></p>
<p><font face="Arial"> Canada exported $9.6 billion worth of services to the EU in 2000, and imported $10.3 billion. </font></p>
<p><font face="Arial"><strong></strong></font><font face="Arial"><strong>Investment</strong></font></p>
<p><font face="Arial"> The stock of Canadian direct investment abroad in the EU has grown substantially during the past decade,
and stood at $56.5 billion in 2000.</font></p>
<p><font face="Arial"> </font><font face="Arial">The stock of EU foreign direct investment in Canada stood at $77.9 billion in 2000. It underwent a very
substantial increase of $28.3 billion in 2000 as a result of major acquisitions, which included Alcatel's purchase
of Newbridge and Vivendi's acquisition of Seagram.</font></p>
<p><font face="Arial"><strong>Political Relations</strong></font></p>
<p><font face="Arial">Since the signature of the Joint Canada-EU Political Declaration and Action Plan in 1996, Canada's relationship
with the European Union has been significantly strengthened. It now goes beyond commercial relations to
include a whole range of issues facing Western nations: foreign and defence policy, environment, social issues,
immigration, information technology, health, and employment. </font></p>
<p><font face="Arial">Canada and the EU co-operate on a number of initiatives. The year 2001 marks the - 30 - 25th anniversary of
Canada-European co-operation under the Framework Agreement for Commercial and Economic Co-operation,
signed in 1976. This Agreement was "inspired by the common heritage, special affinity and shared aspirations"
uniting Canada and the EU countries.</font></p>
<p><font face="Arial">Twice yearly, Canada and the EU hold summits to discuss how the two partners can co-operate on various
foreign policy and trade issues. At the last summit in Stockholm in June 2001, Minister Pettigrew presented to
European Commissioner for Trade Pascal Lamy the study entitled <em>Canada-European Union Trade and
Investment Relations: The Impact of Tariff Elimination.</em> It concludes that Canada-EU trade could increase by
over $10 billion a year if tariffs were eliminated on transatlantic trade. The study is an initial evaluation
assessing the possible effects of tariff elimination on Canada-EU trade. Other issues, such as non-tariff
barriers, investment, trade in services, rules of origin and agriculture, warrant further examination.</font></p>
<p><font face="Arial"><em>Canada-European Union Trade and Investment Relations</em> is available on the Internet site of the Department of
Foreign Affairs and International Trade at:</font></p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20070220203253/http://www.dfait-maeci.gc.ca/english/geo/europe/EU/Canada-EUFTAStudy-english.pdf"><font face="Arial">http://www.dfait-maeci.gc.ca/english/geo/europe/EU/Canada-EUFTAStudy-english.pdf</a> </font></p>
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