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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. PETTIGREW - ADDRESS TO THE CANADA-CHILE CHAMBER OF COMMERCE - SANTIAGO, CHILE</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE PIERRE S. PETTIGREW MINISTER FOR INTERNATIONAL TRADE TO THE CANADA-CHILE CHAMBER OF COMMERCE SANTIAGO, Chile March 13, 2000 I am very pleased to be here this morning, and I am delighted to see so many Canadian and Chilean businesses represented at this breakfast. My trip to Chile is especially important because it coincides with the inauguration of President Ricardo Lagos. Prime Minister Jean Chrétien asked me to represent Canada at the ceremony. I had the honour of meeting President Lagos, as well as the Minister of Foreign Affairs, Soledad Alvear, yesterday. Maybe it is a case of "the early bird getting the worm!" That is certainly true of Canadian businesses in Chile. You recognized the potential of this country -- not just this morning, but a long time ago -- and you took the chance of being among the first to come here. The same is true of Chilean businesses developing markets in Canada. I was pleased to open the Canadian Maritime Group Office on Saturday. The main objective of this office is to serve the needs of Chile as it embarks on a major and ambitious endeavour -- "Proyecto Tridente," which will see the replacement of its frigates over the next several years. We believe Canada can offer valuable assistance and expertise to Chile because our leading edge, multi-role frigate fleet is well known around the world. Our navy can share valuable information about the lessons they learned throughout these challenging years. And I think what each side discovered is really fantastic. Because Chile, like Canada, is a global trader; and, like us, it depends heavily on exports for its national wealth. Chile is also a mid-sized nation like Canada, which means it cannot afford to limit itself to one market or region. With regional investment of $37 billion and an export base almost equally divided among North America, Europe and Asia, Chile -- like Canada -- is truly an international trading nation. I want to salute the work of this Chamber, which is encouraging progressive trade relations between Chile and Canada. At the same time, you are also helping to protect Canadian commercial interests in Chile and providing valuable information and support to all members. I understand that the Chamber's membership now includes about 125 companies, represented by approximately 300 business people. I congratulate you for all the work you are doing to encourage more trade between our two countries. CCFTA Canada and Chile enjoy a dynamic trade relationship. Since the signing of the Canada-Chile Free Trade Agreement [CCFTA] in 1997, political, trade and investment relations are stronger than ever. Canada remains the second-largest investor in Chile today (the first in mining!) with direct investment of $11 billion. So there is no doubt in my mind that the Agreement has contributed to our mutual prosperity. In fact, Chile is Canada's seventh-largest direct investment destination, with more Canadian investment here than in the rest of South America combined! We have made great strides since the signing of the Agreement. For example, a double taxation agreement -- another mechanism that will help facilitate trade between our countries -- was signed in November. But our relationship is so much more than that. The 1997 Agreement was Canada's first free trade agreement with any country outside of our NAFTA [North American Free Trade Agreement] partners. It has created relations between our two countries that can only be described as exceptional. The CCFTA has also allowed us to undertake agreements in such areas as environment, transportation and labour. In trade terms, annual two-way trade now stands at $775 million, an increase of 21 percent, despite recessionary pressures in the region as a whole that saw an average 30 percent decrease in two-way trade. The implementation of the CCFTA continues, with many important side benefits. Following the successful conclusion of the Canada-Chile Commission meeting in November of last year, for example, close to 90 percent of trade is now duty-free, with the balance expected to be largely duty-free by 2002. Chile represents a perfect entrée to the rest of the region in terms of both trade and investment. The number of Canadian companies with substantial operations continues to increase. These companies recognize the benefits of Chile's similar business culture, which include excellent banking and communications services. But as successful as we have been, I believe we must avoid becoming complacent. We must continue to spread the word about the unique advantages offered in this partnership and we must continue to encourage more commercial involvement by other exporters, especially those small and medium-sized companies that need to identify ways to enter this market. Chile and Canada have proven themselves to be natural partners in political, trade and economic terms -- both bilaterally and multilaterally -- in what is frequently described by Canadians and Chileans alike as a "unique relationship" with limitless potential. And I think the recent announcement of the establishment of an office in Viña del Mar by Canadian firms to assist the Chilean government's "Proyecto Tridente" frigate purchasing program is yet another example of how our two countries are working closely together to share knowledge and expertise. The strong partnership Canada and Chile enjoy serves as an example to others. Our free trade agreement with Chile is an important contribution to the cause of freer trade around the globe and an example for others to follow. Both Chile and Canada have recognized that freer trade is an idea whose time has come, as witnessed by your free trade agreements with Mexico and Central America and the current negotiations with South Korea, patterned after our CCFTA. Chile and Canada epitomize partnership, whether as partners at the WTO [World Trade Organization], where we work together in pursuit of enhanced trade liberalization, or as allies in the pursuit of a Free Trade Area of the Americas [FTAA] -- about which I will have more to say in a moment. Trade Promotion I want to tell you that the Government of Canada has taken a very proactive approach to trade and to trade promotion, and we will continue to do so. Team Canada trade missions, for example, are very important to us. They have opened doors around the world for more than 1800 Canadian companies and have helped them find a total of 882 deals worth $24.4 billion in new business. So from the government's point of view, these missions are very worthwhile indeed! In addition, we have 500 trade officers at over 100 posts around the world who are helping hundreds of Canadian companies compete and succeed in foreign markets. We have also worked directly with other governments in the emerging markets of Latin America to encourage technology and management services exports and other partnerships with Canadian small and medium-sized companies. At the same time, our cultural and academic relations with Chile have also been growing over the past several years. We now have two important bilateral agreements: the memorandum of understanding [MOU] on co-operation in education, signed in January 1998, and the MOU on cultural co-operation and exchanges, signed in February 1999. I think it is wonderful that Chilean universities and technical and professional schools have developed links with their Canadian counterparts, and many of them promote the exchange of students and professors. We are also supporting Canadian studies programs in Chilean universities to increase interest in and knowledge of Canada in this country. This has led to the creation of the Chilean Association of Canadian Studies, and we also offer awards to help Chilean students carry out graduate or post-graduate studies in Canada. As well, there is the Canadian Education Centre here in Santiago, which assists Canadian educational institutions in promoting their products and services in Chile and helps Chilean nationals interested in pursuing their studies in Canada. So we have a two-way street of information and learning, and I think this is going to contribute to even greater understanding and even closer relationships down the road. Free Trade Area of the Americas I firmly believe we need to develop greater levels of understanding, not only between Chile and Canada, but also between Canada and all the countries in our hemisphere. The Government of Canada believes that Canada's future is directly linked to that of our hemispheric neighbours. We want to be in on the ground floor of the development of this huge new economic powerhouse. And when it comes to trade, we -- like you -- want to have clear rules of the game to ensure that we are not left subject to the whims of larger and more powerful economies. That is why we are enthusiastic supporters of the Free Trade Area of the Americas negotiations now under way. In fact, Canada chaired the first round of the FTAA talks, from the Santiago Summit in 1998 to the Ministerial in Toronto last November, which I chaired. As you may know, responsibility for chairing the talks went to Argentina following the Toronto meeting. Canada has long advocated the benefits of freer trade among the nations of the world and has always stressed the importance of a transparent, rules-based international trading system. We were one of the original signatories of the GATT [General Agreement on Tariffs and Trade] over 50 years ago, and Canada continues to be a strong supporter of the WTO process today. And, despite the fact we were unable to resolve several outstanding issues at the WTO meeting in Seattle, I and many of my international counterparts have been working hard to get the process back on track. As a mid-sized economy, we benefit from a rules-based system because it provides a more predictable trading environment for our businesses and gives us the ability to compete on a level playing field against economies that are larger and stronger. A more liberalized trading system based on clear rules helps exporters, which in turn promotes increased employment. It encourages businesses to be more outward-looking by giving them larger markets for their goods, and it enables them to obtain economies of scale. In Canada's case, the value of exports in our economy has increased from 30 percent of GDP [gross domestic product] in 1993 to 43 percent in 1999. During the same period of export growth, our unemployment rate has decreased more than 4 percent. With over 40 percent of our economy now export-driven, Canada has more at stake than most countries in building a better, fairer and more predictable international trading system. So we are committed to working toward agreements among like-minded middle powers that give more people the opportunity to share in the benefits of global wealth creation. History shows that those countries that have made the greatest strides in reducing poverty are those that have been the most open to trade. Those nations that couple openness to trade with good governance, sound social and environmental policies and a market-based economy make even greater progress in human development. The FTAA is a historic opportunity to unite the 34 democratic nations of the Americas in a comprehensive agreement for greater economic integration, development and growth. The hemisphere has a population of more than 800 million people and an economy of roughly US$11 trillion. It conducts more than 35 percent of the world's economic activity with less than 15 percent of the world's population! The combined GDP of the Americas exceeds that of the European Union, which is now the world's largest integrated economic and political unit. I believe that Canada and Chile will each benefit greatly from an FTAA that is balanced and WTO-consistent. Canada Is a Trading Nation The search for a better and more predictable international trading environment is what inspired the GATT -- of which Canada was a founding member. It is the same sentiment that drives the WTO. Over the past half century, more open markets have contributed enormously to the prosperity and growth of both developed and developing countries. Our challenge now is to present a plan that explains how we can build stronger economies and create jobs through trade, while still leaving room for national communities to be what they want to be. This has a special meaning for us in Canada, because Canada is now, proportionately, one of the largest trading nations in the world. As I mentioned earlier, seven years ago, about 30 percent of our gross domestic product was export-related, and today that figure is over 43 percent. The United States exports only 11 percent of its GDP, while Japan exports only 15 percent. Today, nearly one third of all jobs in Canada depend on trade! And it is not all natural resources, either. Resources now represent about 32 percent of our exports, compared with about double that 20 years ago. Canada is becoming a knowledge economy, exporting our services, our expertise, and a lot of other things as well. We still have abundant resources of forests, energy, minerals and so on, but the greatest resource in Canada today is its people! Most of our exports are now high value-added goods and services. Canadian companies are world leaders in telecommunications, aerospace, software, environmental technologies and other areas of the new economy. We are looking to share that technological leadership and those high-quality goods and services with countries and business partners everywhere. Conclusion I want to conclude by talking for a few minutes about the WTO, which I believe is an indispensable institution that must not be allowed to stagnate and become irrelevant. In the past 15 years or so, its membership has grown enormously, from about 90 members to 135. China and other previously excluded members are now poised to join. And just as the GATT evolved into the WTO, the WTO itself must continue to change if it is to remain an effective international trade mechanism. Canada continues to support the WTO process, and we continue to push for solutions in the areas of agriculture and services, as well as many others. One area in particular that we have been working on through the WTO is the whole question of culture. This is an area that I know is also an important concern for all the countries in Latin America. I strongly believe that the role of artists in society is not only to express the emotions felt by society, but also to help shape those emotions. This is particularly important today, as the world is going through enormous changes with globalization and the high-technology revolution. It is extremely important that our artists can work to enlighten us -- as societies -- on what it is we are going through. And although there are certain similarities, what we are going through in Canada is different from what you are going through in Chile, or in Brazil, for example. Each country has its own unique set of challenges and opportunities. It is very important that each country make room for its artists to do this important work. That is, in part, why Canada is pursuing a new international instrument on cultural diversity. This agreement would recognize the special role of cultural goods and services within the various economies of the world. It would also recognize the right of governments to preserve and promote cultural diversity within their own economies, while at the same time respecting the rules of the international trading system and ensuring markets for cultural exports. I am very optimistic that the nations of the world will continue to make steady progress toward a more open, rules-based international trading system in these important areas and in many others that are critical to the continued economic and social development of any country. I believe that Canada is proof that opening yourself up to the world, and recognizing and celebrating the diversity that comes with this openness, pays many dividends, both economic and social. I also believe that Canada's openness is one of the main reasons that we have become one of the strongest societies and one of the strongest economies in the world, despite our relatively small population. So I am very happy to see that Chile shares that attitude and continues to look out into the wider world for opportunities that it can capitalize on. But I would also say that as we work to improve the WTO, and as we continue discussions on the FTAA, Chile will always have a special place for Canadians, since Chile was the first country of this region to embark on a free trade agreement with us. Again, I congratulate the members of this organization for all your efforts to build stronger and closer ties between our two countries, and I thank you for giving me the opportunity to visit with you. Thank you. </body> </html>

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