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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. MARCHI - TO THE EUROPEAN UNION CHAMBER OF COMMERCE IN TORONTO - TORONTO, ONTARIO</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 98/42 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE SERGIO MARCHI, MINISTER FOR INTERNATIONAL TRADE, TO THE EUROPEAN UNION CHAMBER OF COMMERCE IN TORONTO TORONTO, Ontario June 4, 1998 This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca I am delighted to be here with the European Union [EU] Chamber of Commerce, and I want to thank the Italian Chamber of Commerce of Toronto for hosting this wonderful dinner. Today's meeting could not be more timely. Just a few weeks ago, the Prime Minister and I were in Great Britain for the reopening of Canada House and to attend the Canada-EU Summit. The Prime Minister also held private talks with Prime Minister Blair, and visited Bosnia and Slovenia to be briefed on the situations there. And, of course, we have just completed a trade mission to Italy, involving 75 businesses and a parliamentary delegation. All of these activities have allowed us to reaffirm the old ties of old friends and to renew our commitment to enhancing co-operation between Canada and the European Union. And while it is true that Canada is working hard to expand our trade with nations around the world, Europe has always held a central position in our history and our hearts -- and that relationship will always continue. The Italy trip clearly demonstrated the strong personal connections that exist between Europeans and Canadians. And just as we could visit Italy and feel very much at home, so can we tour most European countries and sense the affinity of a shared past and a common future. We should never underestimate the value of those connections -- of the natural bridges that span an ocean and facilitate commercial relations. And those commercial relations are strong. For Canada, Europe is second only to the United States as a trade and investment partner. In 1997, Canadian exports to the EU were worth almost $23 billion, and nearly one fifth of our entire direct investment abroad was aimed at Europe. But we also know that we can be doing much more to participate in the exciting new Europe that is emerging. So today, I would like to just touch on four elements of our strategy to enhance trade between us: <ul> <li> First, we want to accelerate progress on the Canada-EU Cross-Atlantic Action Plan; <li> Second, we want to promote Canada as an ideal place for European investment; <li> Third, together with Europe, we want to continue to champion liberalized trade around the globe; <li> And fourth, we need to build the right transatlantic bridges to connect our two communities. Let me just deal briefly with each of these. First, we want to accelerate the work on the Canada-EU Cross-Atlantic Action Plan and conclude the joint trade study. This will allow us to recommend options to reduce or eliminate trade barriers between us. Already, the Action Plan has provided the impetus for concluding a number of bilateral agreements that simplify bureaucratic procedures and provide a "level playing field" for Canadian and EU companies. During the Prime Minister's recent meeting in London with Prime Minister Blair and President Santer, we signed an important agreement that will allow businesses in both Canada and the EU to have a much simpler way of getting their products certified to meet each other's standards. We also signed, in December 1997, an agreement on customs co-operation that will allow us to streamline customs procedures and reduce customs fraud. Looking ahead, we hope to sign even more agreements -- in areas like competition policy, nuclear research and the equivalence of veterinary measures affecting trade in animals and animal products. The pace of progress between us is quickening, and we are determined to maintain the momentum generated by our Action Plan. In that effort, we recognize the vital role that the private sector must play -- particularly the small and medium-sized enterprises [SMEs] -- which are so dynamic and which generate so many of the new jobs. In fact, I can say to you today, that if our trade policy fails to take into account the needs of these smaller businesses, we will deprive ourselves of the greatest engines of growth in our respective economies. That's why we have a new initiative, known as "Crossing the Pond." This is a partnership between the private and public sectors, which is aimed specifically at helping Canadian SMEs to enter the European market, and at demonstrating to European SMEs the advantages of locating in Canada to serve the NAFTA [North American Free Trade Agreement] market. In fact, today in Ottawa, we are holding the first "Crossing the Pond" event, as experts from the private sector and many of our European trade commissioners meet with technology-based companies to help them design the best strategies for penetrating the European market and enhancing our market share. Canada also intends to be a full participant in the Transatlantic Business Dialogue, a private sector-led initiative. Under the leadership of Tom D'Aquino and the Business Council on National Issues, Canadian CEOs have begun to participate, adding the value of their experience and the breadth of their knowledge. Secondly, we want our European friends to know and fully understand what an ideal place Canada is for their investment. By investing in Canada, Europeans are investing in a country with sound economic fundamentals. Last year, our GDP [gross domestic product] grew at 3.8 percent -- the strongest growth of all G-7 and OECD [Organization of Economic Co-operation and Development] nations. Interest rates are low -- below those of the United States. And inflation is just about 1 percent. Best of all, Canada has balanced its budget -- the first G-7 country to do so. But strong economic fundamentals aren't all Canada has going for it. Many of you will know of the study by KPMG International that compared the costs of doing business Canada, the United States and five European countries. The study found that it is cheaper to set up and run a business in Canada than anywhere else studied. To take a stark example from the KPMG study, a European business setting up a typical 100-worker plant in Canada, will save, on average, nearly US$1 million annually over a similar site south of the border. This is a critical point. Investors from Europe who want a foothold in North America can do so in a more cost-effective way by looking to Canada than to the United States. Europeans must understand and recognize that Canada is not simply a market of 30 million, but a gateway to the 400 million consumers of North America. Six-way trade in the NAFTA is over US$500 billion per year. Canada has preferential access to the largest market in the world, and no one knows the Americans as we do. As well, we are leaders of the FTAA [Free Trade Area of the Americas] and are making significant gains in the world of Latin America. And, of course, we are also a Pacific nation, as a member of APEC [the Asia-Pacific Economic Cooperation forum]. So, Canada is a great entry into a vast area for immense trade and commercial potential. Third, our plan is to continue to champion freer trade around the world. In encouraging trade liberalization around the globe, we know that free trade should not mean a free-for-all, and that rules are necessary to provide fairness and certainty. That's why Canada has concluded free trade agreements with the United States and Mexico, Chile, and Israel, and are proponents of freer trade in our hemisphere and in the Asia-Pacific region. With more than 40 percent of our GDP and one out of every three jobs in Canada dependent upon exports, Canada's economic destiny lies in embracing globalization and in ensuring that we can prosper in an open trading environment. It is somewhat troubling, therefore, that we have a $12 billion trade deficit with the EU. That may, in part, be due to an outdated view of Canada as primarily a source of natural resources. Our task is to update that image, to let Europeans know, for example, that we are fifth in the world in terms of aerospace and fourth in telecommunications. But we must also say, quite frankly, that image isn't the only problem. We are also frustrated by the barriers that have been erected to prevent some of our products from entering the European market. Europe is a mature market, but, at a time when barriers are falling around the world, I am hopeful that Europe will become a more accessible market for Canadian products and services. The fourth and final component of reinvigorating our commercial relationship with Europe is to create the right framework for transatlantic trade. At the moment, Europe is pursuing three different tracks: one with Canada, one with the United States and one with Mexico. While in the short run this may enable these individual plans to make progress, in the long run Canada believes that this three-pronged approach is both cumbersome and inefficient. Soon, the time will come to converge the three roads into one super highway across the Atlantic, involving free trade between Europe and all of the NAFTA countries. We need to envision community-to-community dialogue, and not a community-to-three- different neighbourhoods. This would more accurately reflect the reality of the business community that does not view Canada, the United States and Mexico as three separate markets, but as one market, called the NAFTA. It desires, therefore, an integrated, comprehensive, cross-Atlantic approach. This would also help to lessen concerns about a "fortress Europe" or "fortress North America" and demonstrate the long-term wisdom of extending hands across the ocean. Our preference for a single set of negotiations is not new. As long ago as 1994, in a speech to the French Senate, Prime Minister Chrétien proposed a NAFTA-EU free trade agreement. He promoted that idea again last October in his speech to the Canada-United Kingdom Chamber of Commerce, and reinforced this during his most recent visit. So we call upon Sir Leon Brittan and the EU to integrate its approach to the North American market and begin to see it for what it is -- a single market and a single entity, which should be the subject of a single trade agreement. I began by talking about the deep roots we Canadians have in Europe. In honour of our Italian hosts, I want to remind ourselves that last year marked the 500th anniversary of the voyage of Giovanni Caboto -- John Cabot -- to our shores. Today, we must emulate the great spirit of adventure embodied by Caboto. We must look beyond our frontiers. We must reach out across the ocean and embrace the opportunities that await us. We must build a relationship that will honour our past. But more importantly, we must strive to build a relationship that embraces our tomorrows, one that seeks to bring our two communities and peoples closer together. Thank you.</li> </ul> </body> </html>

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