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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. MARCHI - ADDRESS TO THE FIFTH CONFÉRENCE DE MONTRÉAL - MONTREAL, QUEBEC</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> 99/38 CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE SERGIO MARCHI MINISTER FOR INTERNATIONAL TRADE TO THE FIFTH CONFÉRENCE DE MONTRÉAL MONTREAL, Quebec May 31, 1999 (9:30 a.m. EDT) It is a real pleasure to be with you today, and to welcome so many distinguished visitors to our country. Y quiero darles, en esta occasion, una bienvenida calurosa a nuestros amigos de america latina y del caribe. In many ways, this conference kicks off a period when Canadian eyes will be turned to the Americas as never before. In just a few weeks, we will welcome the athletes of the hemisphere to the Pan American Games in Winnipeg. In November, Canada will host the Americas Business Forum in Toronto, to be followed immediately by the FTAA [Free Trade Area of the Americas] Trade Ministers' meeting. In the spring we will host the Annual General Assembly of the Organization of American States. And of course Canada is also the venue for the next Summit of the Americas in 2001, to be held in Quebec City, one of our most beautiful, enchanting and historic cities. As we enter a new millennium, the deepening of our relationship with the Americas is a natural next step in Canada's economic evolution. That's because how or with whom we trade is partly a function of how we fit in with the global community. Our trading patterns are a reflection of who we are. Trade has brought Canada prosperity -- and with over 40 percent of our economy and one job in three linked to exports, it is clear that we are on the right path. It is also clear that when Canadian traders work together, Canada really works! Just as the fur traders of yesterday brought back jobs, investment and growth to their homes, Team Canada missions do the same for all of Canada today. The partnerships and alliances we build on our trade missions will last for generations and enable us to adapt to today's ever-changing world. More and more, we have come to realize that our future prosperity is intrinsically linked to that of our hemisphere. Indeed, we currently export more to Latin America than we do to France and Germany combined. And not surprisingly, the Team Canada mission to Latin America was the largest in our history, with more than 500 companies participating, representing all 10 provinces. That mission led to over 300 deals valued at almost $2 billion. Such success reflects how well the federal and provincial governments work together. Team Canada missions are testimony to the fact that Canada works best when it works together. Canada sees a great future for this hemisphere -- a future united by trade, strengthened by commerce and energized by its people. Recognizing the growing importance of Latin America, we have signed a free trade agreement with Chile, and concluded trade and investment arrangements with Mercosur and with Central America. We are pursuing a similar arrangement with the Andean Community. And so to the question posed by this plenary -- "Are we ready for hemispheric free trade?" -- my answer is a most emphatic "yes." As you know, Canada is chairing the FTAA process until November of this year, and I am pleased to report that the FTAA negotiations are right on track. Work programs have been established for the nine negotiating groups and for the three bodies dealing with some of the broader, cross-cutting issues. Negotiations are well under way. The Trade Negotiating Committee met last month in Miami to advance our work on business facilitation and will meet again in Bolivia in July. Their preparatory work will enable Ministers to take stock of the negotiations and chart next steps when we convene in Toronto. But while hemispheric free trade may be an idea whose time has come, it is not an idea whose success is assured. So this morning, I want to discuss a number of challenges confronting the FTAA. Let me touch on five that Canada considers paramount. Political Momentum First is the need to sustain political momentum for the FTAA. And there are several dimensions to this. For starters, there is the absence of fast-track negotiating authority in the United States. While this is disappointing, it is not fatal for the time being. However, it will clearly affect the level of engagement of other countries, which will not want to negotiate twice. Clearly, no one wants to see the results of months of effort opened up to the wheeling and dealing of the United States Congress. So let there be no doubt: the hemisphere needs a United States that is outward-looking and committed to trade liberalization. Fast-track authority would provide an important reassurance in this regard. It would also ensure that no one else could use the absence of this authority to delay progress for other reasons. Another variable affecting the political landscape is the impact of the global financial crisis. The events of the last two years have caused some to question the benefits of freer trade and to call for increased protection. From our perspective, however, these events only make the case for trade liberalization more compelling. History shows that closing markets only aggravates recessions and makes economic turnaround more difficult. Any return to the protectionist policies of the past, therefore, would betray our commitment to our citizens to create jobs, facilitate economic growth and enhance the quality of their lives. Moreover, the time frame we have set for ourselves also presents a political challenge. 2005 is a relatively long negotiating horizon, and over the next six years all the key players will have elections. We should not be surprised if the result is that process issues dominate the first few years, with the more difficult decisions left to the later stages of the talks. So maintaining the political momentum will not be easy, but it is essential to do so if we are to make the sustained effort required to reach an agreement. Disparity in Size and Economic Development Among the FTAA Participants The second challenge is the disparity in size and economic development among the 34 FTAA participants. Negotiating a free trade agreement among nations so diverse is unprecedented. Clearly, creativity and institutional support will be needed so that the smaller economies may effectively prepare for, conduct and follow up on the negotiations. That's why Trade Ministers agreed last year to establish a Consultative Group on Smaller Economies. This body is playing an important role in identifying the concerns and interests of smaller economies across all of the Negotiating Groups. If you represent Trinidad and Tobago, for example, with a population of 1 million, and you look to Brazil, with 160 million, certain legitimate concerns naturally arise. Canada understands these concerns. After all, we entered into a free trade agreement with the United States, an economy 10 times our size. But we also understand -- and have experienced -- the tremendous benefits that flow from liberalized trade. In good part, we have prospered by having a rules-based framework, including an independent mechanism where trade disputes are decided on the strength of the argument and not on the size of the participants. And that is a message we have raised and will continue to champion on behalf of the smaller economies of the hemisphere -- because at the end of the day, a successful FTAA means leaving no members behind. Civil Society The third challenge is to engage civil society in the process. We cannot expect to establish a comprehensive, 34-country trade agreement without involving our people in a meaningful way. This is not simply a philosophical preference; it is a practical necessity. For if we are to broaden political support for continued trade liberalization, our people must feel that their interests are represented, their voices heard and their input valued. I am pleased that Trade Ministers have agreed to a Canadian proposal to establish a Civil Society Committee. But encouraging as this step is, I believe that more needs to be done. The Committee needs to be made permanent, with adequate support and a broader mandate to enable direct contact with non-governmental organizations. Now, I recognize that there is some difference of opinion on the issue of civil society. But we all live in democracies. And the reality is that the social dimensions of trade policy are attracting more and more prominence in all of our countries. As domestic and international issues become increasingly intertwined, concerns are being raised about issues that directly affect people's lives -- issues such as the environment and labour standards. These concerns cannot simply be wished away. They merit a fair hearing. Of course, there is no better way to make the case for the participation of civil society at the hemispheric level than to show leadership on this issue at home. Canada is doing just that. Indeed, we have already held very successful consultations with a wide variety of organizations and industry stakeholders. Since February, the Foreign Affairs and International Trade Committee of the House of Commons has been holding hearings across Canada on both the WTO [World Trade Organization] and FTAA negotiations. And we are consulting, on an ongoing basis, with the provinces so that their views will be fully reflected in the positions we take. The federal government takes seriously its commitment to listening to the views of all Canadian stakeholders and provincial governments. This is how we can present a strong and unified voice during trade negotiations and at international institutions. Unity of purpose on the world stage has allowed Canada to become a globally competitive force. The inclusion of civil society in the FTAA process is an important test for our hemisphere. Our aim should be to engage our citizens in this historic dialogue and to ensure that their voices are heard, shared and ultimately reflected, so that we can build a true sense of community in the Americas. Business Facilitation Our fourth challenge is to make it easier to conduct business across the hemisphere, and to usher in this reform early in the process. Our goal should be to make it as easy for a Quebec firm to do business in Argentina as in the United States. This work on business facilitation is not always glamorous; indeed, it is highly technical. But it is critical to expanding the flow of trade and investment among our economies, and central to the day-to-day reality of doing business in this hemisphere. In other words, it is intended to improve matters for you, the actual practitioners of trade and commerce in this hemisphere. It is no coincidence, therefore, that the focus of current work -- on improving customs procedures and enhancing transparency in government regulations -- is based on the recommendations of our business communities. I am pleased to say that our chief negotiators are making solid progress in both areas, and that we are well on our way to having a package of customs and transparency measures ready for adoption at the November Ministerial meeting. Our success on business facilitation is important for achieving the concrete progress mandated by Leaders and Ministers for the year 2000. By cutting red tape in priority areas such as customs procedures, we can demonstrate early, practical results from the FTAA and at the same time can help generate the added momentum which is so crucial for the road ahead. The FTAA and the WTO Round Fifth and finally, as the Seattle meeting of WTO Ministers approaches, and with it the probable launch of a new round of multilateral negotiations, a significant question mark is the impact of these negotiations on the FTAA. Given the five years of intensive preparatory work that we have undertaken in the FTAA process and its importance to the hemisphere, it is unlikely that members will simply wish to put the FTAA on hold while awaiting the outcome in Geneva. We all remember how long the Uruguay Round lasted! At the same time, however, we recognize that carrying out two major sets of negotiations simultaneously may strain resources, particularly for the smaller economies in the FTAA process. I expect that as negotiations unfold in Geneva, we in the Americas will be able to focus at the FTAA table on areas where we can demonstrate leadership to the rest of the world -- just as some of our achievements in the NAFTA [North American Free Trade Agreement] were later picked up multilaterally in the Uruguay Round results. We should also be able to use the FTAA process to put our shared interests in the Americas onto the multilateral agenda. I would hope, for example, that the hemisphere will speak out, both in Toronto and Seattle, for the early removal of agricultural export subsidies. From our perspective, regional and multilateral efforts at trade liberalization are two sides of the same coin. Regional initiatives can help prepare domestic industries and generate political impetus for the multilateral trade agenda. Our challenge is to harness the creative synergies from the FTAA and WTO processes so that they are mutually reinforcing, for the benefit of all our citizens. Conclusion In closing, let me say that the initiative to liberalize trade in this hemisphere is both ambitious and historic. It has created excitement and passion. But we are under no illusion about the challenges before us. We need to be realistic as well as confident about the opportunities awaiting us. The FTAA will require commitment from all of us. And that commitment cannot waver. Nor can we wait for the perfect time, because there is no perfect time. We must seize this time and this opportunity. The ancient dream of Bolivar and others to fashion the Americas into one of the greatest regions in the world is closer now than it has ever been. Do we have the will to complete our unfinished task? I believe that we do, and that we can build a richer, freer and more prosperous hemisphere for all our peoples. Thank you. Gracias muchos exitos a todos. </body> </html>

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