2004/5 CHECK AGAINST DELIVERY
NOTES FOR AN ADDRESS BY
THE HONOURABLE JIM PETERSON,
MINISTER OF INTERNATIONAL TRADE,
TO THE CANADIAN CHAMBER OF COMMERCE
NAFTA: TEN YEARS AND BEYOND
MEXICO CITY, Mexico
February 16, 2004
I am honoured that my first official visit to Mexico as Minister of International Trade is
with the Canadian and Mexican business community. I am pleased to have with me
from Canada my esteemed colleague and fellow parliamentarian Charles Penson. I
would also like to extend a warm welcome to representatives of the Mexican
government and Congress who are with us today.
Now is a busy time for Canada. The government of our new Prime Minister,
Paul Martin, has recently stated its objectives for Canada as we forge ahead in a
globalized world:
• strengthened social foundations;
• a 21st century economy built on innovation and entrepreneurship; and
• strong international engagement and leadership.
Mexico is a strategic priority for Canada. I'm here today to build on our relationship.
Canada-Mexico bilateral relations
Canada and Mexico know the benefits that flow from freer trade. This year marks the
10th anniversary of the coming into effect of NAFTA, the trade agreement that has
brought our two countries together in so many ways. The Canada-Mexico partnership,
which this year celebrates 60 years of diplomatic relations, has always been one of
cordiality and mutual respect. For many years, however, we did not fully tap into the
economic potential of our geographic proximity and compatible commercial interests.
We share fundamental values: a common embrace of democracy and respect for
human rights. We also share a common belief that our economies work best and the
quality of life of our people improves most when barriers to trade are removed. And,
thanks to 10 years of NAFTA, we have a common stake in enhancing the opportunities
afforded by our shared trading relationship.
Given all we share, it was very appropriate that Mr. Martin made Mexico his first foreign
destination as Canada's new prime minister when he came to Monterrey last month for
the special Summit of the Americas. I understand he invited President Vicente Fox to
visit Canada possibly as early as this summer.
Canadians and Mexicans have become close friends and strategic partners. We now
make common cause on a broad spectrum of issues, from trade and investment to
diplomacy.
Canada-Mexico ties are solidly rooted in personal contact. Some 50,000 Canadians of
Mexican descent currently live in our country. Every year, one million Canadian tourists
visit Mexico. Over 10,000 Mexican students are studying in Canada.
This year we celebrate the 30th anniversary of the Seasonal Agricultural Workers
Program, which brought more than 10,000 Mexican workers to Canada last year alone.
Our work together on governance issues has enriched our innovative partnership. We
have exchanged best practices on issues ranging from machinery of government to
access to information; from virtual learning for public servants to federalism and
decentralization. We will continue to deepen these ties through dialogue among
parliamentarians, ministers and officials.
As I move on to governance, I must acknowledge the great strides President Fox's
administration has taken to reform and modernize governance here.
Questions of transparency and good governance will always be challenges for both of
us; we will be judged by the measure in which we respond.
Underlying our relationship is the belief that mutual, beneficial investment creates
wealth, jobs and growth. While governments build frameworks for common advantage
with agreements such as NAFTA, it is people like you who make this potential real.
Your hard work, your vision and your confidence to think big are the true strengths of
our nations.
Canada-Mexico bilateral trade relations
NAFTA has been a great success for both of us. In just 10 years, Mexico has moved
from Canada's 16th largest export market to fourth. Canada has gone from Mexico's
fifth largest export market to second.
You now sell more to us than to both the EU and Japan. Under NAFTA, Canada's
investment in Mexico has grown 10-fold. Canadians are the fourth largest investors in
Mexico, and over 1,200 Canadian firms do business here.
Many of these companies are household names in Canada: ScotiaBank, Magna
International, whose president recently stepped down to run for the job of prime
minister of Canada against the governing Liberal party. I wish her tremendous
success…in Mexico!
Other names worthy of note are TransAlta, Bombardier, GTC Transcontinental and
Reichman's International, whose Torre Major is the tallest and most modern office
building in Latin America.
Canadian trade and investment in Mexico have been supported by Export Development
Canada (EDC). Mexico is now the second most important market for EDC after the
United States. In 2003 alone, EDC supported more than 400 Canadian companies in
the Mexican market, over 70 percent of which are small or medium-sized companies.
A success story is the recent increase of EDC's line of credit to América Móvil, which
has doubled to US$250 million.
NAFTA
Canada and Mexico are also closely linked by our shared trading relationship with the
United States. Managing that relationship is critical to both our countries.
NAFTA has both secured and strengthened our access to the largest, most powerful
economy in the world. Under it, we have each increased the value of our exports to the
United States, but not at the expense of each other. Canada has consistently held
around 19 percent of this market, while Mexico has doubled its share under NAFTA.
Borders are critical to all three countries. We must combat terrorism and ensure
security while keeping our borders open to trade. We share a mutual interest in making
sure our borders are the most secure in the world as well as the most efficient.
We will continue to identify existing impediments to trade and investment and work to
eliminate them. Last October, at the NAFTA Commission meeting in Montreal, we
agreed on further improvements, including:
• further liberalizing the NAFTA rules of origin;
• greatly reducing transaction costs; and
• studying the potential of tariff harmonization.
In an era when trade in services is expanding, we need to further facilitate the
movement of business professionals across our borders, as well as promote mutual
recognition of our respective professions. On that point, our civil engineers are in the
final stages of reaching an agreement that will allow them to practise in both countries.
And we are encouraging other professions to follow suit.
As we go forward, there's no doubt of the yet-untapped potential that Mexico represents
for Canadian entrepreneurs, or that Canada holds for Mexican businesses. NAFTA has
given both our countries preferred access, and we must continue to take advantage of
the opportunities this represents.
NAFTA has also helped kindle the interest of both Canada and Mexico in further trade
liberalization in the hemisphere. That is why the Free Trade Area of the Americas
(FTAA) is a shared priority for both our governments.
FTAA
The FTAA is a bold endeavour whose realization will require stronger leadership.
Building on its successful experience with trade and investment liberalization through
NAFTA, Mexico is now exerting just such a leadership role in shaping and broadening
hemispheric consensus and confidence. Canada appreciates the close cooperation we
enjoy with Mexico in the FTAA negotiations.
The FTAA is not an end in itself. It is about building a hemispheric partnership for
prosperity that extends from Baffin Island to Tierra del Fuego, one that will support and
strengthen freedom, respect for human rights and the progressive social and
environmental policies that are the essence of healthy societies--the ultimate objectives
of good government, and ones at the heart of the Summit of the Americas process.
WTO
Last month in Davos, I was delighted to have the opportunity to talk with your Secretary
of Economy Fernando Canales. I share his deep commitment to the successful
conclusion of the WTO's Doha Development Round of trade negotiations.
Canada is a champion of the Doha Round because we believe that, to be sustainable,
globalization must be truly global. It cannot merely be a compact among rich nations
and large corporations.
We believe that prosperity without shared human progress and purpose has no
meaning. All nations must be able to enjoy the expanded opportunity and prosperity
that come with open markets for trade and investment.
Canada and Mexico have many similar goals in these negotiations, including
fundamental agricultural reform, improved market access and strengthened rules. We
are working to eliminate export subsidies on all agricultural products. In particular, we
are pressing the United States and the EU to commit to substantial reductions in
trade-distorting subsidies in order to level the playing field for our farmers.
Improving market access will also create economic growth, especially in South-South
trade, where 71 percent of the tariffs paid by developing country importers are actually
on goods from other developing countries.
Globalization for all
As Prime Minister Martin said in Davos last month: "All states have a real and legitimate
stake in the welfare of other countries, and that confers a special obligation on political
leaders to make our international systems work for the welfare of all."
This should not be seen solely as a difficult challenge, but as an opportunity for us to
create a better world for our children and our grandchildren. It is in our national interests
that international institutions such as the United Nations, the World Trade Organization,
NAFTA, the Organization of American States, APEC and others, such as the FTAA
when it comes into being, work well and work for everybody.
We live in a connected, interdependent world where international interests spill over
national borders and national interests are everybody's business. When one country
pollutes, it is felt not only in that country but around the world. Climate change can be
solved only when nations put their own interests aside for the good of all. Canada is
pleased to be working with Mexico as it sets up its own national climate change office.
In conclusion, let me say how happy I am to be here in Mexico with so many business
leaders who are responsible for the accelerating pace of trade and investment between
Mexico and Canada.
We must go further. We must continue our work together on the Doha Development
Agenda. Our success under NAFTA gives us the credibility to say to others: enhanced
trade and investment can indeed bring great economic and social gains without
sacrificing sovereignty, cultural distinctiveness or national priorities. Globalization can
indeed work for all.
Clearly, the relationship that Mexico and Canada share has worked greatly to our
advantage. I look forward to strengthening our ties of commerce, common cause and
friendship in the months and years ahead.
Thank you.