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<html> <head> <meta name="Generator" content="Corel WordPerfect 8"> <title>MR. PETTIGREW - ADDRESS TO THE DIPLOMATIC FORUM - HALIFAX, NOVA SCOTIA</title> </head> <body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#c0c0c0"> CHECK AGAINST DELIVERY NOTES FOR AN ADDRESS BY THE HONOURABLE PIERRE PETTIGREW, MINISTER FOR INTERNATIONAL TRADE, TO THE DIPLOMATIC FORUM HALIFAX, Nova Scotia October 18, 2002 Introduction I am very pleased to join you this morning for this plenary session. This forum provides all of us with an excellent opportunity to discuss issues of mutual interest, and strengthen the ties of friendship that exist between our countries. As you know, my topic today is Canada's international trade policy agenda. Don't worry, I'm not going to bore you with a review of our many activities. You can get that on our Web site! Relationship Between Trade and Other Issues Instead, this morning I'd like to offer some thoughts on how this policy agenda fits into the broader preoccupations of the people of Canada and their government, given what you have heard earlier today about the priorities announced in the Speech from the Throne. Let me start by saying that I think that trade and investment are at the heart of everything that is going on--I can't help it, it's my job! But there are good reasons for our active and innovative trade agenda, and there are good reasons why I am still personally so excited by this portfolio. In Canada, and around the world, there is much talk of deficits--fiscal deficits, democratic deficits, social, environmental and infrastructural deficits, development deficits. The Canadian government has a good record in tackling deficits, but reducing a deficit is more than just an arithmetic exercise in pursuit of a zero sum goal. The balance you achieve must be seen as a net improvement for everyone. Just as sound fiscal management supports a healthy economy, investments in society, the environment, infrastructure, development and democracy itself build a healthy future--not just for Canadians, but for all our peoples. And--surprise--when it comes to reducing deficits, I believe trade policy is part of the solution. I know this is the point at which I begin to sound a bit philosophical, instead of sounding like a practising politician whose constituents work in vulnerable industries. Well, why not? There is nothing wrong with the force of ideas: combined with hard work and good will, they can change the world. The Goal: A Prosperous Canada in a Prosperous World My idea, in a nutshell, is a straightforward one: to work for a prosperous Canada in a prosperous world. What do I mean by prosperity? It is freedom from want--material, environmental, social and spiritual. Now I'm not preaching Western-style consumerism. I know the planet simply cannot provide for all its inhabitants on the scale of a rich society like Canada's, and I know huge changes are in store, for Canadians as well as for everyone else. But I am saying that we are committed to finding engines of transition, means of spreading the opportunities for growth, so as to build prosperity in all senses of the word. No one says it will be easy. We have some experience with the difficulties of finding the best way, whether in federalism or in health care, water quality or fisheries management. But, curiously enough, we find our trade partners don't always instantly see how our forestry practices or our cooperative farm organizations are better than theirs! Facing Common Challenges Well, that's life: we want different things; others do too. But like it or not, many of us face the same big challenges. These include: • population growth and mass migration; • poverty, disease and malnutrition; • war, ethnic strife, intolerance, crime, terrorism, and the trampling of human rights; • sustainable development pressures on the environment and on our cities; • governance challenges to government and society (how do we cope with change?); • climate change, itself maybe the ultimate example of the limits of consumerism; and, of course, • how to build a world system of trade and payments in the image of the needs of the 21st century. International Trade: Benefits Outweigh Disadvantages You know as well as I do that the inherent nature of trade--interaction with others-- brings some of the answers to the big problems. For instance, half a century of economic integration has brought Western Europe a peace it had not known in centuries. But that interaction also brings questions, for example, about the impact of interdependence on societies' ability to choose their own path. It is clear to me that the benefits of trade far outweigh the disadvantages. If there are forces at work in the world to turn back the clock of international commerce, whether from fear or protectionism, we must resist them. We don't have an endless supply of solutions to the really important problems; that is why we must back those processes that work. On the trade front, that means multilateralism, first and foremost. The WTO matters to us; the Doha Development Agenda matters to us. Of course we do a huge proportion of our trade with the United States, and we are far better off for it. What can I say, we chose our neighbour wisely! Furthermore, our trade is largely governed by NAFTA now, even if we both have recourse to WTO rights and disciplines for some of the "unfinished business" in our relationship. So I'm not going to stand up here, as Minister for International Trade of a country with free trade agreements signed with five partners, and under negotiation with over 30 more, and say that regionalism isn't important to Canada too. Multilateral, Regional and Bilateral Trade: Different Tools, Same Goal What I am going to say is that our trade policy aims to integrate all the tools--multilateral, regional and bilateral--and make them serve the various objectives we have set for ourselves. WTO negotiations, for instance, are the best place to pursue our key export interest: reforming world agricultural trade. And that is also a key concern of developing countries. Within the FTAA [Free Trade Area of the Americas] and in our bilateral negotiations, we are seeking to make progress on market access issues, but the big game on subsidies is in Geneva. Market access for industrial goods and for services, by contrast, is something we can improve at all levels simultaneously, including unilaterally, as we've proved with our new initiative for least developed countries. Bilateral negotiations, by contrast, have a definite advantage when it comes to innovation. The Canada-United States Free Trade Agreement negotiations, for instance, certainly helped us sharpen our understanding of how trade in services might best be handled in the WTO framework. Similarly, NAFTA has taught us a thing or two about investment disciplines--which we still believe in, I hasten to add! And so, you may be sure that if there is agreement to negotiate on that subject under the WTO, Canada will draw on its experience with NAFTA. On balance, I would have to say that it is easier to be creative in negotiations with fewer parties. Recently, for example, our partnership with Costa Rica allowed us both to innovate in the area of trade facilitation and in the structuring of trade concessions, to take into account differing levels of development. Costa Rica, Chile and our NAFTA partners have also allowed us to explore different ways of improving environmental protection and respect for labour rights. These issues are also discussed hemispherically in ministerial processes under the aegis of the Summit of the Americas, and multilaterally in the ILO [International Labour Organization] and in environmental bodies. Perhaps I should take a moment to explain how I see the relationship between these non-trade areas and trade and investment per se. I see them as separate, yet related. The Old GATT System: Strengths and Weaknesses A strength of the GATT system was its ability to draw boxes around certain issues or to ignore them altogether, leaving them outside the system, at least for the time being. That resulted in special rules for procurement, for subsidies, for balance of payments crises, for films, and for many other areas. And if special rules didn't exist, we could always create them under cover of a waiver, like we did for U.S. agricultural policies, or for our preferences for developing countries. Bit by bit, we've taken a second look at these exclusions and omissions--technical barriers, procurement, services, agriculture, intellectual property, and so on. Why? Because we realized that we were passing up opportunities for growth, and we came to agree that the time had come to revisit these issues. I put it to you that we, the nations of the world, are coming to a similar conclusion about an array of broader economic, environmental and societal issues: we have to look at them together, to make sure we are not passing up opportunities. Indeed, many of you represent countries where you have come to that conclusion already: that issues of governance, regulatory balance, competitiveness, or environmental standards had to be addressed. I will not claim that we in Canada know for sure where and how we should seek to make progress collectively. We are still grappling with how to advance that most basic of workers' rights, the right to a job, through trade, and maybe through trade agreements. We would like to create an enabling environment for countries' efforts to protect their ecosystems, while ensuring that the focus remains on cooperation, not confrontation. But there is still room for linkages. Countries of the Americas committed themselves, at the Summit of the Americas, to respect democratic principles, and the FTAA is part of that process. I do not know how best to proceed, but I know that these issues and more are part and parcel of life in the 21st century. I know that Canadians expect their government to address them, at home and abroad, and I know we have to talk to each other and learn from each other if we are to find the way forward. Development I've saved the best for last: development. Ironically, for a country that does over 90 percent of its trade with other OECD [Organization for Economic Cooperation and Development] countries, virtually all of our current trade initiatives have a strong development component. I said a moment ago that the Doha Development Agenda matters to us, including for perfectly self-interested reasons like getting a better deal for our farmers. But I'm a former minister for international development, you know, and I'm excited by the prospect of doing something tangible to advance the cause of development. Of course it won't be easy. The duty- and quota-free access we have just given to least developed countries will affect the residents in my own riding, among others, and developing countries are asking for much, much more. But, we'll be tough negotiators in return. We'll ask for market access concessions, we'll seek proof that non-reciprocity, market access, Special and Differential Treatment, and Trade-Related Technical Assistance will actually lead to growth and development. But maybe--just maybe--we'll tear apart one more of those GATT boxes I was talking about, the one that allowed us to ignore the reality that development is everyone's business, and blinded us to the fact that it is to everyone's benefit. You all know the saying, "No pain, no gain." As an elected representative I am especially attuned to pain: job losses; fear of loss of sovereignty; resentment at outsiders telling us what to do. I expect these sound familiar to you! But every minister for trade these days knows there will be pain. The success of the GATT took care of the easy stuff years ago. The Challenges that Cannot be Avoided Now, real progress depends on real choices: • Do we cut subsidies to farmers? • Do long-established industries lose protection and preference? • Do we accept more onerous obligations and higher standards of economic governance? • If we cut tariffs, how do we protect government revenues? • How do we reconcile environmental or social or cultural goals with economic ones? • Do we give any guarantees of access to our job markets to foreign workers? • Do we practice the non-discrimination we preach and give foreign investors rights, not just profits, in exchange for their technology? • Do we have to share our food and energy and resources with others when they need them, not just when we don't need them? I could go on, but I think you get the idea. Each of these issues has a direct bearing on development, even if it's not overtly part of the development agenda. Each one is challenging, to say the least. Many people, representing powerful vested interests, would blanch at the mere mention of some of these subjects. I'm sure you recognize many hard choices in that list. But if there's one thing that is fairly safe to predict about the revolutionary period we are entering, it is that hard choices are going to be unavoidable in the 21st century. Conclusion Of course, we cannot move forward on every issue at the same time. But, we must do our best. We must help our populations adapt to change, otherwise the backlash could stop progress dead in its tracks. By finding answers to these challenges of post-modern trade policy, we will free ourselves to move further down the path to a true and more moral prosperity, to a prosperity that is shared by people around the world. This is what I call "sustainable prosperity." We Canadians have benefited, and will continue to benefit from international trade. But we want to share the wealth, as it were, recognizing that a more prosperous world is the key to even greater success in the future. And that, in suitably poetical and philosophical terms, is Canada's international trade policy agenda! I wish you all a very interesting and rewarding forum, and thank you very much for your welcome this morning. </body> </html>

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