98/72 CHECK AGAINST DELIVERY

NOTES FOR AN ADDRESS BY

THE HONOURABLE SERGIO MARCHI

MINISTER FOR INTERNATIONAL TRADE

TO THE

PERU-CANADA BUSINESS FORUM

TORONTO, Ontario

October 29, 1998

(9:45 a.m. EST)

This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca

Good morning. Let me begin be adding my own welcome to all of our distinguished guests. We are certainly honoured by the visit of President Fujimori, the members of his Cabinet and the impressive business delegation that has accompanied them.

While our weather may be somewhat cooler than what you are used to, we want you to know that our welcome is warm and we are glad that you have come. Welcome.

I want to thank the Canadian Council for the Americas, along with the Embassy, Consulates and Trade Commission of Peru for organizing today's events. This is a wonderful chance to explore opportunities for trade and investment between our two countries, and I applaud your initiative.

I also want to recognize Canada's Secretary of State for Latin America and Africa, David Kilgour, for the outstanding work he has done to promote greater ties between our two countries. David visited Peru last year and came back very enthusiastic about the potential for greater commercial relations with your country.

Peru, of course, is home of one of the greatest civilizations of the past. The ancient Incas, while a nation of only 40 000 people, conquered 10 million subjects to establish an empire larger than the Ottoman Empire at its peak.

Canada, by contrast, is a relatively young country. But while our histories may be different, our futures are connected.

Canada is a nation of the Americas. And we are committed to expanding our trade ties with other members of the hemispheric family -- whether through our leadership on the FTAA [Free Trade Area of the Americas], or in aggressively pursuing our bilateral interests in the region.

Canada and the Andean Community are already discussing ways to enhance our bilateral trade relationship by exploring a Trade and Investment Co-operation Arrangement. This would complement the existing arrangements that Canada already has with Mercosur and the Central American Common Market.

We are hopeful that such an agreement with the Andean Community will be reached shortly.

Trade between Peru and Canada may be modest, but it is growing rapidly. Two-way trade last year amounted to $400 million -- an increase of more than 100 percent from 1994.

One of the most dynamic areas of that growth has been Canadian investment in Peru. A little over a year ago, Peru launched a major promotional tour of Canada to explain the opportunities that are awaiting Canadian investors. It is obvious that the message got through.

More and more Canadian companies, especially mining companies, are looking to Peru and choosing to invest in its potential. The mining sector alone has a value of $4.2 billion. And companies such as Rio Algom, Teck and Noranda are making the largest single investment ever in Peru, to develop Antamina, the largest copper and zinc deposit in the world.

Other Canadian companies, such as Cominco, Barrick, Ontario Hydro and Hydro-Québec, are on the ground and making a large contribution to Peru's economic development.

In addition, significant infrastructure requirements, such as those created by the vast CAMISEA project, or the need for roads, seaports and railroads, also represent tremendous possibilities for Canadian companies and Canadian technology.

Similarly, in the area of telecommunications, with the removal of Telefonica del Peru's monopoly, we see a near-perfect match between what Peru needs and what Canada has to offer.

Because whether it is in mining, energy, infrastructure or telecommunications, Canada offers world-leading technology that will meet the demands of Peru's expanding economic base.

So there is good reason for optimism, and our business communities are already working hard to expand commercial relations between us. Governments must also do their part. In this regard, Canada remains firmly committed to a Foreign Investment Protection Agreement, and while it is not yet ready to be signed, we will continue to work with our Peruvian friends with a view to completing it very soon.

Now we turn our attention to an agreement on double taxation, and I am hopeful that this can be concluded in the very near future.

Such an agreement is an important signal for our respective business leaders, for it represents the need to build a transparent, rules-based investment regime that will inspire confidence.

While Peru is one of the strongest and most open economies in the region, Canadian investors will want to see progress in this area, especially in light of today's economic turbulence.

Similarly, they will want to be assured that disputes concerning the status of their investments will be dealt with fairly and openly by Peruvian regulatory agencies. And so I appeal to my visiting ministerial colleagues to give swift attention to this important part of our partnership.

Another significant part of the government's role is in ensuring progress in the area of human rights and the strengthening of democratic institutions. It is a goal that we all must share. We have worked closely with individuals and civil society in Peru to improve these conditions, and we will continue to invest significant resources in these areas.

I'm sure you'll agree on the importance of sharing the social dividend as the economic dividend increases. Because if history teaches us anything, it is that we can only ensure long-term stability if the benefits are shared and the people are engaged.

People-to-people connections must also incorporate a strengthening of the business-to-business ties between us. A true public-private partnership is a necessity, especially since governments have become smaller. We need to involve the private sector and build a framework through which more companies will be encouraged to pursue the opportunities that the Peru-Canada relationship presents.

Today's initiative by the Canadian Council for the Americas is a strong example of just this sort of business-to-business contact, and we need to do more of it.

Finally, as you know, Canada is currently chairing the negotiations on the FTAA, and we remain very committed to this important undertaking.

From our perspective, the FTAA represents an exciting, ground-floor opportunity. Economies in this hemisphere are growing quickly and undergoing the deep, structural changes that will enable them to compete in the new global economy.

And so the FTAA is a regional priority for Canada and an integral part of our recognition of ourselves as a country of the Americas.

As you know, the FTAA will create the world's greatest trading region. But the benefits will extend far beyond the economic: history records that trade leads to more openness. It breaks down the walls that divide us, and creates common interests that unite us.

So as we go forward with the FTAA, we must not lose sight of the principles of the Miami Summit: principles that remind us that our goal in liberalizing trade is not simply to increase national wealth, but to improve people's lives.

Because at the end of the day, we will be judged not on the grandeur of our plans, but on whether we increased the prosperity and expanded the opportunities of our citizens.

Of course, we are under no illusions about the task before us. I fully expect that in the months ahead, we will face many challenges and encounter many storms. But when those storms come, we must not run and hide under the shelter of protectionism. We must not succumb to the voices whispering retreat or retrenchment.

Instead, we must stick to our goals. We must continue to pursue the path to freer trade.

Why do I stress this? Because if we let the FTAA slip away, we risk losing a historic opportunity to promote prosperity in the region. It is vital for all of the countries in the Western hemisphere that we maintain the momentum for liberalized trade.

And we see Peru playing a key role in maintaining this momentum. In the days and weeks that lie ahead, we will continue to count on Peruvian support, and to rely on your insights and experience.

Peru and Canada may be divided by distance, but we are united in our common desire to enhance trade between us and indeed, throughout the hemisphere. Together, I believe we can do great things.

So let us build on the momentum we have generated here today. Let us continue to expand our ties and our trade. And let us work together to create a future that is better and brighter for Peruvians and Canadians alike.

Thank you.