99/32 CHECK AGAINST DELIVERY

NOTES FOR AN ADDRESS BY

THE HONOURABLE SERGIO MARCHI

MINISTER FOR INTERNATIONAL TRADE

TO THE NAFTA FIFTH ANNIVERSARY LUNCHEON

OTTAWA, Ontario

April 23, 1999

(1:45 p.m. EDT)

Ambassador Barshefsky, Secretary Blanco, fellow Ministers, Members of Parliament, distinguished guests, ladies and gentlemen:

Let me welcome all of you to Ottawa, especially our friends from the United States and Mexico.

I also want to express my thanks to the Business Council on National Issues, the Canadian Chamber of Commerce and the Alliance of Manufacturers & Exporters Canada for working with us in putting this luncheon together.

Today we celebrate five years of the North American Free Trade Agreement [NAFTA]: five years of progress, partnership and achievement.

In its first five years, the NAFTA has exceeded expectations, contributing to considerably increased trade and foreign direct investment [FDI] flows throughout the continent.

Total trade among the three countries has increased by 75 percent and now surpasses C$700 billion annually.

This in turn has stimulated strong economic growth and contributed to record employment levels in all three NAFTA countries.

The benefits to workers and their families are clear: employment has increased by 20 percent in Mexico, by 7 percent in the United States and by 10 percent in Canada.

On the investment front, the NAFTA partners have invested C$532 billion in each other's economies, while total FDI has reached C$1.1 trillion.

So the message is clear: the NAFTA works.

Furthermore, the NAFTA has helped reduce tariff and non-tariff barriers between the partners and has paved the way for even more commercial activity.

Last year, for example, Canada and the United States completed the process of tariff elimination under the NAFTA, and most tariffs between Canada and Mexico will be removed by 2003.

Our goal is to make it equally easy for a Canadian company to do business in Tulsa or Tijuana as it can in Vancouver.

Moreover, the NAFTA agreements on labour and the environment have bolstered co-operation in these important areas and ensured that domestic laws are fully enforced.

Ultimately, the rules-based trading framework created by the NAFTA has made the conduct of business in North America more predictable and transparent. This, in turn, has helped to minimize disputes.

For Canada, the NAFTA has done something else as well: it has ignited our interest in pursuing opportunities throughout our hemisphere.

Over the past few years we have worked to extend the benefits of free trade beyond North America. As you know, we have a successful free trade agreement with Chile, modelled on the NAFTA, and trade and investment co-operation agreements with Mercosur, with Central America and soon with the Andean Community.

And last year, more than 500 companies participated in a Team Canada visit to Latin America led by our Prime Minister -- the largest and most comprehensive of its kind.

Canada is also an enthusiastic supporter of the Free Trade Area of the Americas initiative. We are currently chairing the negotiations, which will ultimately create the world's largest free trade area, with a population of 800 million and a combined GDP [gross domestic product] of over C$10 trillion.

So the NAFTA has been important not only for the benefits it has brought but also for the precedent it has set and for the desire it has inspired to expand our vision beyond its borders.

Of course, to cite the successes of the NAFTA is not to pretend that our work is done.

From the Canadian perspective, a number of challenges exist for the next leg of the journey:

• First, we must ensure continued implementation of the NAFTA, with particular attention to areas such as professional certification, spousal employment and ground transportation.

• Second, we need to ensure greater openness and transparency in NAFTA institutions. Governments need to reach out better and engage business and other stakeholders.

• Third, we must clarify our common understanding on investor-state provisions to ensure that government's ability to legislate and regulate in the public interest is protected.

• Fourth, we need to make sure that the NAFTA keeps up with the rapid technological changes taking place in the marketplace, such as the introduction of electronic commerce. We must not proceed into the next millennium with old rules that don't reflect the new realities.

• Fifth, we should re-assess areas that were not fully addressed in the NAFTA, or where further progress -- or even a different approach -- may be possible. This should include greater co-operation in our respective use of trade remedies and in our efforts to ensure that technical standards are more compatible and less distorting.

• Finally, because all trade -- like all politics -- is local, we must work to ensure that the goals of trade liberalization, sustainable development and respect for workers' rights are compatible and mutually reinforcing.

Of course, our American and Mexican friends may well have additional priorities. The overall objective, however, remains the same: to continue working together to ensure that we have a common vision for a North American trade community.

This morning, Secretary Blanco, Ambassador Barshefsky and I met with a group of university students from our three countries. These bright young individuals represent the ideals and hopes of a NAFTA generation. We need to persevere, in large part, for them.

Coming together under the NAFTA was a beginning. Staying united was progress. And working together continues to be a success.

As we proceed on this remarkable journey, let us build our friendship and co-operation into a true North American community, where we develop shared values and interests as fully and as quickly as we exchange our goods and services, and where the NAFTA approach can be held out as an example to the rest of the hemisphere and the world.

Thank you.