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NOTES FOR AN ADDRESS BY

THE HONOURABLE SERGIO MARCHI,

MINISTER FOR INTERNATIONAL TRADE,

TO THE

HONGKONG BANK OF CANADA FORUM ON EAST ASIA

TORONTO, Ontario

October 24, 1997

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

It is a real pleasure to be here today and I want to thank the Hongkong Bank for sponsoring this wonderful luncheon. I am also delighted that the members of the Pacific Basin Economic Council and the Prime Minister's Council on Asia Pacific have joined us.

This has been an exciting year for all of us connected with Asia Pacific. During Canada's Year of Asia Pacific, more than 600 events across Canada have celebrated our Pacific heritage and explored new opportunities for trade and investment.

We have raised the profile of this region in our national consciousness. And now that we have placed it front and centre, we must keep it there.

Today, I would like to share some thoughts with you on "the state of play" in APEC [Asia Pacific Co-operation forum] and what our priorities are as we look to the Ministerial and Leaders' meetings in Vancouver next month and beyond.

This year, Canada has had three very specific objectives:

• First, we wanted to advance freer trade and investment;

• Second, we wanted to focus on key elements of economic development such as infrastructure and sustainable growth;

• And third, we wanted to strengthen APEC by involving a broader range of people, including the business community, young people, academics, women and environmental and other organizations.

  Let me just touch briefly on each of these priorities.

  First, advancing freer trade.

  APEC has been working on many fronts to liberalize trade -- not only because it benefits our economies, but also because together we can act as a regional caucus to strengthen the multilateral trading system.

  One of the most exciting developments, and one that has attracted a lot of interest around the world, involves opening up trade in specific sectors. The past year has seen significant progress on this front.

  As you may know, APEC members had agreed to identify a list of sectors for liberalization by 1999. Earlier this year in Montreal, we were able to obtain agreement to accelerate that timetable by two years, so that a list of sectors will now be ready for consideration in Vancouver next month. In fact, my officials are in Singapore working on this right now.

  A number of the sectors are of particular importance to Canada, including environmental products and services, fish and fish products, fertilizers and forest and oilseeds products.

  In considering various sectors, we want the liberalization to be as comprehensive as possible. In addition, we must also move on the trade facilitation front.

  It does us little good to open up a sector if we leave an obstacle course of red tape and regulations standing between you and your customers. Access is important, but we must also concern ourselves with the everyday, practical problems you encounter on the ground.

  As business people, you know the frustrations -- and the costs -- of adapting your products to different standards, of finding accurate information on rules and procedures and of getting access to capital and insurance for smaller transactions.

  These are particular challenges for smaller firms, the very same firms that we wish to encourage to enter the trade world in greater numbers. So we need to make standards more comparable and customs more streamlined. In fact, this year we've put together a blueprint to simplify customs procedures by the year 2000.

  Right now, for example, technology exists that can link customs authorities and reduce clearance times from weeks to minutes. This saves not only time, but also money. I am very proud of our progress in this area and optimistic about what it will mean for business in the future.

  As you go about your business in the Pacific Rim, our objective is to give you the green light, not red tape. We want to facilitate, not frustrate your efforts.

  Second, we wanted to focus in on key components of economic development: infrastructure, skilled workers and sustainable growth.

  This is vital because modern-day commerce requires modern telecommunications and transportation facilities. We cannot continue to build an ever-increasing trade relationship on a foundation that cannot support it.

  You need to be confident, when you pick up the phone to place an order or go to send a fax, that the phones will work. You need to be confident that the road, rail and air transportation systems will get you or your products to destinations on time. If you are going to construct a new plant or office building, you want to know that there are adequate power facilities, sewage systems and water supplies.

  But as you know, this basic infrastructure is not cheap and governments alone often do not have the resources to finance it. That's the bad news. The good news is that there is no shortage of private capital, provided there are ways to minimize risk for investors.

  What we have done is to propose a framework on private investment in infrastructure that will be presented to the APEC meeting in November. Among other things, that framework would provide for better sharing of information and a commitment on the part of export credit agencies to co-operate on investment and insurance for these kinds of projects

  We also know that along with confidence in the infrastructure, businesses must also be confident that they will have workers with the skills to do the job.

  That is why we have been developing pilot projects to recognize professional skills such as engineering, accounting and surveying. That is why we have been examining ways to increase the participation of women in the fields of science and technology. And that is why we're exploring ways to use information technologies to facilitate distance learning and enhance electronic access to information.

  Infrastructure and skilled workers -- these are two of the building blocks of economic development. But accompanying both of these must be respect for our environment and a commitment to sustainable development.

  In APEC, we face particular challenges in this regard.

  By 2015, APEC economies will have 13 mega-cities -- each with more than eight million people. Each of these mega-cities alone is larger than the populations of Nova Scotia, Newfoundland, New Brunswick, Manitoba and British Columbia combined.

  Urban dwellers are already dealing with deteriorating air quality, as well as land and water pollution. The health costs associated with air pollution are staggering. According to the World Bank, poor air quality costs Bangkok and Jakarta about $1 billion each per year. For Mexico City, the price is even higher: close to $1.5 billion every year.

  These are not costs we can afford to ignore. In response, APEC ministers have identified a number of specific measures to encourage investments in environmentally friendly infrastructure, increase the use of technology for sustainable development and increase co-operation between public and private sectors to develop solutions to achieve sustainable growth.

  These efforts will lead not only to the creation of modern infrastructures, but also to sustainable cities throughout APEC.

  Our third and final priority this year was to make APEC stronger through the involvement of a greater cross-section of our people.

  Beyond the engagement of the private sector -- which has been a traditional strength of APEC -- Canada has focussed on increasing the participation of its smaller companies, women, young people, municipal leaders, labour and the environmental community.

  This year, more than any other, our APEC activities have reached out in an attempt to better embrace our civil society.

  This strong and diverse involvement enhances our understanding of one another and broadens the support for future co-operative action. It also ensures that the courses of action we take are informed by the interests and priorities of the people we represent.

  All these efforts combined help us build stronger human linkages, which, as the theme of your forum underscores today, are key to expanding our trade and cultural ties. The efforts of Canada's more than two million Asian Canadians are part of the reason why Canada's ties with Asia Pacific have gained the importance and momentum they have.

  Over the past year, we have brought APEC to Canada. Many who came as visitors left as friends. And those who may have come as sceptics left as converts.

  What they saw was an exciting, outward-looking, trade-friendly environment. They saw a country strategically placed to provide access to the vast North American market, as well as to the Pacific Rim. They saw a country that a recent study by KPMG ranks as the best, lowest-cost location for starting up and operating a new business.

  That KPMG study compared a wide range of costs among five leading European countries, Canada and the United States. And Canada emerged as the clear overall winner.

  We demonstrated our commitment to strong economic fundamentals -- low inflation, low interest rates, a disappearing deficit -- and combined this with the lowest-cost business environment.

  Now, we must maintain the momentum created by our Year of Asia Pacific. The meeting in Vancouver may mark the end of our special year, but it is only part of our ongoing efforts in Asia. More importantly, we need to keep up with our competition, and firm up our market share.

  In order to continue that momentum, and to clearly demonstrate our commitment to Asia Pacific as a vital market for Canada, I am releasing today our Asia Investment Strategy. Copies are available and I would encourage you to pick one up and review the steps we are taking to sharpen our approach and target our resources.

  The Strategy keys in on eight markets -- Hong Kong, Japan, Korea, Malaysia, Singapore, Taiwan, Australia and New Zealand. These will be our priority markets as we demonstrate the advantages of investing in Canada. For our part, we will be stepping up calls on potential investors, both at home and abroad, and dedicating more resources to the task.

  To realize the potential of that investment, we will need the support of all of you, as institutions and individuals, acting as ambassadors for Canada. One of the key tools at your disposal is the KPMG study. It shows that Canada has the lowest business costs overall and the lowest cost in each of the eight industries surveyed.

  Armed with evidence such as that provided by the KPMG study, I am confident that we will successfully attract the kind of job-creating investment and stimulate the trade promotion that this country needs.

  A strong commitment to opening sectors and making it easier to do business, a focus on the building blocks of economic development, and expanding the range of people involved -- these have been our priorities and these remain our focus as we look to Vancouver and beyond.

  There is a Japanese proverb that says "a single arrow is easily broken, but not 10 in a bundle."

  We can draw an important lesson from this proverb. For there is strength in co-operative action. There is strength in looking beyond our own borders for new opportunities. And there is strength in a shared sense of purpose.

  So, let us make APEC into that special bundle. Let us transform the spirit of APEC into a sense of community.

  Thank you.