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NOTES FOR AN ADDRESS BY THE

HONOURABLE SERGIO MARCHI,

MINISTER FOR INTERNATIONAL TRADE,

TO THE BUSINESS NETWORKING LUNCHEON

CO-HOSTED BY

THE IRELAND-CANADA BUSINESS ASSOCIATION

AND THE CANADIAN EMBASSY

DUBLIN, Ireland

June 14, 1999

(10:15 a.m. EDT)

The ties between our two countries are strong, rooted in shared experiences of the past and inspired by common hopes for the future.

Canada owes a great deal to Ireland. From the labour that helped to build many of our cities, to the literature, songs and dance that helped to create a unique Canadian culture, to the sons of Ireland who left to become fathers of our Confederation, Ireland has given much to my country.

Indeed, the Irish presence was so strong in Canada that at one point, a private member's bill was introduced in the Senate that would have made the Irish language one of our official languages.

I might also point out that two Canadian prime ministers, Lester Pearson and Brian Mulroney, were of Irish descent.

More recently, Canada has been trying its best to repay you for the rich cultural legacy that you have given us. And we are delighted that performers such as Céline Dion, Shania Twain, Alanis Morissette and Loreena McKennitt have been so well received here in Ireland.

But if our relationship is rooted in history, our future is tied to commerce. And so today, it is my great pleasure to be part of a business mission to your beautiful country, a mission that coincides with Prime Minister Chrétien's official visit to Ireland.

The purpose of this mission is straightforward: we want to do more business with Ireland. Of course, we begin from a solid base: two-way trade between us last year stood at $1.5 billion, a 100 percent increase since 1995.

And Canada is a major investor in Ireland. In fact, there is more than $8 billion of Canadian investment here. Thirty-nine Canadian firms have established operations in Ireland, including some of our leading companies, such as Corel, Nortel Networks, JetForm, Saturn Solutions, ATI, Scotiabank and the Bank of Montreal.

And just recently, Worldwide Fiber Inc. of Vancouver announced an exciting project to install the world's first transatlantic cable system with a direct landing in Dublin. More than 120 service and operation jobs will be created here in Ireland.

The focus of our mission is on sectors that offer the best potential for Canadian companies, such as telecommunications, information technology, software development, agri-food, construction, building materials, environmental services, medical and health products, and culture.

We are also showcasing our cultural sector, and later today you will have the chance to sample some of that culture when Natalie MacMaster and Ron Hynes perform at Whelans.

We know that there is still tremendous untapped potential in our relationship. In particular, we want to address the imbalance in investment. While Irish investment in Canada is on the rise, it amounts to just $400 million, and we think that this should rise significantly in the coming years.

Let me tell you why.

Just as Ireland stands as a gateway to the European Union, Canada stands as a gateway to the vast North American market. Through our membership in the NAFTA [North American Free Trade Agreement], companies settling in Canada have preferred access to the richest market in the world -- a market of US$500 billion per year.

And that market is expanding. Last year, for example, the increase in our sales to Mexico and the United States -- just the increase, mind you -- was more than triple our total sales to Japan, our second-largest export destination.

And there is no reason why Irish companies can't participate in this booming, lucrative market.

We see Canada as your natural springboard into North America. And, with one coast touching the Pacific, Canada is a natural doorstep to Asia too. Canada also stands as a solid bridge to Latin America. By 2005, the Americas will be the largest free trade zone in the world, with 800 million people and a combined GDP [gross domestic product] of $9 trillion.

But then, you would expect me to trumpet Canada.

Consider the facts:

A new study by the international consulting firm KPMG shows that Canada has the lowest business costs of any G-7 nation. I hope you saw the article in The Sunday Business Post two weeks ago that talked about the KPMG study and outlined the cost advantages that Canada has to offer.

Significantly for Ireland, the second-largest exporter of software in the world, Canada's cost advantages were most pronounced in the knowledge-intensive advanced software sector. Here, costs were more than 14 percent below those of the United States.

For a software firm with 100 employees, that means savings of US$1.6 million every year.

Canada is also the location for low-cost research and development, with the best R&D tax credit regime in the G-7. And contrary to the myth that Canada is a high-tax environment, the KPMG study found that our corporate tax rates are actually the second-lowest in the G-7.

Of course, overall economic considerations are as important as low business costs, and here, too, Canada offers an attractive environment. Our economy is growing strongly, producing jobs at the highest rate of all G-7 nations. Interest rates are low, and inflation is virtually non-existent.

We have put our fiscal house in order, reducing our federal deficit from more than $40 billion to zero in just six years, prompting a leading U.S. magazine to write about the "Maple Leaf Miracle" and The Economist to call us a "Fiscal Virtuoso."

Canada is also a choice place in which to live. For five consecutive years, the United Nations Development Index has ranked Canada as the number one country in the world in which to live.

So if you want to participate in the vast North American market and to do so at a lower cost than in the United States, think of Canada.

We believe that the many similarities between Canada and Ireland make us natural partners, and we see tremendous opportunities for strategic alliances. This is particularly true for small and medium-sized enterprises.

We are working very hard to encourage more of our smaller firms to begin exporting. And their teaming up with smaller Irish companies can bring benefits to both sides.

Irish companies will find Canadian firms leading the world in areas that you might not expect. While many still view Canada as a resource-based economy, the fact is that the percentage of Canadian exports attributable to commodities has fallen from about 60 percent in 1980 to just 35 percent in 1997. This amounts to only 12 percent of our GDP.

Canada today is a high-tech economy, well positioned to compete in the emerging opportunities of the information age and well suited to combine forces with Ireland.

In closing, let me say that the world has watched with admiration as Ireland has transformed itself, over a 20-year period, into the fastest-growing economy in Europe. Along the way, Ireland has been enormously successful in establishing itself as a magnet for international investment.

Now, perhaps, the time has come for Ireland to look beyond Europe, to expand its frontiers and its fortunes by looking west to the richest marketplace in the world. And as you do so, you will find, waiting on the other side of the Atlantic, an old friend and a strong ally.

An Irish proverb reminds us that "a good beginning is half the work." The strong ties of our past have provided us with that beginning. Let us now continue our work.

Let us continue to expand trade and investment. Let us form the partnerships that will allow both of our nations to prosper in new and exciting markets. And let us unite the "Celtic Tiger" and the "Maple Leaf Miracle" as never before.

Thank you.