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<p><font size="+1"></font><font size="+1"><strong>March 29, 2004 <em>(12:30 p.m. EST)</em> No. 48</strong></font></p>
<p align="CENTER"><font size="+1"><strong>PETERSON SPEAKS AT TRADE POLICY DAY</strong></font></p>
<p>International Trade Minister Jim Peterson, speaking before chief executives at the
Canadian Chamber of Commerce Trade Policy Day, today highlighted Canada's
resilience during a challenging year for trade and investment and released <em>Trade
Update 2004: Fifth Annual Report on Canada's State of Trade.</em> The report traces
Canada's trade and investment performance over the previous year.</p>
<p>"The fact that Canada remained so resilient in the wake of some extraordinary
challenges in 2003--a year that included SARS, BSE, the blackout, forest fires in
British Columbia, Hurricane Juan and a rapid rise in the value of the Canadian dollar in
relation to the U.S. dollar--means we have the confidence to take on what lies ahead,"
said Minister Peterson. "We will continue to pursue active trade and investment policy,
and defend Canada's interests abroad."</p>
<p>The Minister's speech made reference to Budget 2004 and reiterated the importance of
trade and investment to the Canadian economy.</p>
<p>Mr. Peterson laid out his reasons for being optimistic. The world economy is regaining
momentum and, as a result, Canadian businesses are well positioned to take
advantage of opportunities for exports and investment. Exports for energy and energy
products have increased. International prices for most commodities have risen. Canada
continued to run a current account surplus and exports of high-tech and many other
commercial services have increased. Canada remains a highly favourable environment
for business and a new stand-alone Department of International Trade is ready to
promote Canada's trade and investment abroad.</p>
<p><em>Trade Update 2004: Fifth Annual Report on Canada's State of Trade</em> notes a broad-based decline in the exports and imports of various industrial sectors, including
automobiles, machinery and equipment, and tourism. </p>
<p>The release of <em>Trade Update 2004</em> follows the publication of KPMG's 2004<em> Competitive
Alternatives</em> international business cost study in February. That report confirms that
Canada is the lowest-cost G7 country in which to do business. It provides the most
thorough comparison of G7 business operations ever undertaken, covering 121
international cities and 17 industry sectors.</p>
<p>The on-line version of <em>Trade Update 2004</em> can be accessed at: </p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20071207024309/http://www.dfait-maeci.gc.ca/eet/trade/state-of-trade-en.asp">http://www.dfait-maeci.gc.ca/eet/trade/state-of-trade-en.asp</a></p>
<p>The full KPMG study can be found at: <a href="https://bac-lac.wayback.archive-it.org/web/20071207024309/http://www.competitivealternatives.com/">http://www.competitivealternatives.com</a></p>
<p align="CENTER">- 30 - </p>
<p>A backgrounder is attached.</p>
<p>For further information, media representatives may contact:</p>
<p>Jacqueline LaRocque<br>
Director of Communications<br>
Office of the Minister of International Trade<br>
(613) 992-7332</p>
<p>Media Relations Office<br>
Department of Foreign Affairs and International Trade<br>
(613) 995-1874<br>
<a href="https://bac-lac.wayback.archive-it.org/web/20071207024309/http://www.dfait-maeci.gc.ca/">http://www.dfait-maeci.gc.ca</a></p>
<p align="CENTER"><font size="+1"><strong>Backgrounder</strong></font></p>
<p align="CENTER"><font size="+1"><strong>CANADA'S STATE OF TRADE AT A GLANCE</strong></font></p>
<p><strong>Exports of goods and services</strong> declined in 2003, falling $14.8 billion (3.1 percent) to
$457.8 billion.</p>
<p>• Declines in goods exports were widespread, notably in automotive products,
machinery and equipment, and industrial goods and materials. Only energy
products posted a gain.</p>
<p>• Services exports decreased by $2 billion to $56.3 billion last year.</p>
<p><strong>Imports of goods and services</strong> also fell in 2003, posting a $14-billion (3.3 percent)
decline to $409.1 billion. Merchandise imports fell $15.1 billion while services imports
rose by $1.2 billion. All major commodity groups were down from the previous year, with
the exception of energy products.</p>
<p>Canada's <strong>current account balance</strong> expanded by $2.4 billion to $25.8 billion, as
improvements to the deficit on investment income ($4 billion) were partly offset by
falling balances on trade and current transfers (down $0.8 billion each).</p>
<p>Canadian <strong>gross domestic product</strong> (GDP) at current prices expanded to just over
$1.2 trillion in 2003, or $38,401 on a per capita basis.</p>
<p>Growth in <strong>real GDP</strong> (GDP adjusted for inflation) decelerated to 1.7 percent last year,
almost half the 3.3-percent rate recorded in 2002.</p>
<p><strong>Inflation,</strong> as measured by the annual change in consumer prices, registered a
2.8-percent increase last year, up from 2.2 percent in 2002. Core inflation, which
excludes food and energy, rose by 2.2 percent last year, compared with 2.3 percent the
year before.</p>
<p><strong>Foreign direct investment</strong> (FDI) inflows into Canada fell to $8.3 billion in 2003, down
nearly three quarters from their levels the preceding year. Inflows to Canada from all
major trading partner areas were down in 2003. FDI outflows from Canada fell by a third
to just over $30 billion this past year. Outflows were down to most major trading
partners, except for the European Union.</p>
<p><strong>Trade by Regions</strong></p>
<p><strong>United States</strong></p>
<p>Exports of goods and services fell by $17.3 billion (4.5 percent) to $364.8 billion, while
imports were off by $15.9 billion (5.4 percent). The U.S. was the destination of 79.7
percent of total Canadian exports, compared with 80.8 percent the preceding year.
Likewise, the U.S. was the source of 68.4 percent of total Canadian imports, down from
69.9 percent.</p>
<p><strong>Japan</strong></p>
<p>Total exports to Japan fell by 6.2 percent, or approximately $750 million, to $11.3 billion
in 2003.</p>
<p><strong>European Union</strong> </p>
<p>Exports of goods and services rose by 5.1 percent to $33.6 billion last year. Goods
exports were up by $1.4 billion (6.2 percent), and services exports advanced by $0.2
billion (2.4 percent). Imports of goods and services were down by $0.8 billion (1.7
percent).</p>
<p><strong>The rest of the world</strong></p>
<p>Exports of goods and services grew by 3.6 percent to $48.1 billion. Imports of goods
and services grew by 6.1 percent to $70.7 billion. Merchandise exports and imports
increased in all major categories of goods, except for exports of agriculture and fishing
products and machinery and equipment.</p>
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