February 9, 2009
Ottawa, Ontario
2009/8

Address by the Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, to the Fraser Institute

Based on a Transcript

Thank you for having me here tonight.

Allow me to briefly talk about trade policy. I don’t think I have to spend a lot of time on the philosophical or historical underpinnings of why we are a free trading nation, particularly with this audience.

When I’m speaking to groups of interns who are posted here for a short period of time, or when I’m speaking to university classes, I like to share my grade five experience, which I remember so well because grade five was the three best years of my life.

Here’s what we were taught in school, and what I would suggest should continue to be taught. About very basic economics, government and trade, we were told: “The Government of Canada sells cars. The Government of Canada sells shoes. Canada sells agriculture products. Canada sells sporting equipment.” And we had this long list of things that Canada sells to other countries. And I thought: “We have a very nice government. This government sells these things to people all over the world. I’m so proud of my government.”

And it probably wasn’t until my wife and I actually got into small business that it started to really dawn on us that government doesn’t or shouldn’t sell those things. It’s hard-working, entrepreneurial, risk-taking, innovative, fearless people, individuals, organizations and businesses who put it all on the line to manufacture, to research, to develop, to export, and to hope to make a profit. That’s who really sells all that stuff. But from a young age, we’re taught as budding citizens that the government does all this for us. So it’s no wonder that when we go into business ourselves, we go to the government and say, well, you sell all this stuff, so help us do it.

The Canadian government’s policy approach is to do everything we can to level the playing field, reduce tariff walls, and fight back against unfair practices on behalf of the entrepreneurial, risk-taking, hard-working, brave and courageous individuals who are willing to put in the time, effort, funds, and risk it all to try to market something abroad. And we do that in a number of ways, such as through free trade agreements.

We are being very aggressive in pursuing free trade agreements. But I don’t have to extol the virtues of free trade to this audience. Obviously, we have a free trade agreement with the United States and with Mexico. You may be surprised, however, to hear we actually have a few others.

As was pointed out in a somewhat scolding article I read over the weekend, we only have a few free trade agreements that have been developed in the last 15 years or so. But we have them with among other countries Jordan, Israel, Chile and Costa Rica. And we have tabled in the House of Commons a free trade agreement with the European Free Trade Association—Norway, Iceland, Switzerland and Liechtenstein. It’s a good agreement. It’s great. And we’ll use it as a lever into the broader EU community. We’re pursuing a free trade agreement with the EU: 27 countries. It would be great to get one.

As you know, the Czech Republic has the presidency of the EU for the next six months. If you’ve never visited that country, you need to. It re-instills your faith in people who know what it is to pay the price, to stand up, whether we’re talking about the ’68 invasion or the Velvet Revolution. These are people who know and believe in what democracy and rule of law are all about. And they’re going to advance our cause with the European Commission. I’ve met with the President of the European Commission [José Manuel Barroso] to make sure the Commission understands Canada’s position. We’re pressing hard to officially launch into a free trade agreement with the EU.

In the House of Commons, we’ll be tabling an agreement with Peru, and one with Colombia. And we’d like to see them go through this session. Our main competitors, like the U.S. and Mexico, have a multitude of free trade agreements. Chile has 21 agreements, concluded or in force, that encompass 55 countries. So you can see that if you’re trying to sell goods or services in one of those countries that has free trade agreements with other countries, you’re going to be at a competitive disadvantage.

The race is on, and we’re in the race. We’re catching up, and we’re going to continue to pursue free trade agreements. We may run into a little difficulty with the one we’re about to table with Colombia. But Colombia has come a long way, even in areas such as the development of human rights, the rule of law, and democracy as we know and appreciate it. The free trade agreement we’ve signed with Colombia, which has to be ratified in Parliament, has very strong labour and environment accords.

We’re also pursuing a free trade agreement with India. I was there two weeks ago and met with Prime Minister [Manmohan] Singh, Minister of Commerce and Industry [Kamal] Nath, National Security Adviser [M. K.] Narayanan, and other key people in the Cabinet. We have agreed to begin the scoping exercise for a free agreement.

India is nearly finished [reviewing] its side of our nuclear cooperation agreement, which will allow Atomic Energy of Canada Limited, Cameco out of Saskatchewan and other representatives of our nuclear industry to move ahead and get some of the business that’s going to be available because India, with its growth, does not want to contribute to climate change. And so India made a policy decision to build 25 to 30 nuclear reactors for the purpose of clean energy within the next 10 to 15 years. It’s an amazing opportunity for us. We’ve got an open door for our industry to move ahead with [selling nuclear expertise]. So we’re pursuing agreements with India, as we are with China.

If we can’t get in a door with a free trade agreement, we’ll get in with a science and technology agreement. We strike a deal with another government; both governments put some money in the pot, and usually link in a university in each country. We get bids from business or academe on what to do with that money to develop new science and technology, and businesses that flow out from that sector.

We also have to move, and we’re doing so aggressively, on open skies—blue sky—agreements. We have those with 41 countries now, and again, we are pursuing more, to broaden consumer choice in terms of airlines, to allow the more rapid and more fluid transit of passengers and goods to and from those countries.

On the tax side, we are continuing down the pathway that we had laid out incrementally—to have the lowest corporate tax of the G8 by 2012. We are committed to that. We took a bold step in this last budget by removing the machinery and equipment tax. Companies wanting to bring machinery and equipment in to increase their productivity would capitalize on this tax decrease.

I’m happily taking on the task of promoting international trade, with the support of my colleagues and a great group of trade commissioners around the world. In about 150 cities, we have trade representatives—trade commissioners who are there to provide a landing spot for Canadian businesses, to provide them with some information in terms of what’s happening on the ground, and to let them use those offices. We’ve put in place a global commerce strategy of $60 million to help get the word out. I really can say that when it comes to international trade, the government is here to help you.

We are doing that to clear the field, to make as level a playing field as possible. You’re going to have to take the risk. You’re going to have to sell the product. But we’ll do everything we can to make sure you are as unencumbered as possible with government taxation, regulation and other processes, so that you can successfully market your goods. We intend to do that. Canada can take on anybody in the world with its products and services.

We’ve just made a very clear stand against the United States and the protectionist elements we’ve heard in its “Buy America” bill. We think we made some progress. We got the President of the United States—in the face of 84 percent of Americans saying they like the bill—we got him standing up, saying he didn’t want to see anything that would go against the United States’ international trade obligations. That was a pretty major concession and the result of a lot of work by a lot of people and a lot of different pressure, including from business groups.

Thanks so much for your attention this evening. And thanks to the Fraser Institute for the great policy work and studies it does on so many different topics to keep the government and our great prime minister heading in the right direction. Thank you for the good work you do.