Address by Minister Van Loan at Munk School of Global Affairs G-20 Conference
No. 2010/42 - Toronto, Ontario - June 18, 2010
Check Against Delivery
I’d like to start by thanking the Munk School of Global Affairs here at the University of Toronto for organizing this pre-summit conference.
The School deserves our appreciation—and our applause—for gathering such an impressive group together to help inform the upcoming summits.
Canadians are proud to be hosting back-to-back G-8 and G-20 summits this year. Our government sees these two events as great opportunities to rally global support in a number of critical areas.
The Muskoka G-8 Summit will be an opportunity to demonstrate Canada’s leadership and accountability in areas like development, peace and security.
Here in Toronto, the G-20 Summit will give global leaders the opportunity to discuss ways to restore the health of the global economy, and lay the foundations for strong, sustainable and balanced growth in the years ahead.
The G-20 convenes regular annual meetings of finance ministers and central bank governors from countries that account for 90 percent of global output, 80 percent of world trade and two-thirds of the world’s population.
In addition to the regular members of the G-20, Canada has extended invitations to the leaders of Ethiopia, Malawi, the Netherlands, Spain and Vietnam.
Global economic recovery will be the focus of this meeting, with priorities that include sustainable and balanced growth, reform of the financial sector and international financial institutions, and global trade and growth. These priorities are all factors that will drive global economic recovery.
We know that Canada’s economic action plan has delivered results. Our government acted quickly and decisively during the global recession, introducing a $62-billion stimulus package to protect Canadians.
But our government also believes that you can’t talk about long-term economic growth without talking about trade. Which is why, today, I’d like to outline Canada’s free trade leadership and our commitment to building a case for freer trade with our G-20 partners next week.
Recovery through increasing trade and commercial ties
Canada is hosting these summits against a unique economic landscape.
The world economy has moved out of recession and is gradually recovering. We’re seeing nations taking extraordinary steps to make it happen.
Canada did its part. Our economic action plan included a number of actions to stimulate job creation, ease credit markets and help workers get back on their feet.
Over the medium term, we’re continuing to make good progress toward balancing our budget—well before any other G-7 country, I might add. And we’re taking steps to ensure that Canada emerges from the downturn stronger and in better fiscal shape than nearly every other industrialized country.
But as nations like Canada take action within their borders, they need to look beyond them, too. The global recession was a stark reminder of how interconnected our economies are.
Look at how the quick and decisive action of key Asian countries during the recession stimulated their domestic economies and global markets. Opening doors to free trade and investment has the same effect.
When trading partners are hit, demand goes down. For a trade-focused economy like Canada, this can have a serious impact on people, on jobs, on communities and on families.
No one country can fully recover in isolation from its trading partners. Strong economies depend on free trade, not barriers. They depend on market access, not protectionism.
North America is a perfect example of this. As you know, the trade partnership shared by Canada and the United States is the largest the world has ever known. Jobs, prosperity and opportunities in both countries are directly supported by our free trade relationship.
So when “Buy American” provisions cropped up in the U.S. Recovery Act, we took action.
With a chorus of support from businesses and organizations on both sides of the border, we fought hard against these provisions, arguing that the doors of opportunity must be kept open for both countries during this time of fragile economic recovery.
And together, driven by the spirit of cooperation that has been the hallmark of the Canada-U.S. relationship for so many years, we negotiated an exemption to the protectionist measures.
We’re now working with businesses and organizations on both sides of the border to set the stage for discussions toward a more comprehensive bilateral procurement agreement for the longer term.
This is an important illustration of the link between free and open trade and economic recovery. It is a lesson we hope our G-20 partners will heed.
This is not the time to erect new barriers to trade. It’s time to take such barriers down. And I’m proud to say that Canada is leading by example.
Canada as a free trade leader
Our government is proactive in its approach to stimulating the economy and encouraging free trade. Unilaterally, we’ve taken action to eliminate all tariffs on imported inputs, equipment and machinery, positioning Canada to become the first tariff-free zone for manufacturers in the G-20.
Our manufacturers can now source the capital equipment and goods for their manufacturing processes from anywhere in the world, free from duties and costly customs procedures.
Our government knows that this will lower costs and enhance competitiveness and innovation. At a time when our businesses need it most, the Government of Canada has taken action to make them more competitive and to provide opportunities for them to succeed in global markets.
Inspired by our great success with North American free trade, Canada is also moving forward on an ambitious agenda to open more doors for our businesses around the world.
Our new free trade agreements with Peru and the European Free Trade Association are now in force. We recently introduced legislation in Parliament to implement our free trade agreements with Jordan and Colombia. And last month, I joined my Panamanian counterpart to sign the Canada-Panama Free Trade Agreement.
These are all important victories that will help Canadians working in a number of sectors succeed. But we’re not stopping there.
We’re now engaged in free trade negotiations with the Caribbean Community, the Dominican Republic, Ukraine and the Central America Four countries of El Salvador, Honduras, Nicaragua and Guatemala.
We’re working closely with India on a joint study that we hope will lead to negotiation of a comprehensive economic partnership agreement.
And we recently concluded the third round of negotiations toward an agreement with the European Union—the most significant Canadian trade initiative since the North American Free Trade Agreement.
These efforts hold a lot of potential to help Canada’s business community deepen its presence around the world.
We also understand the importance of attracting investment to Canada.
It’s been an extraordinary year for Canada with the Olympic Games in Vancouver and now the G-8 and G-20 summits. We’re using these opportunities to focus attention on Canada’s many business advantages:
- an open and attractive free enterprise environment, ranked by the Economist Intelligence Unit as the best place to do business in the G-7 this year and over the next four years;
- the strongest fiscal position in the G-7;
- low corporate taxes—Canada’s on track to having the lowest corporate income tax rate in the G-7;
- the fastest predicted economic growth in the G-7 over the next few years, according to both the International Monetary Fund and the Organisation for Economic Co-operation and Development;
- a skilled workforce, with the highest proportion of post-secondary graduates among countries of the Organisation for Economic Co-operation and Development;
- a vibrant environment for innovation, with one of the most advantageous research and development tax incentive programs in the industrialized world;
- a strong commitment to good governance and the rule of law; and
- an outstanding quality of life.
Canada’s banking system is another attraction. In fact, it’s consistently ranked as one of the best in the world.
Despite the global economic downturn, Canada did not experience any bank failures, and no bailouts were required. Incidentally, that’s one of the reasons why Canada opposed the idea of a global bank tax and prefers focusing instead on the financial reforms agreed to in Pittsburgh last year.
So when it comes to opening doors to trade and investment, Canada is positioning itself as a global leader.
Of course, Canada remains committed to progress at the World Trade Organization, and we look forward to a resumption of talks there.
The World Trade Organization is a cornerstone of our approach to global commerce and creating opportunities for Canadians in the years ahead.
But the fact is Canadians cannot just wait for doors to be opened. So our government is making a focused effort to create new opportunities for them in markets around the world, and to draw more investment to Canada.
We think our efforts to date can stand as a model for other nations to follow as they look to emerge from the global economic downturn.
Building a global case for free trade at the G-20 Summit
The last half-century is filled with examples of developed and developing countries embracing closer business ties with their neighbours and global partners.
Look at the rise of Asian economies like China and India—economies powered by their commitment to trade and investment.
Earlier this month, I was in China and Japan, and I can tell you that there’s a lot of talk in both countries about the prospects for trilateral free trade negotiations with the Republic of Korea.
Look at the European Union, another great example of neighbours breaking down economic barriers and creating an increasingly united platform for business.
Look at the Association of Southeast Asian Nations—a rising economic star of 592 million people.
We think these successes—not to mention the success of North American free trade—and so many others around the world make a strong case for increased trade and investment in the years to come.
That’s why trade and investment will be a core element of Canada’s message to the G-20 next week.
We’ll also underscore the importance of following through with our stimulus measures and continuing to transition to sustainable fiscal and monetary policies in the years ahead.
And we’ll be supporting efforts to build a new approach to international economic cooperation, including reforms at international financial institutions like the World Bank and the International Monetary Fund.
All of these efforts will require political will and commitment. And Canada looks forward to rallying global support for them during the G-20 Summit.
That’s why we appreciate the Munk School’s efforts to spark this dialogue as we prepare to welcome the world.
And I greatly appreciate the fact that all of you have joined in the discussion, and are committing your time and energies to finding solutions and paths forward.
Let’s continue working together to strengthen the global economy.
Let’s continue “talking up” the benefits of free and open trade to chambers of commerce, to other levels of government, to businesses, citizen groups and non-governmental organizations.
Let’s create a strong, sustainable, lasting recovery that benefits us all.
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