Address by Minister Van Loan to Chile-Canada Chamber of Commerce

No. 2010/60 - Santiago, Chile - August 24, 2010

Check Against Delivery

I appreciate this opportunity to talk directly to the people who drive forward Canada’s partnership with Chile year in and year out.

For 18 years, your chamber has been at the forefront of promoting trade, investment and business collaboration between our two countries.

You were a strong and active voice behind our successful free trade agreement, now in its 13th year.

Together, we can help ensure that business plays a positive role in communities across Chile.

I can assure you that our government will continue to rely on your advice and support as it finds new ways to create opportunities for Canadians and Chileans in the years ahead.

I’d like to take a moment to express Canada’s deep relief that the 33 miners trapped at the San José mine are alive. We look forward to their rescue.

Given Canada’s close ties with Chile, I was very pleased that several Canadian companies responded to the Government of Chile’s request for assistance. Working with Chilean authorities, they have provided a range of support, including airlifts, drilling teams, generators and on-site satellite communications.

It’s a good example of Canada’s commitment—that of both government and business—to our friendship with Chile in good times and in challenging times.

And I’d like to talk about an important dimension of this partnership today—the critical role it will play as our nations work toward a lasting economic recovery in the years ahead.

The path to recovery

Like Canada, Chile fared better than most during the recent economic downturn.

Its banking system remained strong throughout the downturn and did not require any government bailouts—just like Canada’s.

Chile’s solid economic growth following the February earthquake is further testament to this country’s strength and resilience.

In the aftermath of the earthquake, Canadian companies stepped up to the plate in a big way and provided support for relief and reconstruction: over $11.4 million-worth of aid, equipment and services. And the Government of Canada provided up to $2 million for urgent humanitarian assistance to the people of Chile in that time of need. These are good examples of our close ties.

The earthquake represented an extraordinary challenge for Chile, coming in the midst of the global economic downturn. But the Chilean government’s efforts to recover from the earthquake and stimulate its economy are bearing fruit. I understand that further growth is predicted for Chile in 2011—a great sign.

Canada, too, understood the importance of timely, targeted and effective action to help bolster our economy during the downturn.

In fact, our approach to economic recovery closely matches the goals set out by world leaders during the G-20 Summit held in Toronto in June.

At the summit, leaders established firm debt-reduction targets in the coming years—something to which Canada and Chile have both long been committed.

Leaders also underscored their commitment to reforming international monetary institutions. This is something Canada and Chile know a lot about, as demonstrated by the strength of our banking and financial systems.

The leaders agreed that targeted and timely stimulus is needed, as well as deficit-reduction measures.

Like Chile, Canada has also been a leader in this regard.

Our economic action plan included measures to maintain and create jobs, reduce taxes, build infrastructure and invest in skills and training for long-term prosperity.

In Budget 2010, the government set out a three-point plan to bring the budget back to balance. This plan includes following through on the exit strategy that is built into the Economic Action Plan, limiting the growth of program spending and reviewing government administrative costs.

On the basis of the Economic Action Plan, our deficit is projected to decline by about one half between 2009–10 and 2011–12, and to be virtually eliminated by 2014–15.

The International Monetary Fund expects that Canada will be the only G-7 country to return to balanced budgets within the next five years.

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.

Canada offers:

  • 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—on track to being the lowest corporate income tax rate in the G-7 in 2012;
  • the fastest economic growth in the G-7 over the next two years, according to both the International Monetary Fund and the Organisation for Economic Co-operation and Development;
  • the first tariff-free zone in the G-20 for manufacturing imports;
  • 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
  • a high quality of life.

Another key to Canada’s economic success is our commitment to free trade.

Free trade is something that Chile certainly knows something about. Chile is not only a gateway to Latin America, but a gateway to the world. It has trade agreements with 57 countries, including Canada, the United States, Japan and China, as well as the European Union.

In fact, Chile’s trade agreements cover countries that account for over 85 percent of the world’s gross domestic product. And about 90 percent of Chile’s exports go to these countries, proof of the power of free trade agreements.

Canadians are very proud that our trade agreement with Chile was something of a watershed for that country—the first comprehensive agreement signed by Chile.

Since then, Canada has steadily built its own track record of success.

Inspired by our great success with North American free trade, we’re 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.

In May, I joined my Panamanian counterpart [Panama’s Minister of Commerce and Industry, Roberto Henríquez] to sign the Canada-Panama Free Trade Agreement.

In June, the Canada-Colombia Free Trade Agreement was passed by Parliament.

Canada has also introduced implementing legislation for a free trade agreement with Jordan.

We’re now engaged in free trade negotiations with the Caribbean Community, the Dominican Republic, the Republic of Korea and Ukraine, as well as the Central American Four: El Salvador, Guatemala, Honduras and Nicaragua.

We’ve worked closely with India to complete a joint study that will lead to the negotiation of a comprehensive economic partnership agreement.

And we recently concluded the fourth round of negotiations with the European Union toward the most significant Canadian trade initiative since the North American Free Trade Agreement.

In the midst of these efforts, we continue to see our partnership with Chile as an engine of opportunity in the years ahead.

The Canada-Chile partnership

Since the Canada-Chile free trade agreement came into force in 1997, our bilateral trade in goods and services has tripled to $2.4 billion last year.

Over the same period, Canadian direct investment in Chile climbed to $8.3 billion, making investment a critical part of our commercial ties.

And thanks to our ongoing efforts, we’re now working on updating several elements of the agreement, including adding a new chapter on financial services.

But a truly sophisticated relationship is about more than trading goods back and forth. It’s also about collaboration and working together. And here again, the Canada-Chile partnership has been a great success.

In addition to the billions in Canadian investment here in Chile, Canadian equipment and service suppliers are becoming part of Chilean supply chains.

Many products manufactured here are using Canadian inputs before being sold domestically, across Latin America and around the world.

To build on this success, our trade commissioners here in Santiago are actively working to match Canadian expertise with Chilean demand.

Canada can offer a lot in areas like mining equipment and services, energy, agriculture and high technology.

Our close collaboration in the area of science and technology is another good example of what we can offer one another.

Researchers and academics are already working together in many innovative sectors, such as biotechnology, cancer research, aquaculture and agri-food technologies.

Our business communities are also getting involved, finding ways to commercialize the breakthroughs and create more prosperity and economic success in both countries.

So in many different sectors, and for many different reasons, Canada views Chile as an important and strategic regional partner, now and in the future.

Conclusion

Canada is committed to closer ties with Chile in the years ahead.

Over the years, our countries have become close partners politically, socially and economically.

Canadians like doing business here. We appreciate Chile’s commitment to transparency and regulatory predictability.

Canada and Chile share a commitment to opening markets and reaching out to the world to capture economic opportunities.

We’re both strategic gateways for trade, especially in the Pacific region.

We’re both very involved in our neighbourhood. Canada will be hosting the 2011 meeting of the Inter-American Development Bank in Calgary, just the latest example of our leadership in the Americas. We hope to see a strong private-sector delegation from across the region at the meeting.

Both Canada and Chile are committed to helping our citizens prosper and thrive in the global economy.

I’m here this week to find new ways to do exactly this, by tapping into the enormous potential that exists in our partnership. Let’s work together to help both countries along the road to lasting recovery. Let’s chart a course for the future that will help Canadians and Chileans find new sources of growth and prosperity.

Thank you.