No. 2010/77 - Toronto, Ontario - October 4, 2010
Check Against Delivery
I’d like to start by thanking the Schulich School of Business here at York University for hosting this event.
With the Asia-Pacific Economic Cooperation [APEC] meeting coming up next month in Yokohama, Japan, it’s important that the members of Toronto’s business community understand not only the opportunities in the region, but also the full suite of government services and support available to them.
After all, these summits are all about strengthening cooperation in the region.
Canada strongly supports the wide range of initiatives that are helping businesses succeed in the region, including through the organization’s Business Advisory Council.
Thanks to these efforts, we’re seeing a variety of steps being taken to improve access to credit, enforce contracts, deal with permits, and generally make business and trade easier and cheaper to conduct in the region.
Indeed, the organization’s close partnership with businesses—especially small and medium-sized ones, which account for an overwhelming percentage of businesses active in the region—is a key factor in its success.
So too is its steadfast commitment to expanding trade in the region.
Over the last quarter-century, Canada has increased its engagement with economic powerhouses like China, Japan, the Republic of Korea, the Southeast Asian family of nations and—while it is not a member of the APEC family—India.
This is important, because our government sees trade and investment as critical to our ability to help Canada’s economy continue recovering.
China overtook Japan as the world’s second-largest economy in the second quarter of 2010.
We’ve also seen the economic rise of South Korea, as well as the Southeast Asian family of nations, which represents a market of 591 million people.
Asia’s economic clout was on full display during the global recession.
Rapid and decisive action on the part of Asian governments to stimulate their economies played a big role in stabilizing the global economy during those uncertain times.
Trade has also played a big role in the region’s ascent.
Since APEC’s formation in 1989, total merchandise trade in the Asia-Pacific region has grown by 350 percent.
I understand that about 40 trade agreements are now in force among Asia-Pacific economies.
These successes demonstrate the importance of free trade as a pathway to strong economies that can support jobs and prosperity among economies of different sizes and in different stages of development.
Canada fully understands the importance of trade to the economy.
Our government recognizes that free trade—like lower taxes, our sound banking system, and our low debt and deficit—is a key to spurring Canada’s recovery.
And over the years, Canada has built a solid reputation for being pro-free trade.
Look at the great success of the North American Free Trade Agreement.
Our domestic industries have thrived through free trade: by selling to our partners, linking-in to North American supply chains and drawing investments to Canada.
Since the North American Free Trade Agreement came into force, our merchandise trade with the United States has increased 73 percent.
Our two-way investment, even in the midst of the global economic downturn, is extraordinary, reaching $550 billion at the end of 2009.
We’ve become integral parts of each other’s supply chains—we make things together.
And Canada’s trade with Mexico has increased fivefold.
Free trade is actually giving our industries and workers the ability to compete and win around the world.
Our government is moving forward with an ambitious trade agenda.
As part of our Economic Action Plan, we made Canada a tariff-free zone for inputs into the manufacturing process: equipment, parts, machinery and materials.
This decision makes Canada the first tariff-free zone for manufacturers in the G-20.
And it will help our manufacturers become more competitive, by making it easier for them to get the inputs they need from around the world—at a better price.
We’re continuing to build on our free trade track record.
In less than four years, we’ve concluded new free trade agreements with Peru, Colombia, Jordan, Panama and the European Free Trade Association states: Iceland, Liechtenstein, Norway and Switzerland.
These are significant victories for Canadian businesses, which will have the opportunity to expand into new global markets on more open, secure and competitive terms of access than ever before.
And we’re not stopping there.
Through our engagement with countries and trading blocs, we are participating in free trade negotiations or serious exploratory talks with more than 50 countries around the world. We are negotiating with the Caribbean Community, the Dominican Republic, South Korea and Ukraine, as well as with four countries in Central America: El Salvador, Guatemala, Honduras and Nicaragua. Stay tuned—there’s more to come.
At the same time, we’re in exploratory discussions on a comprehensive economic partnership with India. There is also promising work going on related to other markets, in Africa and the Americas.
And this fall in Ottawa, Canada will enter into a fifth round of negotiations with the European Union. This is the most significant Canadian trade initiative since the North American Free Trade Agreement.
But as we move forward on these initiatives, we’re also building bridges to Asia Pacific.
Today, Asia represents nearly 17 percent of Canada’s two-way merchandise trade, led by China, Japan and South Korea.
Our government has been very clear in its commitment to build on this.
Prime Minister Stephen Harper has led the way by:
Our government has followed through with an ambitious trade agenda for the region.
Witness our Global Commerce Strategy, for example—a $50-million investment in helping our businesses and investors succeed abroad, including in Asia.
Through this strategy, we’re opening new trade offices in markets like China and India.
And we’ve created a new trade network in Southeast Asia—the “ASEAN network”—with increased trade commissioner positions and greater coordination among our offices there.
It’s essential to have qualified people strategically positioned around the world to help Canadian businesses and investors expand their markets.
That’s what our trade commissioners are doing across Canada, in the Asia-Pacific region and in more than 150 countries around the world: supporting thousands of Canadian companies.
In fact, a recent study shows that exporters receiving assistance from the service log 18-percent higher export values than comparable exporters that don’t use it.
Our trade commissioners are also focused on developing sector-specific strategies to help Canadian companies in key areas.
For example, much of Canada’s success in Asia can be traced to the high price of—and high demand for—our commodities.
We need to do more to diversify our business in the region to include other sectors, such as our service industries and high technology sector.
The growing middle class in the region presents a number of opportunities for Canadian companies.
We’re seeing a growing demand for Canadian food, metals, energy, and engineering, construction, transportation and financial services—the list goes on and on.
And our science and technology partnerships with China and India are helping Canadian innovators join forces with their Asian counterparts to develop tomorrow’s technological breakthroughs.
To assist our businesses in connecting to these opportunities, we’re pursuing a variety of policy initiatives.
For example, we’re negotiating a trade and investment framework arrangement with the Southeast Asian group of nations, in order to provide a stronger foundation for our commercial relationship in that region.
We also recognize the importance of strengthening our investment ties in the region.
That’s why we’re negotiating a number of foreign investment promotion and protection agreements with our partners.
In addition to the two treaties already in force, with the Philippines and Thailand, we are actively negotiating with China, India, Indonesia, Mongolia and Vietnam.
These agreements will give Canadian investors the clarity, confidence and predictability they need to invest in key sectors like mining, energy and financial services.
In addition to helping Canadian investors succeed in the Asia-Pacific region, we’re taking every opportunity to tell our partners in the region about Canada’s many investment advantages, including:
Canada also enjoys the “gift of geography.” Our ports on the Pacific Rim are much closer to the main commercial ports of Asia than are those of our American competitors.
Over the years, we’ve developed an increasingly integrated system of ports, airports, road and rail connections that reach right into the North American heartland.
Canada’s Asia-Pacific Gateway and Corridor Initiative is all about harnessing this competitive advantage.
Working with all levels of government and the private sector, we’re dramatically expanding our transportation infrastructure on Canada’s west coast in an effort to boost trade with China, South Korea, Southeast Asia, Japan and Australia.
The open-skies initiative with New Zealand and South Korea and the expanded air agreement with Japan are further examples of our government’s commitment to expand Canada’s ties to the region.
This is important—and not only from a business perspective.
About 8 percent of Canadians are of Asian origin. This is a great competitive advantage for Canada. People from Asia can feel comfortable doing business here.
We cannot overestimate the importance of strong people-to-people links in business relationships.
Ladies and gentlemen, Canada has a lot to offer the Asia-Pacific region.
As I said before, increasing Canada’s commercial engagement in the world is an important part of our government’s efforts to build a lasting recovery for Canada’s economy.
I look forward to carrying this message to the 22nd APEC Ministerial Meeting in Japan.