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Free Trade Area of the Americas: The Challenges Ahead

 
Comments to the 7th Annual International Air Cargo Conference
by David Kilgour, Secretary of State (Latin America & Africa)
Ottawa Congress Centre, Colonel By Room, May 14, 1998

It is a pleasure on behalf of the Government of Canada to welcome participants of the International Air Cargo Conference. This is your seventh annual conference, but only the first time it has been held outside the United States. Your conference coincides with Ottawa’s Tulip Festival. If any of the previous speakers have told you this city blooms with flowers all year round, it is not my place here to contradict them.

Your conference is also timely in that it comes at a time when the Americas are drawing closer together. Free trade arrangements are breaking out everywhere in the hemisphere, and there is a widespread consensus to move forward toward a Free Trade Area of the Americas by the year 2005.

Leaders from throughout the hemisphere met last month in Santiago to move forward with the FTAA. Canada is proud to be chairing the Trade Negotiations Committee for the next 18 months. These talks will be continuing in Miami, and we hope to sustain the momentum generated during the last three years.

As people involved in the air cargo business, it is obvious that you have a vital stake in the FTAA negotiations in particular, and the broader issue of trade liberalization in general. Any international developments that enhance trade are bound to mean more air cargo shipped and more business for you. That is why it is crucial to enlist your support and that of your customers and colleagues not here today in delivering the free trade message to the public.

One of the biggest challenges we currently face is the current lack of fast-track authority for the U.S. Administration to negotiate the FTAA. Another is persuading the general public that freer trade is a winning proposition. I say this knowing that many of you, especially among our American guests, strongly support the FTAA and are applying all the pressure you can to obtain fast-track authority as soon as possible.

Some said in Washington the other day that even some in industries which have benefited the most from NAFTA are sometimes cool to FTAA. How low does the U.S. unemployment rate have to go before critics realize that freer trade is a win-win proposition?

The lack of fast-track authority must not stop us from moving forward in this seven-year process. We are in this for the long haul, and we face an obstacle on the road – not an insurmountable barrier. But we cannot allow ourselves to lose momentum. The lack of fast-track, if we are not careful, could become a pretext for paralysis. Americans, if they put themselves in their neighbours’ shoes, must ask themselves why an entire hemisphere would engage in complex FTAA negotiations when the commitment of the largest economy is in doubt. Canada, and probably every other country in the Americas, wants to see fast-track approved early in the talks. No one wants to negotiate twice. This message must be conveyed loudly and clearly to the U.S. Congress.

The second challenge is ensuring that the public is involved in the process and supports it. As chair in the first critical months, one of Canada’s major concerns will be to get the message out. We must ensure that the private sector is kept informed on the issues and the progress achieved. It is essential that public opinion be brought with us. Canada has taken a proactive approach in engaging our civil society in the FTAA process, and we have consulted with many groups. We have found that, in the end, we have the same goal – a strong, vibrant economy and jobs for our people.

Our efforts are about more than trade. At Santiago and in other discussions we have committed to address improving education and training, eradicating poverty and building democratic institutions. This multifaceted approach makes it easier for other groups in society to buy into the process.

As chair, Canada will do whatever it can to ensure that the Committee on Civil Society – which we welcome – is successful in its mandate to constructively engage our members of civil society on FTAA issues. This includes business, labour, environmental and academic groups. In the months leading up to Santiago, our government undertook a number of forums and public consultations across the country with civil society. This spirit of consultation must continue.

The negotiations themselves present challenges. One will be reconciling the interests of the 34 diverse nations involved in the FTAA process, which are of varying sized economies. How does Trinidad, for example, with 1 million people go face to face with Brazil with 160 million, or the United States with more than 260 million?

Canada has long been a champion of the smaller economy countries and we understand their concerns about their ability to participate in the FTAA negotiating process. As chair of negotiations for the next year and a half, Canada will listen attentively to their views. We are also providing technical assistance to improve their negotiating capacities. We are fully aware that the FTAA is a large undertaking for these countries and we are prepared to consider, on a case-by-case basis, the special needs of smaller economies. At the end of the day, however, all countries must have the same rights and obligations.

Canada’s interest in hemispheric trade did not begin with the Summit of the Americas process. We have been actively moving toward freer hemispheric trade for some time now, both at the regional and bilateral levels as well as in the hemispheric and global arenas. We advocate the "co-existence" of the FTAA with regional and sub-regional agreements because these are stepping stones to regional integration and a more open global multilateral system. The different tracks of our policy are by no means mutually exclusive. Rather they are complementary. Our various regional trade initiatives over the years might be compared with building bridges.

The first bridge we built was to the United States – the planet’s largest economy, and already by far our largest trading partner, a longstanding friend and ally. There are very few secrets in Canada’s relations with the U.S. Today let me share with you one of the best-kept secrets – the NAFTA is working. Trade between Canada and the U.S. has more than doubled in the ten years since we implemented our bilateral FTA. Our two-way trade is now more than one billion dollars a day. The increase alone in U.S. exports to Canada in 1997 over 1996 was greater than total U.S. exports to countries like China, France or Italy.

Our next bridge, NAFTA in 1994, added Mexico to the relationship, and was an expression of Canadian desire to reach out to Latin America. With NAFTA we faced and are meeting the challenge of reconciling the interests of nations with vastly different economies. Again, this experience has provided many lessons that will serve us in the next seven years as we move toward the FTAA.

For our next bridge, Canada hoped to include Chile in NAFTA. We refused to be held back when the U.S. Congress declined to give the Administration fast-track authority to negotiate a wider agreement. Instead, Canada concluded by itself a bilateral free trade agreement with Chile, largely based on the NAFTA model. Our bridge to Chile gives us a significant link with South America, which is a major market for us.

We have intensified discussions with MERCOSUR, the trading bloc in South America’s southern cone, aimed at reaching a Trade and Investment Cooperation agreement with it. Recently Canada signed a memorandum of understanding on trade and investment with Central America, and we have begun a dialogue with the Andean Community. Of equal importance is our historical relationship with the CARICOM countries in the Caribbean, ties that we continue to build.

The FTAA process has already borne fruit. Trade talks are breaking out everywhere. The FTAA process has spurred regional trade talks and vice versa. Do not the different discussions build on and reinforce one another?

Barriers between the nations of the Americas are tumbling and the outcome can only be increased trade. I envision a day when air cargo moves as easily from Vancouver to Buenos Aires as it does today from Chicago to New York or Edmonton to Toronto. Let’s all of us rise to the challenges and make that vision a reality.

Prime Minister Chrétien summed up our evolving relationship with the hemisphere in his remarks at the closing of last month’s Summit of the Americas in Santiago. "It is clear," he said, "that we are becoming something more than amigos. We are becoming una gran familia."

 
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