Promoting
Trade in the Caribbean and Latin America
Comments by David Kilgour to The Alberta
World Trade Centre and Edmonton Chamber
of Commerce
Edmonton, October 17, 1997
Good morning.
Buenos Dias. Bom Dia. You must be very keen
to do business with the Caribbean and Latin
America to attend a breakfast at this hour.
I know that I am very excited about the
possibilities for trade with these two regions,
which along with Africa, are under my portfolio.
I should
note that although my formal title is Secretary
of State (Latin America and Africa), I am
also responsible for the Caribbean, including
the Commonwealth Caribbean.
Although
the Caribbean is geographically close to
Latin America, our trading relationships
with the two regions have been quite different.
Canada has enjoyed a long historic relationship
with the Commonwealth Caribbean. We share
a common language, and common political
and legal traditions, based on our ties
with Britain. The Bank of Nova Scotia had
a branch in the Caribbean before it was
in Toronto, if you can believe that! We
don’t need to talk about the rum trade
that has been going on between Canada and
the Caribbean for years. We have sometimes
been inclined to take the Caribbean for
granted. This is a serious mistake. The
countries of the Commonwealth Caribbean
are among our closest friends on the international
stage. In our recent bid for Calgary 2005,
eleven of the 25 votes we got were from
CARICOM states.
Our relationship
with Latin America has flourished more recently.
For too long when Canadians looked southward,
they could not see beyond the United States.
Now, we are partners with Mexico in NAFTA,
and we have entered into a bilateral free
trade agreement with Chile. This government
is strongly committed to the process of
expanding free trade throughout the Americas.
In March, we will be active and eager participants
in the Summit of the Americas in Santiago,
Chile, which aims to establish a Free Trade
Area of the Americas by the year 2005. Canada
is also talking trade with other regional
groupings, such as MERCOSUR, the Andean
Pact, CARICOM, and the Central American
Common Market. We look forward to trade
partnerships with members of these groups
as we move toward hemispheric free trade.
Let me draw
your attention to Canada’s efforts
to develop enhanced trading relations with
MERCOSUR. This regional trade pact includes
Argentina, Brazil, Uruguay and Paraguay.
Canada exported nearly $1.7 billion Canadian
to these four countries in 1996, and absorbed
imports of $1.4 billion. As you know, the
Canadian government is trying to lay the
groundwork which will allow more and smoother
trading between MERCOSUR and Canada. These
countries now account for more than $6 billion
in Canadian investment. I’d like you
to know that our respective governments
need to hear from the business community
to move this kind of enhanced trading arrangement
along.
Last month
Prime Minister Chrétien announced
that in January next year a Team Canada
trade mission will visit Mexico, Argentina,
Brazil, and Chile. The mission will be patterned
on our previous successful Team Canada missions
to Asia, that brought together our provincial
leaders with our federal leaders in promoting
economic growth for all of us.
My colleague,
Trade Minister Sergio Marchi, recently announced
a number of trade promotion measures along
with a new name for our trade services network
-- "Team Canada Inc." What is
exciting for me about both the Team Canada
trade mission, and Team Canada Inc., is
that there is a special emphasis on small
and medium-sized enterprises, or SMEs. There
is a clear realization of the importance
of SMEs to our economy and to job creation,
and also a recognition that due to limited
capital, SMEs need to enter into partnerships
with government and each other in order
to reach new export markets.
What is most
striking is the potential for growth of
our trade with Latin America and the Caribbean,
particularly by small and medium-sized enterprises.
Fewer than 10 per cent of Canadian SMEs
are now taking advantage of international
markets. Almost half Canada’s total
exports are done by Canada’s top 50
exporters. When you consider that one in
three jobs, and more than 40 per cent of
our GDP is directly dependent on exports,
it becomes obvious that by encouraging small
and medium-sized businesses to export, we
are contributing to growth and job creation.
Not only
is there an enormous untapped potential
for exports among Canada’s smaller
businesses, but Latin America and the Caribbean
provide many untapped opportunities. By
the year 2000, the Caribbean and Latin America
will provide a market of 600 million people
with purchasing power of $1 trillion U.S.
Pure demographic
growth will account for the major expansion
of the market in this region, but I believe
that trade will also lead to greater prosperity
and improved standards of living for the
peoples of the Americas. Economic growth
can produce a social dividend allowing their
governments to invest more in the areas
of health, education, and new technology,
which in the end will benefit us all.
The potential
in these regions is waiting to be tapped.
Our exports of goods to these regions were
$4.5 billion in 1994 -- an increase of 22
per cent over the previous year, but only
a small fraction of our trade with the United
States.
The good
news for Albertans is that many of the technologies,
services, and products sought in the Caribbean
and Latin America are those in which Alberta
is strong. Among major Canadian exports
to these regions are wheat, canola oil,
pulp and paper products, coal, and telecommunications
equipment, to name just a few. Our expertise
in oil and gas development, mining, environmental
protection, engineering, and telecommunications
is highly sought after.
My first
official trip to Latin America included
attending the opening of the GasAndes Project
in Chile, which is headed by Alberta’s
Nova Corporation. This project is not only
a good business deal for Canadians and Albertans,
but it will result in an improved environment
for Santiago, a city that is sometimes so
polluted that Pavarotti recently had to
cancel his concert there. In November this
year I will be returning to other Andean
countries -- Peru, Colombia, and Venezuela
-- to explore other business opportunities
for Canadians and Albertans -- particularly
in the areas of resource technology.
Alberta alone
did more than half a billion dollars in
exports to Latin America and the Caribbean
in 1995. My point isn’t that we are
not successful already. Rather, it’s
that we can be much more successful if we
turn our attention to the opportunities.
Over the
past four years, Canadian exports to Latin
America have nearly doubled from $2.6 billion
to $5 billion. This is more than our exports
to France and Germany combined, while exports
to Brazil are four times those to India.
Canadian investment in the region has also
increased from $6 billion to $15 billion.
Despite this, and the fact that Canada enjoys
comparative advantages in sectors such as
resource exploitation, information technology
and infrastructure development, our share
of the market remains only two per cent.
We have just scratched the surface.
Our economic
ties have been aided by the growing number
of Canadians, now in the hundreds of thousands,
who come from every country in Latin America
and the Caribbean. Their presence has enriched
our own culture, forged unbreakable bonds,
and sensitized our country to the promise
and richness of the Americas.
I have mentioned
the January Team Canada mission to Latin
America, and the establishment of Team Canada
Inc. as two of the measures this government
is taking to promote trade, especially by
small and medium-sized enterprises. Team
Canada Inc., as announced by Mr. Marchi,
is a cooperative venture of federal government
departments, provinces, municipalities,
educational institutions, and you in the
private sector. As with the Team Canada
trade missions, its emphasis is on partnership
and results.
At the same
time that he announced Team Canada Inc.,
Mr. Marchi also announced other measures
to promote trade, including an increase
in the number of trade commissioners assigned
to Latin America and Asia by 30 per cent
over the next five years. ExportSource,
another recent service, is providing comprehensive
information via the Internet about Canada’s
export services. As well, a new unit specifically
devoted to serving the exports needs of
small and medium-sized enterprises is being
established at the Department of Foreign
Affairs and International Trade.
The Team
Canada trip is expected to sell out. I hope
that Alberta firms wishing to participate
on this trip are well represented. My office
can put you in contact with trip organizers.
The trip will include a large contingent
of small and medium-sized enterprises. As
an opportunity to network with other business
people, both from Canada and in the countries
visited, it will be a very worthwhile experience.
I should point out, however, that embassy
and department personnel will be very busy
with the logistics of the tour. Something
can also be said for visiting Latin America
and the Caribbean at a time when these staff
can give you more personal attention. You
will find many of them very knowledgeable
about business opportunities and general
business climate in the regions they cover.
Department trade staff are an excellent
resource, and they have a considerable amount
of sector-specific market research information.
I would also
like to point out that it is not a good
idea to fly down to Latin America or the
Caribbean with the expectation of signing
multi-million-dollar deals on your first
trip. To an even greater extent that here,
the business culture is based on establishing
personal relations and friendships, and
this can take time. The result, though,
can be rewarding over the longer term.
As I mentioned,
I will be visiting several of the Andean
countries next month to explore possibilities
for improved Canadian trade with this region.
I would be especially interested to learn
from you about your needs, and ways that
I can help you. As a representative of the
Canadian government, I may be able to open
doors, and put in a good word for Canadian
products, services and technology. I have
set aside some time after this breakfast
when I hope to meet with some of you individually.
Please let’s keep in touch. My ability
to serve you comes from having a sound understanding
of your needs.
Before closing,
I would like to make one aside. An independent
study has just been released that shows
Canada now has lower overall business costs
than the United States and five major European
countries. Low start-up costs, low telecommunications
rates, low interest rates and the lowest
overall tax burden of the seven nations
give Canada a 5.4 per cent cost advantage
over the United States. The study, The Competitive
Advantage: A Comparison of Business Costs
in Canada, Europe and the United States,
was conducted by KPMG, an international
consulting firm. This is good news for investors
looking for a low-cost, competitive location
in which to do business.
These are
exciting times for Canadian trade throughout
the hemisphere. I am very excited to be
working with Foreign Minister Axworthy and
Trade Minister Marchi to promote Canada’s
ties with these regions. I also look forward
to working with you in what I believe can
be a successful partnership for Canada and
Alberta.
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