Thank you, Mr. Chairman. We're always prepared to cede some time to the Canadian Wheat Board.
Good afternoon, ladies and gentlemen. I'm going to present a very short introductory statement. I promise you it will not exceed 10 minutes. I and my colleague, Sam Boutziouvis, will then be happy to answer any questions you might have.
As representatives of the Canadian Council of Chief Executives, we're very pleased to be here today to talk about something that we think is very important to Canada. I will try to make the case for supporting the government's current negotiations towards a free trade agreement with Colombia and to address a number of concerns about human rights, labour, and the environment.
For those of you who do not know us, the Canadian Council of Chief Executives is made up of the CEOs and leading entrepreneurs of 150 of our largest companies in Canada. The organization is a research, policy, and advocacy group. The vast majority of Canadian investment, Canadian exports, Canadian research and development, and training is conducted by the member companies of the council.
The other thing I should tell you, if you don't know it, is that we've had a long record of involvement historically in playing a leadership role and advancing the Canada-U.S. Free Trade Agreement; the NAFTA; and our free trade agreements with Chile, Peru, Costa Rica, Israel, and the EFTA; and now we are very deeply involved in looking at, hopefully, free trade agreements between Canada and India and Canada and the European Union. So we've had a long history of engagement, because we believe an open economy, and one that can build on the tremendous trade advantages that Canada has had, will be good for Canadian jobs and for Canadian growth in the future.
So let me begin. First, Mr. Chairman, we think that an ambitious, comprehensive Canada-Colombia free trade agreement would enhance access to a new and growing export market. With a population of some 45 million people--you know this, as you were there--and strong economic growth, Colombia represents an important market for Canadian products and services. The potential of Colombia has not gone unnoticed by Canadian companies. More than 1,000 Canadian enterprises are engaged in commerce with counterparts in Colombia. The current level of Canadian foreign direct investment in the country is about $3 billion and is expected to increase as we move closer to the conclusion of the agreement.
Canada's annual exports to Colombia have more than doubled in the past five years to $660 million. The proposed agreement would benefit companies and workers in a wide range of industries, including the automotive sector, steel, chemicals, public infrastructure development, oil drilling, environment, engineering, agriculture--you've heard from our colleagues on the importance of Colombia for lentils, and we've also heard from the Canadian Wheat Board with regard to barley and wheat--fertilizer, paper and other forest products, copper products, textiles, apparel and footwear, mining, and advanced manufacturing such as mining machinery and equipment.
In our view, ladies and gentlemen, a free trade agreement that is ambitious, comprehensive, and offers reciprocal access will raise awareness and further open this dynamic and growing economy to Canadian know-how and ingenuity well beyond the products and services I've just listed.
Canada's business community would strongly support a Canada-Colombia free trade agreement that includes the following key provisions: greater access to government procurement; liberalization of the services sector; strengthened protection for Canadian patents, trademarks, and trade secrets; improved customs facilitation; greater benefits for small and medium-sized exporters; reform of the domestic legal and business environment to encourage business development and investment; and finally, an agreement to prevent double taxation.
The second reason we so strongly support the agreement is that it will level the playing field for Canadian workers, farmers, and businesses. The Canadian market, as you know, is already open to Colombian imports. Last year more than 80% of what we imported from Colombia entered Canada duty free. A free trade agreement would give Canadian businesses, farmers, and workers similar access to this important growing market.
As you've already heard, Colombia imposes tariffs averaging 11% on industrial goods, 17% on agricultural products, including 15% on wheat, and as high as 80% on beef products and 15% to 20% on cotton yarns and paper products. The elimination of these tariffs would greatly benefit Canada.
It is vital that we keep in mind the international context. For example, the United States has already completed its own free trade negotiations, though I realize the agreements are now stalled and that Nancy Pelosi and the Democrats have said no, for the time being at least. I've absolutely no doubt in my mind that it's only a question of time, after we see the transition take place, that Colombia will come to the fore again.
When one looks at Canada and the United States, we've had many instances of leaders saying “I will not support this agreement, and I will cancel it if I'm elected”, when history proves otherwise. So we're very hopeful that the compelling reasons, whether it's under a Democratic regime or a Republican regime, will move the United States closer to Colombia.
Meanwhile, as you've heard, Colombia is pursuing liberalized trade with the European Union, the members of the European Free Trade Association, Chile, Mexico and others. In our view, Canada cannot afford to fall behind lest we be rendered less competitive and possibly be shut out of the market by more aggressive negotiators.
The third reason we support it, Mr. Chairman, is that a Canada-Colombia free trade agreement would contribute to economic growth and poverty reduction in Colombia. Reforms introduced over the past decade have served Colombians well. As recently as 2006-07, the World Bank listed Colombia as one of the world's top ten economic reformers--not performers, reformers--and last year Colombia's economy grew by over 6.5%. As well, the International Monetary Fund expects that over the next five years annual economic growth will average an impressive 5%. Unemployment has dropped from 16% in 2002 to roughly 10% last year, and an estimated 10 million Colombians have been lifted out of poverty in the past five years. Wages have been rising for five straight years and inflation has declined to about 5%. Those of you who are members of this very important committee would know that those numbers are numbers that many countries would aspire to have. They are very encouraging.
The conclusion of a Canada-Colombia free trade agreement would signal Canada's strong support for the pro-growth initiatives of President Alvaro Uribe and would further increase confidence in doing business in Colombia.
The fourth point, Mr. Chairman, is that in our view the agreement would strengthen democratic reforms and human rights in Colombia. Contrary to what I know you've heard from some earlier witnesses, recent history demonstrates beyond question that pro-market reforms encourage the development of the democratic institutions that are so important to the effectiveness of a functioning government. They deepen relations among countries, improve the protection of human rights and accountability. The increased economic activity that would result from a free trade agreement would create more and better jobs and more opportunities in the formal economy. It would discourage corruption. It would not eliminate it, but it would discourage it and enable the government to make additional investments in institutions that promote the rule of law and greater transparency.
Less than a decade ago, Colombia was thought by many to be a failing state. As recently as 2000, much of the country was controlled by terrorist groups and ruthless drug cartels. Much more needs to be done, but Colombia's transformation in the past few years has been nothing short of remarkable. The facts speak for themselves. Since 2000, the levels of general violence have been reduced by 40%. The murder rate has dropped by 40%. Kidnappings have dropped by 83%, and terrorist attacks on public infrastructure have declined 76%.
Free trade and stronger economic growth will bring new opportunities for the informal and illicit economies that for too many years have been dominated by the drug trade. Already, growth and greater openness have resulted in the demobilization of more than 40,000 paramilitary fighters; fully 95% of them have been successfully reintegrated into mainstream Colombian society.
Let me be clear: violence continues to plague Colombia. We know that. The social and economic costs of conflict are extremely high, but the problems that remain are being dealt with successfully. Colombia has a vibrant democracy with a long history of free elections, a free press, and effective opposition parties.
Importantly, the Colombian people have given the president an 80% approval rating. Colombia, in our view, is on the right track.
May I conclude, Mr. Chairman, with a fifth and final point. Colombia is a vital element in Canada's strategy of re-engagement in a region. For too long Canada has been a fair-weather friend to our neighbours in the southern hemisphere. Fortunately this is now beginning to change. Building on our existing free trade agreements with Chile, Costa Rica, and now Peru, Canada's government is currently negotiating with several Caribbean and Central American countries. A free trade agreement with Colombia would anchor Canada's strategy of increased engagement in the Americas, which we think is a very positive development. Not since our accession to the Organization of American States and the signing of the landmark free trade agreement with Chile has Canada been so constructively engaged in the hemisphere.
The council is convinced that these negotiations are in the economic and strategic interests of both Canada and Colombia. Of course we will have to await the outcome of the negotiations before determining whether the agreement itself is sufficiently ambitious and comprehensive. We're not interested in a piecemeal agreement. In our view, it should be comprehensive and very broad.
I think delaying or cancelling these negotiations would send the wrong signal, certainly at a wrong time, to the people of Colombia. Any postponement would constitute a commercial and foreign policy setback.
It is my understanding that the Government of Canada is pursuing high-quality labour and environmental accords in conjunction with the proposed free trade agreement, with recourse to dispute settlement mechanisms. In addition, our government is committed to working closely with Colombia in the areas of corporate social responsibility and capacity-building.
Regrettably, some labour representatives and political activists have said it would be wrong to negotiate a free trade agreement until Colombia improves its human rights record. In my view this represents a misdirected effort to derail an initiative that would greatly benefit the people of Colombia and the cause of democracy.
A moment ago I referred to the dramatic decline in violence in Colombian society. Let me offer a few more examples that illustrate the rebuilding of trust and the enhanced sense of security. In 2002, some 131 mayors throughout Colombia were forced to exercise their duties and responsibilities from outside their municipalities. Today all Colombia's mayors live and work in their respective municipalities. Ridership on Colombian roads has doubled since 2000, and the number of tourists visiting Colombia has doubled in the past five years. The International Labour Organization apparently agrees with the direction of human rights and labour reforms in Colombia; for the first time in 20 years the ILO has removed Colombia from its labour watch list.
To reiterate, Colombia continues to experience significant social, human rights, and poverty-related challenges. The good news is that Colombia is making progress. We should encourage these economic and democratic reforms. Far from walking away, we should engage the country's leadership as much as possible.
In conclusion, Mr. Chairman, we think Canadian workers and businesses of all kinds would benefit from the negotiation of an ambitious, comprehensive free trade agreement with Colombia. Furthermore, it is in Canada's interest to engage with countries such as Colombia, that are committed to democracy, the rule of law, peace, and greater security. Successful conclusion of this agreement would certainly offer better protection for workers and the environment while strengthening capacity-building and corporate social responsibility. For all these reasons, we support it.
I should say, Mr. Chairman, consistent with our philosophy as an organization--we would apply the same reasoning to China or any country in the world, whether it be Cuba or, for that matter, North Korea--our view is constructive engagement, the opening up of markets, and the patient pursuit of those goals, if necessary, that are absolutely essential to the gradual bringing in to the family of nations, in a full way, of countries that do not necessarily share our democratic values.
Thank you very much.