Mr. Speaker, I take this first opportunity to congratulate you on your appointment to the chair. I thank the people of my riding of London—Fanshawe. I also thank my wife, my children, and all my very dedicated campaign workers who have made my election for the third time to this place possible. I am deeply honoured and I thank them.
I am very pleased to address the House today on the very important issue raised by the opposition, the free trade area of the Americas. The past decade has been one in which the hemisphere has made remarkable progress and in which Canada's relations with its closest friends and neighbours have developed in new and exciting ways.
We will celebrate this progress and the spirit of co-operation that has transformed our community when the Prime Minister welcomes the leaders of the democratically elected governments of the region to the third summit of the Americas in Quebec City in April.
The Americas is one of the world's most dynamic regions. Although its 800 million people are not even one-sixth of the world population, they account for more than one-third of the world's economic activity. At about $11 trillion U.S. the combined gross domestic product of the Americas is greater than that of the European Union.
At the Miami summit of the Americas in 1994, leaders endorsed a declaration and plan of action that expressed their common commitment to strengthening democracy and creating greater prosperity. They also committed themselves to practical measures to improve health care, increase access to quality education and protect biodiversity, to name but a few.
At the second summit in Santiago in 1998, leaders endorsed action to support the development of democratic institutions, protect human rights, and enhance transparency and respect for the rule of law. They also gave specific instructions to begin the process of negotiating the free trade area of the Americas. Once it is complete, the FTAA will be the world's largest free trade area.
Throughout today's debate, my colleagues and I on this side of the House will discuss in some depth the issues of access, services, investment and the need for coherence. I certainly hope hon. members across the aisle will join us in this important debate. However, I must admit that I suspect some members of the opposition will simply cast aspersions on the FTAA rather than offer constructive and realistic ideas. I would love to be proven wrong on that.
Only the opposition can simply say that everything the government does or proposes is fundamentally contrary to the interests of Canadians. The reality of governing is that we must assist Canadians in fulfilling their hopes and achieving their aspirations while providing real, meaningful assistance to the people of the Americas. The FTAA offers Canadians many more benefits that would clearly compel us to support these negotiations.
I am speaking too of the vast hemispheric dialogue on issues such as labour rights and environmental protection that have been fostered and promoted within the broader hemispheric movement. We all expect a free trade area of the Americas to create the conditions for greater prosperity. Without the chance to improve their economic situations through trade and investment, just how could poor countries of the hemisphere begin to address their real problems of poverty, of crime, of environmental degradation, and of threats to democracy and human rights?
We also know that there are vulnerable and excluded elements of our societies. There are challenges to our culture and to our values. There are indeed risks to some parts of our economies, risks that trade alone does not create and that the FTAA alone cannot resolve, but risks that concern our citizens nonetheless.
What do we do? We cannot stand still and accept matters as they currently stand in Canada or anywhere else in the hemisphere if there is a chance to make them better. The facts are clear. Canada has done very well from its openness to trade and investment and has acquired the strength and experience to do even better in the future under even better rules. Therefore we must go forward.
A key objective in the FTAA negotiations is to achieve open and secure market access for goods produced within the free trade area. The elimination of tariffs is key to this objective. Some Canadian exporters face significant tariffs in key markets for important Canadian exports. Canada therefore supports an approach that will allow for early tariff elimination for some products in order to provide exporters the opportunity to expand trade quickly and reduce costs for consumers.
At the same time all countries have domestic industries that may require time to adjust to increased import competition. Consequently we expect that a transition period which allows for the phased elimination of some tariffs will also be negotiated.
Consistent with the approach taken in other negotiations, Canada will push for the elimination of tariffs on all non-agricultural products over a period not to exceed 10 years. Canada is also examining a transitional safeguard mechanism to protect producers from unforeseen difficulties associated with hemispheric trade liberalization. To ensure that only goods produced in the hemisphere benefit from preferential tariff treatment, a Canadian objective will be to negotiate appropriate rules of origin.
If there is one sector where new access could lead to significant benefits for Canada and for Canadian businesses, it is in the area of services. The service sector is a key engine of the Canadian economy. It is responsible for more than two-thirds of Canada's GDP, almost three-quarters of employment, some 10.5 million jobs, and nearly 90% of new job creation in Canada. It is leading the transformation of the Canadian economy into a knowledge based economy.
Canada is the 12th largest exporter of services in the world, exporting some $51.8 billion worth in 1999 alone. The argument for supporting Canada's services exports is particularly eloquent when it comes to the Americas. Canada's commercial services exports to FTAA countries, excluding the United States and Mexico, were worth $1.9 billion in 1998, up from $787 million in 1993.
The Canadian telecommunications sector is enjoying tremendous success, exporting services valued at over $2 billion per year and employing some 104, 000 people. As a consequence, since 1993 the sector has been growing at a rate of just over 9% each and every year.
Still, Canadian exporters of telecommunications services face market access and regulatory restrictions in many countries of the hemisphere, in part due to the presence of telecommunications monopolies in several central and Latin American countries, the lack of transparency, predictability and timeliness in the process for awarding operating permits and licences or prohibitive fees for licensing or interconnection.
In recent years Canada's financial institutions have been very active in central and Latin America. One leading example is Scotiabank which is active in Argentina, Chile, Brazil, Costa Rica, Belize, El Salvador, Guyana, Panama, Peru, Uruguay and Venezuela.
Another good example is the National Bank which recently teamed up with three U.S. venture capital companies and a local Chilean partner to form the Corp Banca consortium in order to purchase banking institutions in South American countries.
The same is true for the insurance sector.
Another sector where Canadian expertise is renowned around the world, of course, is engineering and other related services. Canada is currently the world's third largest exporter of engineering services, and the high calibre of Canadian engineers is internationally recognized. That is why Canada is actively participating in the services negotiations under the free trade area of the Americas.
Canada has much to gain from the establishment of a comprehensive set of rules on trade and services under the FTAA. Canada's general objective in the services negotiations is to seek improved market access for Canadian service providers under a transparent and predictable rules based regime.
In the elaboration of FTAA rules on services, Canada will be guided by its existing rights and obligations in the North American Free Trade Agreement, the Canada-Chile Free Trade Agreement and the WTO General Agreement on Trade in Services, more commonly known at GATS.
While the link between trade, economic growth and jobs is well understood, the same is not true for the flip side of trade investment. Foreign investment has played a central role in Canada's development as a nation and remains essential to securing Canada's continued development and prosperity.
Canada's efforts toward a strong rules based system at the regional and multilateral levels are aimed at creating a solid basis for long term economic expansion and continued social progress. Investment rules provide for transparent, predictable and fair rules for Canadian investors, large and small.
Trade and investment rules give a medium sized economy like ours a great deal of leverage against the political pressure sometimes exerted by larger economies. Conversely, inward investment in Canada coming from the non-NAFTA countries of the Americas totalled only $3 billion in 1999.
Overall, Canada has a strong outward investment orientation in the Americas beyond the United States and Mexico. In this context, Canada has a strong interest in seeking a rules based, secure and predictable environment for investors and their investments in the hemisphere.
In the elaboration of FTAA investment rules, Canada will be guided and take into account past experiences with trade negotiations and the implementation of investment rules with other countries, including those of Latin America and the Caribbean.
Canada's main objective is to ensure a clear delineation of investment obligations that will serve our national interests. As is the case for other trade agreements, the FTAA investment chapter will allow countries to file exceptions for those measures they wish to maintain and what would otherwise not be allowed under the FTAA.
In addition, Canada will ensure that it preserves its ability to adopt or maintain regulations, administrative practices and other measures in sectors of key policy interest. I am specifically referring to our most treasured public health care system and our public education system. These are not open for debate or discussion by the Government of Canada.
The summit process ensures that economic growth through liberalized trade is linked to social development. Hemispheric co-operation on democracy, human rights, labour, employment and environmental issues, justice, health and other major issues proceeds within the same framework as the FTAA. The FTAA is complemented and reinforced by the efforts of many other ministers of the hemisphere, not just trade ministers.
For example, ministers of energy will meet in Mexico at the beginning of March. Ministers of the environment will meet in Montreal at the end of March. Finance ministers will meet in Toronto in early April. Ministers of labour will meet in Ottawa next October.
These collective and co-operative hemispheric efforts on specific issues such as labour, employment and the environment reflect an integrated approach to meeting summit commitments.
We welcome the opportunity to talk about the FTAA and we will never be shy to do so on any occasion. However the Bloc's motion is irrelevant, unfortunately, simply because the government has been at the forefront of the hemisphere in consulting openly with Canadians and with parliament. The kind of leadership my colleagues from the Bloc have called for today is something the government has demonstrated very clearly and repeatedly, and it will continue to do so.
The standing committee studied and published a report. Then the minister tabled the government's response to the report, which set the tone for our proposals for the FTAA at this stage. Had the Bloc consulted with all parties on their motion perhaps we might have been able to agree with it. Nonetheless, we on this side welcome the opportunity to debate it. I am convinced the FTAA process will benefit significantly from this parliamentary exchange on such a very important issue to the people of Canada.