Mr. Speaker, I am pleased to rise today to address Bill C-32 which would implement the Canada-Costa Rica free trade agreement.
This agreement is an important step forward on several levels. To begin with, the success of this endeavour clearly demonstrates that free trade agreements can be negotiated between larger and smaller economies. That bodes well for the future of the free trade area of the Americas.
At the same time, this agreement will open up a new market with exciting potential for Canadian exporters. It also includes precedent setting chapters in the areas of trade facilitation and competition policy.
The Canada-Costa Rica free trade agreement includes side agreements on the environment and labour that are an important improvement on those found in earlier agreements.
I am especially pleased that we have concluded an agreement with Costa Rica, sometimes called the Switzerland of Central America. As a country of some 3.9 million citizens with no military and longstanding, democratic institutions, Costa Rica has been an important beacon of stability in Central America. With a large percentage of its budget devoted to education and health care, Costa Rica's future looks very bright.
Canada and Costa Rica share similar political cultures, placing primacy on respect for the rule of law, democracy, respect for human rights and the environment. Our relationship with Costa Rica has been one of longstanding co-operation, trust and mutual benefit. Formal trade relations between our two countries date back more than 50 years to a bilateral commercial agreement concluded in 1950. Since then our relationship has developed steadily. A free trade agreement will only make it stronger.
Both countries' citizens will be able to share in the prosperity that freer trade creates. Already our bilateral trade with Costa Rica has seen an average annual growth of over 6% in the last five years with a 7% increase in exports and a 5% increase in imports. The FTA will accelerate this growth.
Although our bilateral trading relationship is small, approximately $270 million, this number is rising rapidly. Indeed, there was a 25% jump in our exports in the year 2000. It is also worth mentioning that we have invested about $500 million in Costa Rica.
Canadians are quick to seize an opportunity which could explain the enthusiastic response to the extensive consultations that were concluded regarding this initiative. The response from Canadians was strong and indicated support for pursuing an FTA with Costa Rica. It should also be noted that a significant number of small and medium sized enterprises expressed an interest in such an agreement. For them, numbers like $270 million, our bilateral trade with Costa Rica last year, are very large indeed. Their support is not surprising considering that there are considerable opportunities in the Costa Rican market for many Canadian goods, including automotive products, prefabricated buildings, some fish products and a number of agricultural products.
The improved access we will gain with this FTA will give Canadian businesses an edge in Costa Rica, particularly over foreign competitors who do not have preferential access to the Costa Rican market. As our businesses that benefited from preferential access through the Canada-Chile FTA could tell us, getting into a market first matters.
The agreement will include immediate elimination of Costa Rican tariffs on most Canadian industrial exports. It is expected that over 90% of Canada's current agriculture and agri-food exports to Costa Rica will realize market access benefits.
Canada and Costa Rica believe that a commitment to environmental and labour co-operation along with the effective enforcement of domestic laws should go hand in hand with trade liberalization. That is why, in addition to the FTA, two complementary co-operation agreements on the environment and labour were negotiated in parallel.
These parallel agreements are practical and reflect the scope of our relationship with Costa Rica.
They are also designed to promote values shared by both countries, such as the rule of law and sustainable development.
Considering the benefits I have mentioned, as well as many others, it is not surprising that free trade enjoys widespread support in this country. As I am sure everyone in the House knows, to the chagrin of some I might add, the vast majority of Canadians, more than 70% in fact, support freer trade. They recognize that increased trade is a prerequisite for economic growth and Canada's continued prosperity and social well-being.
The statistics demonstrate that this is true. In the year 2000 Canada's exports of goods and services represented over 45% or almost half of our GDP, a substantially higher proportion than that of our major trading partners. This share is up from 43% in 1999 and up considerably from just 28% in 1990.
Some 80% of the over two million new jobs created since the government took office in 1993 can be attributed to our increased trade. That means that one in every three jobs in Canada is now linked directly to our success in international trade. One in every three jobs is directly related to our success in international trade. That is so important that it bears repeating.
Most of our exports are now high value-added goods and services: telecommunications, aerospace, software, environmental technologies and other areas of the new economy.
Many Canadian companies, including small and medium sized firms and their employees, depend on trade for their growth and success. Trade puts money in the pockets of Canadians who teach in our schools, work in our factories and run our hospitals. As well, Canadian consumers and producers can obtain a broader choice of cheaper and better goods and services through trade. To put it simply, trade translates into better and higher paying jobs and increased opportunity and prosperity for all Canadians.
I would like to turn now to the importance of new WTO negotiations which have been the subject of increased attention and some concern over the past few days. Given the growing importance of trade to the Canadian economy, it is obviously in our interest to have clearly understood and widely accepted rules to ensure that we are not left subject to the whims of larger and more powerful economies.
A rules based trading system also gives Canadian companies access to larger markets abroad, while at home these companies can take advantage of global economies of scale and maintain or increase employment in their communities. Canada's continued prosperity depends on an open and healthy global economy. That is why we strongly support the launch of new WTO negotiations.
Although differences over an expanded negotiating agenda remain, most WTO members are seeking a launch of new negotiations at the next ministerial meeting scheduled to take place in November in Doha, Qatar. In Canada's view, expanded negotiations should improve access to emerging world markets and ensure trade rules keep pace with changes in technology and business practices.
We are working closely with our trading partners, including the United States, the EU, Japan and key developing countries to build support for new negotiations.
WTO members have many challenging issues left to resolve before Doha, but I believe, with political will on all sides, we can make good progress in bridging the differences among members. A new round offers our best hope to gain access to dynamic new markets and to both expand and strengthen the rules based system which has worked so well for Canada.
I would also like to say that in light of the tragic events that took place recently in the United States, I firmly believe that it is more important now than ever to pursue the goal of worldwide trade liberalization.
Bob Zoellick, the United States trade representative, has recently stated that trade reinforces openness, opportunity, democracy and compassion. I think Canadians overwhelmingly endorse that statement. I believe, as he does and as does the Minister for International Trade, that the WTO meeting in Doha should proceed so that the world trading system can continue to promote international growth, development and openness.
The many benefits of free trade are evident on a regional level. Canada's continued engagement with regional trade agreements such as NAFTA and more recently the FTAA are critical to our collective economic prosperity and social well-being. With a combined population of 800 million people and a GDP of some $17 trillion, the Americas is one of the fastest growing markets in the world in terms of consumers and growth in per capita income.
The FTAA represents an historic opportunity to unite the countries of the hemisphere in a comprehensive free trade area that would contribute to job creation and growth throughout the region, including Canada. That is one of the reasons we are enthusiastic supporters of the FTAA negotiations now under way and why Canada continues to play an active leadership role in the negotiations.
The FTAA would create greater prosperity throughout the entire region. Poorer countries of the hemisphere would have the opportunity not only to improve their economic situations through trade and investment but to begin to address the real problems of poverty, crime, environmental degradation, threats to democracy and human rights.
I will quote from UN Secretary General Kofi Annan's report to the preparatory committee for the high level international intergovernmental event on financing for development.
The secretary general was speaking of the important benefits of freer trade to less developed and developing countries which are struggling to enjoy the benefits we in Canada and other countries enjoy. This is exactly what he said:
There is now widespread acceptance that, in the long run, the expansion of international trade and integration into the world economy are necessary instruments for promoting economic growth and reducing and eradicating poverty...Estimates of the potential gains in developing countries from a variety of liberalization measures range from $100 to $150 billion. There are thus large gains to be captured by developing countries from continued liberalization in goods markets.
I have heard it argued by a minority of Canadians and a minority of members of the House that free trade is somehow bad for the poorer countries of the world. They argue that it is a trick meant to take advantage of poor nations while benefiting only wealthier countries like Canada and the United States.
Many of my colleagues and I sat in the Chamber and heard the prime minister of the United Kingdom, Tony Blair, state the same sentiments as the UN secretary general. He said we must challenge false accusations about liberalized and globalized freer trade. He said that in his view as prime minister of a major country freer trade is fundamental to helping poorer nations develop their economies.
Those were not popular statements with a minority of Canadians and some members of parliament on the far left. Nonetheless the facts support them. An independent person like Kofi Annan, whose statement I quoted, cannot be dismissed as someone who does not understand the reality of the global trading system. Poorer countries of the world stand to gain immeasurably by liberalized and globalized trade if we go about it in a careful and fair minded way. That is what Canada is strongly committed to.
Canada is also committed to pursuing technical assistance programming for the Caribbean and Central America to help countries build their capacities for trade, investment and financial stability. At the same time, Canadians have invested $54.8 billion in the nine NAFTA countries of the Americas. Canadian investment in those countries increased sixfold over the past decade. This means that more Canadian money is flowing into South and Central America and the Caribbean.
The Canada-Costa Rica free trade agreement is a symbol of our long term commitment to the hemisphere. It will help advance negotiations leading to the free trade area of the Americas. The agreement will provide much needed insight into how to address the needs of smaller and more vulnerable regional economies.
In the end our efforts to liberalize trade on the multilateral, regional, and, as in the case of Costa Rica, bilateral level will all lead to the same goal: a more open and rules based trading system which will benefit all economies and nations of the world, a system in which there are only winners and no losers. That is what Canada is strongly committed to. Such a result would greatly benefit the people of Canada and people around the world.
I sincerely hope members of the House will support the legislation. Concerns have been expressed about it already, even by some of my colleagues. We are quite prepared to hear and address those concerns. However let us make no mistake. Canada is a free trading nation. We stand by that and support Bill C-32.