Mr. Speaker, in my view, this afternoon's debate is quite an important one. It is an opportunity for us to examine the current trade relationship between Canada and the United States and to look at the tools available to the government and to Canada to manage that relationship.
Canada's trade and investment relationship with the United States is fuelled by the increasing integration of our economies and facilitated by a rules-based trade system offered by the World Trade Organization (WTO) and the North American Tree Trade Agreement (NAFTA).
This relationship is also quantitatively and qualitatively different from that with any other country. Canada's relationship with the United States is both solid and dynamic. The two countries share the largest bilateral flow of goods, services, people and capital between any two countries in the world.
In 2001, Canada exported $351 billion in goods to the United States and imported $218 billion in return. Services exports totalled $31.7 billion in 2000, with corresponding imports at $37.6 billion.
Since the implementation of the Free Trade Agreement in 1989, two-way trade has more than doubled, as my colleague mentioned earlier. Since 1992, two-way trade in goods has increased by approximately 12% per year.
Moving about $1.9 billion worth of goods and services across the border each day, Canada and the United States are each other's largest customers and biggest suppliers. While the majority of Canada-U.S. trade moves freely across the border each day, disputes inevitably arise. Given the magnitude and complexity of the relationship, management of the Canada-U.S. trade relationship is Canada's top trade policy priority.
I now wish to address certain dispute settlement mechanisms.
Many people focus on the dispute settlement systems under the WTO and the NAFTA, which we are using, for example, in our softwood lumber challenges, as the key means of resolving disputes. However, Canada has an array of tools at its disposal to deal with disputes and to address issues before they become more problematic. These of course include consultative and dispute settlement mechanisms under the WTO and the NAFTA.
Before looking at the consultative mechanisms in more detail, I want to re-emphasize the preferential benefits for Canadian trade that have been a direct result of the NAFTA.
You will recall, for example, that Canadian exports were exempted from the U.S. safeguard action announced on March 4, 2002, imposing additional tariffs on imports of 16 steel products.
The fact that our exports of these 16 products were not subjected to these additional tariffs is very important. Since NAFTA, there has been an integration of the North American steel production sector. This is an integration that is not necessarily seen in other North American sectors. Canadian producers will tell us this and have told me this. In addition, American and Mexican producers have confirmed that steel is the most integrated industrial sector in North America.
This exemption was pursuant to those provisions of NAFTA that allow imports from Canada to be exempted from actions if certain conditions are met.
Over the past several years, this particular provision of NAFTA has meant that Canadian imports were exempt from the application of American safeguard action on such products as steel wire rod, line pipe, wheat gluten, tomatoes and bell peppers, and corn brooms.
In addition, Canadian exporters have benefited from the dispute settlement provisions governing anti-dumping and countervailing duty measures established by chapter 19 of first the Canada-U.S. free trade agreement and then by the North American Free Trade Agreement. On 22 separate occasions, anti-dumping and countervailing duties were reduced following chapter 19 review and, on one occasion, the duties were removed entirely as a result of such a review—softwood lumber in 1994.
I think it is important to focus on this good news, these positive effects, which demonstrate that we are indeed an important vendor to the United States and they are an important customer of Canada, as far as Canada-U.S. trade is concerned. In a goodly number of cases, disputes are settled with no negative effects. The mechanisms are in place and they are more than ever useful and effective.
Then there are the consultative mechanisms. I note that under the NAFTA, over 30 entities were established to facilitate trade and investment and to ensure the effective implementation and administration of the agreement. Key areas of ongoing work include trade in goods, rules of origin, customs, agricultural trade and subsidies, standards, government procurement, investment and services and cross-border movement of business people. These NAFTA working groups and committees help to smooth the implementation of the agreement and provide forums for exploring ways of further liberalizing trade between members.
Another important mechanism for managing bilateral issues is the Canada-U.S. Consultative Committee on Agriculture, the CCA. The main objective of the CCA , which is co-chaired by Canadian and U.S. officials, is to reach solutions to emerging bilateral agricultural concerns before these become major irritants.
The CCA has proven to be useful in a number of instances in relieving bilateral trade tensions and in forestalling precipitous actions by Northern Tier states in particular. An important feature of the CCA is the formal role provided for states and provinces: the Province/State Advisory Group serves as a forum for provincial and state governments—usually at the level of the provincial agricultural minister and his U.S. counterpart—to discuss bilateral agricultural trade issues and to work together on areas of concern.
I have not been able to address the involvement and role of parliamentarians but I think I have been able to demonstrate that the government will continue to make full use of the various mechanisms—some of which I have listed—and will do everything possible to ensure prompt resolution of the inevitable disputes.
We are counting on the WTO and NAFTA to further improve access to markets and to fine tune the rules of international trade. I think this is the general strategy that is required.