Mr. Speaker, before I get into my presentation, I would like to respond to the previous speaker when he said that it is a fait accompli, that it has been done in the back rooms. That is not the case. As we saw, he was on his feet a minute ago expressing his views. I am on my feet expressing my opinion. Yesterday we were debating Bill C-31. The Minister of International Trade and the parliamentary secretary a couple of days ago were doing the same thing. I refuse to accept the comment that this is being done behind the scenes.
Bill C-31 and Bill C-32 will be voted on in this House. We all know the numbers. We do not have a majority government but we certainly know that if we present good legislation, the opposition members would not dare not vote in favour of it, because in essence, they would be telling Canadians that they do not want to do what is good for the country. Nothing is being done in the back rooms. Everything is above board and transparent. That is why I take this opportunity to talk about Bill C-31 at second reading.
Bill C-31 establishes the Department of International Trade. I have said before and I will say again that I support this initiative, which was introduced back in December by the Minister of International Trade and the Prime Minister, to create this new department. It enhances our ability to improve our trade and economic position nationally and internationally, but mostly it addresses some of the concerns that were expressed by the previous speaker and other members.
The government's decision to establish a separate Department of International Trade and to add to it the investment functions from Industry Canada is a recognition of the importance that these two functions work in close collaboration with each other in shaping a strong 21st century economy for Canada.
One of the key priorities of the new department and this government is to continue to further secure and enhance our access to the United States. Most of my comments will be primarily as our trade activities relate to the U.S. and Mexico. Of course, as we have heard repeatedly from other speakers, the United States is our major trading partner and I want to reflect that in my comments. At the same time I want to add some comments on how the Minister of International Trade is very proactive in trying to expand our horizons and secure future opportunities for Canada.
Canada and the United States share a unique and vital relationship which is driven not only by our social and cultural similarities with respect to our history, but also our economies primarily are intertwined. This serves as a model to the entire world. The importance of this relationship can never be overstated. We have heard that stated repeatedly. Earlier today in the House of Commons there were questions about our beef industry, our softwood lumber industry, energy, and the list goes on.
Canada and the United States share the largest bilateral flow of goods, services, people and capital between two countries in the entire world. Approximately $1.8 or $1.9 billion worth of goods and services move across the border each day. Canada and the United States are each other's largest customers and biggest suppliers. For example, in 2003 Canada exported $330 billion in goods to the United States and imported $240 billion in return. When members do the adding and subtracting, they will see where we stand.
The largest and most reliable source of energy was exported from Canada to the U.S. in 2003. The value of this exported energy was $42 billion U.S. The relationship is very important to Canada because over 80% of Canadian goods and services exports are destined for the United States. These exports represent approximately 30% of the value of our GDP.
Canada is the number one foreign market for 37 of the 50 states in the United States of America. Although the U.S. buys more goods from Canada than from any other country in the world, its exports to Canada represent only 1.8% of its GDP. When we compare the numbers, the percentage of GDP, 30% to 1.8%, we can see why we try to do our best to maintain an excellent relationship.
Earlier today we heard in the House that the Minister of Agriculture and Agri-Food is meeting with his counterparts in the United States. This government and the Prime Minister have been continuously working hard with the President of the United States to make sure that we have access to that market with respect to our beef industry. While trade is highly integrated and mutually dependent, the fact that we depend more on the U.S. market than the U.S. does on us is very clear.
NAFTA is the cornerstone of our trading relationship with the United States and Mexico and has served us extremely well. Under NAFTA and the Canada-U.S. Free Trade Agreement, Canada has expanded two-way merchandise trade with the United States by over 8% annually.
NAFTA was a visionary trade agreement when it was signed and is still a model for the world. It has succeeded in stimulating growth, raising standards of living and delivering competitive prices for customers. Most of all it has created jobs and growth for Canadians right across our country. Our enterprises have been embraced. The new opportunities created by the NAFTA market have become stronger, more competitive and more export driven.
This of course has helped Canadians reach a very high level in the G-8. Today among the G-8 proudly I say we are looked at as the number one country in terms of no deficit, tremendous growth and job creation. That is not to say, of course, that we have been over the past many years recognized continuously as the best country in the world in which to live. That does not happen and people do not say that without a reason.
Since January 1, 1998 virtually all Canada-U.S. trade has been tariff free, fostering increased trade and investment among the various partners. Between 1993 and 2003, two-way trade in goods increased an average of 7.6% per year. Canada receives about 11% of the total stock of U.S. direct investment abroad, which amounted to $192 billion U.S. in 2003.
In turn, Canadian companies have also invested in the United States. In 2003 they invested approximately $127 billion U.S., accounting for 41% of Canadian direct investment abroad and employing 534,000 people in the United States. In economic terms we are truly integrated and vital to each other's economy and of course security.
We built on the already strong foundation of the Canada-U.S. relationship during President Bush's visit to Canada last November. During that visit the Prime Minister and the president committed to deepening cooperation in North America and the world as a whole. They agreed to work bilaterally to address Canada-U.S. priorities and to continue close cooperation with Mexico on issues of trilateral importance. They also announced the new partnership to lay out an agenda designed to increase the security, prosperity and quality of life of citizens on all sides of the borders.
Through the new partnership, Canada and the United States committed to continuing joint efforts on the smart borders accord to secure the safe movement of people and goods in North America. FAST, which stands for free and secure trade, and NEXUS are two examples of joint Canada-U.S. programs which have been expanded under the smart borders initiative. It has often been said that post 9/11 not just our country and the United States have changed, but the world as a whole has changed and is still changing.
That is why in cooperation with our neighbours to the south, the United States, we have been working to find the means, ways and systems not only to move goods and services expeditiously but more so to move goods and people in a secure way. FAST and NEXUS are the two systems that have been implemented to facilitate that.
The FAST initiative is designed to make cross-border commercial shipments simpler, cheaper and subject to fewer delays. Something we have been hearing about continuously is how to eliminate delays, how to expedite, how to prevent pile-ups at the border, at the Windsor crossing for example, while being cognizant of the fact that we must maintain security. FAST is currently operational at 12 land border crossings. It is anticipated that all land border crossings will be FAST capable in the near future.
The NEXUS program facilitates the movement of pre-approved travellers moving between Canada and the United States. As much as I talked about our goods moving across borders by trucks for example, we also must keep in mind that there is a tremendous number of people who frequently fly to different destinations in Canada and the U.S. for pleasure or for business, daily or on a weekly basis. The NEXUS program helps to alleviate some of the anxieties and delays that people have experienced in the past. I am sure that even now people are experiencing some.
Through this new partnership we have also committed to secure the borders through a land preclearance initiative, and make strategic investments in border infrastructure at key crossings, such as Detroit-Windsor, to ensure that physical limitations do not hamper the flow of North American commerce. Our goal is to strike the right balance between ensuring effective border security while facilitating the cross-border flow of low risk goods and services. In support of this our government has already announced more than $1 billion in border infrastructure improvements.
The North American economy is already highly integrated. We need to ensure that our policies, particularly standards and regulations, reflect and complement that integration. Through the new partnership the government has committed to pursuing joint approaches to partnerships, consensus standards and smarter regulations to promote greater efficiency and competitiveness while enhancing health and safety.
In addition we have agreed to accelerate efforts on rules of origin liberalization to help reduce export related transaction costs. NAFTA rules of origin, which determine whether a product is entitled to be shipped tariff free within the continent, and other customs formalities are often complex and impose a costly regulatory burden on business.
At the July 2004 NAFTA commission meeting, ministers endorsed a rules of origin liberalization package covering a broad range of foods, consumer and industrial products affecting approximately $20 billion U.S. in trilateral trade which was implemented by Canada and the United States last month. This is significant. Work is already well under way trilaterally to explore the scope for agreement on a second group of liberalized rules of origin to be implemented in January 2006 in sectors such as chemicals, pharmaceuticals, plastics and rubber, and motor vehicles. Through this working group we can use the NAFTA framework to further enhance and strengthen our trade and commerce relations with the United States.
All these steps reflect the reality of the North American economy. Increasingly our companies, our entrepreneurs, whether they are Canadian, American or Mexican, operate continent-wide supply chains and distribution systems. Approximately one-third of Canada-U.S. trade is intra-firm, that is, between two branches of the same corporation.
Considering many Canadian production and service hubs are located closer to U.S. markets than some American sites, and are within an hour and a half drive of the U.S., it would seem natural that companies would take advantage of strong Canada-U.S. relations to examine and maximize their business potential. We are committed to doing what we can and taking the necessary steps to facilitate and foster these trading relationships as they are of benefit to all Canadians.
Canada and the U.S. have one of the most prosperous and dispute free economic relationships in the world. There have been a few bugs here and there, but the mechanism is continuously being applied, seeking through those means to ensure that we are treated fairly. Softwood lumber is one area where on many occasions the WTO has ruled in favour of Canada. The government has continuously been at the plate, ensuring that our position, without any ambiguity, is known. The rulings speak for themselves.
As I have already mentioned, Canada and the United States have highly integrated economies, and this adds to the prosperity of both nations. This has been shown over the past 11 years that I have been here. Back in 1993 our unemployment rate was around 12.7%. In 2004 over three million jobs were created, and the economy is stable.
We eliminated the deficit many years ago. We have provided surpluses over the past several years along with balanced budgets. This has allowed the government to reinvest in the economy, whether it be in health care, social programs, research chairs, et cetera. Part of that is the result of the excellent cooperation we have with the United States.
I have said repeatedly that it is important that Bill C-31 be debated in the House so everyone has the opportunity to express their views. Just as important, Bill C-31 must be passed in the House. I encourage all members to consider why we are looking at Bill C-31 and Bill C-32. Bill C-31 is important legislation that would allow the Minister of International Trade to focus on trade.
Before I went into politics, I used to run an employment agency. One department specialized in information technology. Another specialized in the medical industry. Others specialized in the legal industry and the technical and engineering industries. I used to tell my staff that if they spread themselves too thin, they would not be effective. Consultants who worked in the IT area strictly focused in that area. The same was true for the consultants who worked in the legal area and those who worked in the medical area. They would focus on those areas only. They did not cover all ground at any given time.
Once Bill C-31 is passed, it will provide the framework for the minister of trade to focus on trade and economic activity and to generate more commerce for Canadian companies and Canadians. The end result will be revenue, employment and reinvestment in our country.
I covered more so the relationship we have with the U.S. and partially the relationship we have Mexico. That is very important. We should continue to enhance that relationship. At the same time, it is incumbent upon us as the government and with the help of all members in the House to promote new partnerships, grow economies, or as they are also termed emerging economies, whether that be China or Brazil. We cannot overlook Europe and some of the new countries unfolding as well. That will broaden the opportunity to work with the U.S. and yet create other options.