NOTES FOR REMARKS BY PRIME MINISTER JEAN CHRÉTIEN

February 28, 2003
Mexico City, Mexico

I thank the members of the Canadian Chamber of Commerce in Mexico for your generous invitation and your presence here this morning.

I can think of no better indicator of the successful relationship between Canada and Mexico than the success of the Canadian Chamber of Commerce here.

Just over twenty years ago, in 1982, the Canadian Chamber of Commerce in Mexico was created. At that point, business between our two countries was substantial enough to benefit from an institutional framework to bring together the private sectors of Canada and Mexico.

Twelve years later, in 1994, the North American Free Trade Agreement came into effect following extensive consultations in the United States, Canada, and Mexico. In all three countries, business and civil society were very much involved.

So for some time now, our destinies, and the destinies of our three nations, have been linked together. The growth that has developed as a result of our efforts has been nothing short of extraordinary.

You are business people, so you know the numbers, but they are so impressive they bear repeating.

Since NAFTA came into force on January 1, 1994 trade between our countries has doubled to reach US $12 billion per year. Canada is Mexico’s second-largest export market after the United States, while Mexico has become Canada’s fourth-largest market. Since 1994, Canadian investment in Mexico has multiplied four times, to reach $4 billion, with 1200 companies established in Mexico, making Canada the third largest investor here.

Canadian success stories include the Four Seasons Hotel, where we are today, one of the finest hotels in Mexico City, and just across the street, Reichman’s Torre Mayor, the tallest building in Latin America. Air Canada now has 84 direct flights between Canada and Mexico every week, including 28 with their Star Alliance partner, Mexicana. Scotiabank has a major commitment to Mexico, one that has turned Scotiabank-Inverlat into one of the largest banking enterprises in Mexico.

I am also happy to learn that more Mexican companies are beginning to discover the benefits of investing in Canada.

Our fiscal policies have created a very competitive environment with low inflation, budget surpluses, a lower debt, the best growth performance in the OECD, lower corporate taxes, and attractive research and development incentives. We have built strong foundations for economic prosperity.

Canada avoided recession in 2001. We led the G-7 with growth of 3.3% in 2002. And the IMF and OECD predict that our GDP growth will again lead the G-7 in 2003.

Canada’s economy created close to 560,000 jobs in 2002, the highest number of jobs ever created in a single year in Canada. Inflation has been low and steady for 10 years. Interest rates are lower than they have been in 40 years. We are implementing the largest tax reduction in our history. And Canada’s corporate and capital gains tax rates are now below those of the United States.

Canada has also enjoyed a dramatic fiscal turnaround: we have had six consecutive budget surpluses. We are predicting another budget surplus for this year and surpluses in the years after that. Canada is the only G-7 country in that position. Since 1997 we have paid down more than 10% of our market debt. And we are continuing year after year to pay down the debt.

Our debt-to-GDP ratio has fallen from 71% to 49% over this period; and it continues to fall. The OECD predicts that in 2004 our debt to GDP ratio will be below that of the United States. Canada’s economic miracle serves as a benchmark for the G-7.

The reasons for the attractiveness of Canada as a place to invest are not just fiscal and economic: our social investments also make a difference. Our public health care system saves significant costs to business. Unlike all other countries, our public sector pension plans are now fully funded and actuarially sound for at least the next 40 years.

Mexico and Canada can celebrate the success of NAFTA after a decade of freer trade, but like many success stories, there is a lot of hard work involved.

Our private sectors are talking about working together to address problems in the internationally-troubled steel sector.

Our civil engineers are looking forward to the implementation of a Mutual Recognition Agreement that will allow Canadian and Mexican engineers to practice their professions freely in Mexico and in Canada.

Universities from Mexico, Canada, and the U.S. are working together more.

The bilateral seasonal agricultural workers programme has been a model for balancing the flow of temporary foreign workers with the needs of Canadian employers.

Our governments are working together to ensure that trade among the three NAFTA countries continues to expand efficiently so that high-quality, competitively-priced goods are available to consumers as quickly as we can deliver them, while at the same time responding to the security, safety and environmental concerns of all our citizens.

But while we celebrate the goods and services traded between our countries, we must not forget the richness of the human exchanges that take place.

Our people are visiting each other in increasing numbers and are forming families and friendships that span the continent.

Almost a million Canadian tourists flow into Mexico each year, representing almost $700 million in spending. Over 10,000 Mexican students study in Canada – the third largest number of foreign students at Canadian institutions of higher learning.

At the end of the day, this will have been the real long-term success of NAFTA – the gradual, step-by-step creation of a community which spans the continent. Greater prosperity to our countries, yes, but also a deeper understanding of our people, our culture, and our continent.

And I hope that NAFTA’s success story can serve as a model for a wider hemispheric association. I am proud to be a citizen of North America and to have contributed to the process of building this association of nations.

Thank you very much. Muchas gracias.

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