Lunch hosted by His Excellency Alain Juppé, Prime Minister of the French Republic

The large group of representatives of the French and Canadian business communities assembled here today at the French Embassy is eloquent testimony to the range and diversity of current economic relations between France and Canada.

Mr. Prime Minister, not only has your country become Canada's sixth most important economic partner, but our relations are characterized by unprecedented dynamism and quality.

They are marked, in particular, by the greater volume and diversity of our trade in goods and by the expansion of tourism. But the most remarkable feature is the very strong growth in strategic alliances and investment.

Your visit, Mr. Prime Minister, provides us with the opportunity to celebrate this impressive performance and to mark out the directions for future partnerships between our business firms during our meetings and the economic round-table discussions today in Ottawa and tomorrow in Montreal.

The participation of Doris, an affiliate of La Lyonnaise des Eaux, in the Hibernia drilling platform megaproject off Newfoundland, and the participation of Grands Travaux de Marseille in the construction of one of the world's longest bridges, between Prince Edward Island and New Brunswick. Uranium prospecting and mining by COGEMA in Saskatchewan, and cement production by Lafarge in British Columbia. Investments by AXA in the insurance industry in several regions of the country, by Aérospatiale in Quebec, Ontario and Nova Scotia, by the Institut Mérieux in Ontario and by Air Liquide and Gaz de France in Quebec-these are all illustrations of the presence of French business in every region of Canada.

On the one hand, Eurotunnel cars from Bombardier, telecommunications equipment from NORTEL-Matra, steel structures from Canam-Manac, McCain french fries and BATA shoes are now part of the everyday scene in France. Today, more than a hundred Canadian firms are well established and respected in France, where their investments have increased tenfold over the last ten years.

On the other hand, 350 French firms have placed their confidence and their interests in Canada. Their investments have grown by 350% in ten years, with the result that France is now the fifth largest foreign investor in our country.

Strongly established in Quebec and Ontario, they are active in all our Canadian regions, where they sustained more than 40,000 jobs in 1995, including 23,000 in the manufacturing sector alone.

Many of these investments are the outcome of industrial partnerships that demonstrate the maturity of our trade relationship.

That is why we have every reason to be delighted with the recent successes of Bombardier and GEC-Alsthom in high-speed train projects in the United States, and with the recent agreement between Pratt and Whitney and SNECMA to develop and produce a new generation of engines for regional aircraft.

I am also very pleased with the decision, just confirmed by the French company Sextant Avionique, to accelerate its expansion in Canada by establishing a wholly-owned affiliate for the development and production of avionics equipment. This initiative is associated with Bombardier's Global Express and Dash8 400 projects, which will generate dozens of high-technology jobs in the Montreal area.

We appreciate this vote of confidence by French business in Canada's economy and Canada's future. We are working to implement economic policies that will ensure the development of our country in a world where barriers to trade and investment are gradually disappearing.

Our two countries are strongly anchored in their regional economic blocs. Canada does more than 80% of its trade with the United States, while 65% of French trade is with the European Union. It would be to the advantage of both regional blocs to develop new partnerships and transatlantic links.

The economic relations between Canada and France are increasingly influenced by Canada's relations with the European Union, which is our most important trading partner after the United States.

Mr. Prime Minister, you will no doubt recall that when I addressed the French Senate in December 1994, I remarked on the need, in the period following the Cold War, to give a new impetus to the transatlantic relationship by concentrating on greater integration of our economies.

The Canadian proposal was taken up in Washington and the capitals of Europe, and resulted in the signature last December of an American-European action plan, which also took the form of a Political Declaration and Action Plan currently being negotiated between Canada and the European Union.

The Action Plan will have a real impact on the ability of firms to penetrate new markets, forge new alliances, meet world competition more effectively and create new jobs.

This initiative fits with Canada's trade policy, which is focussed on the World Trade Organization and the regional processes for trade liberalization that are enriching the multilateral process.

Our trade policy complements our efforts within Canada to put in place policies that promote growth and jobs while conserving our social benefits.

These objectives are in line with the challenge issued by President Chirac to his partners at the recent G7 Jobs Conference in Lille.

Less than three years ago, the Canadian fiscal position was our major macroeconomic challenge. It was such that our country's economic stability was at risk. We have attacked the problem vigorously. For example, the federal government's deficit as a percentage of GDP, which was twice the average of the G7 countries in 1992, will be the lowest among those countries in 1997. And every government across Canada has made similar efforts.

We had to make hard choices, but our economic policies are beginning to pay dividends. Our exporting firms have revived with competitiveness, profits and job creation. Our exports are 37% of GDP, compared with 24% in 1991. For the first time in several years, our real short-term interest rates are lower than in the United States. The current account deficit has fallen from 4% of GDP in 1993 to 0.6% of GDP in 1995. Over the last five years, inflation has remained below 2%, one of the lowest rates in the industrialized world. Lastand most importantsince the end of 1993 our economy has created more than 600,000 new jobs, and our unemployment rate is down by two points over the same period.

Mr. Prime Minister, this debate illustrates, like many others, the Canadian capacity to reconcile European values with the demands of the North American economy.

Today, France and Canada have everything to gain by resolutely facing the future in order to build new partnerships between our two great G7 member countries.

In this respect, the recent meeting of the tenth Joint Economic Commission was an opportunity to identify new avenues of cooperation by setting up two working groups. The partnerships they will develop in information and multimedia technologies will also emphasize greater cooperation in the environmental field.

In addition, the ninth Scientific Commission, which met in Paris in May, gave new impetus to our already extensive cooperation by focussing on joint research projects in agriculture, forestry, fisheries and oceans, health, social sciences and information technologies, as well as sectors like space, transportation, environment and materials.

However, the most innovative aspect is still the joint decision by Canada and France to cooperate closely in European research projects under the Canada-European Union Science and Technology Agreement, which was signed at the time of the Halifax summit, just as President Chirac was assuming the presidency of the European Union.

Our firms have shown us the path to follow, and as a result our trade has reached historic levels. In view of recent developments, I am fully confident that France's challenge to businessto double the level of bilateral tradewill be met.

And so I would like to return the compliment by putting forward the following ambitious and appropriate proposal of my own.

I invite French and Canadian firms to take possession of the transatlantic business space and to share their knowledge and the comparative advantages they enjoy in their respective regional markets.