Prime Minister Welcomes Progress in Canada-EU Economic Relations

Prime Minister Jean Chrétien today welcomed the progress accomplished in the last six months to reinforce the Canada-European Union partnership, including the conclusion of negotiations on four bilateral agreements in the trade and investment field, that were called for under the Canada-European Union Action Plan.

The agreements, to be ratified by the European Council, deal with veterinary equivalence, mutual recognition of tests and certificates in several important trade sectors, customs cooperation, and competition.

Mr. Chrétien made his statement at the end of the Canada-European Union Transatlantic Summit held in Denver where he met with the President of the European Council, Prime Minister Wim Kok of the Netherlands and Jacques Santer, President of the European Commission. This Summit was the first since the Action Plan was signed in Ottawa on December 17, 1996.

"The discussions focussed largely on the economic and commercial relations between Canada and the European Union, allowing us to evaluate the solid progress made since then," declared the Prime Minister.

Two-way trade in goods between Canada and the European Union totals $38 billion. The European Union is Canada's second largest source of foreign direct investment at $38 billion, while Canadian investment in the EU totals $34.7 billion.

The Summit also led to an agreement on the Terms of Reference for a Joint Study aimed at facilitating trade in goods and services and further reducing or eliminating tariff and non-tariff barriers between Canada and the EU. Both Prime Ministers and the President of the Commission also reiterated their desire to see a Canada-EU business dialogue established to expand commercial links.

In addition, the leaders undertook to explore additional areas of cooperation and provided direction to Canada-EU political co-operation in the forthcoming months. For example, they agreed to work closely together at the forthcoming meeting of the United Nations General Assembly Special Session on the Environment (UNGASS), and issued a call for a Global Forest Convention. The transition period in Hong Kong was among other items discussed at the Summit.

Finally, the agenda of the Summit included the Science and Technology Agreement, signed during the 1995 Summit - with 34 joint projects underway - as well as the Agreement on Higher Education, which covers 19 joint projects under which Canadian and European students can do part of their studies on either side of the Atlantic. It was also agreed to strengthen contacts in the field of justice and home affairs. The interest of members of the European and Canadian Parliaments to restore the past frequency of their contacts was also noted.

The Transatlantic Summit represents the most important in a series of regular meetings between Canada and the European Union at the political and officials levels.

PMO Press Office: (613) 957-5555

June 1997

Canada and the European Commission initialled on May 30, 1997 a broad Mutual Recognition Agreement aimed at eliminating red tape for trade in a wide range of products. The Agreement covers the following sectors: telecommunications products, medical devices, pharmaceuticals, recreational boats, electrical goods and electromagnetic health risks. Under the agreement, Canadian regulators would authorize European organizations to carry out inspection, testing and product approvals to Canadian standards and vice versa. This Agreement ensures that domestic regulations do not emerge as the main barrier to bilateral Canada- European Union trade. The Agreement would cover two-way Canada-EU trade worth more than $12 billion dollars annually (30% of annual bilateral Canada- European Union trade).

Officials of Canada and the European Commission initialled on February 28 an agreement to strengthen co-operation in customs matters. The Canada-EU Customs Co-operation and Mutual Assistance Agreement will facilitate harmonization and simplification of customs procedures, improve the ability to combat customs fraud, and further enhance the close working relationship that exists between Canada and the European Union. Canada already has bilateral customs agreements with Germany and France. This agreement recognizes the complementary nature of the existing bilateral agreements, as well as those that Canada may want to conclude in the future with other European Union Member States.

In March 1997, Canada and the European Union concluded negotiations on veterinary and health standards for trade in live animals and animal products, fish and fish products. The Agreement outlines a process that allows for the recognition of each others' sanitary measures, where those measures meet the importing country's desired level of human or animal health protection. Canada and the EU have still to finalize some annexes of the Agreement. It is expected that the EU ratification process will take several weeks following finalization of the text. In the interim, trade will continue uninterrupted and the lower negotiated inspection frequencies will apply.

Once signed, the Canada-EU Agreement will facilitate two way trade involving some $550 million in exports from Canada to the EU and $250 million in imports from the EU to Canada. Canada's fish exports account for approximately $350 million of the export trade. Canada's principal agricultural exports to the EU covered by this Agreement include red meats ($40 million), tallow ($51 million), dairy products ($46 million), poultry and eggs ($21 million), pet food ($20 million), bovine semen ($16 million), live animals ($5 million).

A Canada-European Union agreement on the application of their competition laws is in the final stage of negotiation. The draft agreement is a state-of-the-art approach to bilateral co-operation and co-ordination in competition law enforcement. It will commit the two parties to assist each other on competition matters and provide for appropriate means and procedures for notification and consultation. Once implemented, the agreement will contribute to ensuring that the benefits of multilateral trade liberalization are not hindered by private restraints to trade. It will also be reflective of the close co-operation that exists between the competition authorities of Canada and the European Union.

June 1997

Since the signing of the Joint Canada-EU Action Plan on December 17, 1996, Canada and the EU have undertaken a series of initiatives aimed at rejuvenating their transatlantic partnership.

The EU remains Canada's second most important trading and investment partner. From 1985 to 1996, the EU share of foreign direct investment in Canada increased from 17% to 21%, with the accumulated value reaching $38.2 billion. With Canadian direct investment in the EU standing at $34.7 billion in 1996, Canada-EU investment levels are almost in balance.

In a number of multilateral fora such as the World Trade Organization and the OECD, Canada and the EU worked together to enhance global trade. Further to their co-operation, a WTO ministerial meeting held in December 1996 reached agreement on Information Technology.

Over the course of the last six months, Canada and EU officials worked together on the terms of reference for the Joint Trade Study. They were approved at the Denver Transatlantic Summit.

Fisheries relations with the EU have improved significantly since the signing of the Canada-EU Political Declaration and Action Plan in December 1996. Several bilateral meetings of Canadian and EU officials have subsequently been held to discuss common concerns in the fisheries sector. A parallel improvement in the Canada- Spain fisheries relationship is an important development. There have been several meetings between Canadian and Spanish officials since December aimed at building trust and better communication between the two countries.

A number of additional Agreements between Canada and the EU have been well underway since the signing of the Action Plan. On February 28, 1997, Canada and the EU initialled an Agreement for Customs Co-operation and Mutual Assistance. On May 30, 1997, Canada and the EU initialled a broad Mutual Recognition Agreement aimed at eliminating red tape for a wide range of products. A Draft Canada-EU Agreement on Sanitary Measures to Protect Public and Animal Health in Respect of Trade in Live Animals and Animal Products was concluded on March 5-6 1997. And a Canada-EU Agreement on the application of competition laws is in the final stage of negotiation.

In February 1997, Canada announced the decision to allow foreign banks to branch directly into Canada. This decision will enable European banks to enter the Canadian marketplace and allow existing foreign banks greater opportunity to compete.

In this crucial year for European security, Canada maintained an ongoing involvement in security building measures. We have been in regular contact with the EU Commission and the Member States in a wide range of fora regarding European political and security issues.

In 1997, Canada and the EU endeavoured to establish a formal dialogue at the level of experts on questions of disarmament, non-proliferation, Eastern Europe and Central Asia, the United Nations, Human Rights and the Middle East.

As a gesture of solidarity, Canada withdrew its ambassador to Iran following the verdict in April 1997 in the "Mykonos" trial in Germany, which blamed senior Iranian leaders for having ordered the assassination of Iranian Kurdish leaders at the Mykonos Restaurant in Berlin.

At the OSCE, Canada worked closely with the EU in 1997 on election monitoring in Croatia and in Bosnia, so as to ensure the setting up and effective functioning of democratic institutions.

Canada and the EU consulted and co-operated at every appropriate opportunity towards the rapid achievement of a global ban on the use, production, stockpiling and transfer of anti-personal mines in December 1997.

Recognizing the role of the EU in confronting new global challenges in Justice and Home Affairs, the Canadian Government decided to increase its resources at the Canadian Mission to the European Union in Brussels. One more officer was added to monitor developments in this field and to promote a broader and deeper dialogue between Canada and the EU in areas of mutual interest.

On migration and asylum issues, major progress in information exchange and co-operation has taken place since the signing of the Action Plan. For the first time, Canada has been invited to participate at the Transatlantic Dialogue Meetings of the European Council's Centre for Information, Discussion and Exchange on Asylum (CIREA) as well as the Centre for Information, Discussion and Exchange on the Crossing of Borders and Immigration (CIREFI).

Under the Agreement on Higher Education and Vocational Training, nineteen joint education projects involving approximately five hundred participants have been agreed, spanning a diverse range of fields, including health, education, engineering, business, veterinary studies, food science, and chemistry.

Building on the Agreement for Scientific and Technological Co-operation between Canada and the European Community, five new collaborative projects have started in 1997. One of these projects looks at flood-risk reduction through space-borne recognition of indicators of excess runoff-generating areas. This is a case where the Science & Technology policy of cooperation can be seen to provide potential benefits to Canadians at risk in flood plains.

Canada is working hard toward the creation of a Canada-EU Transatlantic Business Dialogue (TABD), in addition to initiating plans for a Canadian business delegation to visit Europe and meet their European counterparts in 1997. The TABD is an effective framework for enhanced co-operation between business and governments. It is unique because of the opportunity it creates for close personal interaction between CEOs and government leaders on both sides of the Atlantic.

Further to the commitment to promote closer links between the people of Canada and the EU, on April 20, 1997, Canada officially announced the removal of the requirement for Portuguese citizens to obtain a visitors visa to enter Canada.

Priority will be given to conclude the Joint Trade Study as well as the Agreements still outstanding. Within the general framework of their consultations, Canada will seek to strengthen its co-ordination in the OSCE framework and continue to work together with the EU to ensure the full implementation of the Dayton/Paris Peace Accords.

Canada would like to continue to proceed toward the successful conclusion of the current ongoing Mutual Legal Assistance negotiations with member states. In the area of chemical precursors, Canada and the EU are contemplating discussions on how to address this shared concern.

In 1997, the Canadian government has put in place a Youth International Internship Program to provide career related, internationally focussed work experience for Canadian youth. Some of the interns will be placed in European companies. Discussions are currently underway between Canada and the European Commission on how best to similarly combine resources to foster links between Canadian and European youth.