CANADA ECONOMICS

G-20

Global Affairs Canada. July 4, 2017. Foreign Affairs Minister to attend Ukraine conference in London and G20 Summit in Hamburg

Ottawa - The Honourable Chrystia Freeland, Minister of Foreign Affairs, announced today that she will attend the Opportunity Ukraine conference in London, United Kingdom, on July 6, followed by the G20 Leaders’ Summit in Hamburg, Germany, on July 7 and 8.

Hosted by the governments of Ukraine and the United Kingdom, the Opportunity Ukraine conference will bring together foreign ministers from G7, EU and NATO countries, as well as representatives of international financial institutions and civil society. Conference participants will examine progress made in Ukraine’s reform efforts over the past three years and set out priorities for further advancing these reforms.

Following the conference, the Minister will accompany Prime Minister Justin Trudeau to the G20 Leaders’ Summit in Hamburg on July 7 and 8. At the G20 Summit, Canada will promote inclusive economic growth, progressive international trade, gender equality, and action on climate change.

Quotes

“We have been unequivocal in our support for Ukraine, and we condemn in the strongest terms the invasion and illegal annexation of Crimea. Canada is committed to supporting the people of Ukraine in their efforts to implement deep and sustainable democratic and economic reforms, and as they work to build a secure, stable and prosperous future.”

- Hon. Chrystia Freeland, P.C., M.P., Minister of Foreign Affairs

Quick Facts

• Canada was the first Western country to recognize Ukraine’s independence, on December 2, 1991.
• The Canada-Ukraine bilateral relationship is strengthened by deep people-to-people ties, rooted in the 1.3-million-strong Ukrainian-Canadian community.
• Since January 2014, Canada has committed over $700 million in much-needed assistance to Ukraine, including $400 million in low-interest loans to help Ukraine stabilize its economy; over $245 million in bilateral development assistance projects aimed at advancing democracy, rule of law and sustainable economic growth; over $74 million to support Ukraine’s stabilization and strengthen its security sector; and over $27 million in humanitarian assistance to help vulnerable people affected by the ongoing conflict in eastern Ukraine.
• The G20 Summit brings together the leaders of major advanced and emerging economies, and Germany will host this year’s summit under the theme Shaping an Interconnected World.
• The Minister attended the G20 Foreign Ministers’ Meeting in Bonn, Germany, in February 2017.

G20 Germany 2017: https://www.g20.org/Webs/G20/DE/Home/home_node.html
Canada and the G20: http://international.gc.ca/world-monde/international_relations-relations_internationales/g20/index.aspx?lang=eng&_ga=2.149646260.366199240.1499179888-1371245540.1491838080


The Globe and Mail. 4 Jul 2017. Trump-Merkel divide sets stage for disappointing G20 summit. Trudeau will have ‘very fine line to walk’ at summit as trade talks with U.S. loom.
PAUL WALDIEWith a report from Reuters

Angela Merkel has a well-earned reputation for being a steady leader who knows how to manage a crisis. The German Chancellor will need all of those skills and more when she greets world leaders for the start of the Group of 20 summit in Hamburg on Friday.
This is expected to be the most contentious G20 summit ever, and some experts believe little, if anything, will be accomplished. The prospects don’t look good.
Ms. Merkel and several other leaders, including Prime Minister Justin Trudeau, have already lined up against U.S. President Donald Trump on the summit’s main issues of open trade and climate change. There’s also plenty of tension between Ms. Merkel and Russian President Vladimir Putin over Ukraine, and the German leader has clashed with Turkish President Recep Tayyip Erdogan over political change in his country. With a German election looming in September, Ms. Merkel is also under increasing pressure at home to stand up to Mr. Trump, who is always unpredictable.
Mr. Trudeau will arrive in Hamburg after stops on Tuesday in Dublin to meet Leo Varadkar, the new Irish Taoiseach or Prime Minister, and in Britain on Wednesday to meet the Queen in Edinburgh. Mr. Trudeau will also participate in a business roundtable in Ireland and attend an event at the University of Edinburgh. He is not expected to meet British Prime Minister Theresa May, who recently formed a minority government after a disastrous election campaign that saw her Conservatives lose their majority in the House of Commons. »
A spokesperson for Ms. May said she and Mr. Trudeau have spoken on the phone since the British election but have no plans to meet before the G20.
The two-day summit is being held in the middle of Ms. Merkel’s birthplace, Hamburg, making it easily accessible to thousands of protesters expected to descend on the city. The government has called in 21,000 police to bolster security for the meeting, and tens of thousands of people have already taken to the streets in marches.
“This could be the first failed summit, because the two big sides are on a collision course,” said John Kirton, co-director of the G20 Research Group at the University of Toronto, referring to the Trump-Merkel divide. “A summit that actually made things worse, that’s a failure.” Prof. Kirton believes Ms. Merkel will likely cobble together some kind of consensus on enough other issues, such as terrorism, to salvage the summit, but he said it will still rank as one of the most unproductive G20 meetings ever.
Ms. Merkel has already signalled that the summit won’t be easy, and she may not be displeased with a failed outcome. She’s strengthened her lead in domestic public-opinion polls by standing up to Mr. Trump, and she’s largely recovered from her decision in 2015 to open Germany’s borders to nearly one million refugees who fled North Africa and the Middle East. Last week, she took a pre-G20 shot at Mr. Trump, telling the German parliament that “anyone who thinks the world’s problems can be solved with isolationism and protectionism is simply delusional.” She’s previously indicated that Europeans can no longer count on the United States and warned her compatriots that “the times in which [Germany] could completely depend on others are on the way out.”
On Sunday, Ms. Merkel also tried to address some of the protesters’ concerns, saying she wanted the summit to focus on not just economic growth, “but rather sustainable growth.”
“We’ve got to have a win-win situation for everyone,” she said. “The issues obviously revolve around: How do we achieve inclusive or sustainable growth?”
Ms. Merkel “has by far the most supporters and supporters of consequence [among G20 leaders],” Prof. Kirton said. “Her soulmates are [French President Emmanuel] Macron and Trudeau, and [Chinese President Xi Jinping], who now believes in climate-change controls and open trade. Trump has got the Saudis, and maybe Russia, and that’s about it. It could indeed crash. But there is still a possibility that they can actually set aside the collision and take an off-ramp to the many things on which they agree.” He added the prospect of a meeting on the sidelines between Mr. Trump and Mr. Putin could also derail the summit.
The White House confirmed on Monday that Mr. Trump spoke with Ms. Merkel and Italian Prime Minister Paolo Gentiloni, ahead of the summit.
Tom Bernes, a distinguished fellow at Canada’s Centre for International Governance Innovation, said there is a possibility that the G20, minus Mr. Trump, could band together and develop a renewed sense of commitment on issues such as climate change. “How isolated does the U.S. get and how nasty does that get?” he asked. “The other scenario is that people just try and paper over things to appease the U.S., and in that scenario, then I think that it’s another nail in the coffin for the G20. People will say, ‘What use is it?’ ”
Mr. Trudeau is in an awkward position, Mr. Bernes added. Canada will likely side with Ms. Merkel on pushing for more open trade and backing the Paris climate accord, but Mr. Trudeau won’t want to push too far for fear of alienating Mr. Trump just as Canada faces a host of trade issues with the United States. “Obviously the Canadian government doesn’t want to tweak the Americans. It’s going to be a very fine line to walk,” Mr. Bernes said.
Mr. Trudeau is expected to focus on gender issues at the meeting, including pushing a proposal to create a women’s business council similar to the Canada-U.S. Council for Advancement of Women Entrepreneurs and Business Leaders that Mr. Trudeau unveiled with Mr. Trump’s daughter Ivanka Trump earlier this year in Washington. The idea is for the global business council to produce recommendations to the G20 next year on how to address gender pay issues and the challenges women face around the world in regards to entrepreneurship. Prof. Kirton said Canada is also keen to participate in plans for a $1-billion (U.S.) fund managed by the World Bank to promote female entrepreneurship. He added that Mr. Trudeau will also try to find common ground among the other leaders on clean technology, managed migration and skilltraining programs for young people.
“Canada’s three priorities [at the G20] are inclusive economic growth, women in the economy and managed migration,” he said.
As for the G20, Mr. Bernes said the best outcome for the meeting, which ends on Saturday, might be a stalemate. “I think nothing out of this would actually be a relief,” he said. “That’s the situation the G20 is in right now.”

BLOOMBERG. 4 July 2017. China, Germany Step Up as U.S. Retires From World Leadership
Marc Champion, Peter Martin and Brian Parkin

• Export giants set tone on trade, climate change at G-20 summit
• Trump risks uniting Cold War allies and foes against him

The U.S. traditionally takes point in the search for common approaches to the big global issues of the day at G-20 summits. Not this time.

When world leaders meet in Hamburg on Friday, China and Germany will move in to usurp the U.S.’s role.

The two industrial powerhouses of Asia and Europe are being nudged into an informal alliance to pick up the leadership baton that the U.S. is accused of having dropped since President Donald Trump’s inauguration earlier this year, according to diplomats and officials from several Group of 20 members.

The situation has crystallized ahead of this year’s annual G-20 meeting, which will be held in Germany’s busiest commercial port. That’s in part because, for the first time since the group’s founding, the U.S. will be represented by a president who embraces protectionism, abandoning decades of American cheer-leading for free trade.

“The strategic character of Chinese-German relations is steadily gaining in importance,” Chinese President Xi Jinping said in an op-ed article published Tuesday in German newspaper Die Welt. The two countries “should intensify cooperation on implementing China’s ‘One Belt, One Road’ and jointly make contributions to the security, stability and prosperity of neighboring countries.”



The U.S. was also isolated on climate change at a May summit of the smaller Group of Seven club in Italy, where the final communique split six-to-one on the issue. This time, Trump risks finding himself alone against a united front of European allies, neighbors such as Canada and Mexico, and America’s former Cold War foes on the two biggest summit items.

As the previous and current hosts, Xi and Germany’s Chancellor Angela Merkel would in any case have worked together on the G-20 agenda. Yet three visits to Germany by Chinese Premier Li Keqiang to date, the latest just last month, suggest the two nations are aligned on stepping more broadly into a space that the U.S. has, at least temporarily, left vacant under Trump’s presidency.

“China and Germany’s new closeness is something that happened because of the Trump episode,” said Diego Ramiro Guelar, ambassador to Beijing for G-20 member Argentina. “The two most important leaders in the world are President Xi and Chancellor Merkel at the moment.”

Panda Diplomacy

Ties between China and Germany have been strengthening for years, driven by common economic interests and unobstructed by the kinds of geopolitical rivalries that were complicating relations between Beijing and Washington long before Trump’s election. Germany needs markets for its high-end industrial machinery and motor vehicles, and China wants them -- so much so it bought German robotics company Kuka AG.

Xi will make his second state visit to Germany just before the summit. Two giant pandas that China will loan to the Berlin Zoo arrived already, a gesture sometimes described as panda diplomacy. China gave two pandas to the U.S. in 1972, after President Richard Nixon made his historic first visit to Communist China.

“Relations between China and Germany are at their historic best,” said Michael Clauss, Germany’s ambassador to Beijing, in a recent briefing with reporters. “The economic and political dynamic from a German perspective is moving toward the east.”

The U.S. has “left somewhat of a vacuum” in the region by abandoning the proposed 12-nation Trans-Pacific Partnership free-trade agreement, Clauss said. The deal sought to build a U.S.-centered free-trade bloc among Pacific Rim countries from Chile to Vietnam, as an alternative to more China-dominated initiatives such as One Belt One Road. Trump withdrew the U.S. from the TPP plans within a day of taking office.

Trump Vacuum

The Trump vacuum is still more evident when it comes to climate change, after he announced last month that he was pulling the U.S. out of the 2015 Paris Agreement to slow global warming. The accord was signed by more than 190 countries, including all of the G-20 members.

The U.S. and China, the two biggest polluters, had formed a de facto G-2 for climate change, during the administration of former President Barack Obama. Other partners were brought in only once the big two had settled on the framework they wanted for reducing harmful emissions; neither wanted the quota-based approach favored by the European Union.

That format for climate change negotiations disappeared with Trump’s election. A new vanguard group comprising Canada, China and the EU met for the first time in May. A bilateral China-Germany working group on climate change met in Berlin last week, when each side jointly re-committed to take “an ambitious” approach to implementing Paris agreement goals, and to press that collective approach in Hamburg.

“There’s a clear recognition of our leaders that German-Chinese leadership is now needed,” said Karsten Sach, Merkel’s main climate-change sherpa for the G-20, speaking at a conference in Berlin on Friday. “Both nations are very strong exporters and in terms of the technology aspects of fighting climate change I see very strong cooperation.”



There are still significant limits to how far a Germany-China tandem can go, reflecting frustrations at what Merkel -- like Trump -- sees as lopsided terms of trade. Germany sold more than $85 billion worth of goods to China last year and was Europe’s largest investor in the Middle Kingdom. But it thinks those figures could be much higher, if the Chinese didn’t impose barriers that don’t exist in Europe.

In 2016, Chinese direct investment across the EU rose by 77 percent over the previous year, building on years of annual 30 percent increases, according to a study by the Rhodium Group and the Mercator Institute for China Studies. Kuka and resource recovery firm EEW Energy from Waste GmbH were among the prime targets.

Yet European investment in China fell for the fourth year in succession, with hurdles in industries such as insurance, onerous joint venture requirements and concerns over a new cybersecurity law, which some foreign investors fear could be used to disadvantage them.

China meanwhile prefers to lean on Germany rather than the EU due to wider disputes with the bloc which continues to oppose the granting of market economy status to China at the World Trade Organization.

Some foreign policy baggage China carries could also hinder its ability to create international consensus around its goals, such as its unacknowledged role as protector for North Korea. On Tuesday, Pyongyang successfully tested an intercontinental ballistic missile for the first time, landing in Japanese waters.

Merkel is aware of the dangers of allowing China to peel Germany away from the EU, creating a decidedly unequal partnership between countries that have very different political systems and few shared values. Interviewed in this week’s edition of the German business magazine Wirtschaftswoche, Merkel backed French President Emmanuel Macron’s call for EU governments to be able to do more to block foreign purchases of important companies.

“If countries such as China want to simply buy up something that’s been built up with a lot of subsidies, we have to react to that,” she told the magazine, citing the kinds of technology companies that interest China most, such as microchips and artificial intelligence.

“Seen from Beijing, Europe is more like an Asian peninsula,” she said. “Obviously, we see things differently.”

INTERNATIONAL TRADE

Global Affairs Canada. July 3, 2017. International Trade Minister to visit New Brunswick to promote regional export opportunities

Ottawa - Consistent with the objectives of the Atlantic Growth Strategy, the Government of Canada is actively pursuing initiatives that will help businesses grow and become more competitive in global markets.

On Tuesday, July 4, the Honourable François-Philippe Champagne, Minister of International Trade, will visit Saint John, New Brunswick, where he will engage with local businesses and announce a new pan-Atlantic-Canada export approach with the Honourable Brian Gallant, Premier of New Brunswick; the Honourable Dominic LeBlanc, Minister of Fisheries, Oceans and the Canadian Coast Guard; and the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food on behalf of the Honourable Navdeep Singh Bains, Minister of Innovation, Science and Economic Development.

While in Saint John, Minister Champagne will also hold a series of roundtable meetings with representatives from New Brunswick businesses and the Canadian Manufacturers & Exporters to discuss growing export opportunities for Atlantic Canada. This will include meeting with local companies who recently participated in a pan-Atlantic trade mission to the U.K. and Netherlands to discuss opportunities in the European market, and engaging in a roundtable with Minister MacAulay, on expanding trade in the agriculture, agri-food and seafood sectors.

Also, Minister Champagne will sign a Letter of Intent with the Province of New Brunswick to enhance collaboration between the federal and provincial governments in boosting regional access to government programs and resources that will help companies explore and pursue opportunities in new markets around the world.

Quotes

“The Government of Canada is actively helping businesses in the Atlantic Provinces take advantage of Canada’s position as a trading nation and pursue opportunities in global markets around the world.

By leveraging government programs and expanding into new markets, industries in Atlantic Canada are well positioned for growth that will create more jobs and opportunities across all four provinces.”

- François-Philippe Champagne, Minister of International Trade

“This new export approach will help create economic opportunities and good middle-class jobs for Atlantic Canadians. Our government is proud to be laying the foundation for economic growth in this region.”

- Dominic LeBlanc, Minister of Fisheries, Oceans and the Canadian Coast Guard 

”Canada’s exports have been climbing annually, and our Government has set an ambitious target to grow our agri-food exports to $75 billion a year by 2025. Atlantic Canada will be a part of this ambitious target through expanding trade opportunities and spurring innovative growth in the agriculture and agri-food sector. This will bring more jobs to our region and help support a strong middle class in Atlantic Canada.”

-Lawrence MacAulay, Minister of Agriculture and Agri-Food

Quick Facts

• International exports represent a significant percentage of the gross domestic product (GDP) of Atlantic provinces: 48.4% for New Brunswick, 34.1% for Newfoundland and Labrador, 20.9% for Prince Edward Island, and 18.4% for Nova Scotia (2015). 
• Overall for Canada, international exports represent 31.6% of Canada’s GDP (2015)
• Top exports from Newfoundland and Labrador, New Brunswick, Nova Scotia and Prince Edward Island are crude petroleum, light oil, lobsters, crab and shrimps and potatoes, respectively. 

The Globe and Mail. THE CANADIAN PRESS. 4 Jul 2017. Ottawa invests in national trade corridor. Transportation Minister calls for project submissions as part of $2-billion plan to provide more fluid routes for Canadian exporters
ROBERT FIFE

Ottawa says improving ports and rail links will help the movement of goods to Europe, which is Canada’s second-largest trading partner.
Transport Minister Marc Garneau is opening the door for new infrastructure proposals as part of a $2-billion plan to reduce bottlenecks at major ports of entry and modernize the country’s transportation network.
Mr. Garneau will announce Tuesday the first call for submissions for projects to build a national trade corridor aimed at helping Canadian exporters get their goods to the United States and other international markets. The deadline for submissions is Sept. 5.
“We are looking for infrastructure projects that address urgent capacity constraints and improve supply-chain performance,” according to a speech Mr. Garneau will deliver to the Ottawa Chamber of Commerce. “These infrastructure projects will have a huge impact. They will not only create many new jobs in construction, but they will also lead to general growth through the economy.”
Eligible projects include ports, airports, roads, railways, international bridges, border crossings and many other undertakings.
A total of $2-billion over 11 years has been allocated to the trade corridor, including $400million to support the movement of goods in the northern territories. The new $35-billion federal infrastructure bank will also invest at least $5-billion on transportation trade routes.
“We need our trade routes to be as fluid as possible. By moving goods more efficiently along supply and distribution chains, both transit time and the cost of goods will decrease,” Mr. Garneau said.
Mr. Garneau said improving transportation infrastructure will boost trade with the fast-growing economies of India and China. The Liberal government is involved in exploratory freetrade talks with China.
The Canada China Business Council estimates a free-trade deal could boost Canadian exports by $7.7-billion by 2030 and create an additional 25,000 Canadian jobs.
Improving ports and rail links will also help the movement of goods to Europe, which is Canada’s second-largest trading partner after the United States. Canada has concluded a sweeping free-trade deal with the European Union.
“We must remember we can have the best quality of products and the most ambitious trade agreements in the world, but they won’t matter if we don’t have efficient and reliable ways to get our goods to market,” Mr. Garneau said.
The government is also spending $50-million to set up a transportation information system – in partnership with Statistics Canada – to help provide companies with better data.
“We need clear and readily available information on where cargo is at any given time,” Mr. Garneau said. “Having access to authoritative and consolidated data about all components of the transportation system is essential to improving it.”
Mr. Garneau’s efforts to create single, interconnected transportation systems are the result of year-long consultations after the release of an independent study by former cabinet minister David Emerson, who examined the country’s transportation network and put forward 60 recommendations for improvements.
Mr. Emerson looked at air, marine, road and rail transportation. The study found the transportation network needed to be revamped to keep Canada competitive.
“Our global infrastructure and related rankings have been declining and Canada continues to compare less favourably to other developed nations on a number of measures – a disturbing trend for a small, open economy in which prosperity depends on success in global trade,” the report said.
There has been, for example, a doubling of goods travelling by rail and this has meant longer trains and, in some cases, double-stack containers to handle the demand. Marine traffic has grown by 50 per cent in the past three decades.
Several major infrastructure projects already under way in Canada that are improving the flow of trade include work on the port of Halifax, the $4.8-billion Gordie Howe International Bridge between Detroit and Windsor and the Champlain Bridge in Montreal.

The Globe and Mail. Jul. 02, 2017. CETA, NAFTA, softwood and beyond – So little time, so much for Canada to do on the trade front
BARRIE MCKENNA

OTTAWA — Maybe it’s the cloud of geopolitical uncertainty hanging over the world. Or the lingering economic unease at home. Perhaps it’s all the rain.

But the buzz surrounding Canada’s 150th birthday bash pales in comparison with the national euphoria that marked the celebration of the first 100 in 1967.

And now a symbolic milestone that Prime Minister Justin Trudeau hoped would coincide with the big anniversary has been quietly put off. Implementation of the free-trade deal with the European Union did not happen as planned on Canada Day, bogged down by European angst that Canada may backtrack on key concessions on cheese imports and drug patents.

The two sides recently resumed discussions to get the deal – already a decade in the making – over the finish line.

Mr. Trudeau insisted last week that his government was “working hard to get this deal in place.”

It’s unfortunate that Canada is still grappling with the Canada-EU Comprehensive Economic and Trade Agreement (CETA), because the to-do list facing federal trade negotiators looks long and daunting. It’s doubtful Canada has been hit with so many complex trade files, all at once, in 150 years.

At the top of the list is the pending renegotiation of the North American free-trade agreement – the cornerstone of Canada’s relationship with its dominant trading partner. These negotiations will consume the energies of federal and provincial trade officials when they get started in mid-August.

Beyond NAFTA, Ottawa is also grappling with a multibillion-dollar fight with the United States over softwood lumber, the Bombardier-Boeing commercial aircraft dispute, exploratory talks to revive a massive Pacific Rim trade agreement, the prospect of post-Brexit trade talks with Britain and continuing efforts to get trade deals with China, Japan and India.

Each of these endeavours could take years. Taken collectively, they could push Canadian trade officials to the brink.

“Yes, it’s a pretty busy time,” said Kirsten Hillman, Canada’s top negotiator, in a recent interview with trade publication Real Agriculture. “Our goal as trade negotiators is always to try to set stable, predictable environments for our trading industries, and right now that’s something that we’re working on pretty hard.”

A published report this week suggested “signs” are pointing to a possible resolution of the on-again, off-again softwood lumber dispute amid renewed political will.

It would obviously be convenient for Canada to resolve the dispute before the NAFTA renegotiations begin.

That is probably wishful thinking. Canada and the United States can’t yet see the forest for the trees on this never-ending dispute. They remain far apart on what a deal would look like. Even within Canada, there is no agreement among the provinces and industry players on whether to continue challenging new U.S. lumber tariffs through litigation or try to reach a settlement. Complicating matters, Canada’s largest lumber-producing province – British Columbia – is engulfed in political turmoil and could be headed into another election. Until it has a stable government in place, consensus within B.C. will be tough to get.

And the United States is pushing for a hard and permanent quota on Canadian lumber imports – a demand that does not sit well with B.C. producers, who account for more than half of Canadian output.

Then there is the government’s commitment to trade diversification. Worried that reopening NAFTA and increased U.S. protectionism could disadvantage Canada, Ottawa is pursuing efforts on multiple fronts to diversify its trade patterns. The United States accounted for 76 per cent of Canada’s exports and 52 per cent of imports in 2016. To create more balance, Canada is engaged in free-trade talks with India and Japan, as well as exploratory discussions with China. It has also met with other members of the Trans-Pacific Partnership to see if the deal can be revived now that the United States has pulled out. TPP negotiators are slated to meet this month in Japan to plot the way forward for the agreement, which was signed in 2016.

But for Canada, those efforts will inevitably take a back seat to NAFTA and lumber.

In a clear sign of where the federal government is placing its priorities, Ms. Hillman, an assistant deputy minister at Global Affairs Canada, has temporarily relocated to Washington to direct negotiations with the Trump administration.

The last thing Canadian officials should be doing these days is constantly looking in the rear-view mirror, including the free-trade deal with Europe.

PACIFIC ALLIANCE

Global Affairs Canada. June 29, 2017. International Trade Minister welcomes invitation by the Pacific Alliance to start negotiations to deepen trading relations with Latin America

Ottawa - With its growing middle class and open, market-driven economies, the Pacific Alliance offers immense potential for business partnerships that will support growth, opportunities, and middle class jobs in both Canada and Latin America.  

While in Cali, Colombia, the Honourable François-Philippe Champagne, Minister of International Trade, welcomed an announcement by the Pacific Alliance that Canada has officially been invited to start negotiations in the process to become an Associate Member of the Pacific Alliance.  

This announcement comes following Minister Champagne’s three-day visit to Colombia, where he attended the Meeting of the Council of Ministers of the Pacific Alliance with Observer States and the Fourth CEO Summit of the Pacific Alliance. During these meetings, Minister Champagne highlighted the strength of Canada’s partnership with the Pacific Alliance and reaffirmed Canada’s interest in further deepening this relationship through Associate Membership.

While in Colombia, Minister Champagne also engaged with key Canadian investors in Colombia to discuss Canada’s strategy regarding corporate social responsibility. This commitment was further underscored by the Minister’s signing of a Declaration of a Memorandum of Understanding with Carlos Cante Puentes, Colombia’s Vice Minister of Mines, to ensure a more transparent and effective governance of the extractive sector so that the economic opportunities and benefits produced by the sector may be better shared among all segments of society.

Quotes

“Canada welcomes the Pacific Alliance’s invitation to start negotiations for Canada’s Associate Membership with this important trading and regional integration bloc.

“We recognize the importance and growing influence of the Pacific Alliance, and look forward to strengthening this key partnership that will, in turn, create more economic opportunities for our middle-class.“

- François-Philippe Champagne, Minister of International Trade

Quick facts

• The Pacific Alliance is a regional integration initiative founded in 2011 by Chile, Colombia, Mexico and Peru aimed at fostering the free movement of goods, services, capital and people among member countries.
• Canada has comprehensive free trade agreements with all four members of the Pacific Alliance.
• In 2012, Canada became the first non-Latin American country to become an observer with the Pacific Alliance. Canada is also the only observer country with a joint declaration on partnership, which identifies six areas for cooperation.
• Canada’s total merchandise trade with the Pacific Alliance member countries reached a value of $48 billion in 2016. The four countries of the alliance account for more than 75% of Canada’s two-way trade with the whole Latin American region.

The Pacific Alliance: https://alianzapacifico.net/en/

BACKGROUND

Canada and the Pacific Alliance

The Pacific Alliance is a regional integration initiative created in 2011 by Chile, Colombia, Mexico and Peru that seeks the free movement of goods, services, capital and people. The purpose of the Alliance is to promote greater competitiveness and economic growth for member countries, as well as to expand economic relations with the Asia-Pacific region.

Canada is committed to deepening its cooperation with the Pacific Alliance. Canada became the first non-Latin American observer to the Alliance in 2012. The signing of the Canada-Pacific Alliance Joint Declaration on Partnership in June 2016 demonstrates the strength of our relationship and positions Canada as a privileged partner.

The Pacific Alliance

The Pacific Alliance is not only a platform of commercial integration, but also develops common objectives and shares best practices in a number of areas, such as tourism, intellectual property, regulatory frameworks, gender issues, innovation, mining and climate change. The four members have opened joint trade promotion offices, and participate together in trade shows around the world. In 2015, all four countries’ stock exchanges were integrated into a common market known as MILA.

Together, the countries of the Pacific Alliance represent the eighth economic power and the eighth export force worldwide. In the Latin American and Caribbean region (LAC), they account for 36.4 percent of the GDP, 57.6 percent of the total trade and have attracted 40.5 percent of the inward stock of Foreign Direct Investment to the region. With a young and increasingly qualified labour force, this regrouping of an estimated 225 million inhabitants constitutes an important market for Canada.

Of the 49 observers of the Pacific Alliance, Canada is considered one of the most active in developing dynamic and productive ties with the Pacific Alliance.

Canada-Pacific Alliance Joint Declaration on Partnership

The Joint Declaration identifies six areas for increased cooperation:

• trade facilitation and promotion;
• education and training;
• small and medium-sized enterprises;
• science, technology and innovation;
• responsible natural resource development and corporate social responsibility; and
• environment, including climate change and ocean conservation.

Canada-Pacific Alliance Commercial Relations

Canada has comprehensive and ambitious free trade agreements with all four Pacific Alliance members. Canada also has an important presence in these countries with $42.4 billion of Canadian direct investment abroad (CDIA) in 2015 (approximately 20 percent of the total CDIA in LAC). Canada’s total merchandise trade with Pacific Alliance countries reached $46.2 billion in 2015, representing 73.6 percent of Canada’s two-way trade with LAC.

The extractive sector represents a particularly important sector for Canadian companies in Pacific Alliance countries, with $52.2 billion of Canadian mining assets in 2014 (30 percent of all Canadian mining assets abroad). In 2015, Canada hosted a delegation of government officials from Pacific Alliance countries for an extractive sector study tour, to support the development and maintenance of their regulatory frameworks. The tour also promoted Canada as a partner of choice in responsible mineral development and demonstrated Canada’s commitment to deepening its ties with the Pacific Alliance in this sector.

Canada Achieves Pacific Alliance Observer Status. Opening new markets in fast-growing Latin America will create jobs, growth and long-term prosperity here at home, ministers say

November 15, 2012 - The Honourable Diane Ablonczy, Minister of State of Foreign Affairs (Americas and Consular Affairs), on behalf of the Honourable Ed Fast, Minister of International Trade and Minister for the Pacific Gateway, today announced that Canada has become an observer to the Pacific Alliance, a grouping of four of Latin America’s fastest-growing economies, Chile, Colombia, Mexico and Peru. The Minister made the announcement during a trade mission to Latin America.

“In order to create good jobs, economic growth and greater long-term prosperity for Canadian workers and their families, our government is committed to opening new markets for our exporters around the world,” said Minister Fast. “We look forward to building on our already deep trade and investment ties in Latin America as we continue to pursue the most ambitious trade expansion plan in Canadian history.”

“Having a stake in the Pacific Alliance will give Canada an important opportunity to shape the future prosperity of the Americas," said Minister Ablonczy. “By working through the Alliance with our neighbours in the Americas, we are reinforcing our friendships and paving the way to a bright future for the region.”

The Pacific Alliance was launched in April 2011 to facilitate the free movement of goods, services, capital and people among member countries and to strengthen trade and investment ties with Asia. Canada already has comprehensive bilateral free trade agreements with each of the four countries in the Alliance, and is engaged in negotiations with Chile, Mexico and Peru through the Trans-Pacific Partnership to conclude a 21st-century trade agreement that will bridge the Americas and Asia.

The countries of the Pacific Alliance have a combined population of 207 million and account for 71 percent of Latin America’s exports and 34 percent of its GDP. Two-way bilateral merchandise trade between Canada and the four Pacific Alliance countries reached $39.3 billion in 2011, up 12 percent over 2010.

Canada’s engagement in the Americas has been a foreign policy priority since 2007, with a particular focus on increasing economic opportunities in the hemisphere. Minister Ablonczy is leading a trade mission to Peru, Colombia and Panama on behalf of Minister Fast from November 11 to November 16. She is accompanied by representatives of 18 companies and organizations from the infrastructure sector.

INDUSTRY

REUTERS. Jul 4, 2017. Canada manufacturing growth cools in June as new orders slip

OTTAWA (Reuters) - The pace of growth in the Canadian manufacturing sector cooled in June to a four-month low as job creation slowed and companies saw fewer orders for new work, data showed on Tuesday.

The Markit Canada Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, declined to a seasonally adjusted 54.7 last month from 55.1 in May. A reading above 50 shows growth in the sector.

The gauge of new orders slipped to 55.1 from 55.7, its lowest level since January as firms saw less demand from markets at home.

But export orders edged up to 53.4 from 53.3, the strongest level since November 2014 on greater demand from clients in the United States.

While the figures suggest the recovery in the manufacturing sector has started to lose momentum, firms are still relatively upbeat about the outlook for the next 12 months, said Tim Moore, senior economist at survey compilers IHS Markit.

The Canadian economy is showing strong growth two years after it was hit by the drop in oil prices and the central bank has begun setting the stage for interest rate hikes that could come as soon as July 12. BOCWATCH

Employment among manufacturers declined to 54.7 from 55.4. Input prices fell to 60.3 from 63.2, though companies reported increased prices for raw materials such as steel.

(Reporting by Leah Schnurr, Editing by Chizu Nomiyama)

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