CANADA ECONOMICS
NAFTA
U.S. Department of State. February 2, 2018. Secretary's Remarks: Joint Press Availability With Mexican Foreign Secretary Luis Videgaray and Canadian Foreign Minister Chrystia Freeland. Remarks. Rex W. Tillerson, Secretary of State, Mexico City, Mexico
VIDEO: https://www.state.gov/secretary/remarks/2018/02/277876.htm
MODERATOR: (In progress) (Via interpreter) everybody and welcome to the Ministry of Foreign Affairs. We thank you for being here for the meeting of the Ministries of Foreign Affairs of North America: the Ministry of Foreign Affairs of Canada, Chrystia Freeland, the Secretary of State Rex Tillerson, and the Secretary of Foreign Affairs of Mexico Luis Videgaray Caso.
We would like to ask the ministers to get to the podium.
Now we are going to listen to Mr. Chancellor Luis Videgaray Caso.
FOREIGN SECRETARY VIDEGARAY: (Via interpreter) Thank you very much. Good afternoon. I’m going to speak in Spanish, so I’m going to wait for you to have the correct translation. Good afternoon for all the media. I am very glad to give – and welcome the Secretary of the United States Mr. Rex Tillerson and the Minister of Foreign Affairs Chrystia Freeland from Canada. It’s not the first time they are here in Mexico. We are very glad to welcome them again.
And we are happy to have the opportunity to work in different topics that are important for our North American region. North America – we are convinced that it can be the most competitive region of the world in the next decades, and that’s why we are working. We are working in a framework not only of neighborhood, but of friendship, of collaboration, and the sovereignty of the countries, knowing that together we can do more.
In the conversations that we’ve had today, of course, competitiveness is the core topic. How are we going to work together to generate more economic activities, more jobs for the inhabitants of this region? One of the topics of competitiveness where we can have an opportunity, an important opportunity, is the topic of energy.
The North American region has the capabilities in human and the natural resources to be a very clean energy and cheap energy to be able to transform our societies and our economies. We have agreed to keep on working with the works of our secretaries, and we are also having the objective of getting to the regulations to generate the – and create the synergies where we can have a mutual construction of infrastructure, and of course, to enable the private sector, which is going to be able to create projects not only from hydrocarbons but also from the energy sector in clean energies.
In the commercial area, we see an important opportunity in the modernization of the Free Trade Agreement of North America, which is NAFTA. And this is going to be led by the corresponding areas of the government. We are making progress in a professional way, and from the Mexican Government we see a great opportunity to have a win-win-win situation – where Mexico wins, when Canada wins, and where the United States wins. We don’t see it as a game where someone loses and someone wins. We want a modern agreement to be up to the situation of the 21st century. The North American Free Trade Agreement was agreed 25 years ago; it was a different world then. And now we have the opportunity to adapt it to the new reality, to have an agreement that is fair and that is reciprocal, to have trade based on rules, these rules that are going to allow this region to be – prosper and to keep generating jobs and welfare for the three parts.
An important part of the welfare of our region is the empowerment of women, entrepreneur women. And we agreed on working with them according to the mechanisms that are already established to have an agreement between the three countries. We had a meeting a few days ago of the empowerment of women in Mexico, and we are going to keep working on these important topics.
Another important topic of the region is the – that is, the interest of the three countries is the safety. We identified as an important tool in the matter of drugs, and we have celebrated three meetings. We are going to hold the fourth meeting this year in Canada, and we agreed on having a special emphasis on the combat that we are having against the epidemic of opioids and fentanyl and heroin. This is generating a great damage of our citizens. In Mexico, it’s taking the lives of lots of youngsters, and also in the United States and Canada due to the use of these substances.
So we are going to continue working like last year with our United States Department to have a cooperation which is much more effective, knowing that we have a shared responsibility, and using the trilateral platform to exchange information and have the operational cooperation as well. We also talked about the efforts that we are doing jointly in the illegal human trafficking, which is a priority for the three parts, and we agreed on working on this topic.
In the meeting that we held trilaterally, we talked about important topics of our region, and I mean we are talking about three topics – the cooperation in Central America region. The initiative of Secretary Tillerson and John Kelly held a summit in Miami last year about the cooperation for Central America. Minister Freeland was there too, and we are working on knowing how are we going to work beyond the security issues, how are we going to contribute for the development, the economic development and the stability and the security of this place, especially from Guatemala, Honduras, and El Salvador. We agreed on working on what we are left to do, and we are going to take it as an important matter of our trilateral cooperation.
We also agreed on working with the cooperation initiatives in the Caribbean. This Caribbean region is strategic area which is going to face specific challenges. We are talking about the increase of the cooperation, our shared cooperation, to have a better resilience on the Caribbean islands against the natural phenomena which are derived from the climate change, and also strengthen the energy security in the Caribbean. We can do a lot of things. And each one of our governments have direct relationships with the Caribbean, but we need an effort between the United States, Canada, and Mexico in this matter, and it can be very effective.
And on third place, the situation of Venezuela. This is a very painful situation for our region and for our continent. We are facing the vision – one of the most important things that are at stake are the democratic system, and as part of this Inter-American Democratic Act, which is an instrument that is mandatory for the people of North America since 2001, while we cannot stay and do nothing with the situation of Venezuela. We have already confirmed our concern and our will to keep using the diplomatic tools that are at our hand to keep re-establishing the situation in Venezuela.
I have shared with both ministers the role that Mexico played on the dialogue on the Venezuelan Government in Dominican Republic, and we decided to withdraw because there were no serious decisions made. But that does not mean that Mexico is going to keep having to stop having an active participation in Venezuela. The Venezuelan people are going to find the peaceful path, and Mexico is going to keep working with the rest of the countries of the region, of course, with the United States and Canada, to keep looking for a solution to this serious situation.
These are one of the topics that we mentioned with Mexico, Canada, and the United States. This is a rich cooperation. It’s a very diverse cooperation. And I would like to say that Mr. Tillerson and Mrs. Freeland my gratefulness to be here. It’s very important for me and for Mexico to be here. It’s not just an opportunity; it’s a shared commitment. Thank you very much for being here.
MODERATOR: Now we are going to listen to Mrs. Chrystia Freeland, the ministry of Canada.
FOREIGN MINISTER FREELAND: (Via interpreter) Good afternoon. To start, I would like to thank Secretary Videgaray and the rest of our hosts here in Mexico.
(Interpreter speaks in Spanish.)
(Via interpreter, in progress) ...Mexico, the United States, and Canada is going to face a lot of challenges. The representatives of our countries are going to be having different meetings, and we should remember that we are working together.
(In English) Mexico, the United States, and Canada have long been partners, allies, neighbors, and most importantly friends. We are brought together not only by the physical fact of our shared geography, but by the equally important fact of our shared values.
The discussions we had today were very productive. Of course, we did touch on the NAFTA negotiations. From the very beginning, we in Canada have said that NAFTA must be updated and modernized to provide broader opportunity for the middle class and those working hard to join the middle class in all of our three countries. We are working hard for a deal that is innovative, forward-looking, and mutually beneficial for all three NAFTA partners. And here I will echo Secretary Videgaray and say we believe in a win-win-win outcome, and I am very hopeful that we can get there.
As part of our discussion of North American competitiveness, we had an excellent conversation about energy collaboration, and I am hopeful that’s something that we can carry forward from this meeting.
We also spoke about the importance of advancing democracy in the hemisphere, most notably in Venezuela, where the political and economic crisis continues to worsen. The Maduro regime is systematically violating the human rights and fundamental freedoms of its people. We three agreed that we must do everything we can to restore democracy and relieve the unacceptable suffering of the people of Venezuela.
We also spoke about how we can cooperate to fight transnational crime, in particular the opioid crisis, which is causing such devastating harm to the people of Canada, the United States, and Mexico.
Finally, we spoke about our shared commitment to the empowerment of women and girls and discussed ways we can advance that agenda together.
It’s always a pleasure for Canada to work with our continental partners and neighbors with whom we share so many values and interests on issues of mutual trilateral and also global concern. It’s great to spend time with you, Rex, Secretary Tillerson, and thank you again, Luis, Secretary Videgaray, for hosting this great conversation. Muchas gracias, amigos.
MODERATOR: And now we’re going to thank Mr. Rex Tillerson for his message.
SECRETARY TILLERSON: Well, first let me thank Foreign Secretary Videgaray for hosting today’s trilateral, and thank Foreign Minister Freeland for making the trip down to Mexico City. In 2017, my very first bilateral visit as Secretary of State was to Mexico City, and about this time a year ago we were standing here holding a press conference. As it turns out, my very last trip of 2017 as Secretary of State was to Ottawa. So it’s right that we should meet at this time in the trilateral relationship. And we meet – even when we’re not meeting, I would share with you that the three of us are in very frequent contact on all issues that are of importance to our countries, on security, as well as economic prosperity, because our three countries are connected. When we can work together, and when we are unified in our positions and our voice, we have significant influence on the events not just in our hemisphere, but elsewhere.
So today we discussed a range of trilateral, regional, and global issues, and I cannot emphasize enough the importance of our economic relationships. Canada and Mexico rank as the first or second-largest export market for 42 U.S. states and support nearly 3 million U.S. jobs. North America is also a major player, as Secretary Videgaray highlighted, in the energy markets. And we discussed what we believe are really unique opportunities to promote market-based energy development and to further energy integration throughout North America and the hemisphere.
We also talked and discussed following through on the 2016 trilateral MOU to economically empower women that Foreign Minister Freeland mentioned.
Beyond our trade and economic relationships, we also discussed mutual areas of serious concern, in particular the most immediate threat to our hemisphere from transnational criminal organizations. We continue to employ a coordinated and multilateral approach to diminish the influence of these groups and rid our hemisphere of the violence and devastation they promote. In June of last year, Canada joined the United States and Mexico for a conference on prosperity and security in Central America. At that meeting, we secured commitments from international partners and in the private sector to address a range of issues facing the Northern Triangle governments, including economic, energy, security, and governance challenges. Today, we discussed on how we can follow up on those commitments from that conference. Success there will better protect all of our countries and provide opportunities for the citizens of Central America.
Given the deadly nature of the opioid crisis, we must do more to attack the business models of those who traffic drugs and guns. That was a major theme of the second strategic dialogue that I cohosted with Foreign Secretary Videgaray last December in Washington, D.C. Through our targeted dialogues like this and the North American Drug Dialogue, we are developing and deploying new strategies to disrupt and dismantle these deadly networks that smuggle drugs, that participate in human trafficking and other illicit activities.
Turning elsewhere in the hemisphere, we shared our concerns for the humanitarian crisis that has unfolded in Venezuela. We all urge the Maduro regime to return to free, open, credible, democratic elections and to allow the Venezuelans a voice in their government. Our three countries will work with all members of the Lima Group to assist the Venezuelan people during this time of crisis.
I also expressed to Foreign Minister Freeland and Foreign Secretary Videgaray how I – how strongly I support Peru’s ambitious anticorruption agenda for the Summit of the Americas later this spring. We hope leaders throughout the hemisphere will make concrete commitments to combat corruption, strengthen the rule of law, and support economic growth and job creation.
As challenges become more complex, North America and our three countries will continue to work together to find solutions. That makes meetings like we’ve had today extremely valuable, and it was certainly useful to me and I appreciated the opportunity to meet with my counterparts. And thank you again for hosting, Luis.
MODERATOR: (Via interpreter) Thank you very much, Secretary Tillerson. Now we’re going to have a question and answer session. We’re going to have one question per each one of the participant countries. We’re going to start with Mexico. Jorge Ramos from Grupo Imagen.
QUESTION: (Via interpreter) Thank you very much. I’m on your right, and my partners and I would like to know about the bilateral relationship between Mexico and the United States and the Chancellor Videgaray and Mr. Tillerson, because they talked about the agreement for the Dreamers and the immigrants. Do you have the DACA agreement for the United States for the construction of the border wall? And have you talked about the agreement to fight against the criminal groups that are in both sides of the border, and also to stop the flow of weapons from the United States to Mexico? This is the first part.
The second part is we would also like to know that – if in the agreement to try to go back to the normality in Venezuela, is there a military offensive from the United States to combat Maduro’s situation, and is it going to be supported by Mexico and Canada?
And just a question for Mr. Tillerson: Is there evidence that there is going to be an interference in the Russian Government in Mexico as there was in the United States? I mean the elections of your country. And are you going to reiterate the situation that Canada and Mexico should not have a close relationship to Russia and China?
And finally, I would like to know if there is an agreement between Mexico and the United States about the possibility of deploying guards in the transborder flights to answer to any issue that might arise.
FOREIGN SECRETARY VIDEGARAY: (Via interpreter) We’re going to establish a rule: If you’re going to ask more than three, I’m just going to answer three, all right?
We didn’t talk about the DACA agreement. We have talked about it before, but in the migration situation, it is a matter of the United States to agree on this, and it’s the same thing in Mexico and Canada. And in the case of the DACA, of course we have shared information with members of the American Congress and – congressmen of the United States, but if the DACA people are coming back, it would be a win situation for Mexico and a lose situation for the United States. It would be one of the most important losses in humanity, because this is a situation of people who came as children and they have a clean record, most of them, and are engineers. They work in programming, they are doctors, lawyers, and of course, Mexico would be having an important win situation and lose situation for the United States. But finally, that is the decision from the United States and we are going to try to find a situation in the Congress for the future of these young people. But at the end, it’s what they decide.
I’ve talked to most of them, and most of them want to stay in the United States. Most of them want to stay there and some of them want to come back to Mexico, but it – this is not a matter of the bilateral situation. We also talked widely about this situation in this meeting, and Mr. Rex Tillerson was talking about it in – a few moments ago about the combat of the criminal groups is one of our priorities. And we want these efforts to have a more strategic planning so that we can dismantle the plans of these organizations.
We mentioned it last year and we hope that we can have measurable results. One of the topics that we’re going to mention in the dismantling of these criminal groups is going to be weapons. Of course, the illegal weapons that come from the United States to Mexico is something that should be dismantled. And we have an agreement of what the paradigm is. This paradigm should be cooperation. We should not take the guilt into someone else. The criminal groups that – and the illegal weapons from the United States, Mexico, and the cash that comes is to be able to dismantle the production and the creation of these groups. If we don’t have a joint effort, we are giving a strategic opportunity to these criminal groups, and we’re not going to be able to dismantle them.
Secretary Tillerson is going to talk about the specific question about Venezuela, and I would like to say that Mexico is not going to support the decision that involves violence, either internal or external, for the case of Venezuela. And about the question of the special agents in the United – for the United States in trans-border flights, well, it is a proposal that has not been done.
And there are lots of proposals in terms of security. We are analyzing all these proposals and the operative proposals, but there is not an agreement yet. There is a conversation that is going to be taken seriously.
SECRETARY TILLERSON: Okay. So there were several questions in there. We’ll see if I can remember them all. First, with respect to DACA, President Trump has put forward a proposal to the Congress that I think addresses in a very, very important way how people should be treated and the value of those people. And his proposal would remove the uncertainty for more than a million people that find themselves in this situation. And the President’s been quite clear that he wants to see this solved, and he’s called upon the Congress to solve it. So I think it is certainly his commitment to see this issue resolved once and for all, and provide clarity, which is so important, so that people know how to plan their lives going forward.
With respect to the commitment to disrupt the transcriminal organizations, as I mentioned in my remarks, we created early last year – in fact, it was in this first trip that I made to Mexico City, the first bilat – a different approach as to how we cooperate to attack the entire supply chain of this devastating impact of drugs – cocaine, heroin, fentanyl, opioids. This is having a horrible effect on American citizens, Mexican citizens, Canadian citizens. And so throughout the year we have had two major follow-up meetings in Washington, D.C. We had a very important working dinner last night with the Mexican military counterparts and the navy and the Mexican army and Mexican intelligence service to discuss how we feel about the progress and what are the areas that need more attention. So this is a joint effort that is very, very active, it is very robust, and we intend to maintain this effort well in until we have resolved this problem.
You asked about Russian interference in Mexican elections. All I could say to you is we know that Russia has fingerprints in a number of elections around the world. We hear this from our European counterparts as well. My advice would be – to Mexico would be: Pay attention. Pay attention to what’s happening.
In terms of air marshals on flights, we have air marshals on a number of flights in the United States. It’s about creating security for both the arrivals and the destinations. And any action that would be taken regarding flights with Mexico will be done in full cooperation and coordination with Mexican authorities as well, all with a view that we want to provide greater security for all of our passengers that are traveling back and forth.
With respect to Venezuela and what we would like to see happen there is a peaceful transition, if – if President Maduro would return to the Venezuelan constitution, restore the duly elected assembly, dismantle the illegitimate constituent assembly, and return to free, fair elections, then he’s happy to stay and run in a free and fair election. If he wants to step aside and let someone else follow through on that, that’s fine, but our view is you must return to the constitution, and that’s what we hope Venezuela ultimately will do. That’s what we all are working hard to see them do.
I don’t know if I hit all your questions. Those are the ones I could remember.
FOREIGN SECRETARY VIDEGARAY: Good enough.
MODERATOR: Now our next question, Pilar.
QUESTION: (Via interpreter) Good afternoon. My question is to Minister Freeland. According to the free trade agreement, the negotiation with the United States had several agreements on the United States. Would you give us an opinion about this? What is going to happen with Mexico and the United States?
And we also like to know about the renegotiation period. What are the risks that we are going to have in Mexico in the change of governments for Canada and for the United States? And we also like to know about their recent topics of the situation and told with the Minister Luis Videgaray.
FOREIGN MINISTER FREELAND: As far as NAFTA goes, as actually all three of us said, all three countries are strong believers in North American competitiveness, and we really believe that this agreement, which has now been in place for almost a quarter century, has made our continent more competitive. It has created jobs and growth in Canada, the United States, and Mexico. The world has changed a lot, though, since we first negotiated NAFTA, and to give you an example, on the tracing list for cars in NAFTA today, we have cassette decks – which my children don’t even know what a cassette deck is – but we don’t have rear view cameras.
So it is time to update this agreement, to modernize it, to make it fit for the 21st century, to make it more effective for all three countries, and that is what Canada is 100 percent committed to doing. We believe that that is absolutely possible, and we are working hard with a lot of goodwill.
In terms of timelines, we would love to get this deal done as quickly as possible. Uncertainty is never good for business confidence. Having said that, it’s a really complicated agreement, and we believe in taking the time it takes to get it right. So I think all of us are going to be working really, really hard to get it done as quickly as possible to get a good outcome for all three of our countries.
MODERATOR: Tracy Wilkinson from the Los Angeles Times.
QUESTION: For Secretary Tillerson, you spoke yesterday in Austin quite eloquently, really, about the shared values of the United States with Latin America, the need to strengthen those partnerships, to build the rule of law and democratic institutions, and you also spoke, really, of the benefits of immigration. Our – all the passports of different colors that we have.
Does it undercut your message here and your efforts or mission to build on those relationships when a very different message comes from your own President, who, for example, in his State of the Union, described – painted a picture of immigration from Mexico as a cause of crime, or even today was attacking this morning the FBI and some of the very pillars of rule of law and democracy? Does that make your mission more difficult? Which – and which version should Americans believe, which version should Mexicans believe?
And finally, for the Ministers Videgaray and Freeland, how difficult is it for you to negotiate with a government that speaks in such different voices? Thank you.
SECRETARY TILLERSON: Well, I think with respect to U.S. immigration policy, what the President, I think, has observed is that over the years, our immigration system has grown so many arms and legs, if you just look at the number of different programs by which people come to the United States, that oftentimes we don’t have real good discipline around how those programs are enforced consistent with the laws. And in fact, as the President requested early in his term that a full review be undertaken of all the immigration policies, what we found is there were a lot of exceptions to the intent of Congress – had been put into place.
So the first thing the President has done is said, “Look, we’re going to enforce the laws.” The Congress passed the laws, the executive is required to enforce the laws, and we intend to enforce them to the letter of the law. And so that’s really where this whole process begins. So what we want is legal immigration, legal immigration where we understand who is entering the country, and why are they entering the country and are they coming to enjoy a nice vacation; are they coming to work here for some time; are they coming here for education or are they coming here to work; are they coming here to one day hoping to become citizens?
And so we really – what the President has asked is: Let’s put in place systems. And that’s where a lot of the new, in particular, immigration from countries that are very unstable today, that don’t have strong governments themselves in parts of the world. Let’s make sure we have systems in place where we understand who is coming to the United States of America, and as he indicated, we are a nation built by immigrants. All of us can trace our ancestry, or most of us can, back to someone in the family that immigrated to the United States. And we still value immigrants, and they bring enormous value to our continent. And that’s what the President, though, is asking is, I want to know how this person who wants to come and live in our country is going to bring value to our country. And I think that’s – fundamentally, that’s what he is pursuing.
And it is very complicated, because we have over the years put so many different mechanisms in place, I think well-intended, to deal with situations around the world, many of which – those situations no longer exist. And we’ve never gone back and kind of cleaned this up, and gotten back to where – what was the original intent. So I know it’s painful, the process is, for a lot of people, and that’s why, as we move forward in implementing the President’s directives, we’re trying to do that in a way that accommodates the fact that this is hard for some people. How can we give them time to adjust? What can we do to fix a lot of this back in Congress?
And that’s why the President has been pressing Congress for a number of actions to make changes to the immigration law, to fix these defects that have risen over the years and crept into the immigration system. He wants this to be a country that’s – that follows the law, and he wants us to enforce the law, and when it’s not working, we should go to the Congress and say, “Look, we need you to fix this part of the immigration law, whether it’s on a particular program to deal with refugees or whether it’s other issues like DACA, let’s fix it.” And instead, we’ve had a long period of time where people have kind of issued a directive here and an order there, and things have kind of gotten out of – have gotten out of the normal order.
So my message – that would be my message to people trying to understand what the President’s doing with immigration is let’s have it very clear what the rules are. Let’s enforce those rules, and then people that desire to come to the United States know exactly what the pathway is to get here, and they will have certainty when they arrive. Because we have so many people living in the country today that immigrated, and they’re living under a huge cloud of uncertainty. And the President would like to remove that uncertainty for a lot of people.
FOREIGN SECRETARY VIDEGARAY: Since the question was in English, I’ll answer in English. Mexico will always be prepared to deal with, to work with any administration in the U.S. or in any other country around the world. And we do so because we are a sovereign nation, and we have clarity about our principles, about our objectives and the things we are willing to do and the things we are not willing to do. With the Trump administration, we’ve committed to have a very close communication, and that has proven to be a tremendous benefit for the relationship. I think that in many ways, the relationship today is more fluid, it’s closer than it was with previous administrations, which might be surprising to some people, but that’s a fact of life.
And I want to highlight the role that – and leadership of Secretary Tillerson, who has been instrumental to achieving this, and to bring our countries closer. Yes, we do have some differences, as every other country does, but we’ve been working very closely, we’ve achieved substantial things, and we’re looking into the future. This is a relationship about opportunities and about the things that we can do together, and we’re working well, we’re working close, and we are about results.
FOREIGN MINISTER FREELAND: Yeah, and so – I think the Canadian view is very similar. Canada has been negotiating with the United States for as long as we have been a country. We feel we know you guys pretty well. In fact, we probably spend a lot more time thinking about you than you spend thinking about us. We’re okay with that. When it comes to the current administration, the President’s counterpart is of course my prime minister, and I’ve been with my prime minister at a number of bilateral meetings. And I know that the two leaders have a very strong mutual respect for one another, and I would say, they also really get along. As for my U.S. counterparts, Luis and I are going to embarrass you, Rex, but it is a true pleasure working with Secretary Tillerson.
He is a tremendous friend and partner for Canada, and an incredibly important voice in maintaining the rules-based international order, and it’s been a real privilege for me to work with him on issues ranging from peace and security on the North Korean Peninsula – we recently cohosted a summit in Vancouver on this issue. He was brave enough to come to Ottawa in December; that shows true friendship. And I am grateful both to Secretary Tillerson and to Secretary Videgaray that we three continental partners were able to have a really good meeting here today.
FOREIGN SECRETARY VIDEGARAY: Muchas gracias a todos.
The Globe and Mail. 5 Feb 2018. A NAFTA legacy: Canadian auto jobs are booming, just not in the factories. Auto: Aftermarket jobs increased every year since 1994, even during recession
GREG KEENAN, AUTO INDUSTRY REPORTER
Manufacturing has been hurt and you can measure that through the number of vehicles we’re producing …
DENNIS DESROSIERS, AUTO INDUSTRY ANALYST
It’s almost like Alberta was during their economic boom. Certified journeymen technicians are very difficult to come by. It seems the best way is to train and promote from within.
SCOTT JONES, CO-OWNER OF WEST COAST AUTO GROUP
Scott Jones, co-owner of West Coast Auto Group, figures his five car dealerships in Maple Ridge, B.C., employ 20 per cent more people today than they did a few years ago.
Mercedes-Benz Canada Inc. now owns 11 corporate stores compared with 14 in 2000, but the number of employees at those stores has soared to 1,400 from 575.
These are just two examples of how employment in the auto sector in Canada has been transformed since the North American free-trade agreement came into force: The number of jobs in manufacturing has declined, while the number of jobs in auto sales, repair and finance has soared.
The combination of a buoyant Canadian market that has posted five straight annual sales records and the closing of several assembly plants, which eliminated more than 10,000 jobs in vehicle manufacturing, has changed the landscape.
When NAFTA took effect in 1994, there were 163,000 Canadians working in vehicle assembly, parts manufacturing and tool, die and mould making, representing 27 per cent of all automotive employment. By last year, the number of jobs fell to 151,840, or 21 per cent of total employment.
Jobs not related to manufacturing grew by almost one-third since the inception of NAFTA – to more than 571,000 last year from 434,000 in 1994.
“Manufacturing has been hurt and you can measure that through the number of vehicles we’re producing, the value of parts, the value of vehicles and employment, the one all the politicians focus on,” said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. “Nobody ever talks about the non-manufacturing jobs.”
As another signpost of how the relative importance of auto manufacturing has declined, the ratio of vehicle production to sales in Canada fell last year to a level seen only once since the mid-1960s, and that was during the Great Recession of 2009.
Auto makers built 106 vehicles for every 100 they sold in Canada last year. Since the Canada-U.S. Auto Pact took effect in 1965, the only lower ratio was in 2009 when the companies produced 101 vehicles for every 100 sold. At its peak in 1995, that ratio stood at 207:100.
The booming vehicle market in Canada is responsible for a massive increase in the number of vehicles on the road in Canada, which is one of the factors that is driving the increase in non-manufacturing jobs.
There were 27 million vehicles on the road in Canada last year, compared with about 15 million in the 1990s, Mr. DesRosiers says. That has spurred much of the job creation at dealerships and companies in what is known as the aftermarket – vehicle repairs and the making and distributing of the parts necessary for those repairs.
The boom has made it difficult to find employees in the Vancouver area, said Mr. Jones, a third-generation dealer.
“It’s almost like Alberta was during their economic boom,” he said. “Certified journeymen technicians are very difficult to come by. It seems the best way is to train and promote from within.”
Aftermarket jobs such as those at Canadian Tire and independent garages and repair chains have risen every year since 1994 without a hiccup, even during the recession. Those jobs grew 25 per cent between 1994 and last year.
“Yes, we would have been better off [keeping the manufacturing] jobs – but we’ve ended up net ahead by a significant number of workers,” Mr. DesRosiers said.
The growth of Mercedes-Benz since 1994 shows how the industry has changed.
The company is building a flagship store in the west-end Toronto suburb of Etobicoke that will have 50 service bays.
“That will be the biggest Mercedes service facility we have in the country,” Mercedes-Benz Canada president Brian Fulton said. “We need 50 service bays in Etobicoke. We’ve got eight right now.”
That number of bays will also make the dealership’s service area one of the largest of any auto brand.
Mercedes-Benz Canada sales have quadrupled since 2000. Data compiled by Mr. DesRosiers show that 48 per cent of the vehicles the company has sold in the past 20 years – with the exception of its Smart microcar brand – are still on the road.
The auto maker’s move to offer vehicles in virtually all segments of the market and the overall strength of the economy have contributed to the sales boom, Mr. Fulton said in an interview. That includes the announcement last week that the company will start selling its A-class cars in Canada beginning this fall.
People who thought they could never afford a Mercedes or any luxury vehicle “are saying, ‘I can make that jump and it’s affordable,’ ” Mr. Fulton said.
Service is crucial to maintaining customer loyalty, he added.
“Getting that customer in the door the first time is the hardest thing. If you’ve got them, you can’t let them go.”
TPP
The Globe and Mail. 5 Feb 2018. ARTICLE. The Pacific Alliance is a trade deal that Canada must not ignore
COLIN ROBERTSON, Former Canadian diplomat and a senior adviser for Dentons LLP
The Alliance members – Chile, Colombia, Mexico and Peru – are business-minded. They embrace the rules-based, democratic order. Their economic well-being affects the economic health of Canadian companies, especially in resources, infrastructure and finance.
The government and House of Commons International Trade Committee are currently holding consultations. Here is what they should consider:
The Alliance members – Chile, Colombia, Mexico and Peru – are business-minded. They embrace the rules-based, democratic order. Their economic well-being affects the economic health of Canadian companies, especially in resources, infrastructure and finance.
The “Pacific pumas” have more than 221 million consumers. Their combined GDP is equivalent to the world’s sixthlargest economy. Canadian investment in the alliance is estimated at $50-billion.
The alliance’s goal is to achieve free movement of goods, services, capital and people. The members are integrating their stock markets, and are even sharing embassies in certain countries.
Canada already has free-trade agreements with individual alliance members, so some ask why we should become an associate member.
The first answer is that we must take our opportunities when they come.
We would have first-mover advantage within the best trade agreement in the Americas, just as we will have with trans-Pacific countries through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and transAtlantic through the Comprehensive Economic and Trade Agreement (CETA). That means a bigger payoff as we establish a customer base ahead of the opposition. The cumulative rules of origin would weave the individual free-trade agreements (FTAs) with alliance countries into a seamless web. That would mean improved competitiveness of Canadian products.
Second, the Pacific Alliance is consolidating itself as a platform for economic integration within the Americas.
Canada would become a leader within the Pacific Alliance by virtue of being the biggest economy in the most liberalized caucus of trade countries in the world.
While the alliance is mostly about trade, it is also about building deeper co-operation through regulatory integration and addressing emerging issues such as the digital economy. What better place to advance the progressive trade-agenda goals in gender, labour, environment and small and mediumsized enterprises, than in this group of progressive democracies. And we have already begun. Last year, the CanadaChile FTA was revised to include gender rights.
Third, stronger links with the alliance would give us better place and standing in the Americas. History and migration have given us strong links across the Atlantic and the Pacific. Our ties south of the Rio Grande, by comparison, are less so.
The Pacific Alliance commitment to transparency and anticorruption within Latin America is the better model than its protectionist counterpart, Mercosur – Argentina, Brazil, Paraguay, Uruguay – and a contrast to the periodic illiberal governance in places such as Venezuela. Canadian participation in the alliance would reinforce its attraction to the rest of the Americas.
But there are potential challenges to membership. For example, the alliance’s mobility provisions – free movement among the member states – might not work for Canada.
One option could be to negotiate trusted-traveller programs for business. Our guest-worker program with Mexico could serve as a model. Operating for more than 40 years, it now brings more than 22,000 seasonal workers to Canada annually.
The provinces must be active partners in considering the Pacific Alliance, just as they have been in the negotiations of the CETA, CPTPP and the talks to renegotiate the North American free-trade agreement (NAFTA). Trade is increasingly less about tariffs at the border and more about standards and regulations in areas of provincial or shared responsibilities.
Trade liberalization acts as a catalyst to domestic economic restructuring. Most are winners, but there are also losers. We have developed institutions between the levels of government to find and implement solutions, including adjustment assistance and retraining. We must continue and refine this.
Against a backdrop of “America First” protectionism and no foreseeable conclusion to the zombified Doha round of talks at the World Trade Organization, we need alternative markets. Middle power groupings, such as the Pacific Alliance, pick up the slack and help sustain the rules-based trading order.
Other key Pacific partners – Australia, New Zealand, Singapore and South Korea – are actively considering associate membership. It is always better to be a driver setting the course in the front seat, rather than a late passenger along for the ride. Canada should move now on associate membership in the Pacific Alliance.
AVIATION
REUTERS. FEBRUARY 5, 2018. Boeing may express interest in Canada fighter jet bid: executive
SINGAPORE (Reuters) - Boeing may express interest in a jet fighter competition in Canada despite a recent trade row, but is still studying the matter, a senior executive said on Monday.
Boeing has until Feb. 9 to express interest in taking part in the bidding for 88 jets worth between C$15 billion and C$19 billion ($12.1 billion to $15.3 billion).
Asked ahead of the Singapore Airshow whether the U.S. plane maker would express interest by Friday, Gene Cunningham, vice president for sales at Boeing Defence and Space, told reporters: “That is certainly a possibility and we will let you know as that unfolds”.
Boeing’s relationship with Canada has soured since it complained that Canadian planemaker Bombardier was dumping airliners on the American market. A U.S. trade commission dismissed Boeing’s complaint on Jan. 26.
Cunningham also said Boeing was in discussions across Asia for possible future defense sales, including attack helicopters in Philippines and Thailand.
Boeing has also had preliminary conversations with Vietnam, following the lifting of a U.S. arms embargo in 2016.
“We have been to Vietnam several times to have conversations, but we are still in a formulative phase,” Cunningham said, adding that Boeing would strictly follow specific export controls that apply to all military products.
Reporting by Tim Hepher; Editing by Edwina Gibbs
INTERNATIONAL RESERVES
Department of finance Canada. February 5, 2018. Official International Reserves, All 2018
Ottawa - The Department of Finance Canada announced today that Canada's official international reserves increased by an amount equivalent to US$123 million during January to US$86,748 million.
Details on the level and composition of Canada's reserves as of January 31, 2018, as well as the major factors underlying the change in reserves, are provided below. All figures are in millions of US dollars unless otherwise noted.
NOTES:
- Net change in securities and deposits resulting from foreign currency funding activities of the Government. (Issuance of foreign currency liabilities used to acquire assets increases reserves, while maturities decrease reserves). During January, Canada bills decreased by US$182.7 million to a level of outstanding bills of US$1,898 million. An equivalent of US$304 million in cross-currency swaps was raised while US$542.8 million in cross-currency swaps matured during the month.
- "Return on investments" comprises US$89 million of interest earned on investments and a US$611 million decrease in the market value of securities.
- "Revaluation effects" reflect changes in the market value of reserve assets resulting from movements in exchange rates. In January, the revaluation effect was mainly due to the appreciation of the euro and the pound sterling.
- "Net government operations" are the net purchases of foreign currency for government foreign exchange requirements and for additions to reserves.
- "Foreign currency securities" include maturities of foreign currency debt, cross-currency swap payments and an estimate of interest payments on foreign currency liabilities.
- "Securities lent under repurchase agreements" are included in total reserves. Collateral provided in securities lending transactions is not included in total reserves.
- Cash invested under repurchase agreements is included in total reserves. Collateral provided in securities lending transactions is not included in total reserves.
| Millions of US dollars | |
|---|---|
| Securities | 68,676 |
| Deposits | 7,828 |
| Total securities and deposits (liquid reserves): | 76,504 |
| Gold | 0 |
| Special drawing rights (SDRs) | 8,160 |
| Reserve position in the IMF | 2,084 |
| Total: | |
| January 31, 2018 | 86,748 |
| December 29, 2017 | 86,625 |
| Net change: | 123 |
INTERNATIONAL TRADE
Canadian Intellectual Property Office. February 2, 2018. Release of CIPO’s Annual Report 2016–2017: Empowering innovation through IP
Gatineau — The Canadian Intellectual Property Office (CIPO) Annual Report for 2016–2017 was tabled in the House of Commons on February 2, 2018.
Last year, CIPO advanced its work to modernize Canada’s IP system, improve the quality of the IP rights it delivers, reduce processing times for clients, and increase access to Canadian IP data.
We have a much better understanding today of the needs of our customers, and of the innovation cycle in which they operate. We are offering new programs and products to help innovators and creators make the most of their inventions and creative endeavours.
Quotes
“Innovation changes the way people work, learn and live. It reshapes the business landscape, sometimes transforming how entire industries operate. At its root are intellectual property and the right of inventors, creators and innovators to own and allow others to use their “creations of the mind.” These are inventions, creative works and new designs and processes that have the potential to add immense value to businesses in Canada and around the world.”
- Johanne Bélisle, Commissioner of Patents, Registrar of Trade-marks and Chief Executive Officer
Quick Facts
- Over the last five years we have reduced our processing times to grant patent rights by almost 25%, helping innovators more quickly develop, monetize and commercialize their ideas.
- In 2016-17, CIPO reduced its average trademark turnaround time from filing to registration by 1 month to 26.5 months.
- We have improved processes to enable us to better understand how to use information technology to respond more rapidly to our customers’ IP business needs. For example, the Canadian Patents Database now allows users to access 148 years of patent descriptions and images, and to search, retrieve and study more than 2,300,000 patent documents.
CIPO Annual Report 2016–2017: http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr04322.html
DEVELOPMENT
Global Affairs Canada. February 4, 2018. Minister Bibeau launches International Development Week
Ottawa, Ontario - The Honourable Marie-Claude Bibeau, Minister of International Development and La Francophonie, today issued the following statement:
“International Development Week [IDW] is an opportunity to celebrate Canadians and partners working together to create a better world. With their commitment, expertise and innovative solutions, our partners help people in developing countries to build better futures for themselves and their families. This year’s IDW theme, Partners for a Better World, invites all Canadians to get involved in building a more peaceful, inclusive and prosperous world.
Canada seeks to eradicate poverty and believes that the most effective way to do so is by improving the lives of women and girls. That is why we launched the Feminist International Assistance Policy: to focus our international development efforts through a feminist lens.
“I encourage Canadians—especially youth—to get engaged in IDW activities this week and be a part of the debates, round tables and events organized across the country. Youth can be powerful agents of change, and Canada is working hard to ensure that their voices are heard in all facets of government decision making and in civil society.
“That is why I will soon be announcing the organizations who have successfully applied to the 2017 call for proposals for the International Aboriginal Youth Internships and the International Youth Internship Program, which will give Canadian youth a chance to have life-changing experiences and make a significant impact abroad.
“I hope many of you join in this year’s celebration of our work and take the opportunity to learn about—and be inspired by—the results we are achieving together.
“Use #IDW2018 and share your activities and projects!”
Government of Canada. PM. February 4, 2018. Statement by the Prime Minister on International Development Week
Ottawa, Ontario - The Prime Minister, Justin Trudeau, today issued the following statement on International Development Week, which runs from February 4 to 10, 2018:
“Today marks the start of International Development Week, a time to celebrate Canadian international development workers, volunteers, and partners who work hard every day to improve the lives of millions of people around the world. It is also a chance to engage Canadians, especially young Canadians, to learn more about – and be part of – these efforts.
“This year’s theme – Partners for a Better World – is a reminder that all of us have the power to help build a more just, equal, inclusive, and prosperous world.
“Canada has a long-standing commitment to help the poorest and most vulnerable people in the developing world, particularly women and girls. Around the globe and over generations, Canadian international development workers and volunteers have helped build hospitals, fight malnutrition, provide renewable energy, and advance human rights.
“Around the world, women and girls continue to bear the burden of hardships brought on by poverty and disease. Unequal access to education and healthcare, sexual violence, discrimination, and many other inequities hold them back. That is why, last year, we launched Canada’s new Feminist International Assistance Policy – which makes the empowerment of women and girls a priority in all our international assistance. This new approach focuses on helping the poorest and most vulnerable people, and will move us closer to achieving the goals laid out in the United Nations’ 2030 Agenda for Sustainable Development.
“On behalf of the Government of Canada, I encourage all Canadians to celebrate the many people who work every day to create a more peaceful, just, and sustainable world.”
________________
LGCJ.:
