April 8, 2013 – Palm Beach, Florida
Check Against Delivery
Good morning everyone. Thank you, Gray [Swoope, Florida Secretary of Commerce and President and CEO, Enterprise Florida Inc.], for that kind introduction.
Let me once again warmly congratulate Gil Rémillard [founding chairman of the International Economic Forum of the Americas], Nicholas Rémillard [President and CEO of the International Economic Forum of the Americas] and the organizers and sponsors of this very timely and worthwhile conference. Let’s also thank [Florida] Governor [Rick] Scott for his warm Florida hospitality. In fact, that warmth is why more than 10 percent of Canadians visit this beautiful state every year, contributing $4 billion to Florida’s economy. I know that all of us here keenly anticipate the insights and perspectives that we will gain from the impressive roster of presenters, as well as from our informal conversations with fellow delegates.
Our deliberations are framed around encouraging moderate return to growth of the global economy, and the question “what direction should the path to growth take?”
As a representative of Canada, and Minister of State for the Americas, my remarks will be directed to observations on the emerging markets in our own hemisphere and on Canada’s engagement in response to the opportunities we see there.
Many of you have likely seen the very intriguing signs suggesting future economic trends that HSBC posts where travellers walk onto their flights. One such poster always catches my eye: “There will be no new emerging markets.”
If that is so, and surely HSBC is an unimpeachable source, then the potential of the emerging markets of the Americas should be front and centre in the strategic thinking of government and business leaders. And indeed there is much evidence that such is the case. In fact, it’s forecast that over the long term, these emerging economies will outperform many if not most of today’s advanced economies.
Here are just some of the highlights:
- Brazil now has the world’s seventh-largest economy1 and may potentially become the fifth-largest.
- Chile has earned a solid reputation as a stable place to invest and do business, which explains why Canada has been the number one investor there for over 10 years.
- Peru and Colombia, too, have emerged as vibrant markets, coupling some of the highest GDP growth rates in the hemisphere with stable political institutions.
- Some of the smaller states, namely Panama, Suriname and Nicaragua, have particularly welcoming business environments. This might be a surprise to some.
- Of course, as part of NAFTA, Mexico continues to reform, diversify and grow the support structures of its economy, and that progress is a particular focus of President [Enrique] Peña Nieto’s new government.
- Although several of the Caribbean states, with which Canada enjoys long-standing friendships and cultural ties, are facing challenging financial circumstances, we are heartened by Jamaica’s new resolve and plan to put its fiscal house in order. The tremendous leadership being displayed by Prime Minister Simpson Miller, with the courageous support of the Jamaican people, could well mark the beginning of a long and difficult journey but one that will lead to a bright future for this beautiful island country.
And there’s more.
The World Bank reports that over the last decade, Latin America’s middle class has grown by 50 percent.2 This is a tangible sign of the economic progress of these emerging economies.
And of course we are all closely following, with a great deal of interest and enthusiasm, the emergence of the bold new Pacific Alliance [PA] of Chile, Colombia, Mexico and Peru, with possibly other countries to join soon. The PA’s audacious dream, toward which they are making remarkably swift progress, is of a deeply integrated free trading union that will link to the vibrant economies of the Pacific Rim.
But along with these tremendously encouraging developments, we see challenges. Some in the region view bilateral and multilateral cooperation, and the activities of international companies, with suspicion and even outright resistance.
Agreements, contracts and treaties negotiated in good faith are in some cases not being honoured on a variety of pretexts.
While the potential for economic development in the Americas is vast, providers of needed investment capital cannot ignore the perils of promise-breaking, of rules being changed in the middle of the game and even of politically motivated nationalization of projects built with hundreds of millions of outside dollars. Much of this funding comes from small savers and shareholders and the pension funds of ordinary working folks—and even the taxpayers of partner countries.
We need to continue to communicate, both in word and in policy, the need for consistent, clear and reliable rules. Only by supporting job and wealth creators through reasonable tax structures, commitment to the rule of law untainted by influence and balanced regulation will a country’s path to economic growth meet with success.
In addition, I want to highlight the growing threat of an anti-development mindset throughout the Americas, especially toward the extractive industries. This is even an issue in my own country.
Some of us have lived long enough to know through our own personal experience that the funding of public infrastructure supporting the growth of commercial enterprise, and paying for the provision of important social services such as quality education and health care, has been fuelled largely by the proceeds of resource development.
And yet some actors remain staunchly opposed to such projects.
I believe that concerted efforts by governments, business, analysts, and a resolute civil society are urgently required to provide citizens with credible and solid facts supporting environmentally sustainable and socially responsible resource development.
Absent social acceptance of development projects, the income streams needed to ensure good jobs, modern standards of education and training, technological advances, social progress and greater equality simply will not be realized.
I believe that as leaders we need to give serious and determined consideration about how to overcome this challenge.
Although there are obstacles, the opportunities remain promising. Canada fully recognizes the growing economic and geopolitical importance of the countries of our own hemisphere. In fact, Prime Minister [Stephen] Harper made our engagement in the region a foreign policy priority back in 2007.
To paraphrase a great Canadian, that would be Wayne Gretzky, you have to play where the puck is going to be.
As part of Canada’s Economic Action Plan for jobs, growth and prosperity, we have reinforced Canada’s long-term commitment to expanding our global trade network, including a robust presence in the Americas.
We have deepened our relationships and partnerships, and our economic ties, with our Americas neighbours through a wide variety of initiatives.
We know from experience that doing so will enhance prosperity and growth, both for our own country and for our partners.
Our successes through NAFTA have been a touchstone for the many new trade accords we have entered into elsewhere in the Americas.
With the benefit of that experience, Canada is today working actively to open markets and to create the conditions for a transparent and rules-based commercial and investment environment with key economic partners in the Americas.
As a result of these efforts, we now have concluded seven free trade agreements with countries of our hemisphere. In fact, just last week the Canada-Panama free trade agreement entered into force. In total, that is more agreements than we have with the rest of the world combined.
Canada’s overall trade with the Americas region has increased by more than 32 percent since 2007.
Canadian businesses are also directly engaged. Altogether, more than 2,500 Canadian companies are active throughout the Americas, supported by nine foreign investment promotion and protection agreements, as well as many other accords on trade and investment, science and technology, and air transport.
Approximately 60 percent of all international mining investment in the region is Canadian, and Canada helps to foster and promote responsible business and development practices in countries where we operate through the highest standards of Corporate Social Responsibility. In fact, Canadian companies are world leaders in responsible mining practices.
Canada has recently become an observer in the Pacific Alliance—one of the region’s most dynamic cooperation, trade liberalization and economic integration initiatives.
We are, in fact, the first non-Latin American country to be given this status.
But our engagement in the Americas is not purely economic. Creating economic opportunity and increasing mutual prosperity requires a peaceful and secure environment, supported by robust democratic institutions and a dynamic, educated and flexible workforce.
Canada is working with partners in the region toward achieving commons goals in all of those areas, supported by an investment of $2 billion over three years.
Canada has, for example, been working shoulder to shoulder with the countries of Central America to jointly address the region’s security challenges, especially in the fight against transnational organized crime and drug trafficking.
In Guatemala, our support—including state-of-the-art forensic equipment and training—has helped increase the crime resolution rate from five percent in 2009 to 30 percent in 2012.
We are also mindful that the strength and integrity of a society’s institutions—from the civil service to the judiciary to government itself—has a direct impact on a country’s business and commercial environment, and also on its prospects for long-term growth and prosperity.
That is why collaborating to strengthen democratic governance throughout our hemisphere is a key element of our economic strategy.
For example, in Peru, over 550 inspectors and 450 workers, employers and government representatives have been trained since 2009 on preventing and resolving labour conflicts.
In Colombia, we have supported families who were forcibly displaced by armed groups to return to their land and receive their legal title deeds.
As Peruvian economist Hernando de Soto Polar has argued, property rights are the key feature necessary for developing nations to succeed economically.
To ensure our efforts are coordinated, we have been cataloguing our many partnership projects in the Americas and organizing them by location on a publicly posted virtual map called Panorama-Americas. I invite you to take a look at Americas.gc.ca.
Another key example of our ongoing engagement is the education ties between Canada and the countries of the Americas.
Canada hosted over 15,000 students from the region in 2011, and more than 500 academic agreements link Canadian institutions to regional counterparts.
Also, between 2009 and 2011, Canada supported fair and transparent elections in 17 countries of the region by contributing to no fewer than 47 electoral observation missions of the Organization of American States.
And, we will be adding to that total by supporting the upcoming electoral observation mission to Paraguay later this month.
The path to economic growth in partnership with the emerging markets across the Americas, more than in any other part of the world, is based on personal ties and trusted relationships. This has proven to be the cement required to build a solid foundation of mutual understanding and cooperation in the hemisphere.
If I am to leave you with any message about how Canada engages to help ensure economic growth with and in the Americas, it is this: We attach enormous importance to people-to-people ties and trusted relationships.
Thank you again to the Forum for this opportunity to share some of our perspectives. We look forward to the next two days as together we consider how best to capitalize on the return to growth of the global economy, and thereby help ensure a stable standard of living and quality of life for all the world’s peoples.
