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Promoting the prosperity of Canadians and of the global community is an integral part of Canada's foreign policy. Our country's economic prosperity is tied to a world economy undergoing unprecedented growth and market integration. Developing within the framework of international trade bodies such as the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), our economy today is among the world's richest and most open, with a high proportion of our prosperity dependent on international trade and foreign investment. Canada has derived broad advantages from the NAFTA and other free trade agreements. In April 2001, the Quebec City Summit of the Americas supported growing economic linkages across the Americas, while recognizing democratic freedoms, human rights, and environmental and labour standards as integral to the hemisphere's development.
Canada's economic relationship with the United States demonstrates the benefits of a rules-based international trading system. Within this relationship, however, our vulnerability to unwarranted protectionism and trade actions requires us to adopt new approaches to advocacy and representation. The softwood lumber dispute shows that challenges to Canadian exporters posed by special-interest lobbies may be countered by targeted communications and sustained cross-border alliances.
Canada's need to maintain growing trade and investment flows may require new measures in border management, infrastructure improvement and regulatory cooperation in order to boost confidence among investors and travellers, and to reduce transaction costs for traders and shippers. Canada needs to assess how best to achieve these changes that will enhance our prosperity, including whether to consider adjustments to existing institutions and arrangements or new measures to advance our interests. In considering such measures, of course, it will be crucial to protect the integrity of Canadian social policies and quality of life.
Although increased economic integration has opened remarkable new opportunities for trade and commerce, it also presents new challenges. The past decade's financial crises in emerging markets have highlighted vulnerabilities resulting from the faster flow of information and capital. International efforts have helped to contain economic crises, and there must be further efforts at improving early warning systems and ensuring timely collective action.
Globalization has brought great prosperity, but it is not without its problems. It has benefited many developing countries, including some of the least developed ones; yet those benefits are not being shared equally among and within countries. Over the past decade, financial crises in Mexico, Asia, Russia and South America have raised concerns about the effects of fiscal austerity, privatization and market liberalization. Addressing the needs of the most disadvantaged groups will require continued efforts by international financial institutions - including the International Monetary Fund in designing assistance programs for crisis-afflicted countries, and the World Bank in designing programs to promote development and poverty reduction in emerging markets. A critical challenge for the years ahead is managing globalization to provide for social progress and environmental sustainability.
The Government of Canada is committed to the continued expansion of a stable, rules-based global trading system. As a member of the WTO, we are participating in a new round of global trade talks. We support the legitimate demands of developing countries for better access to developed markets for their goods, including agricultural products. To this end, as of January 2003, the Government of Canada is eliminating tariffs and quotas on almost all imports from 48 least-developed countries, of which 34 are in Africa.
Both economic interests and humanitarian concerns are served when Canada contributes to meeting international development and poverty eradication goals. For this reason, the Prime Minister has announced that Canada's development assistance will double by 2010. As this assistance is delivered in the coming years, it must be effective, flexible, timely and focused on areas of greatest need; and it must be consistent with foreign policy priorities, and with long-term Canadian interests and values. The challenge is to find the best ways of combining these aims.
While challenges of development remain acute, many developing countries are rapidly changing from within - pressing ahead with political and economic reforms, dealing with newly affluent and well-educated middle classes, and emerging as important global forces. China, India, Mexico and Brazil present Canadians with new opportunities for productive partnerships; seizing these opportunities will demand effective strategies and sustained attention.
At home, Canada's economic growth and job creation will depend on being competitive in world markets and attractive to investors. This requires an innovative society with a high level of skills, cutting-edge scientific expertise and extensive opportunities for learning. To succeed, Canada must find suitable foreign partners in investment, education and research, and we must be able to attract workers with advanced knowledge and skills.
Looking abroad, the Government recognizes that foreign investment by Canadian firms should be both competitive and responsible in its social and environmental impact. Some companies have had exemplary success in embodying Canadian values in their foreign business operations. Foreign investment is bringing substantial benefits to developing countries, and will be vital in helping to realize international development goals. In certain cases, however, it can fuel violence and unrest in conflict-ridden areas or poorly governed states. A challenge in the coming years is to help Canadian companies invest profitably in ways that also benefit the communities in which they operate.
The preservation of Canada's natural environment requires economic cooperation with the United States and countries around the world. Better ways are needed to promote environmentally sustainable growth in developing countries while minimizing and fairly distributing the costs of complying with environmental standards.
