Thank you, Mr. Chairman. I would like to commend the Canadian representative for his opening statement, and the materials provided for this review. I also want to thank the discussant, Ambassador Major for his efforts, and as always our thanks to the Secretariat for its report.

U.S. Canada Trade Relations

The United States and Canada have very close and strong ties. Three decades ago President Kennedy perhaps gave one of the best descriptions of U.S. - Canadian relations when he said "geography has made us neighbors, history has made us friends, economics has made us partners. And necessity has made us allies."

We value our strong ties with our northern neighbor. We have our share of disagreements, but together we have worked hard to ensure that North America continues to be a major catalyst for economic growth. This is particularly important as we work to set a new vision for the WTO, the built in agenda negotiations and our work at launching new negotiations.

Our single largest trading relationship is with Canada. It is a vibrant and dynamic relationship. In 1999, 86 percent of Canada's total exports went to the United States, compared with 82 percent in 1997. Similarly, 21 % of U.S. total exports of goods are sent to Canada. Given the important changes in our trading relationship, our exports have increased more than 80% since 1992. This is particularly impressive given the very large base from which this growth has occurred. And, significantly, our two-way trade in goods with Canada exceeds that with the EU-15.

Most often you hear our trading relationship quantified as $1 billion per day (in 1999). We have a very busy border with our good neighbor.

Not surprisingly, the United States and Canada also share one of the world's largest bilateral direct investment relationships. U.S. investment in Canada for 1999 (latest data available) was $111.7 billion, up 9.7 percent from 1998 and Canadian FDI in the United States for the same period was $79.7 billion, up 7.5 percent from 1998. Again, these impressive figures reflect the efforts of our companies and businesses to compete in world markets, from manufacturing and natural resources to financial and telecommunications services.

The United States and Canada have ensured that the multilateral rules of the GATT and now WTO provided the foundation for an extensive system of additional commitments. First there was the U.S. - Canada Free Trade Agreement, which was then superseded on January 1, 1994 by the North American Free Trade Agreement (NAFTA). In addition to expanding the free trade area to Mexico, NAFTA extended commitments to such areas as services, investment, and government procurement. Our efforts together set a standard of open trade for the hemisphere and others to follow, building a web of agreements which complement the WTO and make the trading system stronger. Many may recall that the negotiations on the NAFTA actually provided an important impetus to completing the Uruguay Round.

Canada has made clear that trade has played an important role in fostering and sustaining its economic growth. Canada's export's of goods and services now represents about 45 percent of GDP.

Canada and the WTO

Mr. Chairman, the effective Canadian delegation in Geneva benefits from the strong leadership of Ambassador Marchi. We share the common objective of strengthening the WTO through the on-going work program, including the built-in agenda, pursuing broader negotiations and addressing the institutional concerns raised by Members and the public about the WTO and its operations.

I hope that Ambassador Marchi and his delegation will touch upon the outreach efforts that they have undertaken in Canada to build support for further trade liberalization through the WTO. This experience, we know, has shaped Canada's views in any number of areas B from market access to the institutional questions that the WTO must now face.

Canada and the United States have worked on outreach and transparency B reflecting the importance we attach to this area. While the WTO has made strides in this area, we note that Members remain reluctant to make changes so needed to improve the WTO's operation. Canada has argued to increase transparency in WTO Councils and Committees, so as to improve public and private sector understanding of the WTO. We agree that this will help build public support for trade and investment liberalization.

Canada and the United States proposed that the WTO further improve its policies on the "de-restriction" of documents including more timely release of dispute panel report findings and conclusions. We agree with Canada that action in this area B as soon as possible B will be beneficial for the trading system.

Canada is to be commended for its innovative approaches to transparency, including its proposal to have this Review meeting Web Cast on the Internet. We wish that this proposal had been met with the full support of Members. We are disappointed that this opportunity was missed and hope that we can find an another opportunity to follow up on this proposal.

Finally, we understand that part of Canada's outreach efforts have been aimed at increasing the appreciation of the benefits and impact of liberalization and globalization. Canada has made strides in the area of trade and labor, for example. We note, in particular that the Canada-Chile FTA has a parallel agreement on labor cooperation. We would be interested in learning about your experience with this agreement and how you intend to proceed to address the labor issue in your broader trade policy deliberations, including at the WTO.

Built-In Agenda Negotiations

Turning to the built-in agenda negotiations, on agriculture, we welcome Canada's commitment to make progress in the negotiations, in particular with respect to our shared objective that these negotiations should lead to the elimination of export subsidies. However, while substantial improvements in market access are also identified as one of Canada's key objective for these negotiations, we are disappointed by the virtual exclusion of Canada's supply-managed sectors from real liberalization under Canada's market access proposal. The United States and other WTO members have proposed that there should be no exceptions to tariff reductions and the expansion of tariff-rate quotas (TRQs). Similarly, we ask Canada to reconsider its position on improving market access opportunities.

On services, the negotiations, we have appreciated Ambassador Marchi's leadership. We know that Canadian authorities have been consulting widely throughout Canada on approaches to the new negotiations. We look forward to hearing this week about Canada's intentions in these important negotiations. We have a number of questions to raise with respect to financial services and other sectors.

On-Going Matters of Concern

While we are cooperating closely with Canada in the WTO, I would be remiss if I didn't raise some matters of concern in our bilateral relations, that in turn raise issues in the WTO. On agriculture, under the NAFTA, agricultural export subsidies are prohibited between Canada and the United States. Nevertheless, the Canadian Wheat Board (CWB), a state trading enterprise, maintains unfair trading practices. Its monopoly status, lack of transparency in operations and government backing gives it an unfair competitive advantage in wheat markets around the globe.

In a second area, we have remaining concerns about Canada's recent modifications to its dairy supply management program. Over one year ago, a WTO Appellate Body found that Canada's special class milk regime, which provides reduced priced milk for export, is an export subsidy, and that Canada was shipping subsidized dairy exports in excess of its export subsidy commitment levels, inconsistent with Canada's obligation under the Agreement on Agriculture. Canada's implementation period ends on December 31, 2000. Nonetheless, we remain concerned that the changes made by Canada insufficient to comply with the Appellate decision.

Unfortunately, we continue to face technical and sanitary and phytosanitary barriers to potatoes, wheat and other commodities affecting trade from the United States. We hope that the Canadian authorities will be able to reassure us that problems in these matters are past history.

WTO Rules Issues

We have expressed some concern in the area of subsidies, as well as in intellectual property rights protection and government procurement and we look forward to hearing your response.

With respect to subsidies, we are specifically concerned about a proposed U.S.$ 1.5 billion subsidy package for a DRAM manufacturer, Mosel Vitelic, which we understand is being reviewed by Canadian federal authorities. We would like to know the status of the government's consideration of this assistance package and an explanation of what reasonable grounds Canada believes there are for finding this to be a viable investment in view of the state of the market and the apparent fact that the project is unable to fund itself from normal commercial sources?

In the countervailing duty investigation of corn from the United States, a number of questions have arisen as to the procedures followed by Canadian investigators and we look forward to Canada's response.

On intellectual property rights protection, with respect to the U.S. case on patents: we applaud the adoption of both the reports of the Panel and of the Appellate Body in this dispute which upheld the finding of the panel that a 20 year patent term, as required by the TRIPS Agreement, is not available under section 45 of Canada's patent act. As such, the Appellate Body specifically recommended that Canada bring section 45 of its patent act into conformity with TRIPS. After almost three years of dispute, we look to Canada to promptly implement the DSB's rulings and recommendations.

Finally, in the area of government procurement, we would note that Canada has not yet covered any portion of its provincial procurement market under the GPA. Canada is the only party that has not done so. We hope to hear from the Canadian delegation this week on how it will tackle the continued restrictive procurement practices and policies of the provinces.

Conclusion

Mr. Chairman, the comments I have made have only scratched the surface in terms of flagging issues of concern in what is the most significant bilateral trading relationship we enjoy. Canada is uniquely placed in the world to participate in a number of fora B for example APEC and FTAA. In addition, Canada is active in pursuit of bilateral negotiation of FTA's, building upon its agreements with the United States, Israel and Chile. Thank you.