Canadian, U.S. mining share goal

From a speech by federal mines minister Gerald Merrithew at the 1988 Minerals Policy Outlook Conference.

The mining industries in Canada and the United States have many similarities. Both industries play an essential role in our two countries’ advanced market economies. Both offer high wages in comparison with many of our competitors, which means that worker productivity is a key factor impacting on industry profits. And both industries have been through a difficult period of restructuring, rationalization and adjustment during the past five years. Employment plummeted, cash flows dropped, profitability was almost non- existent and there were many mine closures. Another similarity between our industries is the concern in Canada and the United States for workplace health and safety and for environmentally acceptable industrial development.

Finally, mineral development has served as a tool for regional economic development in many parts of both countries, especially in remote areas.

Mining has helped open up the frontier areas of Canada and the U.S. Many towns and cities in existence today have their roots in mining.

In addition to their similarities, the Canadian and U.S. mining industries also complement each other in several important ways.

For example, the United States is Canada’s largest market for minerals and metals — and vice versa. Canada is a close, friendly and secure source of supply for the United States. Much of our 2-way trade is tariff free — and remaining tariffs will be removed over the next decade as the new Canada-U.S. Free Trade Agreement is implemented.

There are also close links between Canadian and American mining companies and research organizations.

Cross-border investment is a third way in which our industries complement each other. For example, American Barrick Resources, Echo Bay Mines, Cominco and Placer Dome have all made substantial investments in the United States. Likewise Amax, Newmont Mining and Inspiration Resources are significant players on the Canadian mining scene.

In many ways, the similar and complementary features of the Canadian and U.S. mining industries make them a “North American industry.”

That is not to say there are not several issues of debate between us. Indeed, it is because we are so close that differences are apt to arise more frequently than in a more distant trading relationship.

We have many reasons to work together to achieve common goals, but we also have different opinions on several important issues.

For example, in both countries, there are significant efforts under way to clean up the environment and to reduce sulphur dioxide emissions from nonferrous smelters. In Canada, we have put legislation into place to greatly reduce the output of sulphur dioxide by 1994. The United States has passed the Clean Air Act. But these policies do impose costs for the smelting industry and they are significant.

Both countries have recognized a legitimate public policy role in assisting the industry to adjust. Funding for many of the expenditures in the United States for sulphur dioxide recovery systems and sulphuric acid plants has been done through the issuance of tax-free, low-interest-bearing pollution control revenue bonds.

Canada does not have this type of instrument but we have established an Acid Rain Abatement Program that makes financial asistance available to any company operating in Canada for the purpose of decreasing sulphur dioxide emissions.

In other words, the Canadian and U.S. governments differ in their approaches to the problem. This sometimes leads to misunderstandings; what is viewed as an acceptable policy in one country might appear to be a subsidy elsewhere. Free Trade Agreement

That is one reason the Canada- U.S. Free Trade Agreement is so important.

This historic agreement has many features that will strengthen trade between our countries. Several have special importance for the mining industry.

Perhaps the most significant clause of the agreement is the creation of a unique dispute settlement mechanism. This will help both American and Canadian producers: it is a win-win proposition.

A major problem for Canada’s mining industry has been the unpredictable and sometimes unfair application of U.S. antidumping and countervail law. The agreement will remove this uncertainty by creating an impartial, bilateral panel with binding powers to rule on the fairness of these trade remedies.

Over the long term, both countries will work towards establishing a new regime to address problems of subsidization and dumping. The goal is to develop new rules that will eliminate the need for trade remedies and create a more predictable and secure environment for exporters on both sides of the border.

For the mining industry, the Canada-U.S. Free Trade Agreement will do much more than reduce barriers to trade. It will enhance competition, create better conditions for investment, establish better procedures for resolving disputes and generally improve Canada’s bilateral and multilateral trade opportunities.

The Canadian mining industry — through the Mining Association of Canada — strongly supports the agreement. Support from the U.S. industry is also solid. We are all looking forward to the benefits of this historic pact.

Clearly, there are many areas in which the Canadian and U.S. mining industries can work together to resolve common problems. Our similarities and the ways in which we complement and co-operate with each other are far more significant than the issues on which we differ.

We have a shared history of development on this continent, and the mining industries in both countries have overcome the same problems and taken advantage of the same opportunities.

The Free Trade Agreement will not only open the door to our respective domestic markets, but will act as the major stimulus for our industries to enhance productivity and product specialization, create new market opportunities for its many products and stay at the forefront of technological advances.

The result will be a stronger, healthier North American industry, more able to compete internationally than ever before. This type of co-operation is not only mutually beneficial but also very necessary to ensure future prosperity.