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NLIS 2
April 19, 2000
(Industry, Trade and Technology)


Government comments on European Free Trade Area negotiations

Industry, Trade and Technology Minister Sandra Kelly said today that the federal negotiations on a free trade agreement with countries of the European Free Trade Area (EFTA) have broken off, due to an inability to agree on shipbuilding provisions.

The discussions had been ongoing and were close to being concluded. Norway proposed dropping its subsidy on shipbuilding if Canada reduced its 25 per cent tariff on new ships. The Canadian negotiators refused this offer, and as a result, talks have ceased.

"I am pleased to see that the federal government has taken a solid stand on this issue. I firmly believe that Canada needs to hold firm on the 25 per cent import duty for new ships," said Sandra Kelly, Minister of Industry, Trade and Technology. "We have strongly presented our case to the federal government and they have moved forward on that basis. Removing this tariff would have a detrimental effect on our shipbuilding industry in Canada, and in particular on facilities such as Friede Goldman Newfoundland in our province."

Countries involved in the European Free Trade Area include Switzerland, Norway, Iceland and Liechtenstein. Norway, which is a major producer of supply vessels used in the offshore petroleum industry, had been advocating the need for Canada to reduce its import duty on new ships.

Prior to and during the negotiations, the provincial government had been asked by the federal government for its input and position on the shipbuilding issue, along with Quebec, British Columbia, Nova Scotia, and New Brunswick, each of which has a stake in the industry. The federal government has also consulted extensively with the shipbuilding industry in Canada.

The federal government has indicated that there are no plans to re-start the discussions with the EFTA, and that further consultations would take place with industry and the provinces when and if discussions continue.

"I share the concerns of the shipbuilders in Newfoundland and Labrador that lifting the import duty would have a negative effect on this industry in our province. I will continue to work very closely with my federal counterparts to impress upon them the importance of maintaining the current policy in future negotiations," added Minister Kelly.

Media contact: Jacqueline Simon, Communications, (709) 729-0050.

2000 04 19                                                         3:15 p.m.


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