Canada and Turkey: Common Interests and Goals
By the Right Honourable Brian Mulroney
June 24, 2010

We stand shoulder to shoulder today as partners in NATO under a similarly daunting UN mission in Afghanistan.

The ties forged in the heat of battle are enduring, as are the principles of the alliance in which we are both active partners. Our shared democratic and alliance values give us scope for greater collaboration. Turkey currently occupies a non-permanent seat on the UN Security Council. Canada has aspirations for the same status later this year.

Turkey and Canada are both weathering the impact of the deep global recession and have fared better than most in withstanding the financial shocks. This performance validates the fundamental strengths of our respective economies which are registering robust growth this year, among the strongest of the OECD countries. Our banks were not bailed out. Our regulatory systems held fast and we are both now seeing more tangible signs of economic recovery. We, therefore, have unique credentials to bring to the G-20 Summit in Canada in the next few days and efforts to ensure a coherent and stable transition from recession to recovery.

All need to learn from what went wrong and why. Canada and Turkey should be united in ensuring that remedies are tailored precisely to redress what prompted the financial debacle. When it comes to financial reforms, we should both be wary of “one size fits all” solutions.

It is essential to note that there was no financial crisis in Canada. Throughout the recession, our banks have remained strong. Far from needing bailouts, they are making acquisitions in the US and other countries. Four Canadian banks now rank among the top ten in North America. The World Economic Forum accords first place to Canadian banks for their strength and stability. That is why we are understandably cautious about global remedies recommended by some whose systems have buckled.

Another lesson learned is that the global institutions of economic governance – the International Monetary Fund and the World Bank created 60 years ago at Bretton Woods – need a serious examination. These institutions served us well through ups and downs of the global economy in the last half of the century. They were the first ports of call in economic turbulence. But they were created when the US economy, together with the European economies at that time, dominated the global economy.

I am convinced that the structure and decision making procedures of these organizations need to match the current realities. History and sentiment are honourable traits, but not when they stand in the way of sensible reforms to recognize new realities.

The G-20 is a relatively new instrument of global governance, one that has performed remarkably well through the deep recession but, as recent events in Turkey’s immediate neighbourhood demonstrate, recovery remains fragile in many quarters. There is a genuine risk that complacency or hesitant political resolve will undermine genuine recovery. The G-20 needs to fortify public trust in international governance, especially in financial governance. The values that are central to our shared democratic, political systems and to our market economies are being tested as seldom before.

The most serious hazards to global economic stability are major current account imbalances between high surplus and deficit countries and budgetary deficits that are growing worse in too many countries. Recovery will not be sustained unless these acute imbalances are corrected and greater fiscal discipline is exercised. The measures needed will be difficult and delicate. Structural reforms are never easy, particularly for democracies.

Fundamentally, it is a matter for leadership and political will. In a brilliant address delivered some years ago in Canada, Theodore Sorenson – himself a skilled observer of powerful leaders as Special Counsel to Presidents Kennedy and Johnson – said: “Once in office those who wish to stand up and stand out and leave something enduring behind must build new institutions, not new images.” “They must look to the next generation not merely the next election. They must talk in terms of fundamental values, not merely costs. They must appeal to our hopes as well as our needs, to what we long to be and what we know is right. That’s leadership.”

Time is the ally of leaders who placed the defence of principle ahead of the pursuit of popularity. And history has little time for the marginal roles played by the carpers and complainers and less for their opinions. History tends to focus on the builders, the deciders, the leaders, because they are the men and women whose contributions have shaped the destiny of their nations. As a contemporary American observer noted some years ago: “In a nation ruled by polls and ratings, where even newspapers hire focus groups to see what kind of news readers want, we are losing sight of something we should have learned as teen-agers: Just because something is popular doesn’t mean it’s right.”

Presidents and Prime Ministers are not chosen to seek popularity. They are chosen to provide leadership. There are times when voters must be told not what they want to hear but what they have to know. And what they have to know is a quotation from the book of proverbs inscribed on the Peace Tower in Ottawa: “Where there is no vision, the people perish.” Leaders must have vision and they must find the courage to fight for the policies that will give that vision life.

Leaders must govern not for easy headlines in 10 days but for better countries in 10 years – and the must be ready to endure the attacks that often accompany profound or controversial change, while the await the distant and compelling sounds of a verdict that only history and a more reflective nation can render in the fullness of time.

The G-20 is uniquely placed to concentrate on a few critical commitments that will help rectify the serious imbalances and provide a framework for greater fiscal responsibility in the medium term. Leaders have the opportunity to commit collectively to an action program that world be much more difficult to implement individually. That is the basic objective of the Summitry and I am confident that the session in Toronto will establish a framework for coherent, effective, action leading to a balanced recovery.

Whether on financial regulatory reform or on trade policy issues, I would think that Canada and Turkey will find much common ground. We both recognize the need for a regulatory regime that will restore confidence to the international financial system we are both dependent on maintaining open markets for our goods and services. Protectionism poses a serious threat to sustainable recovery. When the going gets tough, protectionism is politically popular. When your exports are shrinking and unemployment is rising, throwing up barriers to imports can have an irresistible appeal to politicians and to the public.

We must never forget however that protectionism was tried during the Great Depression. It failed. We did not recover from its disastrous impact for generations. We do not need to learn that lesson hard way again. The issues the leaders confront are complicated and contentious. The challenges and problems are different in different countries but collective will is the essential ingredient for success in Summitry. Consensus may be hard to achieve but it is very much in the interest of all that consensus emerge and that commitments made are honoured in practice. Credibility and stability are at stake. The G-20 will be judged appropriately not by the rhetoric and communiqués that emerge from its deliberations but by the progress it delivers.

In visiting Istanbul, I am mindful of Turkey’s impressive history of constructive foreign policy activism which gave particular emphasis to greater stability to your immediate neighbourhood and enhanced Turkey’s role as a responsible stakeholder in global affairs. Under the slogan of “zero problems with neighbours”, Turkey exercised useful new impetus for stability in Iraq, to the perennial challenge of peace in the Middle East, to longstanding tensions with Armenia and in helping the Cypriot parties move toward a lasting solution to their differences.

Your staunch commitment to NATO and the UN’s role in Afghanistan is among the very best.

I commend, too, Turkey’s new interest in Africa – a continent whose challenges have been ignored or side-stepped for too long.

As your Foreign Minister has observed, “Turkey’s diverse regional composition lends it the capability of manoeuvring in several regions simultaneously.”

I personally and strongly endorse your persistent efforts to gain full membership in the EU. While recognizing this is truly a work in progress and that there may be reasons for caution given recent events, I am convinced that this will serve in the long term to enhance Turkey’s active bridging role straddling Europe and Central Asia.

I believe as well that a modern, dynamic Turkey has much to contribute to the EU including the powerful demonstration that Christian and Muslim nations can work together to build a more durable peace and deeper prosperity. I believe it would be an error of historic dimensions for the EU to reject Turkey’s application for membership.

Turkey is uniquely placed and uniquely qualified to play a more dynamic diplomatic role. As Prime Minister Erdogan has stated, “Istanbul is not only a cente combining the continents but also a central symbol combining and synthesizing civilizations.”

Turkey’s secular democratic tradition is a major source of your new found diplomatic influence – not hegemonic but inclusive and intent on building peace and security. You are striving to overcome age-old differences between countries with confidence building measures and by acting as a mediator and facilitator to find solutions to chronic problems. That has been the essence of diplomacy and I salute you for it. But I must tell you candidly that some recent events are very troubling. Thomas L. Friedman, a knowledgeable foreign policy columnist for the New York Times, recently wrote: “Turkey’s balancing role has been one of the most important, quiet, stabilizers in world politics. You only notice it when it is gone.”

Indeed, while not gone entirely, in the eyes of many that role has been diminished recently because Turkey has surrendered some of its admirable moral leadership with its new policy of attacking Israel and lauding Hamas. Turkey can continue to promote its valued tradition of democracy without abandoning its friendship with and sense of fairness for both Israel and the Palestinian Authority in the West Bank, both of which are committed actually building a viable Palestinian state and an unprecedented degree of opportunity and prosperity for the entire region.

I encourage you to look closely at Canada in terms of economic partnership.

We are natural resource rich in agriculture, energy and minerals.

We have impressive technologies in aerospace, health, environmental science and education.

We are human resource rich with a talented, well-educated and motivated work force.

Our government is committed to an open climate for investment. Last year, there was a significant liberalization of Canadian investment rules.

Corporate taxes are on track to be the lowest among the G-7 countries. On new business investments the tax advantage for Canada over the US will be 10 percent by 2012.

The general federal corporate income tax rate has declined to 19 percent in 2009 and is scheduled to be 15 percent by 2012. Provincial tax rates for the most part are following this trend.

Canada is the easiest country in the world to start a new business placing first among the G-7 by the World Economic Forum for ease of market access, low non-tariff barriers and the volume of duty free imports. Overall, the Canadian business climate is positive, anchored by a stable financial sector, respect for the rule of law and a solid judicial infrastructure.

Canadian firms are following the path of firms in mature industrial economies in seeking out profitable investments around the world. As their global investments show, Canadian firms have much to offer in manufacturing, technology, financial services and natural resource development. And they are fully supported by the Canadian government.

Economic growth is vital to progress in both of our countries. The key to growth and employment is productivity and both rely heavily on innovation and international engagement. It is an undeniable fact that internationally active business firms – using open avenues for trade and investment – are more productive and more innovative, pay higher wages and are more profitable than those who rely exclusively on domestic markets.

Canada – Turkey bilateral merchandise trade reached $1.5B in 2009, reflecting to some extent the general decline in global markets last year. Our exports were primarily minerals, oil, communications equipment, vegetables, and iron and steel products. Several Canadian companies are well-established in Turkey – RIM, SNC Lavalin, Bombardier, and Inmet Mining among others – anchoring more than $1B of Canadian investment in Turkey. Moreover, Ontario Teachers Private Capital Fund and the Canadian Pension Plan have jointly established a large private equity fund focused exclusively on investment opportunities in Turkey.

I believe that there is tremendous potential in Turkey for Canadian traders and investors to expand and grow. A trade mission on Renewable Energy and the Environment was in Istanbul last month. We concluded a double taxation agreement last year and signed a bilateral air agreement leading to direct non-stop Toronto-Istanbul flights by Turkish Airlines. Both will inspire broader partnership and mutual advantage.

I am happy to confirm as well that Canada will open a Consulate in Istanbul, together with Export Development Canada, to solidify further our commercial ties.

Democratic governments can be rambunctious at times. Believe me, I have the scars to prove it from my days in government. But the principle of freedom is the bedrock of democracy. It may generate fractious debate, even political turmoil at times but is also the ultimate guarantor of progress. Turkey has worked hard to build a secular state and a strong democratic system of government. It is, in fact, one of your greatest achievements.

In the words of the father of modern Turkey, Kemal Atatürk: “This nation has never lived without freedom and independence.” Countries like Canada and Turkey which enjoy the benefits of freedom should never underestimate its intrinsic advantage. Freedom, after all, is the inspiration for the innovation and innovation is the key to progress.

The value of a truly independent media is essential to our commitment to political freedom. I say this, again, from the benefit of experience having led a democratic government for almost 9 years in Canada. During my time in office, there were days when I regarded freedom of the press as less than an unalloyed blessing! But it is vital to policy debate and is what distinguishes most from authoritarian regimes. Education, based on the principle of merit, is also a pillar for progress and for a free society. I am proud to deliver tomorrow the Commencement Address and accept an Honorary doctorate from KOÇ University during my visit and wish to congratulate Rahmi Koç once again for his family’s magnificent contribution in establishing this institution. The University’s motto is “to serve humanity by increasing the number of people who can be of service to the Turkish nation.” There can be no better goal than that, especially in a country where almost half of the population is under 25 years of age.

We are living in extraordinary times when our most pressing need for bold leadership to chart a new way forward.

I recognize that there are challenges these days – domestic and global – that test the resolve of democratic leaders and the fabric that holds our societies together. But I genuinely believe that, despite differences in culture and history, Canada and Turkey bring much in common to global challenges of peace and prosperity. We each have experience and capacity to provide sensible stewardship and to establish more coherent global governance. It is in that spirit that I am privileged to speak to you today.

History will judge us not by today’s successes but on the future examples of high achievement we hopefully leave for generations to follow.