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To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®. September 21, 2007 Paulson Remarks on Signing of Update to U.S.-Canada Income Tax Treaty Chelsea, Today, we are signing a protocol that is the fifth update to the tax treaty originally signed in 1980. Mutually beneficial tax agreements between the United States and Canada have a long tradition, dating back at least to 1928 when our countries signed an agreement on the taxation of income from shipping. Our existing tax treaty is a significant part of the We share not only a 5,500 mile border, we share a commitment to trade and open investment. By further reducing barriers to cross-border activities for U.S. and Canadian taxpayers, this updating of our treaty enables us to move even more swiftly in the dynamic global economy. Our countries have the largest bilateral trade relationship in the world, with total exports and imports exceeding $530 billion in 2006. Canada is the United States' largest single-country trading partner. The Ambassador Bridge that links Detroit and Windsor is the largest trade link in the world --- 7,000 trucks cross daily, carrying goods worth more than $120 billion per year. The vast majority of our cross-border trade flows without difficulty. We share Canada's commitment to a "safe, secure and efficient" border, and we have learned that security and efficient flow of legitimate trade and travelers are not mutually exclusive. This robust economic relationship with This updating of our treaty represents the welcome culmination of many years of dedicated work by officials in both I want to express my appreciation for Minister Flaherty's advancement of a mutually respectful and productive collaboration between our countries. He was instrumental in our ability to reach agreement on this treaty and, during the recent turbulence in financial markets has proven to be a sure and steady hand on Canada's economic keel. As Minister Flaherty mentioned, this protocol includes several important provisions. It eliminates the withholding tax on cross-border interest payments and updates tax rules on pensions for workers who cross the U.S. - Canada border. It also updates and clarifies the existing treaty in areas such as the treatment of partnerships. There is also a provision for arbitration of unresolved double-taxation cases; this will lead to more expedient and efficient resolutions of these cases. The inclusion of an arbitration provision is a new development for the United States. I look forward to working with the Senate Foreign Relations Committee to have this protocol ratified by the full Senate as soon as possible. I also appreciate the work the Foreign Relations Committee has done in reviewing the other four tax agreements that President Bush has sent to the Senate, and I am hopeful that they will be ratified very soon. The We reciprocate that confidence --- the natural result when we are committed to economic cooperation. Minster Flaherty and I also share a commitment to environmentally sound business practices, and to preserving our abundant natural heritage for generations to come. So it is particularly appropriate that we are here in beautiful Thank you for your hospitality today. I look forward to working in partnership with you to bring this agreement into force, and on economic issues that will surely arise in the future.
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