would need to be carefully considered. with monetary policy continuing to be set to achieve the inflation target, our institutions should not be lulled into a false sense of security by current low rates. similarly, households will need to be prudent in their borrowing, recognising that over the life of a mortgage, interest rates will often be much higher. thank you. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

about each one in a bit more detail. trade liberalization the first principle is trade liberalization, and our economic relationship with the united states has reflected that goal. as you and i discussed last year, the canadian and u. s. economies made difficult adjustments to freer trade in the early 1990s. the canada - u. s. free trade agreement and the north american free trade agreement exposed many canadian companies to stiffer competition. but freer trade also opened up new markets. and canadian companies have risen to the challenge. some of the sectors that we used to protect the most — such as furniture, clothing, and wine — have established a strong presence in international markets. on the whole, canadian industry has flourished with the competitive pressures generated by these agreements. and so has the trading relationship between canada and the united states. as you can see from chart 1, freer trade has clearly meant increased volumes of exports and imports. and now that we have made the adjustment, the more open trading environment is clearly helping to raise living standards for canadians. that should strengthen our resolve to see freer trade extended both within and beyond north america. we need to continue to work towards reduced trade barriers, both within nafta and at the doha round of multilateral talks. it won't be easy, but the long - term economic benefits will make our efforts worthwhile. structural reform the second principle focuses on improving the structure of national economies, to facilitate adjustment to changing economic conditions and to ensure the longer - term viability of social - and income - security arrangements. a number of initiatives have been undertaken in canada, but i'm going to focus on only three. i am sure that you're familiar with them, and many of you have participated in the debate surrounding these reforms. first, employment insurance ( ei ) benefits were restructured to strengthen the incentive to work. with these changes, and with improved economic performance, ei payments as a share of gdp have declined significantly over the past decade, from more than 2 1 / 2 per cent to just over 1 per cent, as shown in chart 2. second, the canada and quebec pension plans were revamped, to put them on a sustainable footing. the reforms meant some restructuring of benefits and a sharp increase in contributions — moves that were necessary, if unpopular. the results are shown in chart 3. the assets of the cpp are now managed by the independent canada pension plan investment board, the mandate of which