Canada and Thailand: A Look Forward at the Economic Opportunity

//Canada and Thailand: A Look Forward at the Economic Opportunity

Canada and Thailand: A Look Forward at the Economic Opportunity

As Thailand prepares for the ASEAN chairmanship in 2019, Canada-ASEAN relations are taking center stage in corporate, academic and political circles on both sides of the Pacific. I recently had the distinct pleasure of speaking on a panel at just such an event: the “Canada and Thailand: Lessons from the Past and Future Agenda” Seminar, held October 12th, 2018 in Vancouver, British Columbia Canada. Organized by co-hosts, Victor V. Ramraj, Director, Centre for Asia Pacific Initiatives, University of Victoria, and Paul Evans, School of Public Policy and Global Affairs, University of British Columbia, the seminar brought together leaders in Canada-Thailand relations to identify opportunities and constraints in strengthening relations between the two nations.

I spoke on the “Strengthening Economic and Commercial Ties” panel, alongside Mr. Ian Burchett, Director General for Southeast Asia, ASEAN and APEC, Global Affairs Canada, and Dr. Jingjai Hanchanlash, President, Thai-Canada Economic Cooperation Foundation. It was evident in our discussion that current economic relations suggest a strong baseline for growth and expansion; bilateral merchandise trade in 2017 totaled $4 billion, Thailand is Canada’s second largest trading partner in ASEAN, and the two nations share a rich history dating back nearly 60 years, rooted in a soft infrastructure development partnership.

Further, the Canadian and Thai economies offer complimentary and equally strong sectors for collaboration that can be pursued in the immediate term. Agriculture and Agri-food, and the Petrochemical manufacturing sectors are one such starting point.

Agricultural and Agri-food products represent Canada’s top export category to Asia since 2008, and continued to represent the largest percentage of exports from Canada to Asia in 2017 at $18.6 billion (theasiafactor.ca). As published in The Canada Advantage report, authored by the CABC in partnership with the University of British Columbia, the Agri-food sector alone contributes more than $111 billion to Canada’s gross domestic product, and sales to Asia-Pacific and Southeast Asia totaled $16.9 billion to 24 markets in 2015. For Canada, Thailand represents a market of nearly 70 million people with a growing middle class and thus meaningful target market for Canadian exports. From Thailand’s perspective as one of the few net exporters in the Agri-food sector, Canada represents a trading partner that can share expertise in technological advancements and processes in the agriculture sector while simultaneously exporting high demand product.

Vancouver city skyline

Secondly, the petrochemical industry presents a unique opportunity for trade between Canada and Thailand. The Canadian gas industry recently received uplifting news by way of the LNG Canada FID announcement. LNG Canada is light at the end of the tunnel for the desperately landlocked Canadian oil and gas market, offering relief in the form of tidewater access to international markets. LNG Canada will soon service a max production capacity of 26 MTPA to the resource-hungry Asia markets.

Of further benefit, Canadian gas is “rich” in nature (C2 and greater molecules). Specific to Thailand, Canada’s rich gas offers valuable input into the energy value chain for petrochemical manufacturing. As construction and further development of Canada’s natural gas exports progress, the beginnings of a new trade relationship for Canada and Thailand may follow suit.

New market development is also a seed worth cultivating in growing Canada-Thailand economic relations. Technology, specifically Artificial Intelligence (AI), is a natural fit for further growth and collaboration between the two nations.

Canada is positioned as a global leader in the research and development of AI. Montreal and Toronto are world-leading incubators of AI research and the development of commercial applications. Montreal based Element AI, is one of the first Canadian AI firms to expand into ASEAN, having recently opened their Singapore office on November 13th, an event attended by Canada’s Prime Minister Justin Trudeau during his visit to Singapore.

In turn, Thailand is clear in its position to digitize and transform its economy through its public commitments to Thailand 4.0 and the Eastern Economic Corridor (EEC). The numbers tied to EEC alone are impressive. According to Thailand’s Board of Investment, the EEC has already attracted US$9.3 billion in promised FDI as of January 1, 2018. The Thai government expects US$43 billion in investment for the EEC over the next five years. Linking Thailand’s growing demand for AI commercial applications with Canada’s leading-edge technologies is a gateway to developing a new pillar in economic relations.

Bangkok city skyline

Our discussion on October 12th proved that a strong case exists for economic collaboration, but how do we foster these relationships?

2019 is a promising and important year to advance these ties. As noted to above, Thailand assumes the chairmanship of ASEAN. Further, as demonstrated by HE Mr. Maris Sangiampngsa, Ambassador of the United Kingdom of Thailand to Canada, at the October seminar in Vancouver, Thailand is educated and proactive in developing close commercial ties in the Canadian market. Ambassador Maris led his opening remarks by stating, and I paraphrase, it is now his government’s job to facilitate the development of the private sector and people-to-people ties. An inspiring and fundamental narrative that carried through the day’s discussions.

The CABC as an organization is working to facilitate private sector partnerships between Canada and ASEAN. On December 17th, 2018, in partnership with CABC Member Fasken, the CABC is hosting a Canada AI and ASEAN Market Opportunity event. This event will explore the ASEAN market, identify market opportunities for Canadian AI in ASEAN, and outline a roadmap for Canadian firms to become export ready. Further, the December seminar will lay the framework for an AI mission to ASEAN in 2019 to connect leading-edge Canadian AI technology with innovative markets like Thailand.

From a broader trade perspective, the recent ratification of the Comprehensive and Progressive Trans Pacific Partnership is a meaningful first step in more fundamental economic ties between Canada and Southeast Asia. While Thailand is not a signatory to the agreement, it has expressed interest in exploring eventual participation. Next on the horizon is continued work towards a Canada-ASEAN Free Trade Agreement (CAFTA), which would naturally include Thailand. Advancing a CAFTA is of high priority on the CABC’s advocacy agenda, as demonstrated by our recent reports: The ASEAN Advantage and The Canada Advantage.

With stronger people-to-people ties, continued government support, complimentary goods and services, and advancements in trade agreements, the economic opportunity for Thailand and Canada relations is one of growth and technological advancement.

By Andrew Doherty, Executive Director, Canada-ASEAN Business Council

The article is also published on CanCham Thailand’s website. 
Click here to read the full publication of Voyageur (Jan – March 2019).

2019-03-15T11:54:03+08:00