Since 2012, the CABC has been working to grow commercial opportunities and facilitate the creation of a sustainable and prosperous Canada-ASEAN economic relationship. Despite the current global trading environment of growing protectionism, Canada and ASEAN are well-positioned to stand together as champions of open trade.
Allow me to share some of our observations over the past few years:
Increasing trade between Canada and ASEAN
Trade between Canada and ASEAN is substantial and growing – ASEAN is Canada’s sixth-largest trading partner while Canada is the ninth largest merchandise-trading partner of ASEAN.
In 2017, total merchandise trade between Canada and ASEAN was at nearly USD 18 billion, an increase of 10% from the previous year. Meanwhile, Canadian FDI in ASEAN amounted to USD 9.4 billion in 2017.
As Minister of International Trade Diversification, the Hon. Jim Carr, pointed out, “expanding into the Southeast Asia region will help Canadian-owned businesses access one of the world’s fastest-growing markets”.
Growing appetite for deeper ASEAN-Canada trade
The governments of ASEAN and Canada have repeatedly reaffirmed their commitment for closer economic cooperation. Areas for cooperation include trade diversification, encouraging innovation, promoting small businesses, improving connectivity and strengthening people-to-people exchanges.
In 2016, at the 5th ASEAN Economic Ministers (AEM)-Canada Consultations in Laos, senior officials were tasked to prepare draft terms of reference of a feasibility study on a potential ASEAN-Canada Free Trade Agreement (FTA).
In 2017, officials worked on the Joint FTA Feasibility Study, launched exploratory discussions on a potential FTA, and held the 2nd Annual ASEAN-Canada Trade Policy Dialogue.
In March 2018, at the 4th CABC Business Forum in Singapore, then-Canadian Minister for International Trade, the Hon. Francois-Philippe Champagne met with ASEAN Secretary-General, H.E. Dato Lim Jock Hoi, to further discuss the potential for an ASEAN-Canada FTA.
This year also marked the first set of face-to-face exploratory discussions between Canada and ASEAN. In September, the Ministers came together again in Singapore and continued to demonstrate commitment to strengthening their cooperation.
The Time to Co-operate is Now
There has never been a more important time for ASEAN and Canada to accelerate their partnership.
ASEAN and Canada – as two trade-dependent regions with complimentary economies and deep people-to-people ties – are ideally positioned to brighten their economic futures through a deepened trading relationship.
With a population of over 633 million and a combined GDP of over US$2.5 trillion, ASEAN represents a logical opportunity for Canada’s trade diversification into Asia. Similarly, Canada presents ASEAN businesses its preferential market access to 1.2 billion consumers. According to our 2017 analysis, an FTA can add an additional CAD $11 billion to ASEAN-Canada trade by 2027.
When it comes to free trade, Canada has emphasized that it stands open and ready to engage with like-minded partners. Amidst the backdrop of growing protectionism, an important window of opportunity has opened for ASEAN and Canada to meaningfully grow their trade relationship.
Wayne C. Farmer
Canada-ASEAN Business Council