Prime Minister Justin Trudeau attended the 33rd Association of Southeast Asian Nations (ASEAN) Summit held in Singapore from November 13 to 15. This move was seen as a strategic diplomatic push to advance Canada’s trade diversification agenda and reaffirm its commitment to deepen economic ties with the region.
Southeast Asia, collectively known as ASEAN, is made up of 10 countries: Singapore, Indonesia, Malaysia, Thailand, Brunei, Philippines, Cambodia, Laos PDR, Myanmar and Vietnam. Currently, it has a combined GDP of roughly $2.6 trillion, making the bloc the third largest economy in Asia and the sixth largest worldwide. In 2017, Canada’s bilateral trade with ASEAN countries reached $23.3 billion CAD, making the region Canada’s sixth largest trading partner.
The Government of Canada has recognized the growing importance of the region over the past decade. In 2009, Ottawa appointed a dedicated ambassador to ASEAN. In addition, Canada has diplomatic representation and offices for the Canadian Trade Commissioner Service (TCS) in all 10 member countries to promote Canada’s economic interests in the region. With the shared goal of improving their relationship through trade ties, Canada and ASEAN are currently exploring the potential for a Canada-ASEAN free trade agreement.
According to The ASEAN Advantage: Exploring Canada’s Trade Potential, such an agreement with ASEAN is predicted to generate between $4.8-billion and $10.9-billion CAD in additional bilateral trade, ‘benefiting a wide range of companies and many millions of workers’. In addition, it would also enhance Canada’s profile and credibility in the region. More importantly, the report argues, increased trade with ASEAN countries would help diversify Canada’s foreign trade, and reduce dependence on its traditional markets.
Despite its eagerness to speak about trade diversification, however, Canada’s engagement with the region remains relatively weak compared to that of its counterparts in the Western world such as the United States, Australia and New Zealand, which have moved more quickly to redefine their relationships with Southeast Asia. The United States has “rebalanced,” Australia has embraced “The Asian Century,” and New Zealand has a strategy for “ASEAN Partnership: One Pathway to Ten Nations.”
Incidentally, Southeast Asia has not appeared prominently in Canada. According to the findings of 2018 National Opinion Poll released by the APF Canada, only 9% of Canadians are supportive of Free Trade Agreements with Southeast Asian countries, as compared to 66% for NAFTA, 26% for China, and 16% for India. Among the Asian countries, China and Japan are regarded by Canadians as being the most important for Canada’s economy.
This is largely due to Canada’s dependence on its traditional trading partner and a lack of understanding of and appreciation for the potential for economic growth through markets in Southeast Asia.
The 640-million strong ASEAN population is a promising consumer market and presents significant opportunities for Canadian trade and investment: ASEAN’s GDP grows at an average annual rate of 5% a year and creates a giant middle class. It is predicted that ASEAN will overtake the EU and Japan to become the fourth largest economy in the world by 2050, behind China, India and the US.
If Canada believes that the ASEAN region is critical to Canada’s economic future, it needs to secure a stronger partnership with ASEAN. This will take the form of a long-term strategic vision in its approach to relations with the region and building greater awareness of ASEAN among Canadians.
Winda Listiyani is a Master’s student majoring in International Relations at the International University of Japan in Niigata. She is currently studying at the Norman Paterson School of International Affairs, Carleton University through an exchange program.
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