Canada’s trade minister says the federal government will proceed “promptly” with the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as it looks to further broaden its trade strategy in the Southeast Asian region beyond so-called TPP11 borders.
“While some have said that this is the Asian century, and we have seen China rise to assume that mantle, I’ll put it to you that it’s also Canada’s century,” Minister François-Philippe Champagne told a select grouping of Canadian and international business leaders and policy experts attending the Canada-ASEAN Business Council’s (CABC) fourth annual business forum, held this year in Singapore.
“Now is our time,” he said. “We are here to stay.”
That was the message of Champagne’s keynote address Thursday to a largely pro-trade contingent: Canada is in Asia, with a progressive trade mandate, and with an awareness of what the minister described as enormous trade potential between Canada and the Association of Southeast Asian Nations, which, in addition to the CPTPP member countries of Singapore, Malaysia, Brunei and Vietnam, includes the growing regional economic powerhouses of Indonesia, Thailand and the Philippines.
“I imagine a future of enormous potential between our countries,” Champagne told Business in Vancouver in a one-on-one interview. “That’s why it was important for me to be here and talk to the Secretary General [of ASEAN] about the next steps.”
Without committing to a timeline for officially launching free trade talks with ASEAN, the minister did note he was “cautiously optimistic” that discussions on a Canada-ASEAN free trade agreement (CAFTA) would proceed. (ASEAN Secretary General Dato Lim Jock Hoi also noted the association is “cautiously optimistic” Canada will move forward with exploring CAFTA.)
At present, ASEAN is Canada’s sixth-largest trade partner. Its population is young, growing and surpasses that of the European Union as home for more than 634 million people. By 2030, ASEAN is expected to be the world’s fourth largest economy.
“They see also the potential to engage with Canada, so I think it’s very important to show not only that we are here, but we’re here to stay,” said Champagne. “In Asia, it’s very important to show a Canadian presence consistently.”
Some analysts have questioned Canada’s seriousness in pursuing what Champagne calls an “ambitious trade agenda,” particularly when it comes to the Asia Pacific region.
For example, Canada’s hesitation in Vietnam last November on signing what was then the TPP was raised across multiple sessions at the CABC Business Forum. Eduardo Pedrosa, secretary general of the Pacific Economic Cooperation Council suggested that moving forward with ratifying and legislating the new agreement would serve as a symbolic step toward demonstrating Canada’s commitment to the partnership.
Ratification aside, Canada’s presence in Southeast Asia is growing. Export Development Canada’s first global branch, based in Singapore’s financial district, celebrates its one-year launch anniversary in March. The province of British Columbia also just opened a new trade and investment office in Singapore, which complements its offices in Manila and Jakarta.
“I think now people are beginning to realize how big the markets are,” shared Stewart Beck, president of the Asia Pacific Foundation of Canada (APFC). “The penny is dropping.”
According to APFC research, the first nine months of 2017 saw Canadian trade with 17 major Asian economies increase by more than 8%, year over year, with exports up 15%. Regarding the CPTPP specifically, the Canadian government estimates the deal will boost Canada’s GDP by $4.2 billion over the long term, and increase exports by 4.2%.
“What we have been providing to this agreement is preferential market access on a first-mover basis. Which is very important for businesses, particularly, obviously, when you look at B.C. There’s enormous opportunity in terms of forestry, there’s enormous opportunity with respect to our agriculture product, our fish products, and also services,” Champagne told BIV.
“I mean, this is a market which I think our B.C. companies could do particularly well on the services side,” he said, adding he was pleased to see B.C. well represented among the nearly 300 senior-level government and private sector participants at the forum.
While the export potential is there for a variety of B.C.-related sectors, it is incumbent on firms – particularly small- and medium-sized businesses – to seize new opportunities and shift their export and business expansion strategies east.
“Business does have to make a commitment to take advantage of [free trade agreements] otherwise – why do it in the first place,” said Wayne Farmer, president of the CABC, adding that business participants at and partners of the forum – Canadian National Railway (TSE:CNR), Bank of Nova Scotia (TSE:BNS), Bank of Montreal (TSE:BMO), Manulife Financial Corporation (HKG:0945) and Sun Life Financial (TSE:SLF), to name a few – already understand the region’s economic potential.
“There’s a lot of companies back in Canada that aren’t aware of the opportunities, whether it’s here, whether it’s the Korean agreement that we have in place, whether it’s even CETA (the Canada-EU Comprehensive Economic and Trade Agreement),” said Farmer. “That’s ever more so obvious with what’s happened with the United States, where I think NAFTA has almost worked too well for a lot of Canadian companies, and we’ve been very structured to trade north-south for a long, long time.”
CABC, Canadian consular services and high commissions, and Canadian Chamber of Commerce chapters across the Southeast Asian region are among the organizations working to educate Canadian businesses on regional trade opportunities that exist currently, and will exist once the CPTPP reduces many tariffs to zero and opens up dozens of service sectors.
The federal government too says it will look to support businesses’ understanding of the region’s economic advantages. Perhaps its biggest initiative, listened to closely at the forum, will be to push for additional multilateral, rules-based agreements in Asia.
“It’s not just about Canada and ASEAN now. The world is watching us, the world is watching Canada, and we feel that to be on the right side of history, we need to strengthen that relationship,” said Champagne.
Focusing on making progressive trade deals that benefit people across the Asia Pacific he says will put Canada on that right side of history.
The full interview with Minister Francois-Philippe Champagne can be listened to on Business in Vancouver on Roundhouse Radio 98.3. Listen here at 13:40.
Hayley Woodin’s work in Singapore and Southeast Asia is supported by an Asia Pacific Foundation of Canada media fellowship for 2017-2018.