SINGAPORE - Studies have been conducted, and discussions had, on what benefits a free trade agreement with the Association of Southeast Asian Nations (ASEAN) would bring to Canada.
Among them are a $1.2 billion gross domestic product (GDP) boost by 2027, greater trade diversification and large export gains for a variety of sectors, according to The ASEAN Advantage, a joint report from the Canada-ASEAN Business Council (CABC), the University of British Columbia, the Asia Pacific Foundation of Canada and others.
Where such a deal ranks on Canada’s list of trade priorities, however, is another matter.
After all, it’s a list that already includes a major renegotiation now nine months in, a deal signed in principle but not yet ratified and an alphabet soup of other trade options, ranging from exploratory talks with China to questions about a post-Brexit Canada-United Kingdom relationship.
The key issue here is that how Canada prioritizes Asia matters to Asia, and at stake are deeper diplomatic and economic ties with the world’s fastest-growing region.
“It looks very positive,” ASEAN Secretary General Lim Jock Hoi told government, trade and industry officials at a CABC event in Singapore earlier this year. He added that he was “cautiously optimistic” Canada would follow through on its interest in the region, which includes another six nations not part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
“We have all the reasons to be cautiously optimistic,” responded Canadian Minister of International Trade François-Philippe Champagne. “But I think what speaks more than our respective feelings is action.”
Many in diplomatic and trade circles in Southeast Asia agree that actions speak strongly, and that some of Canada’s actions have told decision-makers that, as a country, Canada is not serious about Asia.
“Dithering” on signing the TPP-11 last November, for instance, has been repeatedly cited as an example of the country’s slow march to action, despite its keenness to speak about trade diversification.
“That last-minute reservation really rattled the region,” said Jason Salim, a private-sector political risk analyst in Singapore and a former researcher with a Singapore-based think tank focused on Southeast Asia.
Canada’s reservation is one of a couple of recent examples he gives for regional concern about the country’s commitment.
“We all know what happened during Prime Minister [Justin] Trudeau’s visit to India. That to us is a sign that Prime Minister Trudeau is more preoccupied with domestic politics than he is interested in foreign policy,” added Salim. “We saw very little of consequence to the visit apart from a few photo ops.”
From Salim’s perspective, the trade mission also reinforced a regional sentiment that Canada’s approach to Asia is a two-pronged strategy featuring India, and China. He argues that any successful strategy in Asia, especially when trading with giants, is a three-legged stool that requires engagement with the Southeast Asian block.
On Canada’s part, that engagement includes an existing number of federal and provincial consular and trade offices throughout the region and will be further bolstered by the CPTPP once it is ratified.
It’s challenged, however, by a lingering history of complex East-West tensions fuelled, in part, by “West knows best” politics and exacerbated by a significant western knowledge gap on Southeast Asia.
“I would say everything that comes with a kind of social superiority, it doesn’t work in this part of the world anymore. It has to be: we’re sitting at the table together, we are on the same page,” said Francesco Mancini, associate dean at the National University of Singapore’s Lee Kuan Yew School of Public Policy, when asked about the addition of “comprehensive” and “progressive” to the 11-member TPP agreement.
“These countries are becoming more assertive. Their policies and politics are becoming more assertive.”
This includes a desire for international engagement on a range of issues, from defence and security to technology and information sharing.
“Countries here don’t want us only to talk about selling them stuff. They want to talk about common, regional architecture,” said Ron Hoffmann, Alberta’s senior representative for the Asia Pacific Basin. “And we’re not that active or that good at some of these things. It’s just a bit of a wake-up call that we can’t just go here to talk about a few things. We as a nation are not that serious here.”
Hoffmann sees the November dithering in Da Nang, Vietnam, as symptomatic of 30 to 40 years of Canadian behaviour.
Among key milestones, according to a number of sources, is a perceived failure of not having attended or seriously participated in financial restructuring initiatives after the 1997 Asian financial crisis and opting out of joining the Asian Infrastructure Investment Bank as a founding member when it launched. Canada officially joined in 2017.
When international politics have fallen short, the quality of Canadian products has served the Canadian brand well abroad, as have the country’s open attitude toward immigration and the strength of its post-secondary institutions.
Canada is increasingly known for its technology, in addition to its agricultural products. It is prized as a great place to live.
But even outside politics, there remains room for improvement.
“The Canadian financing scene has a terrible reputation in Asia. Nobody wants to invest in a small company in Canada, from Asia, unless it’s an acquisition and they want to get the technology,” explained David Wynne, president and CEO of Green Technology Asia Pte Ltd., and a former senior diplomat for Canada in Korea, Japan, Singapore and with the Asia-Pacific Economic Cooperation.
“The exits are painful, highly risky, there’s low growth, and the way things are taxed – there are no capital gains in Singapore.”
According to Wynne, a “huge amount of credibility as being a friend of ASEAN” was lost after the Asian financial crisis.
“That’s still remembered. You know, Canada likes to come in and make all this noise, but when the rubber hits the road, they’re not there,” he said. “The way we went back into TPP still shows us at the margins, not at the core.” •
Hayley Woodin’s work in Singapore and Southeast Asia is supported by an Asia Pacific Foundation of Canada media fellowship for 2017-18.
