Trade diversification is of paramount importance for trading nations such as Canada and Taiwan.
Canada’s latest trade diversification strategy sets a target of 50% export growth by 2025. Canada has been actively engaged in talks with its trading partners and was one of the first six countries to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The effort has been rewarded. Last February, the second month the agreement was in effect, Canadian pork shipments to Japan saw a 122% increase compared with the same month a year before. Now the government of Canada is seeking Canadians’ input on opportunities for Canada in an expansion of the CPTPP, and Taiwan is one of four economies that have been identified by Global Affairs Canada.
Taiwan has expressed its wish to be included in the second round of talks on membership of the CPTPP, which already covers about 13% of global gross domestic product with its current members, representing a collective market of 503 million people. Because Canada is an important member of the CPTPP, its support for Taiwan’s admission would help lift the agreement to its full potential. There are sound reasons for Canadians to back Taiwan’s accession.
To begin with, if included in the CPTPP, Taiwan would be the fifth-largest economy of all the trading bloc’s members. About 30% of its imports come from CPTPP members and the same members receive 20% of Taiwan’s exports. It’s clear that Taiwan’s membership can contribute to a more integrated global economy.
Moreover, Taiwan is already a reliable, stable and growing market partner for Canada. Taiwan has a population of 23.1 million and a GDP that ranks among the top 20 in the world. It is also one of the world’s wealthiest economies on a per capita basis. Taiwan is Canada’s 13th-largest trading partner and its fifth-largest Asian trading partner, as well as B.C.’s sixth-largest trading partner. In 2018, Canada’s total merchandise trade with Taiwan was $7.8 billion, with Canadian exports amounting to $1.99 billion. The extent of trade between the two countries is something many Canadians are unaware of. There are, for instance, more Roots Canada retail stores in Taiwan than in all of Canada.
Further, Canada ranked as Taiwan’s 12th-largest country of origin for agricultural imports in 2018, with the value of products reaching $4.1 billion and accounting for 21.6% of total Canada-Taiwan trade. Those products, including soybeans, grains, beef, pork, poultry, seafood, potatoes and coniferous wood products, are among the fastest-growing Canadian agricultural exports to Taiwan.
Taiwan is poised to increase agricultural imports from Canada, but being part of the CPTPP would ensure continued, reliable growth.
Taiwan also continues to demonstrate its attractiveness as a growing market opportunity in other sectors, such as energy. One Canadian company that has seized this opportunity is Northland Power, whose significant (1,044 megawatts) offshore renewable energy project was secured in a competitive ratified-final--proposal process under Taiwan’s feed-in tariff program.
Taiwan has a middle-class economy and a population that thinks highly of Canada. Both value a commitment to ethics, democracy and cultural diversity. A responsible adherent to World Trade Organization rules and ranked 13th for ease of doing business by the World Bank, Taiwan represents a trustworthy and responsible trading partner.
Despite geographical distance, Canada and Taiwan share values, and our complementary economies would make us perfect allies. Given the pervasive challenges that Canada has recently faced with its largest trading partners, Taiwan offers an attractive marketplace and potential investment opportunities for Canadian businesses. I sincerely hope that Canada will also support Japan’s suggestion that Taiwan be included in the CPTPP. •
Andy Kang-I Chen is director general of the Taipei Economic and Cultural Office, Vancouver.