Canada to begin free trade negotiations with 10-member Association of Southeast Asian Nations

VANCOUVER — Canada will enter into free trade negotiations with the Association of Southeast Asian Nations, a 10-nation group of countries that includes Indonesia, the Philippines and Vietnam.

International Trade Minister Mary Ng made the announcement Tuesday night, saying a possible deal would bring an economic opportunity for Canada and an opportunity to diversify supply chains.

“They are the third largest consumer market in the world. There are more than 600 million new customers in ASEAN and they have an economy of about $ 5 trillion,” Ng told the Star.

“So, it’s really important for job growth and to attract investment from the region into Canada.”

The negotiations come as critics have pushed for Canada to become more involved in the Indo-Pacific.

The announcement was made after a virtual meeting between Ng and ASEAN economy ministers earlier Tuesday. The meeting was part of the 10th consultation between Canada’s economic ministers and ASEAN.

The ASEAN, initially formed in 1967, includes larger countries such as Indonesia, the Philippines and Vietnam, but also a number of smaller members, such as Singapore and Brunei.

According to a joint media statement, two-way trade between Canada and ASEAN nations was worth about $ 19.9 billion in 2020. Foreign direct investment between the parties has also increased since 2020.

An agreement with the ASEAN would open markets for Canada’s resources and agricultural commodities while also presenting potential for small and medium-sized trade, Ng said.

She said the agreement will be based on the work already done through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which Canada signed with other Pacific nations in 2018. It will also contain “high-level” labor and environmental provisions.

Experts have called for an Ottawa-based Indo-Pacific strategy, partly in response to an increasingly hostile government in Beijing. A press release on Tuesday said the decision to continue with ASEAN negotiations is a milestone in Canada’s economic and trade engagement in the Indo-Pacific.

Ng did not say whether the free trade agreement is specifically part of the envisaged strategy, emphasizing that the plan is part of an overall diversification of Canada’s trade relations.

“Absolutely, this is a part of the world that is growing, their middle class is growing,” Ng said. “There are really opportunities to deal with.”

Jonathan Berkshire Miller, the director of the Indo-Pacific Program at the Macdonald-Laurier Institute in Ottawa, has worked for Canada to produce an Indo-Pacific strategy as many countries, including Canada’s allies, work to counter China’s influence in the region.

He said Canada’s current trade with ASEAN member nations is low, but a possible free trade agreement would be an “ingredient” to eliminate trade dependence with China.

“It’s by no means a substitute for the Chinese market,” he said. “But I think it diversifies us a little bit.”

Although it would help Canada get away from dependence on China, there could be obstacles with such an agreement.

A member of ASEAN Myanmar is particularly problematic, Berkshire Miller said.

Human rights abuses and genocide have long overshadowed the country. Violence has flared up again since a coup took place earlier this year and the country is currently ruled by a military junta.

Berkshire Miller said Ottawa can overcome the challenges, but it will not be easy.

“There’s a way to do it, but I think it will require a bit of skill,” Berkshire Miller said. “I do think those things need to be delicately managed. You don’t want to miss the opportunity of the whole bloc for one country.”

Ng said Ottawa has worked to uphold labor and other standards in its free trade agreements. She said the government will make trade deals led by Canadian interests and values.

Global Affairs Canada said public consultations showed a “high level of support” for a free trade agreement with ASEAN.

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