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China is Canada's second- largest trading partner.
The trade minister was in Canada.
The photo was taken by LARS HAGBERG/AFP.
Canada and the Association of Southeast Asian Nations agreed to start formal talks, a move that could aid the Liberal government's push to gain broader access to the Asian market and shift focus away from China.
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Economic ministers from the 10-member group that includes Indonesia, Singapore, and Vietnam will meet this week in a virtual meeting to begin negotiations for a free-trade agreement. The bloc has a gross domestic product of $5 trillion and a population of 650 million, making it the fifth largest economy in the world.
This is a significant milestone in the renewal and deepen of Canada's economic partnerships and commercial engagement across the Pacific. The first round of talks will begin after she tables a notice of intent. The notice will be filed when Parliament is in session.
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Canada has trade agreements with some of the members of the Association of Southeast Asian Nations, including Singapore and Malaysia, through the Trans-Pacific Partnership, but a separate deal would boost Prime Minister Trudeau's efforts to broaden Canada's list of significant trading partners. China is Canada's second-largest trading partner with total trade amounting to $101.8 billion in 2020.
The supply chains of Canada and China were disrupted by the COVID-19 epidemic, which slowed the flow of goods between the two countries. Relations between Canada and China are at an all-time low after Canada arrested a Chinese executive at the request of the United States. The Canadians were held for nearly three years before a prisoner-style swap saw them freed in September.
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Dan Ciuriak, a former deputy chief economist at Canada's trade department, said that the Liberal government's initial motivation to negotiate preferential trade terms with the Association of Southeast Asian Nations was to create a counterbalance to China as an export destination in Asia.
Ciuriak said that the problem is now diversification. You never know which region is going to close down, so you need to have redundant sources of supply. It is a pure case of hedging risk.
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Canada announced in June that it would begin negotiating a trade deal with Indonesia, which could lead to an agreement with the Association of Southeast Asian Nations. It could pave the way for the country to join the Regional Comprehensive Economic Partnership, which includes China and India, if it succeeds. Prior to joining, the RCEP members had bilateral deals with the other nations.
Carlo Dade, director of trade and investment at the Canada West Foundation, said that a deal with the Association of Southeast Asian Nations could be a problem for domestic businesses. He said Canadian efforts would be better if they focused on persuading the members of the Association of Southeast Asian Nations to join the Trans-Pacific Partnership, which has higher quality rules surrounding issues such as human rights, labour and environmental protections. He said that we are not going to get as good a deal.
Canada could be in hot water if it scratched out deals with countries with histories of human rights violations, like the Philippines, that would undermine the Liberals' push for progressive trade policies. That is a head-scratcher.
Since the military launched a violent coup in February, there has been a lot of unrest. More than 600 people have died.
Email: bbbharti@postmedia.com
