CANADA'S TRADE POTENTIAL: INDO-PACIFIC REGION
The scale of U.S. economic ties, combined with retaliatory tariff threats, means Canada must pursue a mixed strategy: defending its U.S. trade interests while accelerating domestic reforms and knowledge-economy growth, while substantially increasing trade with other Countries to reduce long-term dependency.
A key part of this endeavor is the successful implementation of various trade agreements, successful implementation and beneficial outcomes.
The Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP) includes 11 original members (Australia, Brunei, Canada,
Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam),
with the United Kingdom joining as of December 15, 2024
In 2024, the total merchandise trade between Canada and all CPTPP partners (without finalized 2024 statistics) is estimated to have been in the area of$150 billion. Canadian exports to CPTPP partners in 2024 were valued at $55.9 billion, representing an 18.5% increase from 2021.
Canada's merchandise trade with the AP7 (Australia, Brunei, Japan, Malaysia,
New Zealand, Singapore, and Vietnam) also grew in 2024. The total two-way
merchandise trade between Canada and the AP7 reached C$70.2 billion in 2024,
representing an increase from C$66 billion in 2023.
Plus, Canada is navigating other trade agreements in the region. The
Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA), with
negotiations concluded in November 2024, is projected to increase Canadian
exports to Indonesia by an additional C$446.5 million by 2040.
While
the projected export increase is not very large in the grand scheme of Canada's
international trade, the CEPA represents a strategic move to strengthen
economic ties with Indonesia and potentially open doors for further engagement
in the rapidly growing Southeast Asian market.
Negotiations for the Canada-India Comprehensive Economic Partnership Agreement and the Canada-ASEAN Free Trade Agreement are underway.; ASEAN countries are Canada's sixth-largest trading partner.
While the Canada-Indonesia CEPA, Canada-India CEPA, and Canada-ASEAN FTA are
focused on specific bilateral or regional trade relationships, the CPTPP is a
multilateral agreement that includes multiple countries in the Asia-Pacific
region and covers a wider range of trade and investment issues
These agreements also enhanced Canadian firms' competitiveness by easing
tariffs and non-tariff barriers, simplifying trade rules and opening government
procurement opportunities.
The CPTPP has delivered a clear and direct economic boon to key Canadian
industries. Agricultural and food exports have flourished. Manufacturers have
seized new opportunities in Japan, Vietnam, and Malaysia.
Natural resource sectors, particularly Minerals, and service industries like
trade and transportation have also thrived.
The CPTPP's science-based approach to Sanitary and Phytosanitary Measures
(SPS), tariff reductions, improved market access, and other high standards have
been instrumental in this success.
Canada's resolve to evolve its trading relationships in the Indo-Pacific region
is a testament to its strategic vision to diversify and reinforce its economic
resilience.
As the CPTPP and other pacts continue to bear fruit, it's clear that expanding
trade ties with the Indo-Pacific region is one more approach worth pursuing.
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