Better late than never.
Canada’s push to join the Indo-Pacific Economic Framework for Prosperity, or IPEF, is the surest sign yet that Ottawa is finally getting serious about forging stronger ties in that all-important region.
Although the IPEF is not a formal trade pact – well, not yet anyway – the U.S.-led initiative is meant to serve as a strategic counterweight to China’s economic clout. The group’s 14 members, countries that represent 40 per cent of the world’s GDP, are pursuing greater co-operation on issues that include trade, supply chains, clean energy, tax policy and combatting corruption.
It is imperative that Canada is granted membership in this multilateral organization as soon as possible. Not only do we have to reimagine ourselves as an Indo-Pacific country, we must also rebuild our credibility with the United States and other key allies in that region.
“There is broad support for Canada joining the Framework among the current IPEF membership,” wrote Grantly Franklin, a spokesman for Global Affairs Canada, in an e-mailed statement.
Even so, all 14 countries still have to formally sign off on Canada’s admission to the group.
“Canada is continuing discussions with the U.S. administration, and with IPEF members across the Indo-Pacific, regarding expedited membership and advancing our shared priorities and wider interests in the region,” Mr. Franklin said.
Fingers crossed that Canada’s membership doesn’t get bogged down by delays, because Ottawa already faces the challenge of making up for lost time.
Earlier this month, IPEF members wrapped up a set of negotiations in Australia. The next round of talks is scheduled for February, with India serving as host.
Canada, of course, was noticeably absent when the IPEF was launched by U.S. President Joe Biden in Tokyo this past May.
At that time, Prime Minister Justin Trudeau tried to make light of Canada’s exclusion by suggesting our companies already have preferential access to Asian markets under the auspices of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement. In fact, he mused the IPEF was the U.S. government’s attempt to regain its own lost ground in the Indo-Pacific.
(Recall that then U.S. president Donald Trump withdrew his country from the Trans-Pacific Partnership, which preceded the CPTPP, back in 2017.)
“The fact that U.S. isn’t in the CPTPP means they’re having to look for ways to try and to create connections with countries in the Pacific that they don’t have a free trade deal with,” Mr. Trudeau said at the time.
Let’s just say his explanation never washed with business leaders.
Goldy Hyder, president and chief executive officer of the Business Council of Canada, was among those who pointed out that joining the IPEF would allow Canada to strengthen links with countries that are not signatories to the CPTPP, such as India, Indonesia, Korea, the Philippines, Thailand and the U.S.
“Granted, IPEF isn’t perfect. By the Biden administration’s own admission, it remains a work in progress,” Mr. Hyder wrote in an op-ed published in The Globe and Mail in August. “All the more reason, then, for Canada to join at an early stage and help shape it.”
His logic still holds true. With so many of the world’s multilateral organizations in a state of disarray, Canada must contribute to the IPEF’s evolution.
But first, Ottawa needs to secure a seat at the negotiating table. Once it does, Canada’s objectives include deepening regional integration, advancing shared interests in supply chain resilience, furthering the adoption of clean technology and combatting crime, according to Global Affairs Canada.
The Trudeau government also highlighted its interest in joining the IPEF in its recently-released Indo-Pacific Strategy, noting it would help tap new markets for Canadian exports.
“We believe that IPEF will contribute to key objectives of the Strategy that benefit Canadian businesses, and will help to foster a more, predictable and sustainable regional economic order,” stated Mr. Franklin.
“As a leader in the development of trade, technology, labour and environmental standards, Canada can add value to the Framework.”
There’s no doubt the IPEF aligns with Canada’s economic interests. Fast-tracked membership would also be an early win for Ottawa’s Indo-Pacific Strategy, which includes new investments totalling nearly $2.3-billion.
After years of neglecting the Indo-Pacific, Canada finally seems to have a real shot of strengthening alliances with like-minded countries in the region.
Canada, though, still has a long way to go to prove that it’s a reliable partner. The Trudeau government’s resolution should be to continue that work in 2023.