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Prime Minister Justin Trudeau holds a press conference at the conclusion of the Asia-Pacific Economic Cooperation summit in Lima this week. (Guadalupe Pardo/Reuters)
Prime Minister Justin Trudeau holds a press conference at the conclusion of the Asia-Pacific Economic Cooperation summit in Lima this week. (Guadalupe Pardo/Reuters)


With the collapse of TPP, Canada must turn its focus to the Asian bloc Add to ...

Joshua Brown is a consulting manager for Tractus Asia serves on the management committee of the Canada Asean Business Council (CABC). Wayne Farmer is president of the CABC and managing director of Islemount Capital.

President-elect Donald Trump’s vow to withdraw the United States from the Trans-Pacific Partnership (TPP) has removed any remaining hope that the provisions of the agreement, the largest of its kind, will be adopted by its 12 signatories.

The collapse of the long-negotiated TPP places new importance on Canadian alternatives for access to free-trade relationships in Asia, which will be pivotal to our continued competitiveness. While Prime Minister Justin Trudeau’s recent business-focused trip to China is to be commended, China is not Asia’s only growth area.

ASEAN, the Association of Southeast Asian Nations, is a vital global growth engine that has the potential to be overshadowed by China. With all of the political complexity that China presents, greater government and business engagement with ASEAN may result in quicker and easier wins for Canadian businesses. ASEAN escapes most Canadian headlines, but should not be ignored.

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If ASEAN were a single country, it would be the world’s seventh-largest economy and is expected to be the fourth-largest by 2050. The Asian Development Bank (ADB) growth forecast for the region is 4.8 per cent in 2017, which includes some of the fastest growing economies in the world, some expanding at more than 6 per cent a year.

The region’s macroeconomic performance has also helped to drive steady growth in the size of the consumer class, with some 67 million households in ASEAN states earning incomes large enough to make significant discretionary purchases. The growth is expected to continue.

Canada is engaged in commerce with the region and optimistic about its outlook. Canada-ASEAN bilateral merchandise trade reached a record $21.4-billion in 2015. As a group, ASEAN ranks as Canada’s sixth-largest trading partner when compared with individual countries. Canadian direct investment in ASEAN increased 11.4 per cent to $10-billion in 2015.

This year’s Canada-ASEAN Business Outlook Survey, led by UBC, the Canada ASEAN Business Council (CABC) and the Asia Pacific Foundation of Canada, indicated 94 per cent of responding companies optimistic about opportunities in ASEAN, and 86 per cent expecting the importance of the region to grow. Companies with current operations in the region reported strong profitability. Canada needs consistent engagement in the region to advance interests and grow.

Despite foreign service cutbacks in other regions, the previous Harper government made ASEAN a priority. Cabinet minister-level traffic to the region, a new embassy in Myanmar, new trade representatives in Cambodia and Laos and the appointment of a dedicated ambassador to ASEAN all helped advance this agenda. This year, for the first time, Canada has a diplomatic presence in all 10 ASEAN members. The Trudeau government needs to continue this commitment.

The recent efforts by both Foreign Affairs Minister Stéphane Dion and International Trade Minister Chrystia Freeland at last summer’s ASEAN meetings were a strong first step and bore fruit. The government announced the launch of a Canada-ASEAN trade policy dialogue and the tasking of senior officials to prepare terms of reference for a Canada-ASEAN free-trade-agreement feasibility study – a significant milestone. The Canada-ASEAN Business Outlook survey showed that 72 per cent of companies believe a free-trade agreement will ease their operations in this important market. But more needs to be done.

During a recent business consultation preceding the Canada-ASEAN Business Forum organized by the CABC in Jakarta, participants met with representatives of the Canadian government, including Ms. Freeland’s parliamentary secretary. While thankful for recent investments, they felt that considerable roadblocks exist between Canada and ASEAN in areas of business visas, temporary work permits and educational exchanges.

At a time when both Europe and the United States are projecting protectionist views and the future of agreements such the Trans-Pacific Partnership (TPP) are bleak, Canada has an opportunity to act differently and openly engage with the region. Its strong links to the North American and European market combined with strengths in finance, technology, education and natural resources make it an appealing partner for ASEAN.

Mr. Trudeau should signal early and clearly that Canada is strongly committed to ASEAN. Visiting and engaging with the region frequently, showing personal support for the proposed free-trade agreement, and making some rapid progress to resolve visa issues would send a strong message.

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