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Canada ramps up focus on southeast Asian tradeThursday, March 19, 2015 > 09:47:07
It is no coincidence that Southeast Asia has appeared more prominently in Canada's economic consciousness recently. For federal officials, Southeast Asia is a major focus for pursuing business opportunities, and they say that is unlikely to change in the near future.
That focus can be seen in International Trade Minister Ed Fast's two-day trade mission this week to explore trade and investment opportunities. Fast is to attend the second edition of the Canada-ASEAN (Association of Southeast Asian Nations) Business Forum in Bangkok. He'll also visit the Philippines.
Fast says the trip - his 13th visit in less than four years - will not be the last.
"We will go, and then we will go back - again and again - to let them know we are serious," Fast said in an interview just before his departure for Bangkok. "It's a huge opportunity, and it is one that has just started."
Southeast Asia is a fastgrowing region that contains several high-growth markets, a combined market size that would rank seventh in the world, a population of more than 600 million, and an acute need for investment as several ASEAN states race to build the infrastructure they need for an increasingly demanding population.
Canada's trade with the ASEAN group was $18.8 billion last year (led by $3.6 billion with Thailand and $3.5 billion with Indonesia), but Fast says that number can be larger. He said that trade missions where Canadian businesses state their case faceto-face with Southeast Asian partners will be vital in deciding whether Canadians can benefit in a market ripe with great potential.
"What I noticed a few years ago when I talked with officials, was that they believe Canada was largely absent in ASEAN," he said. "That's no longer the case. The message we are delivering - and they will have noticed this - is that Canada is back in the region."
ASEAN countries pose challenges for foreign businesses - it is a free-trade zone, but each country has its own set of rules and procedures, as well as varying social, political, cultural and economic backgrounds. The Canadian government has programs to educate and support Canadian investors and entrepreneurs in operating in each ASEAN country.
However, things are expected to become less complicated in a few months time. ASEAN is moving to become a single, integrated market, the ASEAN Economic Community, much like the European Union without some of the more controversial elements such as a central bank and a single currency.
Officials have said they planned to have the Economic Community in place by the end of this year, which would allow investments, goods, services and skilled labour to flow among member countries without constraint. Some experts have expressed skepticism on the timeline, noting a lot of work remains on reaching agreement on an ASEAN standard for investor/labour protection and financial benchmarks. But when the ASEAN Economic Community is in place, Canada could reap significant rewards by having been a major player before integration takes place.
Once that is in place, the New Democrats are hoping for more work on issues such as human rights and democracy.
"I don't think you can divorce trade from these very important discussion areas," said Don Davies, the opposition critic to Fast's department.
Davies noted that former Asia Pacific Foundation President Yuen Pau Woo, in a report to the Canadian government a few years ago, talked about the importance of leveraging Canada's economic soft power by being a constructive partner in advancing progress in area like Southeast Asia.
Another area where Davies sees Canada playing a role as a fair and constructive player is in facilitating a peaceful resolution of territorial disputes in the South China Sea between several ASEAN members (including the Philippines, Vietnam and Malaysia) and China.
Fast said Canada has helped set up three P3 (public-private partnership) centres in the region to increase development because development plays a vital role in improving local living standards, while benefiting the Canadian economy through business opportunities.