ASEAN–Canada Free Trade Agreement Needed To Bolster Trade -- Canadian Think Tank

KUALA LUMPUR, Sept 24 (Bernama) -- ASEAN and Canada must quickly conclude their free trade agreement (FTA) to diversify from being too dependent on any one major market, be it the United States (US) or China.

Asia Pacific Foundation of Canada (APF Canada) president and chief executive officer Jeff Nankivell said diversification has become a priority after Washington imposed costly tariffs on a wide range of trading partners.

APF Canada is an independent, not-for-profit organisation focused on Canada’s relations with Asia. Its mission is to be a catalyst for Canada’s engagement with Asia and Asia’s bridge to Canada.

In an online interview from its newly established Asia regional office in Singapore, Nankivell stressed that Canada urgently needs to “rewire its supply chains” and expand into markets, particularly in Southeast Asia.

“Canada has thrived by being part of an integrated North American economy. But when you rely too heavily on one partner, you expose yourself to risk, and Canada feels that risk more than ever.

“That’s why we need to look at Southeast Asia and beyond,” he said from APF Canada’s first regional office outside Canada, which reflects its commitment to Asia and to building long-term partnerships.

It will be done by leveraging Asia’s stability, innovation, and global connectivity.

Costly tariffs

“Global interdependence is both a blessing and a curse, and every country in the world is feeling it right now,” he said, adding that Ottawa and Southeast Asia are now paying the price of Washington’s costly tariffs.

Nankivell will be moderating a plenary session at the Canada-ASEAN Business Forum. He is here with his regional office director Barrett Bingley and team ahead of ASEAN private and government sector functions this week.

APF Canada is the official knowledge partner of the flagship event and will present two research papers.  

On China’s emergence, he said trade risks extend beyond the US. China is also using arbitrary and coercive measures that affect Canada, even if Ottawa is not as dependent on Beijing.

“ASEAN economies have real needs that Canada is well placed to meet. At the same time, Canadian businesses are looking to ASEAN to diversify customer and supply chains. It is a two-way opportunity,” he said.

Nankivell said ASEAN leaders are also eager to diversify their trade relationships. This creates momentum and a favourable environment for the ASEAN-Canada free trade agreement, particularly since negotiations began four years ago. It is time to cross the finishing line.

CPTPP to advance trade

He said the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to which Malaysia and Canada are both parties, could pave the way for deeper engagement with the European Union (EU), noting that the United Kingdom’s exit from the EU and entry into the CPTPP will reshape global trade links.

He said APF Canada sees the CPTPP as one of the strongest vehicles for advancing high-standard global trade and supports its careful expansion.

“It is one of the best hopes to keep high-quality, rules-based trade alive. We want to see it grow, but only in a way that protects its high standards,” he said.

Other than the urgency to advance trade liberalisation, he said US tariffs and trade policy shifts also underscored the need to establish stronger dispute settlement mechanisms.

The impasse at the World Trade Organisation (WTO), particularly the stalled dispute settlement system due to the US boycott of its appeal mechanism, has forced countries to seek alternative solutions.

“What makes this harder is the unpredictability of the US as a partner whom we can no longer fully count on to uphold the rules of trade,” he said.

-- BERNAMA