Canada consulting at home toward Indonesia trade deal

Possibility of broader Southeast Asian pact also looms

Continuing to seek out free trade deals in the Asia-Pacific region, Canada has launched public consultations on the merits of a potential bilateral pact with Indonesia.

“Deepening trade ties with Indonesia would benefit Canadian businesses of all sizes and lead to economic growth and prosperity for years to come,” International Trade Minister Mary Ng said in a statement Monday.

Such a pact would benefit importers and exporters by improving market access to the world’s fourth most populous country, according to Global Affairs Canada.

Trade deals between Canada and some nations in the region are already in place, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) between Canada and 10 other countries: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

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Indonesia’s developing economy has advanced significantly in the last decade, but is believed to still have growth potential led by a growing middle class. Among countries in Southeast Asia, Indonesia already boasts the largest economy.

It is also the largest export market in the Association of Southeast Asian Nations (ASEAN), a block of 10 member states, including the Philippines and Thailand. CPTPP members Brunei, Singapore and Vietnam also belong to ASEAN.

Canada and Indonesia are signees on a handful of general World Trade Organization (WTO) agreements, but currently have no bilateral trade pact. The two signed a memorandum of understanding on trade last August.

According to a release from the Indonesian embassy, the MOU was to “facilitate co-operation in the field of export development activities for Indonesia, focusing on support of Indonesian export promotion activities that includes trade in products and services particularly for women-owned or led SMEs (small and medium enterprises).

“The signing of the agreement is also a form of continuous efforts by Indonesia and Canada in finding ways to boost bilateral trade relations between the two countries.”

At the time, Indonesia’s ambassador to Canada said he hoped the two nations would find co-operation on a bilateral free trade pact or a regional one involving ASEAN.

Exploratory talks for a possible Canada-ASEAN trade deal started in 2017, offering some insight into the benefits and challenges of a deal with just Indonesia.

Ag opportunities

Face-to-face meetings between Canada and ASEAN members continued over the next few years and in 2018, Ottawa held public consultations on a potential pact.

Of the 49 submissions in that consultation, 20 were from agricultural stakeholders.

According to the government, stakeholders overall expressed support for a free trade deal and highlighted “existing barriers for Canadian firms, including high tariffs, sanitary and phytosanitary issues and non-tariff barriers” could be addressed.

“The government heard that there are significant opportunities for Canadian agricultural products in the ASEAN market, and that a possible FTA would level the playing field in ASEAN with Canada’s regional competitors, especially Australia” which already enjoys preferential tariff rates through its own FTA with ASEAN, a summary of the consultations said.

“Many agriculture stakeholders also suggested that Canada’s long-term goal should be to encourage ASEAN members to join the CPTPP.”

The strongest support came from export-oriented sectors, notably beef, canola, pork and grains.

According to the government, “a small number of stakeholders, especially from the supply-managed agricultural sectors” were skeptical of the benefits of a deal.

“Contributors indicated that support for an agreement would depend on outcomes that provide a carve-out for supply managed goods,” the summary said.

Ng and counterparts from ASEAN member states met virtually last August. In a joint statement following the discussion, the countries supported continued efforts toward a trade deal.

Consultation on the merits of a deal between Canada and Indonesia will run until Feb. 23. Those interested in sharing their views can do so by visiting Global Affairs Canada’s website.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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