Trade tensions with the U.S. and BREXIT uncertainty over the utility of the Comprehensive Economic and Trade Agreement (CETA) has Canadian companies and policy makers looking elsewhere for opportunities to grow and diversify the economy.
Most of the attention has been focused on China and India. With good reason; these giants are forecast to grow at a multiple of the Canada and U.S. rate and could rank as the world’s largest and second-largest economies in fairly short order. Their needs are quite complementary to what Canada has to offer and in both cases, a large diaspora of first-generation Indian and Chinese professionals and entrepreneurs possess the language skills, market knowledge and networks Canadian companies can leverage to succeed in these markets.
However, there is another part of the world that possibly provides similar potential: The Association of South-East Asian Nations, or ASEAN. It is large (population of over 620million) and fast growing (forecast GDP growth of 5.1% in 2019). By 2050, five of its member states (Indonesia, Vietnam, Philippines, Thailand and Malaysia) could be amongst the 25-largest economies in the world. Yet no ASEAN member country figures amongst Canada’s top trading partners, or even within the top 20.
Canada’s accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in October, 2018 should prompt Canadian businesses to take a closer look. CPTPP provides improved access to the markets of Vietnam, Malaysia and Singapore, and two other ASEAN countries, Indonesia and Thailand, have formally announced interest in joining. Canada also benefits from relatively large numbers of Canadians of Philippines or Vietnamese origin whose networks and experience could help open these markets.
But Canadian entrepreneurs, companies, and policy makers need to recognize that the clock is running. Chinese firms and regional giants in Japan, Korea and Taiwan are already way ahead, and better focus by countries like Australia and some European nations over the past decade means that Canada starts very much at the back of the pack in succeeding in ASEAN markets. Still, the size and growth of these economies makes the prize very much worth competing for.
In the attached article, EDC Economist Peter Hall sets out the case for why Canadians should start paying a lot more attention to this region of the world.