University of Calgary

PRISM: University of Calgary's Digital Repository

Graduate Studies Master of Public Policy Capstone Projects

2017-09-08

Towards a New Canadian Trade Strategy in Asia?

Wong, Jeremy

Wong, Jeremy. (2017). Towards a New Canadian Trade Strategy in Asia?. (Unpublished master's

thesis). University of Calgary, Calgary, AB.

http://hdl.handle.net/1880/106823

master thesis

Downloaded from PRISM: https://prism.ucalgary.ca

MASTER OF PUBLIC POLICY

CAPSTONE PROJECT

Towards a New Canadian Trade Strategy in Asia?

Submitted by:

Jeremy Wong

Approved by Supervisor:

Jean-Sébastien Rioux

Submitted in fulfillment of the requirements of PPOL 623 and completion of the requirements for the Master of Public Policy degree

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Capstone Approval Page

The undersigned, being the Capstone Project Supervisor, declares that

Jeremy Wong

has successfully completed the Capstone Project within the

Capstone Course PPOL 623 A&B Jean-Sébastien Rioux (Name of supervisor) _____________________________________ 8 September 2017 (Supervisor’s signature) (Date)

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Acknowledgements

I would like to thank my supervising professor, Dr. Jean-Sébastien Rioux for his guidance in completing this capstone. I would also like to thank my fiancée, Janice, and my parents, as

without their support, this would not have been possible.

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Table of Contents Introduction .......................................................................................................................... 1

Literature Review ................................................................................................................ 13

Methodology ....................................................................................................................... 24

Findings ............................................................................................................................... 27

Political Implications ........................................................................................................... 35

Bibliography ........................................................................................................................ 41

Appendices ......................................................................................................................... 47

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Capstone Executive Summary In response to the rising economic importance of the Asia-Pacific region, the Canadian

government has often expressed the intent to develop increased trade ties with countries in Asia.

In this Capstone, a Canadian trade strategy towards Asia is proposed. The strategy is based on

examining existing literature and data and proposing the relevant variables that Canada needs to

consider in prioritizing Asian markets. Through qualitative and quantitative analysis of these

variables, findings indicate that Canada would benefit from prioritizing the markets of Japan,

India, China, Indonesia, and the Philippines in Canadian trade strategy. Canada would also benefit

from engaging in the mega regional free trade agreements of the Trans-Pacific Partnership and

the Regional Comprehensive Economic Partnership.

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Introduction

In light of the rising economic importance of Asian countries, what would be an effective

trade policy for Canada in that region? Is it possible for Canada to develop a strategy in

response to current global market trends and rising Asian growth? What kind of strategy would

be effective for Canada, bearing in mind the many variables that need to be considered in

trade? How would bilateral relations and the development of new free trade agreements affect

this strategy? What are the competitive advantages or disadvantages of industries that Canada

has to offer compared with countries in Asia? This capstone attempts to determine which

variables listed above are relevant and causal in benefitting Canadian trade.

This Capstone addresses an important issue in Canadian trade policy because of the

rising economic importance in the Asian market. Asia for the purpose of this capstone includes

the major economies of continental Asia and around the Pacific Rim, and the emerging

economies in South East Asia, as outlined in the Appendix tables. The countries in the region

contain the world’s fastest growing economies, as since 1990, the region has seen a continued

increase in global investment.1 China is already the world’s second largest economy, and is

projected to eclipse American economic output within the decade.2 The future of Canadian

economic growth will be significantly connected to its trade relations with Asia because of the

nature of global trade. If Asia continues to rise in economic importance, Canada will need to

develop trade relationships in that region to foster Canadian economic growth and open new

1 Peter A. Petri, Michael G. Plummer, and Fan Zhai. 2012. “Trans-Pacific Partnership and Asia Pacific Integration: A Quantitative Assessment”. Peterson Institute for International Economics: 36. 2 Denise R. Osborn and Tugrul Vehbi. 2014. “Growth in China and the US: Effects on a small commodity exporter economy.” Economic Modelling, Elsevier: 268.

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markets for export or benefit from lower cost imports. If other countries can develop

preferential trade relations with Asian countries and Canada fails to do so, this will be highly

detrimental to the growth of the Canadian economy, as it will reduce Canadian trade

opportunities.

Currently, the majority of Canadian exports are still directed towards slow-growth

developed economies, with approximately 73 percent of exports heading to the United States,

Canada’s largest trading partner.3 Slow growth economies are typically characterized by

developed nations that have lower annual growth in GDP percentage, usually under 3 percent.4

This could be due to many factors, including low population growth, stagnation in productivity,

and erosions of competitive advantages. Although Canada’s major trading partners consist of

slow growth economy countries, it is important for Canada to develop trade ties with Asian

countries, as Asia contains many of the fastest growing economies in the world and would give

Canada opportunities for beneficial trade.

As the ideology of free trade has developed, a system of trade agreements was needed

to ensure fairness and order in how countries trade with each other. Since the end of World

War II and the establishment of the United Nations, the global economy has become

increasingly more integrated in trade. In an effort to reduce global trade barriers, the Global

Agreement on Tariffs and Trade (GATT) was signed by twenty-three nations in 1947. As trade

ties continued to develop and countries sought to establish rules for trade, the World Trade

3 The Canadian Trade Commissioner Service. 2017. Trade Commissioner Service U.S.A. Accessed Mar 9, 2017. http://tradecommissioner.gc.ca/united-states-of-america-etats-unis-amerique/index.aspx?lang=eng 4 John Miller. 2015. “Slow Growth and No Growth.” New Labor Forum, 24 (3): 45.

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Organization (WTO) was founded in 1995. Since its creation, the World Trade Organization

(WTO) has sought to institutionalize and regulate trade to promote the global economy. The

WTO currently consists of 159 member countries, with members adhering to mutually agreed

upon trade rules. Through the WTO, the Doha Round was launched in 2001, in efforts to

“achieve major reform of the international trading system through the introduction of lower

trade barriers and revised trade rules”.5 The Doha Round was intended to bring about

negotiations for fairer and freer trade among member countries. Although many WTO member

countries would benefit from negotiating a large and inclusive global trade framework, it is very

difficult for so many countries to agree on what this kind of framework should entail. Different

countries are concerned about different matters of trade, and with so many countries, it is

difficult to come to agreement on an all-inclusive trade agreement. For example, more

developed countries in the OECD are generally more concerned with environmental protections

and labour rights, whereas developing countries would not accept agreements that include

these regulations.6 Negotiations through the WTO have been plagued with delays and

disagreement between member states. Since then, regional trade agreements initiated outside

of the WTO have emerged as the main means to liberalize trade.7 In Asia, regional economic

alliances have also continued to form in which Canada has shown interest. The Asian Pacific

Economic Cooperation (APEC) forum was formed in 1989, with Canada as a founding member

amongst twenty-one other member economies.8 Although global trends are shifting towards

5 World Trade Organization. 2016. The Doha Round. Accessed Octover 19, 2016. https://www.wto.org/english/tratop_e/dda_e/dda_e.htm. 6 Chad Brown. 2017. “Mega regional trade agreements and the Future of the WTO.” Global Policy 8, (1): 108. 7 Petri, Plummer, and Zhai. “Trans-Pacific Partnership and Asia Pacific Integration,” 5. 8 Government of Canada, “Asia Pacific Economic Cooperation (APEC),” http://www.international.gc.ca/apec/index.aspx?lang=eng (accessed July 7, 2016).

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regional trade agreements rather than negotiations through the WTO or bilateral agreements,

it is argued that the transparency and non-discrimination of regulations that could be achieved

through the WTO would be preferable to regional FTAs.9 However, progress through the WTO

seems unrealistic in the foreseeable future.10

In the Asian Pacific Region, the TPP is one major free trade agreement of preeminent

focus within the last decade. Under the Obama Administration and the Harper government, the

US and Canada were directly involved in the trade negotiations for the TPP. The TPP seeks to

reduce trade barriers and set the rules of trade for the member countries bordering the Pacific

Ocean. As a bloc, the TPP would become Canada’s largest trading partner, accounting for more

than 70 percent of trade.11 However, with the election of US President Trump, the Trans-Pacific

Partnership appears to be defunct.12 President Trump has promised in his campaign to

withdraw from the TPP immediately upon assuming office13. In light of this development,

Canada may need to re-evaluate its Asia-Pacific trade strategy moving forward, without the

TPP.

The origins of the TPP began in 2005 when four Asia-Pacific Economic Cooperation

(APEC) economies (Brunei Darussalam, New Zealand, Singapore and Chile, known as the P4)

9 Brown, “Mega regional trade agreements and the Future of the WTO,” 109. 10 Fred Bergsten, Marcus Noland, and Jeffrey J. Schott. 2011. “The Free Trade Area Of The Asia Pacific: A Constructive Approach To Multilateralizing Asian Regionalism”, Asia Development Bank Institute: ADBI Working Paper Series, 336: 3. 11 Amari Akira. 2016. “The Trans-Pacific Partnership (TPP) Agreement.” Asia-Pacific Review 23 (1): 11. 12 Adrian Morrow, “Trump withdraws from TPP, but offers Canada hope on NAFTA”, The Globe and Mail, Jan 23, 2017. http://www.theglobeandmail.com/news/world/us-politics/trump-executive-order-tpp/article33701019/, (accessed March 9, 2017). 13 Donald J. Trump, “Donald J. Trump’s Vision,” https://www.donaldjtrump.com/policies/trade (accessed May 12, 2017).

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signed the Trans-Pacific Strategic Economic Partnership.14 This agreement was created in hopes

of sparking a more comprehensive and wide reaching Trans-Pacific strategy. In the TPP, the

“Asia-Pacific Region” is defined as countries which border the Pacific Rim. In 2009, the U.S

joined the negotiations. As the largest economy in the world, America’s presence and influence

in the TPP negotiations could potentially shape the future of trade agreements to benefit

American interests.15 Later that year, Australia, Peru, and Vietnam joined negotiations,

followed by Malaysia in 2010, and Canada and Mexico in 2012. Canada had the opportunity to

enter the original discussions in 2005, but declined, failing to foresee the future importance and

development of the TPP.16 In 2010, then Trade Minister Peter Van Loan entered discussions

with the US to support Canada’s case for joining the TPP, but the US declined, partly because of

Canadian protectionism over supply management in the dairy industry. These concerns were

shared by New Zealand and Australia.17 In 2011, Prime Minister Harper announced Canada’s

intention to join the TPP at an APEC summit in Honolulu.18 After a year of negotiations, Canada

was welcomed into the TPP negotiations in 2012 alongside Mexico.19 The major issue of supply

management in the dairy industry was put up for negotiations, with Canada eventually agreeing

to remove some protections for the supply management system in the form of a 3.25 percent

opening of imports to foreign products. Former PM Harper promised a fifteen year, $4.3 billion

14 Todd Allee and Andrew Lugg. 2016. “Who wrote the rules for the Trans-Pacific Partnership,” Research and Politics: 2. 15 Allee and Lugg, “Who wrote the rules for the Trans-Pacific Partnership,” 2. 16 Laura Dawson. 2012. “Can Canada join the Trans-Pacific partnership? Why Just Wanting it is Not Enough,” Commentary (C.D. Howe Institute): 2. 17 Ian Elliott. 2012. “Canada Drums Up TTP Backing”, Feedstuffs, 84: 1 18 Dawson, “Can Canada join,” 2. 19 Investment Weekly News. 2012. “United States-New Zealand Council Welcomes Inclusion of Canada and Mexico in Trans-Pacific Partnership Talks”.

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compensation package to aid dairy farmers through this transition, although the Liberal

government may reconsider this promise.20

Since Canada’s admission into negotiations, the next major development was Japan’s

entry into the TPP in 2013. Japan is the world’s third largest economy and could be a major

destination for Canadian agricultural and natural resource exports. Canada has been pursuing a

free trade agreement with Japan since the meeting between former PM Harper and former PM

Noda in 201221. Japan could provide great value to Canada in terms of mutual investment and

trade.

Another important aspect of Canada’s entry into the TPP revolves around its trade

relations with the US and Mexico under NAFTA. Since Canada, the US and Mexico would all be

part of the proposed TPP, the new TPP rules would update many areas of trade between the

three countries that NAFTA does not cover. NAFTA needs updating because NAFTA is primarily

about goods and neglects modern areas of regulation regarding services, investment, and

intellectual property, amongst others.22 If all three countries sign on to TPP, then TPP would

potentially erode some of the trade advantages under NAFTA, but would also open trade to a

larger market. This is because NAFTA gives preferential market access between Canada, the US,

and Mexico, but under the TPP this preferential market access would be opened up to all TPP

20 Gordon Isfeld. “4.3 billion TPP compensation for Canada’s dairy industry is not a done deal”, Financial Post, Nov 18, 2015. http://business.financialpost.com/commodities/agriculture/4-3-billion-tpp-compensation-for-canadas-dairy-industry-is-not-a-done-deal-trade-minister-chrystia-freeland/wcm/2948f05d-46d1-4523-94f2-37d42d4243b9, (accessed May 15, 2017). 21 Global Affairs Canada, “Canada-Japan Economic Partnership Agreement (CJEPA)”, (2015), http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/japan-japon/background-contexte.aspx?lang=eng. 22 Wendy Dobson and Diana Kuzmanovic. 2010. “Differentiating Canada: The Future of the US-Canada Relationship,” The School of Public Policy 3 (The University of Calgary): 18.

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countries. This would erode advantages that are currently between Canada, the US, and

Mexico, but it would open up new advantages and disadvantages between all the TPP member

economies. It was necessary for Canada to join TPP negotiations because if Canada had not

joined the TPP, it would be left out of the competitive trade advantages of the TPP that would

benefit the US and Mexico in relation to the other TPP members.23

In October 2015, the negotiations of the TPP were concluded, and in February 2016, the

TPP was signed by the twelve Asia-Pacific countries at the negotiating table, including Canada.24

The next major step for the TPP to come into effect was ratification by all member countries.

Ratification includes the approval of legislation by each member government of the TPP

through their own legislative processes. The TPP would have come into effect 60 days after all

member countries ratify the agreement, or if after two years, will come into effect if at least six

member countries with 85 percent of the combined GDP have ratified the agreement.25 This

means that the success of the TPP must include US ratification, being the world’s largest

economy. So far, only two member countries have ratified, including Japan on January 20,

2017, and New Zealand, on May 11, 2017. The TPP is projected to benefit Canada economically

in the long term by $4.3 Billion in GDP gains, and the cost of not joining the TPP to Canada is

projected to be $5.3 Billion in long term GDP losses.26 Thus, negotiations and subsequent

ratification of the TPP is extremely important to the future of the Canadian economy. However,

23 Dobson and Kuzmanovic, “Differentiating Canada: The Future of the US-Canada Relationship,” 6. 24 Byung-Il Choi. 2016. “Whither the TPP? Political Economy of Ratification and Effect on Trade Architecture in East Asia,” East Asian Economic Review 20, 3 (Korea Institute for International Economic Policy): 313. 25 Choi, “Whither the TPP,” 314. 26 Government of Canada, “Asia Pacific Economic Cooperation (APEC),” http://www.international.gc.ca/apec/index.aspx?lang=eng (accessed December 7, 2016).

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the high possibility that the US will not ratify the TPP forces Canada to consider an alternative

approach to its Asian economic trade strategy.

In his Presidential campaign, President Trump portrayed the TPP and NAFTA as an unfair

trade deal for America that hurts American employment. He also campaigned on rebalancing

the trade deficit with China. His campaign slogan “Make America Great Again” reflects the

protectionist and patriotic sentiments of his policy direction.27 The stipulated deadline for TPP

ratification in the member nations is February 2018.28 If the US does not ratify the TPP, then in

its current form, the TPP will dissolve because it needs US support to pass. With the heavy

involvement of the US in writing the TPP, its withdrawal would signify a major shift of policy

away from Asia. Under the Obama Administration, the US was positioning itself to be more

integrated and engaged with the Asia-Pacific region. The TPP was a means to promote

American influence in the region to counter Chinese expansionism. On January 23, President

Trump signed an Executive order that indicated the US withdrawal from the TPP. Consequently,

US ratification of the TPP will likely not occur under the Trump administration. Reaction in the

US has been mixed, as US Senator John McCain commented that the withdrawal “will send a

troubling signal of American disengagement in the Asia-Pacific region at a time we can least

afford it” whereas democrats like Bernie Sanders applauded the American withdrawal.29

27 Midas Letter, “Trump Will ‘Make America Great Again’ at Canada’s Expense”, Financial Post, November 28, 2016, http://business.financialpost.com/midas-letter/trump-will-make-america-great-again-at-canadas-expense, (accessed June 17, 2016). 28 Vinod Aggarwal. 2016. “Mega-FTAs and the Trade-Security Nexus: The Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP),” Pacific Issues 123 (03): 4. 29 Justin Sink and Toluse Olorunnipa. “China eyes opportunity as US pulls out of Trans-Pacific Partnership”, Sydney Morning Herald, January 24, 2017, http://www.smh.com.au/world/china-eyes-opportunity-as-us-pulls-out-of-transpacific-partnership-20170123-gtxbi1.html, (accessed June 5, 2017).

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More recently, Australia, New Zealand and Japan have pushed forward in hopes of a

TPP-11 deal. The Japanese PM Shinzo Abe continues to spearhead trade liberalization for Japan,

seeking to finalize a Japan-EU Economic Partnership Agreement as well as the TPP. It is possible

that if a TPP is finalized without the US, the US will have increased incentive to join further in

the future. However, TPP members Vietnam and Malaysia are stalling the TPP-11 negotiations

because of a desire to renegotiate the original terms. Under the original agreement, Vietnam

and Malaysia were more willing to agree to change in order to access the US market for

exportation, because of competitive advantages in the garment and electronic sectors. Without

the US market access, these countries are reconsidering the value of the TPP.30

Alongside the development of the TPP, it is of major significance that China, India,

Japan, Australia, New Zealand and the other Association of South East Asian Nations (ASEAN)

countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines,

Singapore, Thailand, and Vietnam) are in the process of negotiating the Regional

Comprehensive Economic Partnership (RCEP).31 The RCEP would include a population of 3.4

billion people with approximately 30 percent of world GDP at 21.4 trillion USD. The RCEP

negotiations began in 2012 and notably do not include the US or Canada. Some have suggested

that this alternative trade agreement could be viewed as a means by which China contends for

regional dominance.32

30 Chandran, Nyshka, “Japan wants a massive trade deal without the US, but these countries stand in its way.” CNBC News, July 13, 2017, https://www.cnbc.com/2017/07/13/vietnam-malaysia-stand-in-the-way-of-japans-trans-pacific-partnership-dream.html, (accessed July 29, 2017). 31 Vinod K. Aggarwal, “Mega-FTAs and the Trade-Security Nexus: The Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP),” Pacific Issues 123 (03, 2016): 4. 32 Shintaro Hamanaka. 2014. “TPP verses RCEP: Control of Membership and Agenda Setting”, Journal of East Asian Economic Integration, 18: 1.

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With Trump having pulled out of the TPP, China could emerge as the major player in

shaping the future of Asian trade relations.33 The RCEP was the main agenda item at the recent

APEC Summit in Peru. Relative to the RCEP, the TPP more comprehensively addresses labour

rights, intellectual property, digital commerce, and the environment. In contrast, the RCEP is a

much more limited, traditional type of agreement that would not address the labour and

environmental concerns that the US was hoping China would need to adapt to under the TPP.34

The TPP contains thirty chapters extensively covering all goods and services in detail, with

specific lines addressing all tariffs, whereas the RCEP, although still in its development, contains

approximately a dozen chapters that may exclude certain goods and services and not fully

reduce all tariffs. The TPP includes specific chapters on government procurement, dispute

settlement, customs, extensive intellectual property coverage, environmental protection that

includes fishing rights, endangered species trade, logging, ozone, and protection of workers’

rights that includes prohibiting the use of forced labor, child labor, and necessitating minimum

wages and acceptable working conditions.35 The TPP agreement is overall much more

transparent and clear in its stipulations, whereas the RCEP is vague in many categories. This lack

of clarity could be intentional, as this gives member countries of the RCEP, with China at the

forefront, the ability to maintain control over its own domestic practices and avoid compliance

with extensive trade agreement rules as set by the TPP.

33 Ami Miyazaki and Tom Westbrook, “Trump’s Threat to Pull Plug on TPP Allows China to Take Leadership on Trade”, November 22, 2016, http://globalnews.ca/news/3081166/trumps-threat-to-pull-plug-on-tpp-allows-china-to-take-leadership-on-trade/, (accessed May 6, 2016). 34 Hamanaka, “TPP Versus RCEP: Control of Membership and Agenda Setting”, 168. 35 Asian Trade Center, “RCEP vs. TPP Comparison”, November 2016, http://www.asiantradecentre.org/talkingtrade//myvwg5yr21a93pkjc45bwzx3wtbc3z, (accessed July 5, 2017).

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Japan was also involved in shaping the RCEP from its onset, seeking to balance China in

its rise to Asian economic dominance. Japan has used the RCEP as a bargaining chip to gain

more favourable terms in the TPP, but with the anticipated US withdrawal from the TPP, Japan

could refocus its efforts on the RCEP.36 Japanese PM Shinzo Abe has stated that the TPP is

“meaningless” without American support.37 Japan prized entry into the US market for its

exports, and without the US in the TPP, it has possibly lost its primary goal for ratification. Japan

has also been unwilling to proceed with bilateral trade agreement negotiations with Canada

until the future of the TPP becomes more apparent. There have been suggestions of the TPP

going forward with the remaining 11 countries, even if the US does not ratify. During an APEC

meeting in Hanoi, Vietnam on May 27, 2017, trade ministers from the eleven countries met and

agreed to present options to bring the TPP-11 into force as quickly as possible. The assessment

is set to be finished before the APEC Economic Leaders Meeting on November 10-11, 2017 in

Danang, Vietnam.38

Other countries have also responded to the change in American policy towards Asian

trade under President Trump. Vietnam and Malaysia have both recently shifted its focus from

ratifying the TPP to RCEP negotiations.39 Although both part of RCEP negotiations, Australia and

36 Mike Blanchfield, “Japan Waits to Deal Directly With Canada On Trade, Not Ready to Abandon TPP: Envoy,” Global News, November 27, 2016, http://globalnews.ca/news/3091447/japan-waits-to-deal-direct-with-canada-on-trade-not-ready-to-abandon-tpp-envoy/, (accessed June 12, 2017). 37 Mike Blanchfield, “Japan Waits to Deal.” 38 Investment Treaty News, “TPP-11 to move forward; United States to focus on bilateral negotiations and NAFTA”, International Institute for Sustainable Development, June 12, 2017, http://www.iisd.org/itn/2017/06/12/tpp-11-to-move-forward-united-states-to-focus-on-bilateral-negotiations-and-nafta/, (accessed July 20, 2017). 39 Miyazaki and Westbrook, “Trump’s Threat to Pull Plug on TPP Allows China to Take Leadership on Trade.”

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New Zealand seem hopeful that moving forward in the TPP without the US could eventually

lead to US ratification.40

Among APEC countries, there has also been a long-term vision to form an Asia-Pacific

free trade bloc. In the Bogor Declaration of 1994, leaders agreed to commit to “complete the

achievement of our goal of free and open trade and investment in the Asia-Pacific no later than

the year 2020. The pace of implementation will take into account differing levels of economic

development among APEC economies, with the industrialized economies achieving the goal of

free and open trade and investment no later than the year 2010 and developing economies no

later than the year 2020.”41 This commitment later became known as The Free Trade Area of

The Asia Pacific (FTAAP). FTAAP is an even broader regional trade agreement than both the TPP

and RCEP, as it includes all members of APEC, including key members such as the US, China,

Russia, and Japan. An APEC wide trade agreement would be of major economic importance, as

together the countries would account for approximately 60 percent of world trade.42 However,

FTAAP seems to be the most ambitious and least likely trade agreement at this point, as it

would encompass a large area and many countries of differing agendas, and no realistic

negotiations for FTAAP have occurred to date. As the US has withdrawn from the TPP and RCEP

discussions are still underway, FTAAP seems improbable at this point, especially considering the

lack of American leadership in the Asia Pacific trade arena.43

40 Phil Mercer, “Australia Considers TPP Without US”, VOA News, November 23, 2016, http://www.voanews.com/a/australia-considers-tpp-without-us/3608204.html, (accessed June 9, 2017). 41 Asia Pacific Economic-Cooperation, “1994 Leader’s Declaration.” November 15, 1994, https://www.apec.org/Meeting-Papers/Leaders-Declarations/1994/1994_aelm.aspx, (accessed Aug 1, 2017). 42 Bergsten, Noland, and Schott, “The Free Trade Area Of The Asia Pacific,” 5. 43 The Economist, “America’s Big Bet.” November 13, 2014, https://www.economist.com/news/special-report/21631797-america-needs-push-free-trade-pact-pacific-more-vigorously-americas-big-bet, (accessed Aug 4, 2017).

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It is important to note that among the Pacific Rim states, Canada currently has FTAs with

South Korea, Honduras, Panama, Colombia, Peru, Costa Rica, Chile, Mexico and the US.44 For a

full list of Canada’s current trade agreements, see Appendix tables.

Literature Review

The extant literature regarding global trade is broad and voluminous, but very limited

when narrowed down to Canada’s potential future trade strategy in Asia. To effectively review

the literature on Canada’s potential trade strategy in Asia, a wider area of research was

necessary to examine the critical factors. This literature review will focus on several key areas. It

will begin more generally, focusing on recent trends in global trade openness or restrictiveness.

Subsequently, the economic climate and trends in Asia will be described, setting the stage for

any trade consideration that Canada would have in building ties in Asia. It will then cover the

literature on relevant current free trade agreements that Canada is a part of or is considering

joining and discuss what the impacts of these trade agreements have had or will have. This will

be followed by an analysis on Canada’s potential competitive advantages compared with Asian

countries if Canada committed to various trade agreements. Canadian domestic attitudes and

political considerations will be also considered relating to support or opposition against trade

agreements. Lastly, sources on the history, development and impact of the major potential

agreements will be reviewed, mainly focusing on the TPP and the RCEP. Taken as a whole, this

44 Global Affairs Canada, “Canada’s Free Trade Agreements”, February 11, 2016, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fta-ale.aspx?lang=eng, (accessed July 7, 2017).

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literature review seeks to summarize the approach thus far in developing a Canadian trade

strategy in Asia and the variables that need to be considered.

In regards to more recent trends in global trade openness or restrictiveness, a joint

International Monetary Fund (IMF), WTO, and World Bank paper outlined the trends and

impacts of growth in global trade.45 The article makes the case for a correlation over the last

fifty years between trade openness and economic growth, measured in GDP growth by yearly

percentage and worker wages. GDP growth reflects the size and health an economy, because it

measures the increase in domestic production year over year. The data in this study shows that

increasing trade integration and lowering barriers helped drive economic growth. Nevertheless,

the benefits of trade, especially in advanced economies, are not spread equally. Trade has

resulted in overall growth but has adversely affected some individuals and communities,

causing job losses in less competitive sectors, requiring governments to enact polices to help

ease the adjustments caused by trade. It also demonstrates that since the early part of this

century, there has been an increase in protectionism and less progress in easing trade

restrictions. Free trade agreements can invoke much domestic opposition. Tariffs and

restrictions can protect domestic industries and employment by making it harder for foreign

competitors to export profitably with tariff-adjusted prices.46 Without these protections,

industries that are less competitive or efficient compared to the world market would be made

obsolete.

45 International Monetary Fund. 2017. “Making trade growth and engine of growth for all”. 1-64 46 Choi, “Whither the TPP,” 313.

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In an Organization for Economic Co-operation and Development (OECD) paper

addressing the rise of global protectionism, Thomsen and Mistura collected data measuring the

regulatory restrictiveness and the statutory barriers against foreign direct investment (FDI).47

There was a significant correlation between lower regulations and higher FDI. This means that

the lowering barriers will give opportunity for more foreign investment, leading to more

economic growth and trade. They noted that the general trend from the 1970s-1990s was the

increase of global trade openness, with more exports from emerging economies. However,

since 2000, the easier reforms have already been made, making it harder to increase reforms

for trade openness. OECD countries seem to be more open for foreign investment, whereas

non-OECD countries are more restrictive. This paper indicates that the lower the FDI

restrictiveness of a country, the more beneficial and attractive it would be to foreign

investment, meaning that Canada would benefit from investing in Asian countries with lower

restrictions against foreign investment.

In developing a trade strategy in Asia, it is important to assess the recent and projected

economic climate in the region. In an Asian Development study in 2016, key indicators were

chosen to assess the general health of the region.48 In the people, economy and output section,

key indicators that were highlighted included population and size and growth of GDP. The Asia-

Pacific region contains more than 4 billion people, accounting for almost 55 percent of global

population. The countries with the highest population in the world, China and India, are in Asia.

Population size is an essential consideration because the larger the population, the larger the

47 Fernando Mistura and Stephen Thomsen. 2017. “Is investment protectionism on the rise?” OECD Global Forum on International Investment, 1-7. 48 Asia development Bank. 2016. “Key indicators for Asia and the Pacific 2016.” 1-396.

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labour force and the larger the market for consumption. In another IMF paper on the Asia

Region economic outlook, population is considered a key factor, as size and age of population

could have major impacts to economic health49. Another key indicator is the size and growth

rate of GDP. The region accounts for around two-fifths of global GDP, with three of the world’s

ten largest economies, China, Japan, and India, located in the region. These three countries

account for approximately 70 percent of output in Asia. GDP size is noted as a key indicator in

these studies because it measures the economic output and size of an economy. Although it is a

very general figure, a growing GDP may indicate higher production, higher employment, and

greater economic health as compared to a shrinking GDP. In the recent few years, growth of

real GDP in half the economies in Asia exceeded 3 percent.50 Out of the countries considered,

the fastest growing economies according to GDP are Cambodia, India, and Myanmar. The

region continues to lead the world in economic growth, with 6.3 percent growth in 2016.51

Projections for the region are 5.5 percent in 2017 and 5.4 percent in 2018.52 Higher growth

rates in GDP indicate expanding economies, higher demand, and more opportunities for trade.

The region is the highest recipient of FDI, meaning that foreign countries are willing to invest in

this region to seek economic opportunities for profit.53 FDI was highest to South East Asian

countries of Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Thailand, and Vietnam, with

large investment from China and Japan.54 It is of note that the economic growth rate in China is

49 International Monetary Fund. 2017. “Asia and Pacific: Preparing for Choppy Seas.” Regional economic outlook, World Economic and Financial Surveys, 43. 50 Asia development Bank, “Key indicators for Asia and the Pacific 2016,” xxxii. 51 World Bank Group. 2017. ”Global Economic Prospects: Weak Investment in Uncertain Times.” 26. 52 International Monetary Fund. 2017. “Asia and Pacific: Preparing for Choppy Seas.” Regional economic outlook, World Economic and Financial Surveys, 14. 53 Asia development Bank. 2016. “Key indicators for Asia and the Pacific 2016.” xxxiii. 54 World Bank Group, “Global economic prospects,” 195.

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gradually slowing down, as the focus shifts from industry to services in an effort to rebalance

the economy for healthier long term growth. It is also important to note the effect of

commodity pricing on GDP growth rate, as commodity prices have been low in recent years,

benefitting commodity importers like Thailand and Philippines, but negatively affecting

commodity exporters in the region, like Lao PDR, Malaysia, and Myanmar.55

Another central aspect that affects trade is the presence or absence of trade

agreements between countries. In another IMF paper, Hannan used a “synthetic controls

method” to measure the impact of trade agreements on the amount of trade between country

pairs.56 Findings reflected that there was significant trade growth over time due to trade

agreements. In his study of NAFTA, it was seen that all members of the agreement benefitted

from overall trade growth. It is important to note that trade agreements can cause import

diversion, meaning that countries left out of a trade agreement will import less to the countries

within the trade agreement. Thus, it is important to be included in free trade agreements in

order to avoid detrimental import diversion. In another study on the Canada US FTA in effect

from 1989-1994 prior to NAFTA, Zhang discovered that both countries benefitted in long run

productivity gains but experienced short run adjustment costs.57 The study focused on the

effects of the FTA on Canada’s GDP, labour productivity and unemployment to discover the

general equilibrium of the trade liberalization. The annual real GDP growth rate of Canada was

lowered by 2.56 percent during the short run adjustment but grew to a 1.86 percent increase in

55 World Bank Group, “Global economic prospects,” 26. 56 Swarnali Ahmed Hannan. 2016. “The Impact of Trade Agreements: New Approach, New Insights.” International Monetary Fund, 1-32. 57 Du Zhang and Yin Hsiao. 2015. “The Macroeconomic Effects of the Canada-US Free Trade Agreement on Canada: A Counterfactual Analysis.” The World Economy, 1-15.

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the long run. It also lowered the annual labour productivity by 0.62 percent from 1989-1991,

but increased it in the long run by 2.39 percent. Unemployment increased by 1.81 percent

during 1989-1994.

In regards to more recent FTAs, different studies have been conducted to assess the

value of the FTAs that Canada has established or currently in the midst of negotiating. In a

study on the Canada Korea Free Trade Agreement (CKFTA) a model was created to measure the

impact of the CKFTA from 2015-2035.58 The overall projected impact of the FTA was small but

positive, with a 0.06 percent increase in Korea’s GDP and 0.05 percent increase in Canada’s

GDP. It is almost important to measure projected export and import gains and losses, as exports

are sometimes preferred to imports in trade analysis, because of the perceived advantages due

to domestic production and opportunities for domestic employment. This perception was

evident in President Trump’s campaign rhetoric, as he repeatedly accused China of stealing

American Jobs due to free trade, as reflected by the trade deficit.59 Trade balance is also useful

in examining what and to where a country is importing and exporting goods and services.

Countries naturally import in sectors where they are less competitive, and can buy goods and

services more cheaply from foreign sources. Countries will export in sectors where they possess

competitive advantages, exporting to countries that in turn have competitive disadvantages in

that sector. In the CKFTA, Korea would expand its exports of goods to Canada by 19 percent,

whereas Canada would increase its exports to Korea by 26 percent.60 Canada would be focused

58 Dan Ciuriak and Jingliang Xiao. 2014. “The Impact of the Canada-Korea Free Trade Agreement as Negotiated.” Journal of East Asian Economic Integration, 18, (4) 1-38. 59 Cecil Bohanon and Bill Styrill. 2017. “Advice for Trump: Drop trade-deficit obsession.” Indianapolis Business Journal. 37, (46): 11. 60 Ciuriak and Xiao, “The Impact of the Canada-Korea Free Trade Agreement as Negotiated,” 32.

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on the agricultural sector and Korea would be focused on the industrial sector, according to

their competitive advantages, reflecting the importance of identifying which sectors contain

comparative trade advantages in trade agreements. More specifically, Korea would be slightly

gaining in the Canadian auto industry and Canada would be gaining in the Korean beef industry,

although it is of note that most of these gains would be diversion from American or Australian

Beef.

In a study of a potential FTA between Canada and India, Dobson studied the size of

bilateral trade and the comparative advantages between Canada and India.61 She concludes

that increased trade liberalization would be beneficial to both the Canadian and Indian

economies, proposing a services-only bilateral FTA. Canada could offer services in the finance,

energy, power and environmental sector, whereas India could expand in the software sector.

The potential for growth in bilateral trade between the two countries is large. However, due to

distance, the limited trade in goods that currently exists between Canada and India and the

presence of much large trading partners that are closer to both countries, increase in trade may

prove to be difficult.62 Another study used a partial equilibrium model to account for revealed

comparative advantages and trade complementarity to evaluate a potential Caribbean

Community (CARICOM)- Canada FTA.63 Findings showed that there was low trade

complementarity and that the FTA would not be beneficial for CARICOM countries. A potential

benefit could be if the FTA was altered to be limited to services only. Revealed comparative

61 Wendy Dobson. 2011. “Deeper Integration between Canada and India?” Margin- The Journal of Applied Economic Research, 5, 1, 93-115. 62 Eugene Beaulieu. 2012. “The Comprehensive Trade Agreement with India: What’s in it for Canada (or India for that matter)?,” The School of Public Policy 3 (The University of Calgary): 6. 63 Khadan, Jeetendra and Hosein, Roger. 2015. “Trade, Economic and Welfare Impacts of the CARICOM-CANADA Free Trade Agreement.” Social and Economic Studies, 64, (3,4), 103-150.

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advantage (RCA) compares the share of a country’s export of a type of commodity to another

country’s share, both compared to the global share of that commodity being traded.64 An RCA

value above zero means there is a comparative advantage, whereas below zero means there is

a disadvantage for that commodity or sector. Canada has traditionally had RCA in natural

resources and agriculture, and disadvantages in manufactured products.65 Specifically

addressing Canada’s RCA in agriculture, a longitudinal study was done by Sarker and Ratasena

on the RCA of Canada’s agricultural products between 1961 and 2011.66 They found that

although there were advantages in the export of wheat, beef and pork, the main advantage was

found in wheat. In another study by Fen and Latif, the bilateral trade flow between China and

Canada was examined in regards to trade intensities, intra-industry trade, comparative

advantages, and trade complementarity.67 The study revealed that there has been a continual

increase in trade in the last decade, and also high trade complementarity and few overlapping

sectors. The study recommended increased trade and stronger ties, as there is still further

room for growth. In Export Development Canada’s guides for trade in Asia, it is important to

note that bilateral trade flows, import and export data regarding top traded commodities, and

comparative advantages by sector are mentioned to guide Canadian businesses in how to trade

64 Dobson, “Deeper Integration between Canada and India?”, 98. 65 Dobson, “Deeper Integration between Canada and India?”, 98. 66 Sarker, Rakhal and Ratnasena, Shashini. 2014. “Revealed Comparative Advantage and Half-a-Century Competitiveness of Canadian Agriculture: A Case Study of Wheat, Beef, and Pork Sectors.” Canadian Journal of Agricultural Economics, 62, 519–544. 67Su Fen and Ehsan Latif. 2014. “Bilateral trade between China and Canada: trends, patterns, and comparisons.” Crawford School of Public Policy (The Australian National University and Wiley Publishing Asia Pty Ltd.), 77-87.

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with Asian countries.68 This further reveals the importance of these variables in analyzing and

developing trade.

Other variables of consequence in the literature include risks in developing trade. In the

EDC guide for business development with China, possible risks to business include protection

and security for foreign investment.69 In order for businesses to be secure, they need to be

properly and fairly regulated. This could be at risk due to bureaucratic interference and

inconsistent application of regulations as a result of corruption. Officials may request bribes in

exchange for approval of business applications. Therefore, it is important to assess the levels of

corruption when measuring potential trade partnerships. Canada also has laws regulating

corruption, including the Corruption of Foreign Public Officials Act, which enables prosecution

of Canadians breaking anti-corruption laws abroad.70 The presence and stability of a democratic

government has also been shown to be beneficial to trade. In a study by Milner and Kubota,

trade flows, liberalization of trade, and democratization of the political system were

compared.71 The study found that political leaders in autocratic regimes have less tendency to

reduce trade barriers. In democratic political systems, there is more association with reducing

trade barriers. Their argument is that democratization increases the electorate size and free

trade promotes more benefits for the average voter.

68 Export Development Canada. 2016. “Doing Business in China, A Guide for Canadian Importers and Exporters.” 1-64. 69 Export Development Canada, “Doing Business in China, A Guide for Canadian Importers and Exporters,” 8. 70 Justice Laws Website. “Corruption of Foreign Public Officials Act (S.C. 1998, c. 34),” Government of Canada, http://laws-lois.justice.gc.ca/eng/acts/C-45.2/, (accessed Aug 6, 2017). 71 Milner, Helen and Kubota, Keiko. 2005. “Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries.” International Organization Foundation (Cambridge University Press), 59, (1), 107-143.

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Canadian attitudes on trade with Asia are also important to discuss in developing an

Asian trade strategy. A study by Allen focused on the question of why Canadians oppose trade

deals in Asia but support deals with Europe.72 The study showed that although Canadians view

Asia as economically important to Canadian prosperity, they are unwilling to support increased

trade with some Asian countries due to political and social factors. Canadians are averse to

building trade ties with countries with non-democratic countries or countries with poor human

rights records. Another article by Paltiel demonstrates Canada’s lack of a clear and coordinated,

long-term strategy in engaging in trade with Asia.73 Paltiel asserts that Canada has failed to

view trade with Asia as a necessary economic reorientation instead of as a supplementary

option to traditional trading partners.

As mentioned previously, the two major regional FTAs of significance currently under

negotiations in Asia are the TPP and the RCEP. Literature on the TPP and RCEP show some

insight on the economic impact of these agreements on the trade and GDP of member

economies. A study by Manchin and Pelkmans-Balaoing that examined the existing FTAs in Asia

suggests that the continued shift towards a regional FTA in Asia is preferred to the creation of

individual bilateral FTA’s between countries because of the different rules of origin and

regulations that each individual FTA imposes.74 The more diverse the regulations, the more

transaction costs between countries, making it more difficult for trade to flow in the region. In

another study focusing on the economic impact of Canada joining the TPP, Chen calculated the

72 Allen, Nathan. 2015. “Keeping rising Asia at a distance: Canadian attitudes toward trade agreements with Asian countries.” International Journal, Asia Pacific Foundation of Canada, 70 (2), 286-308. 73 Paltiel, Jeremy. 2016. “Resolute ambivalence: Canada's strategy toward China and the Asia-Pacific.” Canadian Foreign Policy Journal, 22:1, 40-53. 74 Manchin, Miriam and Pelkmans- Balaoing, Annette. 2007. “Rules of Origin and the Web of East Asian Free Trade Agreements.” World Bank Policy Research Working Paper, 1-29.

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gains that Canada would receive if eliminating tariffs from five Asia-Pacific countries.75 These

countries were China, Thailand, Malaysia, the Philippines, and Indonesia. If Canada eliminated

tariffs from 2010 levels against these five countries, the gains for Canada would be USD 276.45

million from China’s exports, and another USD 33.96 million total from the four other countries.

Imports from all five countries would also gain significantly, ranging from 40 to 70 percent

increases. This reveals the impact of FTAs on Canadian trade with Asian countries and also

reveals the distortion that tariffs have on the market.

Overall, there is limited literature specifically on a Canadian trade strategy in Asia, and

this capstone will seek to contribute to this research gap. One notable report from Global

Affairs Canada on Canada’s Next Markets from a global perspective identified three different

methodological approaches to identifying key markets.76 These approaches included the

Canadian Commercial Interest List (CCIL), FTA Prospects Analysis, and Most Important Future

Markets Analysis. CCIL uses 18 indicators to determine the importance of Canada’s trading

partners, including amount of trade and investment, economic size, growth potential, research

and development spending, and trade commissioner service requests. Amongst the top 25

most important partners, the Asian-Pacific countries that were included, in order of most

importance, are China, India, South Korea, Indonesia, Japan, Vietnam, Thailand and the

Philippines. In FTA Prospects Analysis, economic capacity and trade policy ratings were used to

determine which countries without existing FTAs to focus on for trade negotiations. Among

75 Chen, Bo. 2014. “Trans-Pacific Tariff Barriers: A Case Study of Five Asia—Pacific Developing Countries and Canada.” China Economic Journal, 7 (2): 251-260. 76 André Downs. 2017. “Canada’s Next Markets. Presentation to the Trade Experts Roundtable. Symposium on the New Security Dimension of Global Commerce.” Global Affairs Canada, 1-18.

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Asian- Pacific countries, China, Japan, India, Indonesia, Taiwan, Philippines and Hong Kong were

amongst the top fifteen countries to engage. The Asia-Pacific region as a whole was identified

as the most promising region according to economic capacity. In the Most Important Future

Markets Analysis, country GDP, population, and trade flow sizes were used to identify Canada’s

future priority markets. Among Asia-Pacific countries, China, India, Singapore and Indonesia

were identified as Canada’s most important future markets.

Methodology

The research methodology of this capstone is based on statistical and quantitative

analysis based on published data relating to the relevant variables that have been described in

the literature reviewed. This data is then amalgamated to compare and analyze the variables,

ultimately developing criteria for determining which Asian-Pacific countries Canada would most

benefit from in an increased trade relationship. Each country is then ranked according to

certain variables, and an aggregated ranking of the variables is determined. Additionally,

qualitative variables are used for analysis to further clarify the factors that determine which

trade relationships are priority markets for Canada. Qualitative analysis is also used to consider

membership in the two mega regional trade agreements, the TPP and RCEP. These regional

FTAs are compared to the potential bilateral trade agreements with individual countries and

evaluated. From this research, a Canadian trade strategy regarding the Asia Pacific region is

developed.

The ten variables chosen are as follows: population, GDP, GDP growth rate, trade

balance, FTA Status, revealed comparative advantages by aggregate sector, sectoral

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opportunities, FDI restrictiveness, Corruptions Perceptions Index ranking, and democracy

ranking. Although many other variables and deeper econometric analyses may be considered,

for the purposes of this capstone project, these ten variables have been identified through the

previous literature review as the most important. Some of these variables overlap with the

Global Affairs Canada report on Canada’s Next Markets.77 However, the data for this capstone

is focused specifically on the Asia Pacific region and seeks to go more in depth in regard to

Canada’s relationship with Asian countries. As with any research endeavor, this capstone

project is constrained by its ability to only consider a limited number of variables, limited

availability of current data for all selected countries, and limited econometric data available

relating specifically to Canada and the relevant regional trade agreements. Another limitation is

that ranking based on the variables is not weighted, with each variable ranking being

aggregated with equal weight.

As mentioned previously in the literature review, these variables were chosen as

indicators of priority market countries with which Canada could build increased trade ties. The

variables used for quantitative analysis in determining priority country rankings are population,

GDP dollar amount, GDP growth percentage, FDI restrictiveness, Corruption Perception Index

ranking, and Freedom score. The variables used for qualitative analysis are trade balance, trade

agreement status, revealed comparative advantages, and sectoral opportunities.

Population, GDP in dollar amount, and GDP growth rate percentage per year data is

sourced from the World Bank global indicators database.78 The larger the population, GDP, and

77 Downs, “Canada’s Next Markets”, 1-18. 78 The World Bank, “Population, all countries and economies,” http://data.worldbank.org/indicator/SP.POP.TOTL (accessed Aug 10, 2017).

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growth rate, the higher priority the country is ranked, as there is a larger market available for

trade. The higher the GDP growth percentage, the greater the potential demand for trade.

Rankings from the Corruption Perception index are sourced from the Asian Development Bank

2016 report on key indicators in Asia.79 The lower the corruption, the higher the country is

ranked. Foreign Direct Investment Restrictiveness data is sourced from the OECD database.80

This index measures the number of hostile regulations towards foreign investment. The higher

the value the more restrictions there are. Values were measured from restrictions based on

foreign equity limitations, screening and approval mechanisms, employment of foreigners, and

operations. The Freedom score is sourced from the Freedom House Freedom in the World 2017

report.81 Scores include an aggregate of political rights and civil liberties, with 0 being least free

and 100 being most free. The freer a country is, the higher it is ranked.

In terms of the qualitative analysis, data on Canada’s trade balance, import and export

volume with the selected Asian Pacific countries is sourced from Statistics Canada.82 Trade

balance helps to reveal who Canada is trading with more and what goods we have advantages

or disadvantages in for production. Canada’s trade agreement status with the selected

countries is from Global Affairs Canada.83 The trade agreement status reveals whether or not

an agreement is already in place and which countries we should focus on if no agreement

79 Asia development Bank. 2016. “Key indicators for Asia and the Pacific 2016.” 257. 80 Organization for Economic Co-operation and Development. 2016. “OECD FDI Restrictiveness index,” http://stats.oecd.org/Index.aspx?datasetcode=FDIINDEX# (accessed August 8, 2017). 81 Freedom House. 2017. “Freedom in the World 2017, Table of Country Scores,” https://freedomhouse.org/report/fiw-2017-table-country-scores (accessed August 9, 2017). 82Statistics Canada. 2016. “Imports, exports, and trade balance of goods on a balance-of-payments basis, by country or country grouping,” http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/gblec02a-eng.htm (accessed August 5, 2017). 83 Global Affairs Canada, “Canada’s Free Trade Agreements”, February 11, 2016, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fta-ale.aspx?lang=eng, (accessed June 7, 2017).

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exists. Revealed comparative advantages by aggregate sector are sourced from the Asian

Development Bank 2016 report on key indicators in Asia.84 This informs Canadian industry on

which sectors to focus on for export development, supported by the sectoral opportunities

sourced from Export Development Canada.85

Findings

In Table 1 below, the variables that reflect Canada’s relationship with the selected Asian

Pacific countries for quantitative analysis are shown. According to the analysis presented in this

table, Japan and India are the top two countries that Canada should increase trade with,

followed by Australia, Korea, and China in the top five. Indonesia ranks at the top of the ASEAN

countries, and Brunei ranks as the lowest priority nation for building trade ties. Japan ranked

high on all categories except for GDP growth rate, as it is a highly-developed nation with slow

growth at 1 percent GDP in 2016. India on the other hand, ranked first in GDP growth at 7.1

percent, but scored lower in FDI Restrictiveness, Corruption and Freedom than Japan. Australia

and Korea had similar higher rankings. Both had lower population and growth rate rankings, but

higher rankings in GDP, FDI Restrictiveness, Corruption and Freedom. China was notably highest

in population and GDP, and quite high in growth rate at 6.7 percent, which is only 0.4 percent

behind first ranked India in that category. This reflects the importance of the Chinese market.

However, concerns over FDI Restrictiveness, Corruption and Freedom resulted in overall lower

scores for China.

84 Asia development Bank. 2016. “Key indicators for Asia and the Pacific 2016.” 304-306. 85 Export Development Canada. 2016. “Doing Business in South-East Asia, A Guide for Canadian Importers and Exporters.” 1-48.

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Table 1: Canada’s relationship with selected Asian Pacific Countries

*Green indicates the country is part of both TPP and RCEP negotiations, red indicates only RCEP, white indicates neither.

Country Population (millions)

GDP (US $ millions)

Growth Rate (% Real GDP)

FDI Restrictiveness

Corruption Perceptions

Index

Freedom Score

Aggregate Ranking Country

China 1374.6 11199145.16 6.7 0.327 83 15 1 Japan Taipei, China 23.5 526757.72 0.7 N/A 30 91 1 India Hong Kong 7.3 320912.24 2 N/A 18 61 3 Australia

Japan 127 4939383.91 1 0.052 18 96 4 RO Korea RO Korea 50.6 1411245.59 2.8 0.135 37 82 5 China Australia 23.8 1204616.44 2.8 0.146 13 98 6 Indonesia

New Zealand 4.6 185017.32 2.4 0.24 4 98 7 Philippines India 1283 2263522.52 7.1 0.212 76 77 8 New Zealand

Brunei Darussalam 0.4 11400.27 -2.5 N/A N/A 29 9 Taipei, China

Cambodia 15.1 20016.75 6.9 0.052 150 31 10 Thailand Indonesia 255.2 932259.18 5 0.315 88 65 11 Malaysia Lao PDR 6.5 15903.44 7 0.18 139 12 12 Vietnam Malaysia 31 296359.12 4.2 0.211 54 44 13 Hong Kong Myanmar 52.5 67429.59 6.5 0.356 147 32 14 Singapore

Philippines 101 304905.41 6.9 0.398 95 63 15 Cambodia Singapore 5.5 296965.71 2 N/A 8 51 16 Myanmar Thailand 67.2 406839.68 3.2 N/A 76 32 17 Lao PDR

Vietnam 91.7 202615.89 6.2 0.114 112 20 18 Brunei Darussalam

Source: World Bank World Bank World Bank OECD FDI

Index ADB Freedom House

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The qualitative variables considered are Canada’s trade balance, trade agreement status

with the selected countries, revealed comparative advantages, and sectoral opportunities.

These are reflected in Table 2 on the next page.

In regard to trade balance, Canada has a trade deficit with China, Taiwan, Hong Kong,

Japan, and Korea. Most notably, Canada’s trade deficit with China was at $15.2 billion in 2016.

Canada has a trade surplus with Australia, India, Indonesia and Singapore. Trade balance is

placed in qualitative analysis because although trade balance helps to reveal the amount of

imports and exports in trade with a certain country, it is difficult to rank countries according to

trade balance for prioritizing markets. For example, If Canada imports more from China, it

means that we are increasing the welfare of our citizens because we can purchase more goods

at a cheaper price than if purchased domestically. However, this also means that China is

producing at a comparative advantage, meaning that the industry and the labour used in

production benefits a foreign market rather than Canada’s. A trade deficit in many sectors

would reflect Canada’s weakness in producing in those sectors for export. Nevertheless, even if

Canadians did not import from China, we would import from another country that had cheaper

labour than Canada or replace that labour with advances in technology.86 Labour that is not

used in Canada for that specific sector can also shift to another sector in which Canada has a

competitive advantage, meaning that employment is not necessarily lost due to trade.87

86 Woo, Wing Thye. 2008. “Understanding the Sources of Friction in U.S.--China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment”. Asian Economic Papers. 7 (3): 63. 87 Chad Bown and Rachel McCulloch. 2007. “Beyond myth and emotion, here’s the truth about our trade deficit.” The American. 1 (2): 74.

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Table 2: Canada’s relationship with selected Asian Pacific Countries (Qualitative Variables)

Country Trade

balance (millions)

FTA status Revealed Comparative Advantages by Aggregate Sector (2015) Sectoral Opportunities

Primary Low Tech Manufacturing

Med/ High Tech

Manufacturing

Business Services

Personal Services

China -15,234.60 Negotiations 0.23 1.4 1.12 0.71 0.49

Agrifood, seafood, Automobiles, construction materials and technology, green tech, health care, infrastructure,

energy tech, Taipei, China -1,368.20 0.16 0.64 1.6 0.29 0.53 Agriculture, Biotechnology, Infrastructure, Energy,

Telecom

Hong Kong -1,730.00

Japan -762.5 Negotiations 0.05 0.37 1.4 1.12 0.44 Agriculture, agrifood, Environmental Infrastructure &

Waste Water, Food & Beverage, Forestry (Lumber, Pulp & Paper)

RO Korea -4,328.80 CKFTA 0.02 0.34 1.53 0.8 0.73 Agriculture, Automotive & Heavy Truck, Environmental Infrastructure & Waste Water, Media & Entertainment,

Oil and Gas, Telecom

Australia 85.3 Agriculture, Construction & Infrastructure,

Environmental Infrastructure & Waste Water, Forestry (Lumber, Pulp & Paper), Mining & Metals, Oil & Gas

New Zealand

Agriculture, Environmental Infrastructure & Waste Water, Food & Beverage, Forestry (Lumber, Pulp &

Paper), Machinery - Packaging, Industrial & Analytical Instruments, Oil & Gas, Pharmaceuticals

India 1,110.60 Negotiations 0.67 1.88 0.76 0.94 0.64 Automotive, energy, IT, transportation and clean tech infrastructure, health care tech, agrifood, wood

Brunei Darussalam

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Cambodia petroleum products, agricultural machinery,

mechanical products, textiles, vegetable products, infrastructure development

Indonesia 365.7 2.23 1.8 0.62 0.46 2.03 fertilizers, wood pulp and paper products, cereals,

mechanical products, aerospace products, telecommunications, infrastructure development

Lao PDR Machinery and equipment, vehicles, fuel and consumer

goods, mechanical appliances, electrical equipment, audio and visual equipment

Malaysia 0.65 1.24 0.9 2.12 0.54

Electronics, machinery, petroleum products, plastics, vehicles, iron and steel products and chemicals,

Fertilizers, aerospace parts and products, mechanical appliances and electrical equipment.

Myanmar Construction & Infrastructure, Mining & Metals, Oil and Gas, Telecom

Philippines 0.31 1.17 0.64 2.12 0.54

Electronics, mineral fuels, machinery and transport equipment, iron and steel, textile fabrics, grains and chemicals, Mineral ores, slag and ash, cereals, meat

and meat products and by-products

Singapore 412.1 Negotiations Mechanical appliances, plastic and plastic articles, electrical machinery and equipment, optical and

medical instruments, nickel and nickel articles

Thailand 0.41 1.6 0.68 1.43 1.22 Wood pulp paper and paper by-products, fertilizers,

electrical machinery and equipment, mechanical equipment, precious metals and stones, and cereals.

Vietnam 3.75 1.83 0.25 0.85 1.07 Mechanical appliances, iron and steel products, fertilizers, food products and by-products, and seafood

Source: Stats Can Global Affairs Canada

Asia Development Bank Export Development Canada

**Green indicates the country is part of both TPP and RCEP negotiations, red indicates only RCEP, white indicates neither.

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In terms of FTAs between Canada and the selected Asian Pacific countries, Canada only

has an existing FTA with Korea in the Canada Korea Free Trade Agreement (CKFTA). Canada is in

the process of negotiating bilateral FTAs with China, Japan, India, and Singapore. This means

that Canada has the potential to create many more FTAs in the region. Revealed comparative

advantages (RCA) by aggregate sector and sectoral opportunities help inform which sectors

Canada would most benefit from in foreign trade investment. The values for RCA show that

China is strong in low, medium and high tech manufacturing, Taiwan Korea, and Japan are

strong in high tech manufacturing, and India, Indonesia, Malaysia, Philippines, Thailand and

Vietnam are strong in low tech manufacturing. Indonesia and Vietnam are also high in primary

industry. Malaysia, Philippines and Thailand are high in business services and Indonesia scores

high in personal services. Moreover, Canada has somewhat overlapping comparative

advantages in export sectors to other Asian Pacific countries with Australia. Both countries have

competitive advantages in agriculture and oil and gas products.88 In general, the RCA scores

show that Canada would not benefit from investment in low tech manufacturing in the region

or from investment in high tech manufacturing among the non-ASEAN Asian countries. Canada

would also most likely not benefit from investing in the sectors listed above with the countries

that have high RCAs in those sectors. In terms of sectoral opportunities, Canada would

generally benefit from developing exports in agriculture, agrifood, wood and oil and gas

products in the region. As Asia grows in its demand for energy, Canada has an opportunity and

competitive advantage to export energy products to the region, especially in the form of liquid

88 Evan Capeluck.2016. “A Comparison of Productivity Developments in Canada and Australia: Lessons for Canada.” International Productivity Monitor, 04, 30.

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natural gas.89 Additionally, among ASEAN countries Canada would benefit from developing

exports in machinery, mechanical products, infrastructure technology services, and natural

resource development. It is also important to take into account that among countries in the

region, the studies in the literature review indicated high complementarity in RCA between

Canada and China.90 There are also benefits to a Canada India FTA in terms of sectoral

complementarity.91

The rankings of the countries proceed to shift due to the qualitative variables discussed

above. Due to an existing FTA with Korea and overlapping comparative advantages with

Australia, the top five countries in the Asia Pacific that Canada should increase trade with are

Japan, India, China, Indonesia and the Philippines.

Among the selected countries studied in the Asia Pacific Region in this Capstone, it is

also critical to consider membership in the negotiations for the two mega regional trade

agreements, the TPP and RCEP. Japan, Australia, New Zealand, Brunei, Malaysia, Singapore and

Vietnam are part of the TPP negotiations. All of these countries plus China, Korea, India, and

the rest of the ASEAN countries are a part of RCEP negotiations. Theoretically, membership in

free trade agreements can be regarded as a Prisoner’s Dilemma game.92 In free trade, the

choice between nations would be either to allow free trade or to enact tariffs. If all nations

cooperated and allowed for free trade, then the payoffs of all nations would be at the Pareto

89 Brent Jang. “LNG exports to Asia crucial to Canadian natural gas industry”, July 15, 2015, The Globe and Mail, https://www.theglobeandmail.com/news/british-columbia/exports-to-asia-crucial-to-canadian-lng-industry-report/article25524989/, (accessed Aug 24, 2017). 90 Fen and Latif, “Bilateral trade between China and Canada: trends, patterns, and comparisons”, 77-87. 91 Dobson, “Deeper Integration between Canada and India?”, 93-115. 92 Meredith Lewis. 2011.“The Prisoner’s Dilemma Posed by Free Trade Agreements: Can Open Access Provisions Provide an Escape?” Chicago Journal of International Law, 11(2): 646.

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optimum of open markets. This would result in increased efficiency and maximized production

and consumption, if nations specialized in their own sectors with competitive advantages.

However, the dominant strategy would be to enforce tariffs, because if other nations chose to

allow free trade or enforce tariffs, the payoff to enforce tariffs is higher in both cases based on

self-interest. Thus, the Nash equilibrium would be for all nations to enforce tariffs instead of

creating open markets. The paradox of cooperation here is that cooperation would actually

bring greater welfare at the Pareto optimum rather than at the Nash equilibrium of mutual

tariffs. FTAs like the TPP help nations raise welfare to the Pareto optimum by assuring behavior.

Enforcement exists through the penalties that nations can incur by not keeping trade open as

outlined in the FTA. However, enforcement can be costly in litigation and imperfect in the

judgement of outcomes from the WTO. The development of the institution of free trade in the

WTO versus regional or bilateral FTAs could also be viewed as a Prisoner’s Dilemma game.

Although membership and trade liberalization in the WTO would be the Pareto Optimum for all

countries, it is in the self-interest of countries to defect and form regional or bilateral FTAs to

gain an advantage.93 If more and more countries keep defecting and forming FTAs outside of

the WTO, then the Nash equilibrium would give lower payoffs than if all countries were to

cooperate through the WTO.

The Prisoner’s Dilemma game described above illustrates the necessity for Canada to be

a part of the mega regional trade agreements in the Asian Pacific.94 For Canada, entering into

TPP negotiations arose out of necessity. If all other nations in the TPP ratified the agreement,

93 Bergsten, Noland, Schott. 2011. “The Free Trade Area of The Asia Pacific: A Constructive Approach to Multilateralizing Asian Regionalism.” Asia Development Bank Institute: ADBI Working Paper Series, 336. 94 Lewis, “The Prisoner’s Dilemma Posed by Free Trade Agreements, 647.

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then Canada would be the only country left at the Nash equilibrium while other countries

would be at the Pareto optimum, creating competitive disadvantages with those nations.

Canada could have pursued bilateral trade agreements outside of the TPP, but with the

magnitude of the nations involved in the TPP, it would have been greatly harmful for Canadian

access to major markets around the Pacific Rim if it was left out. Bilateral FTAs can be

beneficial, but with many different FTAs with many different nations in the region, trade can

become very complicated and transaction and administration costs can be detrimental.

Bilateral FTAs could be beneficial to Canada because Canada would not need to appease

demands from multiple states like in the TPP, but regional FTAs offer a much more sizeable

market than bilateral FTAs. Without the aggregate market access that the TPP provides, it could

be less realistic that other countries like Japan would be willing to enter into bilateral FTAs. The

TPP is projected to benefit Canada economically in the long term by $4.3 Billion in GDP gains,

and the cost of not joining the TPP to Canada is projected to be $5.3 Billion in long term GDP

losses.95 Therefore, considering the size and magnitude of the TPP, and similarly the RCEP,

Canada’s trade strategy towards the region would benefit from entry into both the TPP and

RCEP as soon as possible as well as continuing to pursue FTAs with Japan, India, China,

Indonesia and the Philippines.

Political Implications

In Prime Minister Justin Trudeau’s 2015 Mandate letter to the Minister of International

Trade, he asserted the priority of expanding Canada’s free trade agreements globally,

95 Government of Canada, “Asia Pacific Economic Cooperation (APEC),” http://www.international.gc.ca/apec/index.aspx?lang=eng (accessed August 7, 2017).

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prioritizing the expansion of trade with large, fast-growing markets in Asia.96 In light of the

findings from this Capstone, it is recommended that Canada’s trade strategy in Asia be to enter

into negotiations for both the TPP and the RCEP, and for FTAs with the priority markets of

Japan, India, China, Indonesia and the Philippines. However, in the process of pursuing this

trade strategy, political considerations need to be considered.

At the international level, strengthening Canada’s engagement and trade relationships

in Asia will increase Canada’s market access in the region. At this stage of uncertainty with the

TPP, Canada should continue to promote TPP negotiations with the other 10 member states

even without the US, while giving opportunity for the Trump Administration to reverse its

position and possibly ratify the TPP at a later stage. The benefit that Canada has over other

Asian TPP nations is that it already has NAFTA with the US and Mexico. If Canada were to enter

into a TPP 11 minus the US, Canada would still gain entry into the Japanese market. It is

important to note that the US heavily influenced the drafting of the TPP, and without the US, it

could be redrafted to be more beneficial to Canada, especially considering Canada’s late entry

into negotiations. On the other hand, keeping the TPP as is could make it more appealing for

the US to reengage in the future.

If Canada joined the RCEP, it would further integrate the Canadian economy with the

Asia economies. Canada is already part of APEC, which seeks to build economic growth and

cooperation in the Asia-Pacific community.97 However, the direction of the RCEP is quite

96 Justin Trudeau, “Minister of International Trade Mandate Letter”, 2015, http://pm.gc.ca/eng/minister-international-trade-mandate-letter, (accessed August 7, 2017). 97 Asia-Pacific Economic Cooperation, “Member Economics”, http://www.apec.org/About-Us/About-APEC/Member-Economies.aspx, (accessed August 7, 2017).

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different than the TTP. If Canada supports the RCEP, it could indicate support for limited FTAs

that lack addressing areas that Canadians are concerned about, including labour rights,

intellectual property, digital commerce and environmental protection. Supporting the RCEP

could also negatively affect the Canada-US relationship and the influence of North America on

Asian trade, as the shaping of the RCEP is dominated by Asian states like China and Japan. It is

also important to note that Canada’s major trading partner by far is the US, and Canada must

take into account the American position in relation to the Chinese position regarding the RCEP.

Currently Canada is not a member of RCEP negotiations.

Domestically there are many political factors that contribute to the process of creating,

ratifying and implementing a FTA. Trade agreements s are often not just based on rational

policy decision making, but on political interest. Politicians who seek office or wish to retain

power will adopt certain positions regarding free trade in order to gain political support. The

implementation of an FTA can bring about positive or negative political consequences. Despite

the benefits of trade, it is important to note that certain industries will suffer domestic losses

under the free trade agreement if they are less competitive than global firms. In regards to the

TPP, The Canadian agricultural sector is currently protected by tariffs and a supply management

system, but this would be eroded under TPP rules. Former PM Harper had promised a 15 year,

$4.3 billion compensation package to aid dairy farmers through this transition.98 Changing this

supply management system will be difficult, as it involves complex cross-jurisdictional

negotiations with provinces. Under a buy-back scenario, costs for the farms are estimated at

98 Andrew Russell and Nick Logan, “Canada Has Signed the TPP. Now Should We Ratify It?”, Global News, February 4, 2016, http://globalnews.ca/news/2497741/canada-has-signed-the-tpp-now-should-we-ratify-it/ (accessed August 15, 2017).

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around 30 billion dollars in value.99 There is also the potential of political risk due to possible

opposition from the producing regions. The promised aid and subsidies to the agricultural

industry are not only to help transition farmers from the supply management system but to

alleviate political blowback over the TPP. The agricultural industry has strong lobby groups and

could use their concentrated political leverage to swing votes in producing regions in Quebec or

manufacturing regions in Ontario. However, there actually only 13 ridings in Canada with more

than 300 dairy farms, as farms have become larger and more industrialized.100 This would mean

that political blowback would be somewhat limited.

The TPP also presents challenges and possible opposition from labour groups. As

markets open, unemployment will rise in industries that cannot produce as cheaply as firms

overseas. Unifor, the largest private sector union in Canada, has publicly spoken out against the

TPP.101 Unifor represents the former Canadian Auto Workers Union and the former

Communications, Energy and Paperworkers Union of Canada. Environmental and social justice

groups like the Council of Canadians also oppose the TPP, contending that free trade and

increased globalization are harmful for the environment and for fair wages for workers.102

Domestic ratification of the TPP in Canada is another major step in the process that

could involve significant challenges. Joining the TPP is not just a federal decision, but would

99 Janyce McGregor, “5 Reasons to Defend Farm Marketing Boards”, CBC News, January 5, 2012, http://www.cbc.ca/news/politics/analysis-5-reasons-to-defend-farm-marketing-boards-1.1186293, (accessed August 15, 2017). 100 Finley, Martha Hall (2012) “Supply Management: Problems, Politics – and Possibilities.” SPP Research Paper 5(19): 21. 101 Terence Corcoran, “Canada’s Big Union Bosses Are Bringing Us All The Dangerous, Destabilizing Politics of Donald Trump”, Financial Post, October 31, 2016, http://business.financialpost.com/fp-comment/canadas-big-union-bosses-are-bringing-us-all-the-dangerous-destabilizing-politics-of-donald-trump (accessed August 3, 2017). 102 The Council of Canadians, “Trans-Pacific Partnership (TPP)”, http://canadians.org/tpp, (accessed August 3, 2017).

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need cooperation from the provinces in cross jurisdictional areas. The federal government must

ensure cooperation because it would be responsible for paying penalties even if provinces are

the ones that violate trade rules, as seen in the case of Newfoundland and Labrador and the

expropriation of Abitibi-Bowater assets that violated NAFTA.103 Approval from provinces could

be viewed as a weighted voting game, using the Banzhaf Power Index to measure the influence

of provinces in supporting the TPP. Each province is uniquely affected by the TPP, and political

support would be dependent on which provincial voter base the party in power is hoping to

appease. All provinces must be willing to follow the new proposed trade rules, which is only

possible if they have input and feel included in the negotiating process. The Abitibi-Bowater

case involving NAFTA is a recent example of lack of cooperation that led to heavy fines against

the federal government.104 Newfoundland and Labrador violated NAFTA trade rules, but since

these rules are binding upon the federal government and not the provincial, the federal

government was forced to pay the costs. A major difference between NAFTA and the TPP is that

the Federal government has done much more consultation with the provinces in TPP

negotiations, aiming for this to translate into increased support for the possible TPP ratification

process.

If Canada were to shift its focus on joining the RCEP, it is also unsure what domestic

opinion would be on joining a China led regional FTA. As mentioned in the literature review,

Canadian public opinion seems to be more in favor of building trade ties with European,

103 Bertrand Marotte, “Ottawa Pays AbitibiBowater $130-million for expropriation”, The Globe and Mail, August 24, 2010, http://www.theglobeandmail.com/report-on-business/ottawa-pays-abitibibowater-130-million-for-expropriation/article1378193/, (accessed August 15, 2017). 104 Marotte, “Ottawa Pays AbitibiBowater $130-million for expropriation.”

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democratic countries rather than non-democratic Asian countries.105 The shift towards Asian

markets would be framed in light of the economic opportunities in Asia and the necessity of

Canada to engage Asian markets in the possibility of the TPP failing to be ratified. Ultimately,

despite possible political ramifications, Canada is still faced with moving forward on an Asian

Pacific trade strategy.

105 Allen, “Keeping rising Asia at a distance: Canadian attitudes toward trade agreements with Asian countries”, 287.

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Appendix

Table 3: Individual Variable Rankings of Asian Countries for Canadian Trade (Quantitative Variables)

Country Population (millions)

GDP (US $

millions)

Growth Rate (%

Real GDP)

FDI Restrictiveness

Corruption Perceptions

Index

Freedom Score

China 1 1 5 11 11 17 Taipei, China 12 7 17 N/A 6 4

Hong Kong 14 9 15 N/A 5 9 Japan 4 2 16 1 4 3

RO Korea 9 4 11 4 7 5 Australia 11 5 12 5 3 1

New Zealand 17 14 13 9 1 2

India 2 3 1 8 10 6 Brunei

Darussalam 18 18 18 N/A N/A 15 Cambodia 13 16 4 2 17 14 Indonesia 3 6 8 10 12 7 Lao PDR 15 17 2 6 15 18 Malaysia 10 12 9 7 8 11 Myanmar 8 15 6 12 16 13

Philippines 5 10 3 13 13 8 Singapore 16 11 14 N/A 2 10 Thailand 7 8 10 N/A 9 12 Vietnam 6 13 7 3 14 16

*Green means country is part of both TPP and RCEP negotiations, Red means they are only a part of RCEP, and white means neither.

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Table 4: Canada’s Free Trade Agreement Status

Country/ Country Grouping Agreement Title Status

Chile Canada-Chile Free Trade Agreement In force 1997

Colombia Canada-Colombia Free Trade Agreement 2011

Costa Rica Canada-Costa Rica Free Trade Agreement 2002

European Free Trade Association (EFTA): Iceland, Liechtenstein, Norway, Switzerland

Canada-European Free Trade Association (EFTA) Free Trade Agreement 2009

Honduras Canada-Honduras Free Trade Agreement 2014

Israel Canada-Israel Free Trade Agreement 1997

Jordan Canada-Jordan Free Trade Agreement 2012

Korea Canada-Korea Free Trade Agreement (CKFTA) 2015

North America North American Free Trade Agreement (NAFTA) 1994

Panama Canada-Panama Free Trade Agreement 2013

Peru Canada-Peru Free Trade Agreement 2009

United Sates Canada-U.S. Free Trade Agreement (CUSFTA) 1989- suspended by NAFTA

Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru,

Singapore, United States of America, Vietnam Trans-Pacific Partnership (TPP) Signed

European Union Canada- EU Comprehensive Economic and Trade Agreement Signed

Ukraine Canada-Ukraine Free Trade Agreement Signed

Caribbean Community (CARICOM): Antigua and Barbuda, Bahamas, Barbados, Belize,

Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname,

Trinidad and Tobago Canada-Caribbean Community Trade Agreement Negotiations Negotiations

Dominican Republic Canada-Dominican Republic Free Trade Agreement Negotiations Negotiations

El Salvador, Guatemala, Nicaragua

Canada-Guatemala, Nicaragua and El Salvador Free Trade Agreement Negotiations Negotiations

India Canada-India Free Trade Agreement Negotiations Negotiations

Japan Canada-Japan Economic Partnership Agreement Negotiations

Morocco Canada-Morocco Free Trade Agreement Negotiations Negotiations

Singapore Canada-Singapore Free Trade Agreement Negotiations Negotiations