ASEAN and Canada agreed on 17 November to officially launch negotiations for an ASEAN-Canada Free Trade Agreement (FTA) to boost economic, trade, and investment ties.
The launch of the talks represents a significant milestone in the ASEAN-Canada relationship and a meaningful step in Canada’s renewed commitment to trade and economic engagement in the region, the Southeast Asian bloc said in a statement.
“The FTA would strengthen ASEAN-Canada economic relations, connect ASEAN closer to the global value chains, and improve market access for both ASEAN and Canadian firms,” Dato Lim Jock Hoi, Secretary General of ASEAN, said.
Despite the pandemic, bilateral trade relations between ASEAN and Canada have remained strong over the past year. According to Canada’s statistics, in 2020 total two-way merchandise trade was valued at US$19.9 billion, a decrease of 2.4 percent year-on-year, ASEAN said. At the end of 2020, foreign direct investment (FDI) from Canada to ASEAN member states rose by 11.7 percent annually to reach US$12.5 billion, while FDI from ASEAN member states to Canada stood at US$1.2 billion, down by 0.9 percent.
As a group, ASEAN member state economies represent Canada’s sixth-largest trading partner, according to 2020 data from the Canadian government.
“In order to enhance our commercial relations and strengthen our presence in this fast-growing market, Canada is committed to negotiating a comprehensive FTA with ASEAN,” the Canadian government said.
ASEAN and Canada are currently discussing the next steps in the FTA negotiation process, including a first round of negotiations. According to the ASEAN-Canada FTA Joint Feasibility Study, an FTA would result in a US$7.8 billion increase in bilateral trade between ASEAN member states and Canada.