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Canada and ASEAN members pledged to strengthen their economic ties at the Canada-ASEAN Business Council’s (CABC) annual general meeting.
The meeting last week, attended by 65 CABC members, listed three initiatives that would help promote more trade between Canada, the tenth largest economy in the world, and the ASEAN membership.
The first was a potential Canada-ASEAN free trade agreement (FTA), a project that has been in the works since 2017. CABC said Brunei, the current chair of ASEAN, has stated opening negotiations for the FTA was a top priority to help stimulate the region’s economy.
The CABC also said it has submitted a proposal to explore the possibility of a Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA), an initiative which the CABC said has garnered strong approval from the country’s private sector.
The council also discussed adding more countries in the region to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together, those economies represent about 13.5 percent of global gross domestic product (GDP).
In 2020, trade between Canada and ASEAN members reached $21.26 billion (USD). The CABC said they expected this number to rebound in 2021.
“This recovery is demonstrated through increasing sentiments of trade liberalisation, supported by pent-up demand, low interest rates and declining protectionist measures,” the CABC said in a statement.
It added the strengthening of trade ties will “strengthen supply chains, speed up economic recovery and increase mutual economic competitiveness on a global scale”.
A joint feasibility study organised by Canada and ASEAN in 2016 suggested that an FTA would benefit both economies and help build a stronger, long-term economic relationship.
Using a model in which the FTA included “goods liberalisation, a reduction of non-tariff measures (NTMs) and improvements to trade facilitation,” the two sides predicted that an FTA would increase GDP in ASEAN by $5.1 billion (0.3 percent) and in Canada by $3.36 billion (0.3 percent).
Using this model, Cambodia was predicted to benefit from a $675.9 million boost to its GDP, a 4.14 percent increase at the time of the study, making it the biggest gainer in ASEAN in terms of percentage.
Cambodia’s biggest export to Canada in 2019 was knitted or crocheted apparel, accounting for $543.58 million, followed by non-knitted or crocheted apparel at $153.51 million.
In the other direction, Canada’s biggest export to the Kingdom in 2019 was fur skins and artificial fur at $29.76 million, followed by vehicles (other than railways) at $18.7 million, according to Trade Economics, an aggregate data website.
In 2020, Canada exported $24.99 million of goods to Cambodia, while Cambodia sent $1.20 billion of goods to Canada, according to the Canadian government.
Notable Canadian brands in Cambodia include the 100 perecnt Canadian owned ABA Bank, (Cambodia’s third largest bank) and Circle K stores, operated by Alimentation Couche-Tard which is headquartered in Quebec.