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 (Unpublished master's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