平和
和平
평화
ASIA
26 March 2014
Canada's catchup game in Asia

Canada's catchup game in Asia

As Asia has emerged as a global economic and political power these past two decades, Canada has been caught napping --

-- missing out on too many opportunities and necessities for economic and political cooperation.

In its recent report, "Securing Canada's Place in Asia", the Asia Pacific Foundation of Canada has proposed that Canada develop a comprehensive long-term national strategy on Asia to redress this situation.

As recently as the 1990s, Canada was a respected regional player in Asia. The decline in Canada's commitment to Asia began after Canada hosted the APEC leaders' meeting in 1997 -- ironically around the same time that Asia's rise was accelerating and that the creation of Asian-based institutions was increasing. Canadian government ministers and senior bureaucrats lost interest in Asia's evolving regional institutions. And Canadian business has often not invested sufficient time and resources to build the necessary personal relationships and partnerships.

Thanks to rapid and dynamic growth, Asia accounts for over 30 per cent of world trade, and three Asian countries (China, Japan and Korea) are ranked in the world's top ten trading nations. But only about 10 per cent of Canada's exports go to the region -- even though Canada exports commodities which are in high demand in Asia. And over the past decade, Canada's direct investments in Asia have only been roughly the same as in Europe, even though Asia's economic growth rate has been about triple that of Europe.

Looking ahead, the growth prospects in Asia remain very strong, as there is still large potential for convergence with advanced economies, and middle class consumers are becoming a new driver of growth. And the ongoing economic funk in the US and Europe means that rebalancing Canada's growth strategy towards Asia has become a necessity.

Asia's rapid economic development has also increased global competition for resources. This is having many widespread implications, such as on the natural environment, security of supply, overseas investment activities of Chinese state-owned enterprises, and regional security in the South China Sea and Sea of Japan. As a major producer of energy, food and minerals, Canada has the potential to be part of the solution to these resource competition issues.

With the inclusion of China, India, Indonesia, Japan and Korea in the G20, Asian countries now have greater influence on global economic governance. Canada and other advanced countries will need to secure the support of these Asian countries as a Western-centered global system is interacting with a rising Asia. Moreover, the rise of China and other Asian powers has profound implications for regional and global order. History contains few examples of successful and peaceful strategic transitions of the scale currently underway.

The Canadian government has made commendable strides over the past three years in expanding and deepening Canada's relations with its Asian counterparts. But the time has come to deepen this into a comprehensive long-term strategy, and make up for lost time.

The Asia-Pacific Foundation has two main sets of specific recommendations. First, Canada needs to pursue vigorously bilateral and regional free trade agreements (FTA). Canada has not yet concluded a single FTA with any Asian country whereas all of Canada's competitors have. Canada clearly feels that it has been left behind by Australia which already has FTAs with ASEAN, Singapore, Thailand and Malaysia. But while the first decade of the millennium saw a flurry of FTA activity in East Asia, the crisis-stricken global economy has seen an outbreak of protectionism and has surely dampened enthusiasm for more FTAs. Canada is also a latecomer to the Transpacific Partnership negotiations.

Second, Canada needs more visible and sustained participation in regional institutions, especially the East Asia Summit, a regional leaders' forum for strategic dialogue and cooperation. Following the inclusion of Russia and the US last year, Canada is now the only major economy in the Asia-Pacific region to not be a member of the East Asia Summit. Canada is also not a member of the ASEAN Defence Ministers Meeting.

A curious omission in the Foundation's report is any reference to the country's Asian Canadians (dominated by Chinese and Indian Canadians) who make up more than 10 per cent of the national population. The evidence shows that migration can be a powerful driver of international trade and investment.

Two leading former Canadian diplomats, Joseph Caron and David Emerson once wrote: ‘Canada remains on the fringes of [Asia’s] remarkable transformation, whether diplomatic engagement, trade, foreign investment or educational or cultural exchanges. We risk being left behind.’

In this context, the Asia Pacific Foundation report is a brilliant initiative to help secure Canada's place in Asia. But it is deeply regrettable that Canada still requires such a report to convince it of the obvious need for an Asian strategy -- and also that Canada has lost so much time these past two decades.

Author

John West
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
Tags: asia, canada

Social share