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Canada has been working on negotiating a free trade agreement with the countries of the Association of Southeast Asian Nations (ASEAN) since late 2021. Canada’s involvement in the Asia-Pacific region, notably with the ASEAN, reflects its strategy of trade diversification and its recognition of the growing importance of this Asia-Pacific region in the global economy.
Founded in 1967, the ASEAN is a regional intergovernmental organization comprising 10 member states in Southeast Asia, including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. This diverse group of nations has a population of over 650 million and a combined GDP of almost $3,000 billion, making the ASEAN Asia’s third-largest economy after China and India. However, Thailand’s significant presence in the poultry sector highlights the need to consider Canada’s economic interests in trade negotiations. Chicken production and export are essential pillars of its agricultural economy. In 2023 alone, Thailand exported 14 Mkg of chicken to Canada, demonstrating its influence on the global poultry market. This reality highlights how crucial it is for the supply management sector to closely monitor Canada’s negotiations with this region.
Although the Canadian government seems eager to impose an agreement on the ASEAN, the fact remains that preliminary discussions will face significant challenges. Firstly, ASEAN member countries have different economies and political priorities, making it difficult to draft a comprehensive trade agreement that mutually benefits all parties. Differences of opinion on key issues such as tariffs (some association countries are defined as less developed), rules of origin and sanitary and phytosanitary standards are already complicating discussions and hampering progress toward a finalized agreement.
Additionally, Canada must take a cautious and balanced approach to the rapidly changing geopolitical dynamics in the region, particularly with the increasing influence of China and India and the intensifying tensions among the major regional powers. The delicate relationship with China and India, which are both key trading partners and sources of security concerns for the ASEAN, raises questions about how Canada will navigate between economic cooperation and political concerns.
Thailand represents a twofold challenge for Canada. Besides concerns about a future agreement with the ASEAN, Thailand has already declared its intention to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), raising concerns about its potential impact on the Canadian poultry sector. As Thailand seeks to strengthen its economic ties with other members of the CPTPP, this could lead to increased competition for Canada, particularly in the poultry sector, where several concessions have already been granted under the Canada-United States-Mexico Agreement (CUSMA) and the CPTPP.
If Canada wants to diversify its trade, it must take a strategic and proactive approach to negotiating with the ASEAN while protecting its sensitive supply management sectors: Canada has already made significant concessions on imports of supply-managed products, particularly under the CUSMA and the CPTPP. These concessions create imbalances in these sectors, and slowly contribute to the weakening of these sensitive segments, which generate employment and economic development for the country. In light of the fragile supply chains and food insecurities that the world is currently facing, it would be advantageous for Canada to continue diversifying its commercial initiatives while simultaneously working toward strengthening the resilience of its successful agricultural sectors.
