ASIA
26 March 2014
Canada's fast track to Asia
Canada's trade minister, Ed Fast, inspired a PECC conference with his ambitions for Canada in the Asian Century. But an Asia Pacific Foundation survey suggests it may not be easy.
Canada's trade minister, Ed Fast, inspired a Pacific Economic Cooperation Council conference with his "fast track" ambitions for Canada in the Asian Century. But a recent national opinion poll by the Asia Pacific Foundation suggests that he has his work cut out for him.
The balance of global economic power has shifted to emerging economies, especially in Asia, said Fast. It is critical for Canada, as a great trading nation, to engage with Asia.
Canada may well be the world's most resource rich country -- with its oil, gas, timber, diamonds and so on. And Asia wants to access these resources.
Canada is seeking to take advantage of Asia's markets by building up its infrastructure -- transport links, ports and energy pipelines. At this stage, Canada is "two days closer" to Asia than US ports. But Canada must work hard to maintain that advantage, as the US will try to catch up. And the Panama Canal is being expanded too.
Canada did not have a coherent trade strategy until the present government came to power in 2006, according to Fast. But this government understands that trade and investment are engines of economic growth.
It has negotiated free trade agreements with countries like Jordan and Thailand, as gateways to their neighbouring regions. Thailand is Canada's most important trading partner in Asia. This gateway approach is however hampered by the complexity of rules origin in regional trade.
Also in the region, Canada has trade negotiations underway with Japan and Korea. And most importantly, it is now a part of the Trans Pacific Partnership trade talks.
Canada has resorted to regional free trade agreements because negotiations at the World Trade Organisation are in a state of coma. He is hopeful of progress at the WTO on trade facilitation, food safety and least developed country issues in the coming months.
The Canadian government is also active in trade promotion, helping Canadian companies on the ground with information, contacts etc. Canada's trade commissioners also help foreign companies wishing to do business in Canada. Small and medium companies can also receive export financing support.
Fast also highlighted recent work by the OECD and the WTO on global value chains. This work stresses the importance of imported intermediate goods to export performance. And also the role of services as inputs into exports of manufactures and natural resources.
Canada is the world's fourth largest exporter of engineering services. So trade and investment liberalisation must also tackle non-tariff barriers for these services.
In short, Canada is now more active in Asia, especially South East Asia where it had been absent. It is now seeking membership of the East Asia Summit which deals with regional security issues. And mayors and provincial governments are now actively courting their counterparts in China.
Fast is also actively promoting Canada as a destination for foreign students. Currently, Canada has over 260,000 foreign students, with large numbers coming from China, India and Brazil. They contribute $8 billion to Canada's economy, and one-quarter of these students stay on as migrants, because Canada still has labor shortages in certain areas. And most importantly, those who return home become important ambassadors and contacts for Canada.
Fast impressed his audience at the PECC conference with his ambitions. But the results of the Asia Pacific Foundation of Canada's national opinion poll on Canadian views on Asia suggest that he has his work cut out for him.
“There is a growing discrepancy between Canadians’ understanding of Asia’s importance and their willingness to do something about it,” said Mr. Yuen Pau Woo, President and CEO of the Asia Pacific Foundation of Canada, when he released the poll results just ahead of the conference. “More Canadians appear to be hesitating as they face tougher decisions about how to advance the Canada-Asia relationship.”
The 2013 National Opinion Poll of Canadian Views on Asia, an annual poll that examines Canadian attitudes toward Asia, found visible downward shifts in Canadians’ embrace of the Asia Pacific, as well as their sense of urgency to deepen relations with countries in the region. Significantly, fewer Canadians now see Canada as part of the Asia Pacific region – down 11 points from last year at 18%.
Canadians expressed cooler views towards most countries in Asia, especially China. Canadians with unfavorable or ‘cool’ feelings towards the People’s Republic of China exceeded those with favourable views by a factor of three. Nevertheless, China tops the list of Asian countries Canadians believe should receive greater emphasis in Canada’s foreign relations (54%). They also view China as the most important Asian country for Canada’s prosperity (45%).
Overall, Canadians are hesitant to engage more deeply with Asian countries on economic matters. Fewer Canadians are enthusiastic about Canada entering into free trade deals with Japan (60%, down 3% from 2012) or China (42%, down 6% from 2012). While 50% believe Canada would benefit from more Asian investment, support has fallen seven points from 12 months ago. A strong majority of respondents remain opposed to direct investment from Asian state-owned enterprises, particularly from China (76%), India (72%) and Japan (58%).
On energy relations with Asia, Canadians are increasingly divided on the best path forward. Most Canadians support building pipelines to export natural gas (54%) to ports on Canada’s west coast for export to Asia. However, fewer respondents now feel a sense of urgency to take advantage of Asian countries’ need for energy resources (53% in 2013 vs. 61% in 2012).
Canadians, however, appear more positive about building ties with Asia through cultural exchanges (70%), increasing student exchanges and university agreements (59%) or providing development assistance to Asian countries that demonstrate progress in fostering democratic norms (64%).
“The conflicted attitudes of Canadians make for a more difficult environment to deepen political and economic ties with Asia,” said Mr. Yuen Pau Woo. “There is a need for stronger leadership on Asia from government, business and civil society. This will only happen if ‘Asia strategies’ are a priority and if organizations invest in the skills, knowledge and experiences that are needed to be successful in Asia.”
One of the most disturbing results of the opinion poll is that younger Canadians (notably those 18-29 years of age) place less value on the potential benefits of Canada engaging economically with Asia. This is true for perceptions of the importance of Asian countries to Canada's prosperity, support for free trade agreements with Asian countries, and support for efforts of the Canadian government to facilitate trade and investment with countries in the region.
Will this conference, boldly entitled "Navigating Asia’s Future, Charting Canada’s Strategy", mark a turning point in Canada's relations with Asia? We will see over the coming days discussions.
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
The balance of global economic power has shifted to emerging economies, especially in Asia, said Fast. It is critical for Canada, as a great trading nation, to engage with Asia.
Canada may well be the world's most resource rich country -- with its oil, gas, timber, diamonds and so on. And Asia wants to access these resources.
Canada is seeking to take advantage of Asia's markets by building up its infrastructure -- transport links, ports and energy pipelines. At this stage, Canada is "two days closer" to Asia than US ports. But Canada must work hard to maintain that advantage, as the US will try to catch up. And the Panama Canal is being expanded too.
Canada did not have a coherent trade strategy until the present government came to power in 2006, according to Fast. But this government understands that trade and investment are engines of economic growth.
It has negotiated free trade agreements with countries like Jordan and Thailand, as gateways to their neighbouring regions. Thailand is Canada's most important trading partner in Asia. This gateway approach is however hampered by the complexity of rules origin in regional trade.
Also in the region, Canada has trade negotiations underway with Japan and Korea. And most importantly, it is now a part of the Trans Pacific Partnership trade talks.
Canada has resorted to regional free trade agreements because negotiations at the World Trade Organisation are in a state of coma. He is hopeful of progress at the WTO on trade facilitation, food safety and least developed country issues in the coming months.
The Canadian government is also active in trade promotion, helping Canadian companies on the ground with information, contacts etc. Canada's trade commissioners also help foreign companies wishing to do business in Canada. Small and medium companies can also receive export financing support.
Fast also highlighted recent work by the OECD and the WTO on global value chains. This work stresses the importance of imported intermediate goods to export performance. And also the role of services as inputs into exports of manufactures and natural resources.
Canada is the world's fourth largest exporter of engineering services. So trade and investment liberalisation must also tackle non-tariff barriers for these services.
In short, Canada is now more active in Asia, especially South East Asia where it had been absent. It is now seeking membership of the East Asia Summit which deals with regional security issues. And mayors and provincial governments are now actively courting their counterparts in China.
Fast is also actively promoting Canada as a destination for foreign students. Currently, Canada has over 260,000 foreign students, with large numbers coming from China, India and Brazil. They contribute $8 billion to Canada's economy, and one-quarter of these students stay on as migrants, because Canada still has labor shortages in certain areas. And most importantly, those who return home become important ambassadors and contacts for Canada.
Fast impressed his audience at the PECC conference with his ambitions. But the results of the Asia Pacific Foundation of Canada's national opinion poll on Canadian views on Asia suggest that he has his work cut out for him.
“There is a growing discrepancy between Canadians’ understanding of Asia’s importance and their willingness to do something about it,” said Mr. Yuen Pau Woo, President and CEO of the Asia Pacific Foundation of Canada, when he released the poll results just ahead of the conference. “More Canadians appear to be hesitating as they face tougher decisions about how to advance the Canada-Asia relationship.”
The 2013 National Opinion Poll of Canadian Views on Asia, an annual poll that examines Canadian attitudes toward Asia, found visible downward shifts in Canadians’ embrace of the Asia Pacific, as well as their sense of urgency to deepen relations with countries in the region. Significantly, fewer Canadians now see Canada as part of the Asia Pacific region – down 11 points from last year at 18%.
Canadians expressed cooler views towards most countries in Asia, especially China. Canadians with unfavorable or ‘cool’ feelings towards the People’s Republic of China exceeded those with favourable views by a factor of three. Nevertheless, China tops the list of Asian countries Canadians believe should receive greater emphasis in Canada’s foreign relations (54%). They also view China as the most important Asian country for Canada’s prosperity (45%).
Overall, Canadians are hesitant to engage more deeply with Asian countries on economic matters. Fewer Canadians are enthusiastic about Canada entering into free trade deals with Japan (60%, down 3% from 2012) or China (42%, down 6% from 2012). While 50% believe Canada would benefit from more Asian investment, support has fallen seven points from 12 months ago. A strong majority of respondents remain opposed to direct investment from Asian state-owned enterprises, particularly from China (76%), India (72%) and Japan (58%).
On energy relations with Asia, Canadians are increasingly divided on the best path forward. Most Canadians support building pipelines to export natural gas (54%) to ports on Canada’s west coast for export to Asia. However, fewer respondents now feel a sense of urgency to take advantage of Asian countries’ need for energy resources (53% in 2013 vs. 61% in 2012).
Canadians, however, appear more positive about building ties with Asia through cultural exchanges (70%), increasing student exchanges and university agreements (59%) or providing development assistance to Asian countries that demonstrate progress in fostering democratic norms (64%).
“The conflicted attitudes of Canadians make for a more difficult environment to deepen political and economic ties with Asia,” said Mr. Yuen Pau Woo. “There is a need for stronger leadership on Asia from government, business and civil society. This will only happen if ‘Asia strategies’ are a priority and if organizations invest in the skills, knowledge and experiences that are needed to be successful in Asia.”
One of the most disturbing results of the opinion poll is that younger Canadians (notably those 18-29 years of age) place less value on the potential benefits of Canada engaging economically with Asia. This is true for perceptions of the importance of Asian countries to Canada's prosperity, support for free trade agreements with Asian countries, and support for efforts of the Canadian government to facilitate trade and investment with countries in the region.
Will this conference, boldly entitled "Navigating Asia’s Future, Charting Canada’s Strategy", mark a turning point in Canada's relations with Asia? We will see over the coming days discussions.
Author
John WestExecutive Director
Asian Century Institute
www.asiancenturyinstitute.com
REFERENCES:
- Navigating Asia’s Future, Charting Canada’s Strategy. June 3-5, 2013.- Asia Pacific Foundation of Canada. 2013 National Opinion Poll: Canadian Views on Asia
- 21st PECC General Meeting | Vancouver, Canada | June 3-5, 2013
- Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway