How important is trade with Asia for Canada's future?
Answer
Growing Asian markets represent opportunities for Canadian exports, particularly from Pacific coast provinces.
Explanation
Trade with Asia is a strategic priority for Canada's future, anchored by the Indo-Pacific Strategy launched on November 27, 2022 with $2.3 billion in federal funding over five years. The strategy diversifies Canadian trade away from over-reliance on the United States, expands defence and security cooperation, and deepens economic and people-to-people ties with Asia's growing economies. The region accounts for 40 per cent of global GDP and is home to two-thirds of the world's middle class.
Canada's largest Asian trading partners are China, Japan, South Korea, and increasingly the ASEAN bloc. Two-way trade with China was about $115 billion in 2023, with Canadian exports of canola, wheat, lumber, pulp, copper, and iron ore offset by imports of consumer goods and machinery. Two-way trade with Japan was about $30 billion. South Korea takes Canadian beef, pork, softwood lumber, and aerospace under the Canada-Korea Free Trade Agreement (in force 2015).
Multilateral agreements anchor Canadian access to Asian markets. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), ratified by Canada in 2018, gives Canadian exporters preferential access to a market of about 510 million people across Japan, Vietnam, Singapore, Malaysia, Australia, New Zealand, Chile, Peru, Mexico, and Brunei. The United Kingdom acceded to the CPTPP in 2024, and accession applications from China, Taiwan, Costa Rica, Uruguay, and Indonesia are under review.
Beyond trade, the Indo-Pacific Strategy commits to expanded military deployments through Operation Horizon, intelligence sharing, support for Indo-Pacific democracy, and academic partnerships. The Canadian Armed Forces' frigate deployments through the Taiwan Strait, the East China Sea, and the South China Sea send signals about Canadian commitment to a rules-based order. Canada's foreign-policy reset on China since the 2018-2021 Meng Wanzhou and Two Michaels dispute focuses on competing where necessary, cooperating where possible, and challenging where required.
Why this matters for your test
Asian markets are central to Canada's diversification strategy and to the country's prospects beyond the United States. Recognising the November 2022 Indo-Pacific Strategy and the CPTPP membership gives candidates two specific anchors.
Source: Discover Canada: The Rights and Responsibilities of Citizenship
