Next week the annual meeting of the Asia Pacific Economic Cooperation forum will be held in Manila, Philippines. Why should Canadians care about an annual APEC meeting? You might be surprised to learn just how much influence APEC has in Canadian lives and how many opportunities it provides for Canada’s economic well-being.
Economic growth is like a garden. It requires tending, watering, and investment. Ultimately, it needs to be taken care of. For Canada, APEC is like the watering can for our economic growth garden.
When APEC was first established in 1989, it posed as many questions as it offered answers. Much like the parties at the heart of the political campaigns recently waged in Canada, APEC’s popularity and utility ebbed and flowed since its inception. But public opinion about APEC has been steadily on the rise in the last decade and this has everything to do with its maturity in carrying out its mandate: to respond to growing interdependence among the economies in the Asia Pacific region by promoting free trade and investment, economic growth and development, and co-operation in the region.
APEC clearly provides a critical mechanism to enhance Canada’s regional engagement and bolster opportunities in Asia as a forum for economic growth, trade and investment with a region of the world that can provide dividends for Canada’s future economic prosperity and security. With 21 member countries representing approximately 2.8 billion people, 57 per cent of the world’s GDP and 47 per cent of world trade, membership has its privileges. We need only look at regional trade initiatives such as the Trans-Pacific Partnership (TPP) and the foundation it has laid for a Free Trade Area of the Asia Pacific (FTAAP), as well as the potential for micro-, small- and medium-sized enterprises in Asia (MSMEs), to see how APEC can help sow new seeds for Canada’s engagement with the Asia Pacific region.
Over the past 10 years, the 21 APEC members have been working towards the development of an FTAAP to allow for free and open trade and investment across one of the world’s largest economic zones. Studies conducted by the Pacific Economic Cooperation Council have forecasted that the gains from an FTAAP – approximately US$2 trillion by 2025 – would be eight times that projected from the TPP.
In today’s world driven by Asian growth, the opportunities for Canadian MSMEs have grown exponentially. Considering that Canadian MSMEs represent the vast majority of businesses in Canada, employing more than 7.5 million Canadians – about 70 per cent of Canada’s private sector labour force – it becomes clear how critically important they are to the growth of the Canadian economy.
Yet, only 41,000 of these Canadian MSMEs are exporting. Championing the internationalization of MSMEs is in Canada’s immediate best interest and APEC is, again, the watering can that will help this seed grow. APEC, and in particular its Business Advisory Council (ABAC), has placed a high priority on support for MSMEs, specifically their access to financing, mentorship and capacity building. Efforts by APEC have focused on measures to ensure that MSMEs are integrated in global value chains thus enabling further innovation and economic value for Canada’s economic prosperity.
The TPP also includes specific measures to give MSMEs the opportunity to expand by providing access to new and emerging markets and their customers in the Asia Pacific region. In very practical terms, the TPP will make it easier and less costly for Canadian MSMEs to do business in this region and compete globally by, for instance, streamlining customs procedures through enhanced transparency and online information-sharing.
As the premier economic co-operation forum in the Asia Pacific region, APEC is where the greater strides will be made, where efforts to build on the TPP will take place, and where the geopolitical significance of the TPP will play out. APEC is also where practical efforts are being made that will help Canadian companies take advantage of the opportunities available in the dynamic and fast-growing economies in Asia. Canada must be a part of it.