When Canadians think of economic opportunities in Asia, most think of emerging economies with impressive projected growth rates and large GDPs, like China and India, or of more established economies, like Japan or Korea.
What most of us don’t think of is a group of economies in Southeast Asia known as the Association of South East Asian Nations (ASEAN). While the growth rate of China is expected to cool off, it may surprise many Canadians to learn that ASEAN economies like Indonesia, Vietnam, and the Philippines are expected to become some of the hottest in the region, with projected GDP growth rates matching or beating China and India by 2019, according to the International Monetary Fund.
Which is why Canada’s International Trade Minister Ed Fast is currently on his 13th trade visit to Southeast Asia in just four years. Fast will join business leaders and other senior government officials in Bangkok this week for the Canada-ASEAN Business Forum, where trade and investment between Canada and Southeast Asia will dominate the agenda.
For many Canadians, ASEAN may seem convoluted and confusing—a mishmash of disparate nations with varying forms government; different levels of development; diverse cultures and religions; and, quite often, troubled historical pasts. These perceptions may explain why ASEAN has not featured prominently on Canada’s trade and investment radar.
A national opinion poll by the Asia Pacific Foundation of Canada found that only 11 per cent of Canadians believe Southeast Asia is highly important for Canada’s economic prosperity, compared to over a third of Canadians who see China and Japan as highly important.
ASEAN as a region is not without its challenges. A 2013 Asia Pacific Foundation of Canada survey of Canadian businesses in ASEAN found that issues of corruption, inconsistent applications of laws and regulations, and intellectual property infringement are some of the major concerns for Canadian businesses currently operating in the region.
ASEAN leaders are aware of the international business community’s concerns and are taking proactive steps to address them. The ASEAN Economic Community (AEC), for instance, hopes to streamline intra-ASEAN economic relations and increase the region’s competitiveness in order to attract global trade and investment.
The ambitious goal of the AEC is to deliver a single market and production base with the free flow of goods, services, capital, investment, and labour across the region by the end of 2015. Although inspired by the European Union’s predecessor, the European Economic Community, it is significantly different from the EU in that no member country will surrender any of its sovereignty, monetary policy governance, or border regulation to a managing organization.
Despite internal differences and market-entry challenges, ASEAN is a place of burgeoning opportunities for Canadian trade and investment. It features a population base of over 600 million for Canadian goods and services; a set of regional free trade agreements than can provide Canadian companies operating in ASEAN with preferential market access to China, India, and Japan; and, possible collaborations in Private-Public Partnerships to develop the region’s infrastructure.
APF Canada’s survey of Canadian businesses in ASEAN found that 86 per cent of these businesses see profitably within their first three years of operations and over 62 per cent have increased their investment in the region within two years. It is a place we cannot afford to overlook when we consider engaging emerging markets in Asia
Critics of ASEAN’s Economic Community argue that the scope of trade and investment liberalization proposed is limited and the agreements that makeup the community will fail to be implemented by the 2015 deadline, given the limited capacity of some of the less developed countries. To some extent this is true, but it does not mean we should dismiss ASEAN’s genuine commitment to pursue greater integration into the global economy.
The Canadian government has recognized the growing importance of the region. Canada announced a new dedicated ambassador to ASEAN and resident representatives in Cambodia and Laos; opened its first Chancery in Myanmar; and, expanded its countries of focus, which receive a majority of Canada’s development assistance, to include four ASEAN countries: Indonesia, Myanmar, the Philippines, and Vietnam.
Yet the message of ASEAN’s growing importance hasn’t really transferred to Canadians at home.
In order to bridge this information gap, we need to leverage our diaspora populations to build the profile of ASEAN across Canada, much like our South Asian and Chinese diasporas have done for India and China. Recent census data shows that Southeast Asian visible minorities constitute 2.8 per cent of the Canadian population, and in the past decade, the Philippines remains one of the highest sources for immigrants to Canada.
While we need to educate and support our Canadian companies operating in the region, we must be simultaneously building greater awareness of ASEAN at home. Missing out on ASEAN now, will be missing out on Canada’s future.
Stewart Beck is the President and CEO of the Asia Pacific Foundation of Canada.
This piece was first published in Embassy on March 18, 2015.