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Trade in AI: Digital Trade Rules for the AI Era in the Indo-Pacific

Kati Suominen: Founder and CEO of Nextrade Group; 2025-26 APF Canada John H. McArthur Research Fellow
September 2, 2026
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This report is part of a series on "Canada’s Trade in AI with the Indo-Pacific" from one of APF Canada's 2025-26 John H. McArthur Research Fellows, Kati Suominen. Read the first instalment here. 

AI is emerging in Canada not only as a means to promote innovation and productivity, but also as a tradable asset. The previous paper in this series showed that over the past decade, Canadian exports of AI-intensive services (information services, computer services, research and development, financial services, and professional services) have grown substantially faster than Canada’s traditional exports — manufacturing, mining, and agricultural products. While the U.S. is the primary market for Canada’s AI-intensive services, Indo-Pacific markets are also important and, thanks to their rapid digital transformation, poised to grow in importance for Canada’s AI-intensive firms.

In addition, the urgency of deepening market access and fair treatment for Canadian AI-intensive firms in the Indo-Pacific has increased in the past few months: at the joint review of the Canada-United States-Mexico Agreement (CUSMA) on July 1, 2026, the U.S. declined to extend the Agreement to 2042. CUSMA remains in force until 2036, but it now enters a cycle of annual reviews. Ensuring access to Indo-Pacific markets for Canada’s AI-intensive services is an important hedge against developments in the Americas. Engaging now is also timely for Canada to shape Indo-Pacific AI governance frameworks: the region’s markets are developing their AI governance frameworks and fashioning AI-related provisions in their various trade agreements.

The purpose of this paper is to review the baseline trade policy landscape facing Canadian AI-intensive firms in the Indo-Pacific, including Indo-Pacific countries’ liberalization commitments in various specific services sectors and cross-sectoral digital trade commitments.

The second section develops the analytical framework and examines Indo-Pacific trading partners’ multilateral commitments under the General Agreement on Trade in Services (GATS) and preferential liberalization, especially under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), for which services liberalization data is readily available. The third section reviews current applied restrictions across key Indo-Pacific markets and sectors, complemented by detailed evidence on regulatory and operational barriers, and discusses emerging AI laws in the region and their implications. The fourth section synthesizes the findings.

Key Takeaways

  • Canada’s AI-intensive services face high barriers in certain Indo-Pacific markets, especially China, India, Indonesia, the Philippines, South Korea, and Thailand. These countries have high multilateral restrictions — meaning Canadian AI-intensive services cannot rely on existing GATS commitments to ensure market access. These countries are also not subject to the liberalization commitments of the CPTPP. Even where applied barriers are somewhat lower, Canadian firms still face challenges, such as data transfer limitations. Liberalization in Southeast Asia could be deepened through Canada’s trade agreement with Indonesia and its forthcoming trade agreement with the Association of Southeast Asian Nations (ASEAN).
     
  • Canadian AI-intensive firms have better access to Australia, Japan, New Zealand, and Singapore, thanks to the CPTPP and these economies’ overall moderate applied services restrictions. To be sure, there are some sectoral limitations, and the four economies’ bound multilateral commitments are still significantly higher than CPTPP commitments or applied practices. In addition, targeted measures such as procurement preferences, data governance requirements, and platform regulations can affect specific AI-related services.
     
  • Across all Indo-Pacific markets, the least liberalized AI-related services sectors include legal services, broader professional services, and financial services. For example, in financial services, there are data processing restrictions, licensing requirements, and the need for regulatory approvals that may affect fintech and AI-enabled financial applications. In computer and related services, the most liberalized AI-relevant sector, restrictions vary significantly by market: China, Indonesia, and Vietnam maintain particularly high bound and applied restrictions related to data localization, cloud licensing, and foreign participation.
     

Read the full report below, or download a copy above.

Kati Suominen

Dr. Kati Suominen is Founder and CEO of Nextrade Group and ideates and leads Nextrade Group engagements with the company's more than 50 clients. She has ideated and built dozens of data and analytical products, pilot initiatives, and eight global initiatives and public-private-partnerships to support Nextrade's clients in enabling world trade through technology.

Kati is the author and editor of over 120 papers and 10 peer-reviewed books on trade, globalization and technology and has spoken and keynoted numerous times at such venues as Davos, World Trade Organization, World Trade Symposium, Global Trade Review, ICC Banking Commission, Institute of International Finance, IMF, and World Bank, APEC Senior Officials' Meeting, and commented in such media as Wall Street Journal, Washington Post, Time, Politico, BBC, CSPAN, USA Today, and Los Angeles Times. 

Kati Suominen's latest posts:

Canada's Trade in AI: What is it and How Much of it is with the Indo-Pacific Region Focus on tariffs is ignoring Canada's fastest-growing trade opportunity Canada's Under-the-Radar Trade Opportunity: Digital and AI-Enabled Trade

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