Canada, Indonesia prepare for trade talks

Canada may soon engage Indonesia in trade talks.

The two nations have long flirted with the idea of a trade agreement, and Canada launched consultations of the subject in January.

That consultation ended in February — a summary is expected to be published by Global Affairs this spring — but already Canadian trade officials are preparing for negotiations, and it is believed the federal cabinet has granted permission to begin formal talks.

Expanding trade in growing markets like Asia is an ongoing goal of the federal government.

According to a statement from Global Affairs, a comprehensive partnership agreement with Indonesia “would create meaningful market access for Canadian business through the elimination of tariffs and non-tariff barriers for our exports, including agriculture and agri-food, industrial and advanced manufacturing, minerals, and professional services.”

That statement said Canada’s approach is to “seek a comprehensive and inclusive agreement to ensure that the benefits and opportunities of increased trade and investment are widely shared, including for women-owned businesses, small businesses and Indigenous entrepreneurs.

Some experts have questioned if Canada’s inclusive trade agenda can find success in a majority Muslim country with bigger priorities than trade with Canada, but it is expected that issues like women’s rights will be brought to the table.

Indonesia’s developing economy has advanced significantly in the last decade, but is believed to still have growth potential led by a rising middle class. Among countries in Southeast Asia, Indonesia already boasts the largest economy.

It is also the largest export market in the Association of Southeast Asian Nations (ASEAN), a block of 10-member states, including the Philippines and Thailand.

Canada and Indonesia are signees on a handful of general World Trade Organization agreements, but have no bilateral trade pact. Last August, Indonesia and Canada signed a memorandum of understanding on trade.

The Indonesian embassy said at that time the signing of the agreement was a form of “continuous efforts by Indonesia and Canada in finding ways to boost bilateral trade relations between the two countries.”

Indonesia is believed to be interested in either a bilateral free trade pact with Canada or a broader deal involving the ASEAN bloc, but multilateral talks have moved slowly since first being explored in 2017.

As the largest economy in Southeast Asia with a gross domestic product of C$1.4 trillion, Indonesia is Canada’s largest export market in that region. Indonesia is also Canada’s largest market in Southeast Asia for agri-food products and Canada’s single largest wheat customer, according to Global Affairs.