Canada left out of launch of new U.S.-led trade talks on Indo-Pacific

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Canadian business leaders say Canada should not have been left out of the launch of new American-led trade talks about the Indo-Pacific region.

They’re urging Prime Minister Justin Trudeau to sign on as soon as possible, saying Canada needs to be present if countries representing 40 per cent of the world’s economic output are setting new rules for trade.

Earlier this week, U.S. President Joe Biden launched the Indo-Pacific Economic Framework for Prosperity (IPEF) with a dozen initial partners that include Australia, New Zealand, India, Singapore, Japan and South Korea. The countries said in a joint statement the pact will help them collectively “prepare our economies for the future” after the fallout from the COVID-19 pandemic and the war in Ukraine.

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Goldy Hyder, president of the Business Council of Canada, said he’s puzzled why Canada was not included at the launch of discussions that could shape the future of commerce in the Indo-Pacific.

“We have got to remind everybody we are a Pacific nation. I think there is a sense we are not. How is it our own neighbour and ally could leave us out of a long list of countries that have been included?” Mr. Hyder asked.

“We have to assert and get ourselves in there,” he said of the IPEF talks.

“Part of the issue may well be in some cases we are taken for granted or forgotten – and neither is right,” Mr. Hyder said. He spoke from Seoul, where he was meeting with South Korean business leaders and government officials.

Prime Minister Justin Trudeau played down Canada’s exclusion from the launch of the talks in comments to reporters during a visit to Vancouver Tuesday.

He said the fact that Canada is a member of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement, which includes many of those involved in the new U.S.-led talks, means Canadian companies already have preferential access to those Asian markets.

Washington has lacked an economic pillar to its Indo-Pacific engagement since then-president Donald Trump withdrew the United States from the CPTPP, leaving the field open to China to expand its influence.

“Fortunately, Canada has a free trade deal with the CPTPP and we have a free trade deal with the U.S., which was just renewed with the new NAFTA, so it is not something that directly affects us,” Mr. Trudeau said of the Biden-led economic talks.

“The fact that U.S. isn’t in the CPTPP means they’re having to look for ways to try and to create connections with countries in the Pacific that they don’t have a free trade deal with.”

Mr. Trudeau would not say whether Canada would seek to join the Biden-led talks.

“We’re taking a look at it. I think it’s always a good thing when countries agree to work together. But the U.S. wouldn’t be doing that if they had actually been in the CPTPP like was actually planned by a previous administration,” he said.

Mark Agnew, senior vice-president of policy at the Canadian Chamber of Commerce, said Canada has been left out of several significant developments in the Indo-Pacific region, including the Quadrilateral Security Dialogue – known as the Quad – between India, South Korea, Australia and United States, as well as AUKUS, the defence pact involving Australia, Britain and the United States.

Mr. Agnew said he believes Washington’s new economic talks are meant to rival a trade deal China has put together that encompasses much of Asia – the Regional Comprehensive Economic Partnership – as the two world powers attempt to set the rules to govern trade in the region.

“I think what the Americans have done is ask ‘How can we as the United States assert ourselves in the region?’ And I think what we are seeing is the product of that effort.”

Mr. Agnew said Canada can’t afford to skip the discussion.

“If you are a company operating in the Indo-Pacific region, you want to have a consistent set of rules for you to operate in that environment for matters such as consumer privacy,” he said. “If you are not part of the conversation on setting standards then they are not going to be able take your interests into account.”

The White House said the deal offers no tariff relief to the countries that join, but provides a way to sort through issues ranging from climate change to supply chain resilience and digital trade.

“The future of the 21st-century economy is going to largely be written in the Indo-Pacific – in our region,” Mr. Biden said at a launch event in Tokyo earlier this week. “We’re writing the new rules.”

Mr. Biden also wants the deal to enhance environmental, labour and other standards across Asia.

International trade lawyer Lawrence Herman said Canada should join the trade pact.

“It’s in Canada’s interest to participate in multilateral or regional agreements involving the U.S. given our close dependency on the United States and the integration of our economic systems,” he said.

He said he thinks Canada’s absence from the launch of these talks reflects a perception that this country is a marginal player.

“There are many reasons why Canada is not on the front lines of some of these strategic developments and one of them is we are not seen as having pulled our weight over decades on military and security matters – and that has to change,” Mr. Herman said.

He added that a defence policy review under way could change Canada’s approach to security matters.

The U.S. embassy in Ottawa did not immediately respond to a request for comment Tuesday on Canada’s absence from the list of countries included in the launch of IPEF talks.

With files from Reuters and Associated Press

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