Canada’s decision to enter formal bilateral trade talks with Taiwan is an element of a broader strategy for the Indo-Pacific region, its minister of international trade told CNBC Tuesday.
The 2 sides agreed on Feb. 7 to start formal negotiations on a trade agreement so as to strengthen trade and investment.
“I used to be capable of launch what we call FIPA — it is a foreign investment, protection arrangement with Taiwan, but it is extremely much a component of Canada’s Indo-Pacific strategy for diversification into the region,” Mary Ng, the trade minister told CNBC’s “Squawk Box Asia” on Tuesday.
“We went out to the Canadian people and had a really broad consultation before getting up to now, which is launching into this dialogue,” she added.
Bilateral trade between Canada and Taiwan reached $5.82 billion in 2022, based on Taiwan’s official statistics. Taiwan is Canada’s thirteenth largest trading partner globally, and its fifth largest trading partner in Asia.
Taiwan’s exports to Canada amounted to $3.3 billion last 12 months, and Canada exports to Taiwan amounted to $2.52 billion in the identical period, based on that data.
The agreement would “establish more resilient supply chains within the post pandemic era, jointly support the rules-based international economic and trade order,” Taiwan’s ministry of foreign affairs has said.
Indo-Pacific strategy
Besides Taiwan, Canada can be exploring growth opportunities within the region, said the Canadian minister. She said there are ongoing talks with the 10-member Southeast Asian ASEAN bloc on various trade areas for cooperation.
“You will see within the Indo-Pacific strategy that Canada laid out a really comprehensive plan for a way we’re going to grow within the region,” noted Ng.
“This region is the fastest growing,” she said. “By 2030, you are going to have a big a part of the growing middle class. By 2040, I believe the numbers are somewhere like half of the world’s middle class … within the region.”
“The Indo-Pacific region will play a critical role in shaping Canada’s future over the subsequent half-century,” Canada said in its long-awaited Indo-Pacific strategy released in November.
“Encompassing 40 economies, over 4 billion people and $47.19 trillion in economic activity, it’s the world’s fastest growing-region and residential to 6 of Canada’s top 13 trading partners,” the official plan stated, highlighting significant opportunities “for a long time to come back.”
China is critical
Canada’s Indo-Pacific strategy also underlined its approach to China, a critical a part of its framework.
“China is an increasingly disruptive global power. Key regional actors have complex and deeply intertwined relationships with China,” the official plan stated. “Canada’s Indo-Pacific Strategy is informed by its clear-eyed understanding of this global China, and Canada’s approach is aligned with those of our partners within the region and world wide.”
China considers Taiwan a breakaway province and says it has no right to conduct foreign relations. In recent times, there have been increased tensions between either side over Beijing’s military activities near the island.
The trade minister said Canada “still stands by its one China policy,” and that climate change is one area that either side could engage in.
“But there’s absolutely areas where Canada will stand and lead with its value …. our democratic values standing up for human rights, standing up for the rule of law,” said Ng.
“There are going to be areas that Canada will absolutely challenge China on. But diversification for me because the trade minister is the job and that’s growing into this very dynamic market,” she added.
