ASEAN, Canada a step closer to concluding trade deal by 2025
Jakarta Globe | 2 October 2023
ASEAN, Canada a step closer to concluding trade deal by 2025
by Jayanty Nada Shofa
Jakarta. ASEAN and Canada are aiming to conclude the negotiations on a free trade deal by 2025, and both sides have recently moved a step closer to that goal.
The Indonesian province of Bali last week hosted the fifth trade negotiating committee for the ASEAN-Canada Free Trade Agreement (ACAFTA) talks. Djatmiko Bris Witjaksono, a director-general at the Indonesian Trade Ministry, was the lead negotiator for ASEAN. Djatmiko said that both sides had agreed to wrap up the negotiations within 2 years.
“The ACAFTA will become ASEAN’s first FTA with the Americas. Negotiators must work towards the substantial conclusion of its negotiations by 2025,” Djatmiko was quoted as saying in a recent press statement.
Djatmiko said the fifth round of the ACAFTA talks discussed several outstanding issues, including on “labor and environment”. The Bali meeting also brought together a number of working groups, among others, on investment, intellectual property, and trade in goods. The recent negotiating round also had working groups in the services sector.
“In this round, we have agreed on many articles and paragraphs,” Djatmiko said.
ASEAN and Canada agreed to launch the ACAFTA negotiations in 2021. Canada called the 10-membered ASEAN grouping its fourth-largest merchandise trading partner in 2021. Last year, Canada-ASEAN merchandise trade totaled $40.7 billion.
A joint feasibility study shows that a Canada-ASEAN FTA that liberalizes trade in goods reduces non-tariff measures, and improves trade facilitation can increase the Southeast Asian bloc’s gross domestic product (GDP) by $39.4 billion. The same study shows that Canada is expected to get a $5.1 billion in GDP gain. The same deal is expected to add $7.1 billion to Indonesia’s GDP.
The government reported that Indonesia-Canada trade rose from $3.1 billion in 2021 to $4.3 billion the following year. Indonesia, however, posted a $1.7 billion trade deficit with Canada in 2022.
Indonesia and Canada are also currently trying to seal a bilateral comprehensive economic partnership agreement —also known as the ICA-CEPA— by next year. Indonesia said the ICA-CEPA could boost its GDP by $1.4 billion. The deal is also expected to increase Indonesia’s exports to Canada by $851 million in the medium term.
