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Public Consultations on a Possible Canada-ASEAN FTA

September 1 to October 16, 2018

Overview

From September 1 to October 16, 2018, the Government conducted public consultations to seek the views of Canadians on a possible free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN). Since September 1, the Government received 49 submissions in response to the Gazette notice (38 from business stakeholders and 11 from non-business stakeholders and partners), the majority (20) of which were from agricultural stakeholders. The Government also engaged with a variety of stakeholders in meetings and teleconferences during this period, and during this period engaged with 32 stakeholders and partners.

Overall, stakeholders expressed support for FTA exploratory discussions with ASEAN and highlighted the significant opportunities for Canadians and Canadian businesses in the ASEAN market - notably with non-CPTPP economies (Indonesia, Philippines and Thailand) - across a broad range of sectors, including agriculture, manufacturing and services, among others. Stakeholders highlighted that a possible FTA could address existing barriers for Canadian firms, including high tariffs, sanitary and phytosanitary issues and non-tariff barriers.

A number of contributors also used this opportunity to indicate support for the Government’s efforts to diversify Canada’s trade toward the Asia-Pacific region and to encourage the Government of Canada to quickly ratify the CPTPP. It was suggested that Canada design a possible Canada-ASEAN FTA as a stepping stone for future CPTPP accessions for those economies that are not yet in a position to embrace the high level of ambition contained in the CPTPP.

A small number of stakeholders, especially from the supply-managed agriculture sectors, are skeptical of the benefits of a possible ASEAN-Canada FTA. Contributors indicated that support for an agreement would depend on outcomes that provide a carve-out for supply managed goods.

Annex A contains a list of submissions received through the Gazette process. Annex B includes a list of stakeholders that were consulted as part of this public consultation.

What We Heard From Stakeholders

Business Stakeholders

In general, Canadian businesses and national business associations representing broad sectors of Canadian industry are supportive of a possible ASEAN-Canada FTA. In their view, a possible FTA with ASEAN would enhance Canada’s competitiveness, enable trade diversification in the Asia-Pacific and stimulate economic growth.

Agriculture and Agri-Food

The Government of Canada received a total of 20 submissions from the agriculture sector, which as a rule, are supportive of FTA exploratory discussions with ASEAN and the Government’s efforts to diversify Canada’s trade in the Asia-Pacific. The Government heard that there are significant opportunities for Canadian agricultural products in the ASEAN market, and that a possible FTA would level the playing field in ASEAN with Canada’s regional competitors, especially Australia (which already enjoys preferential tariff rates through an FTA with ASEAN). Many agriculture stakeholders also suggested that Canada’s long-term goal should be to encourage ASEAN members to join the CPTPP.

Export-oriented agriculture sectors (beef, canola, pork, grains) expressed strongest support for a possible ASEAN-Canada FTA. These stakeholders noted that a possible FTA with ASEAN would need a robust dispute settlement mechanism and a consistent application of harmonized science-based sanitary and phytosanitary standards and requirements.

The support of supply managed sectors for a possible ASEAN-Canada FTA is dependent on outcomes that provide a carve-out for supply managed goods. Stakeholders in sugar refining and extraction (sugar beets) are concerned with the increased competition that may result from an FTA with ASEAN, especially from Thai producers.

Fish and Seafood

Stakeholders in the fish and seafood industries are supportive of a possible ASEAN-Canada FTA. Tariff elimination, HS code harmonization and a more effective process for the issuance of health certificates and import permits in ASEAN markets were identified as key priorities.

Manufacturing

In general, Canada’s manufacturing sector supports a possible FTA with ASEAN provided it would reduce tariffs and non-tariff barriers. Some manufacturers indicated however, that the elimination of Canadian tariffs may increase competition from foreign companies requested that Canada seek terms that are no more favourable to ASEAN than those negotiated in the CPTPP. Notably, the auto industry expressed concerns with CPTPP outcomes and requested that Canada negotiate more favourable terms for non-tariff barriers (e.g. Vietnam) under an FTA with ASEAN.

Services (including financial services)

The services sector expressed support for a possible FTA but noted several barriers that would need to be addressed under a potential agreement. Priorities cited include the need for well-functioning labour mobility provisions for professionals; air transport liberalization and measures to facilitate tourism; the elimination of restrictions on data flows - including forced localization; a reduction in restrictive foreign ownership requirements; the inclusion of ratchet mechanisms in services and investment chapters; strong ISDS provisions; and the elimination of local hiring requirements.

Provinces and Territories

The Government of Canada received positive feedback from Provinces and Territories. Several Provinces and Territories were particularly supportive of a possible FTA with ASEAN, noting opportunities for the meat, grains and oilseeds sectors. One indicated support for a possible FTA with ASEAN particularly for the fish and seafood sectors. One noted its support for trade diversification and progressive trade. Another flagged that an agreement with ASEAN would need to protect supply management and address labour rights, non-tariff barriers, ISDS and intellectual property.

Non-Business Stakeholders

Labour Unions

The two labour unions that submitted views expressed opposition to a possible FTA with ASEAN, citing concerns related to human rights in some ASEAN countries, temporary entry of foreign workers, the possible loss of Canadian jobs, the privatization of public assets and the possible negative impact on trade with the U.S.

Indigenous Partners

Indigenous groups indicated they would seek a general exception for the rights of indigenous peoples, as well as carve-outs and special provisions in several chapters of any agreement with ASEAN. In a telephone consultation, one group also asked the Government to consider including an indigenous chapter in an agreement with ASEAN.

Next Steps

Despite the conclusion of the dedicated consultation period, the Government of Canada is committed to continue to hear the views of Canadians on a possible FTA with ASEAN. The feedback received from stakeholders will help inform the Government’s decision on whether to launch FTA negotiations with ASEAN in addition to the Government’s internal analysis and the results of the exploratory discussions with ASEAN. Officials will continue to engage with stakeholders on a possible FTA with ASEAN in parallel with exploratory discussions.

Annex A

List of Gazette Submissions

Provinces and Territories

Non-Government Organizations

National Business Associations

Agriculture and Agri-Food

Fish and Seafood

Manufacturing

Services

Unions

Indigenous

Individuals

Annex B

List of Stakeholders and Partners Consulted

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