Squandering the Asian Opportunity

As the only NAFTA member without a trade deal with an Asian country, Canada is limiting the role it can play on the 21st-century world stage.

The recent announcement of a free-trade deal between Korea and the United States underscores Canada’s lonely position as the sole NAFTA member that does not have a trade deal with an Asian country. While Ottawa focuses on a "security perimeter" with the U.S., Washington, D.C. is busy forging deeper ties with Asian countries. In addition to the Korea deal, the U.S. is negotiating to enter the Trans-Pacific Partnership (TPP), a free-trade agreement of eight Pacific Rim economies – which Canada is blocked from joining.

The broader question has to do with Canada's place in the evolving international architecture and Ottawa's willingness to take into account the global power shift to Asia.

For a mature discussion to take place, we need to revisit four assumptions about Canada’s place in the world.

First, the cliché about Canada joining any club that will welcome Ottawa’s membership is no longer valid. The mood of recent Canadian governments has not been in favour of joining for the sake of joining, but the reality in any case is that there aren’t many international groupings of value that would welcome Canada as a member. The UN Security Council bid is a stark reminder of this point, but other examples include the East Asian Summit (EAS) and the TPP.

Even in the case of clubs that we are bona fide members of, such as the ASEAN Regional Forum Dialogue Partners, new iterations of these groupings can result in Canada being squeezed out. For example, a recent meeting of defence ministers in Hanoi included all the ASEAN countries and eight dialogue partners (including the U.S., Australia, Russia, and New Zealand), but not Canada.

Second, there is an assumption that Canada is already a member of the most important clubs and can therefore be selective about joining upstart organizations. Membership in the G8 is seen as the pinnacle of diplomatic exclusivity. Membership in the G20 – and our hosting of the recent meeting in Toronto – also reinforces the sense that we are already in the top tier of global governance. In fact, our hosting of the G20 earlier this year was no more than a happy coincidence that had to do with Canada's prior commitment to hosting the G8 meeting in Muskoka.

Likewise, our membership in NAFTA is often seen as an example of Canada already belonging to the most important clubs. Privileged access to the U.S. market has been a boon for the Canadian economy. However, the importance of this special relationship has been diminished over time by the thickening U.S.-Canada border and by the recent economic malaise in the United States.