Thank you for the opportunity to appear as a witness before the House of Commons international trade committee. As you know, my name is Stewart Beck. I am president and CEO of the Asia Pacific Foundation of Canada, a not-for-profit organization established by an act of Parliament in 1984 and a leader in research and analysis of Canada-Asia relations for over 30 years. We partner with government, business leaders, and academics in Canada and across the Asia-Pacific region to offer clear, specific, and actionable policy advice.
Prior to my role at APF Canada, I was a public servant and diplomat for 32 years, a career culminating in the post of Canadian high commissioner to India. I also served abroad in the U.S., Taiwan, and mainland China.
The rise of Asia marks one of the defining shifts of the 21st century. Within five years, Asia will represent 44% of the world's gross domestic product and 54% of the global middle class, and it will consume $4.8 trillion U.S. annually, 42% of the world's total consumption. Responding to this dramatic global shift, the Government of Canada has accelerated its engagement with Asia, making trade with China and India a pillar of its overseas agenda, and launching foreign trade missions and negotiating free trade agreements with renewed enthusiasm.
Yet, despite being a Pacific nation with approximately 60% of all new immigration originating in Asia, Canada remains marginalized in many of its relationships with Asian countries, which is costing us in building the necessary trade architecture in the region. Canada has been fortunate to have sources of growth and stability in traditional partners such as the United States and Europe, and these partnerships should not be ignored. The new Government of Canada has an opportunity to articulate a more targeted and strategic approach to engaging Asia that both advances Canadian national interests and contributes to the sustainable development and growth of the region.
To assist the Government of Canada in this endeavour, APF Canada recently released a non-partisan strategy paper that outlines a series of recommendations for the government to consider as it articulates its response to the rise of Asia. I have a copy of it here in both official languages, if you are interested. It's 25 pages, and you can read it on the plane going to Calgary. We firmly believe that a strategic approach is needed that considers the diversity of the region and accommodates a degree of uncertainty and short-term volatility. Our strategy paper is entitled “Building Blocks for a Canada-Asia Strategy”, and it is available on our website.
First among the advisory documents, the 10 actionable recommendations, is that the Government of Canada work with Parliament to ratify the Trans-Pacific Partnership. The TPP is the largest and most ambitious trade deal in the world. It effectively lowers tariffs and sets common standards for 12 countries that represent a combined market of $28.5 trillion, or 40% of the global economy. Of the 12 countries it encompasses, we already have joint free trade agreements with two, a bilateral free trade agreement with another, Chile, and a Commonwealth partnership with five others: Australia, New Zealand, Singapore, Malaysia, and Brunei.
The direct gains to Canada of the TPP are largely in the Japanese market, but much more significant are the potential indirect benefits. In a mid-sized economy such as Canada's, well-designed trade agreements like the TPP are an important means of driving innovation, productivity, and growth. The TPP can provide scale, market depth, discerning customers, flow of talent, and foreign direct investment. Not being part of the TPP, on the other hand, would be unambiguously negative for Canada. The potential costs of not being in a multilateral trade agreement anchored by the United States are significant and real for a NAFTA partner.
Canadians have been slow to embrace the TPP. Part of the reason for this is unfortunate, but understandable: It is an agreement negotiated largely in secret, with little involvement of the business community in identifying trade opportunities and risks, and signed by a former government during an election. More fundamentally, though, Canadians want to be convinced that such trade agreements are in their best interests.
APF Canada polls have consistently found that two-thirds of Canadians support free trade agreements in general, but this optimism about trade has yet to infuse the discourse around the new TPP. Our latest national opinion poll on attitudes toward the TPP finds an even split, with 41% expressing support for the TPP, and 38% opposed to this historic deal. The poll highlights a significant disconnect between positive attitudes toward free trade generally and divided views on support for the TPP specifically.
I'll just run quickly through the key findings.
Do I have time?