By Sarah Taylor, the Ambassador of Canada to Thailand.
As we celebrate 60 years of diplomatic relations between Thailand and Canada in 2021, now is a good time to take concrete measures to bring our countries closer.
Thailand and Canada are both trading nations. Trade improves the standard of living of our
respective citizens. These outcomes are improved by market diversification and robust and predictable trading rules. Canada, as a middle power and defender of the rules-based international system, is at the forefront of several initiatives to modernise existing institutions and trade agreements to reflect the realities of the 21st century.
We have, for instance, led on the creation of the Ottawa Group, comprised of 13 partners including Japan, South Korea, and Singapore, to reform the World Trade Organization and address specific challenges that are putting the rules-based trading system under stress.
We also pushed for a modified and more inclusive version of the Trans-Pacific Partnership which, as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is now in force for seven out of its 11 signatories, including Japan, Vietnam, Mexico, Australia and Singapore.
With China, South Korea and the United Kingdom having publically indicated they are considering membership in this trade pact, momentum is building.
The trade pact sets common rules for 500 million consumers and underlying regional supply chains that span the Asia-Pacific region, making trade in goods and services more predictable and transparent. Improving ease of doing business and providing certainty will be all the more vital as countries work to grow their economies following COVID-19. One of the ways the CPTPP does this is by levelling the playing field for all, especially SMEs, which will be key drivers in this recovery phase.
The CPTPP’s comprehensive tariff elimination and provisions to non-tariff barriers could offer advantageous conditions for trade beyond what the Regional Comprehensive Economic Partnership (RCEP) offers.
Free trade agreements often lead to lively domestic discussions on the benefits of further liberalisation. Canada, in the lead-up to ratifying CPTPP, was no exception. This is why CPTPP has dedicated chapters and provisions to ensure the benefits of trade are widely shared, including with those who have historically not always benefitted fully from such agreements.
The agreement also includes enforceable provisions for labour and the environment, features which Canada sees as key to next generation trade agreements that provide benefits beyond simple tariff reductions.
CPTPP also affirms each country’s ability to balance commitments in areas such as intellectual property with other important domestic public policy objectives, such as promoting access to medicines. Canada is open to sharing its experiences in promoting this balance, including with respect to the protection of plant varieties.
As a significant market with expansive global connections, Canada offers many opportunities for business. Canada is the world’s 9th largest economy and the only G7 country with trade agreements covering Asia, North America, and Europe. In 2019, Charoen Pokphand Group invested close to CAD500 million to purchase an agri-food company in Winnipeg, Canada.
This major investment, the first of its kind by a Thai food company in Canada, is a reminder that Thai companies can take advantage of the open, competitive, and innovative Canadian market.
Thailand is one of the most advanced economies of Southeast Asia. However, the Thai economy is particularly vulnerable to external shocks due to its heavy dependence on exports and tourism.
The road to recovery after the COVID-19 pandemic could be long and painful. Having played a leadership role during its chairmanship of ASEAN in 2019, the Thai government has reason to celebrate now that RCEP has reached the ratification stage. RCEP is a significant agreement in advancing trade liberalisation and the rules-based order in Asia at a time of growing geopolitical uncertainty.
With RCEP concluded, Thailand can consider additional ways to support its post-COVID-19 recovery, including by strengthening Thailand’s position in regional supply chains and its appeal as an attractive investment destination through the CPTPP.
Our world is deeply interconnected, as we have seen throughout this difficult pandemic year. As we prepare for the recovery phase, now is a good time to consider how we can strengthen the rules-based trading system to ensure that the economic pain brought by COVID-19 remains temporary, and that we build back better, together.
Participation in CPTPP could be an option for Thailand as it seeks to create new opportunities for Thais and to enhance its position within the global trading system.
Canada welcomes interest in accession from any economy that can meet CPTPP’s rules and commitments, and looks forward to continuing to work with Thailand to advance rules-based trade in support of sustainable economic recovery.
About the author
Dr. Sarah Taylor is the Ambassador of Canada to Thailand and Laos. She previously served as a diplomat to the People’s Republic of China, and had a background in archaeology.