ASEAN and Canada: Building Bridges with the Great White North

The Plan of Action (POA) to implement the ASEAN-Canada Strategic Partnership (2026-2030) was adopted at the ASEAN Post-Ministerial Conference with Canada held recently in Manila. The POA, which supersedes the ASEAN-Canada Enhanced Partnership (2021-2025), seeks to foster deeper cooperation between the two regions in trade and investment, as well as broader economic cooperation. This comes as the ASEAN-Canada Free Trade Agreement (ACAFTA) is also slated for conclusion later this year — five years after negotiations were initiated in 2021. However, respondents in the State of Southeast Asia Survey (SSEA) continue to rank Canada low in terms of strategic relevance for ASEAN among its fellow Dialogue Partners. Over the three years the Survey has examined this aspect, from 2024 to 2026, Canada ranked 10th out of 11 countries, just outpacing New Zealand in all instances.

This reflects its perceived smaller role in the region compared to bigger powers such as the US and its allies and partners Australia, Japan and India. In this sense,
the POA and ACAFTA represent Canada’s attempt to bring something to the table which is congruent with Ottawa’s capabilities. The two initiatives will help to better anchor Canada as a reliable partner in ASEAN in areas of mutual benefit, including food security, energy resilience, and green transition.

Despite perceived sluggish traction, the pace in the establishment of Canada’s official economic relationships with ASEAN Member States (AMS) has been progressing moderately well over the past decade and seen to accelerate in 2025 during the height of the US’ reciprocal tariff uncertainties. Canada and some ASEAN countries (namely, Brunei, Malaysia, Singapore, and Vietnam) are already involved in an free trade agreement (FTA), in the form of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force in 2018. Canada also has bilateral agreements with countries in the regional bloc at various stages of completion. This includes the Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA), which entered into force in September 2025. Canada initiated FTA negotiations with the Philippines and Thailand in November 2025. In June 2026, Indonesia and the Philippines also began discussions to accede to the CPTPP.

Despite perceived sluggish traction, the pace in the establishment of Canada’s official economic relationships with ASEAN Member States (AMS) has been progressing moderately well over the past decade.

With more ASEAN countries joining the CPTPP, there will be some pressure for the proposed ACAFTA to be at least as attractive as the CPTPP in its provisions in order to be adequately utilised. Moreover, the more targeted and strategically deeper bilateral agreements that Canada is in the process of formulating with various AMS could also have unintended consequences of competition with the multilateral ACAFTA. This means that the ACAFTA has some big shoes to fill in order to leave a meaningful mark on the region. At a minimum, for other AMS without any existing or prospective FTAs with Canada — namely Cambodia, Laos, Myanmar, Timor-Leste (CLM-TL) — the ACAFTA would provide these less-developed countries a platform to strengthen trade ties with Canada. By encompassing the less-developed AMS, which face the greatest challenges in alleviating regulatory and institutional capacity weaknesses under the ACAFTA umbrella, there could be greater traction in alleviating some of these barriers for Canadian firms. A formal platform such as ACAFTA could facilitate closer dialogue on these pressing issues and provide the potential to implement targeted capacity-building and technical assistance to address them.

From Table 1, it can be seen that Canada is very competitive in its supply of fuels, fertilisers and food. These products are essential goods and have been in the spotlight since fighting broke out in the Middle East. The Strait of Hormuz has evolved into a key bargaining chip between Iran and the US in the prolonged conflict. This means that continued access to these key commodities and products has become a key priority in economic security toolkits globally, including for ASEAN countries. The potential for greater supply-source diversification for the ASEAN region and, on the flipside, greater market access for Canada through the ACAFTA is a clear win-win for both parties.

Competitive Canucks

Figure 1. Canada’s Export Competitiveness in Key Products

Note: Revealed Comparative Advantage (RCA) measures a country’s competitiveness in specific exports. It is calculated as a proportion of a country’s exports of a certain product to the proportion of the world’s exports of that product.

For purposes of food security, the complementarity between Canada’s supply and ASEAN’s needs may be more clear-cut. Estimates of Canada’s agriculture export potential (including fertilisers, pulses, and preserved and processed food products) against actual export performance show that these exports under-performed in Southeast Asia. In 2023, exports of these products to the region amounted to CAD2,250 million, or about 61 per cent of its predicted export potential. ASEAN’s growing population, increasing incomes and continued risks of food insecurity make Canada’s agricultural and fertiliser exports to the region a natural area for greater cooperation.

In fossil fuels, the situation remains more nuanced. Given supply shocks, several ASEAN countries have sought to lessen their exposure to imports. They are seeking to boost domestic capabilities and have diverted more attention to renewable energy systems. Thus, Canada’s competitive edge in this arena going forward will need to balance providing traditional fossil fuel supply resilience with the critical foundations to support energy transition objectives. Canada has started to make some inroads into the region through knowledge-sharing activities to promote greater cooperation with the AMS in areas of infrastructure, critical minerals, and associated technologies to advance energy transition.

As all AMS differ in their unique strengths in resources and capabilities, as well as their strategic priorities, a structured approach to identifying complementarity gaps and value-added economic activities to strengthen partnerships between the two regions will be imperative for greater traction. Both food security and energy transition drivers present mutually beneficial and credible bids to enhance Canada’s strategic relevance in the region. As such, Canada may have found its niche by helping Southeast Asia build its future.

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