Prime Minister Justin Trudeau and Ministers Mélanie Joly and Mary Ng recently spent a week in Asia for meetings of the Association of Southeast Asian Nations (ASEAN), the G20 and the Economic Cooperation for Asia-Pacific (APEC).
At the same time as these meetings, the federal government announced several economic measures, totaling approximately $1 billion, aimed at implementing Canada’s Indo-Pacific Strategy, unveiled Sunday by Minister Joly.
A large part of these funds focuses on infrastructure projects in the region and aims to facilitate and promote the export of natural resources and agricultural and agri-food products.
Such an approach is very good and takes into account Canada’s (“natural”) economic advantages. However, it ignores a whole section of the Canadian economy, just like that of the Indo-Pacific region: the digital economy. According to some recent studies, the Indo-Pacific region is considered the most dynamic in the world when it comes to digital trade.
For many Canadian businesses, especially small and medium-sized ones, digital commerce could be one of the best ways to do business across the Pacific.
After all, digitalization allows companies to increase the scope and geographic reach of their business. It also reduces trade costs and facilitates easier supply chain adaptation.
To do so, it is therefore important that Canada’s Indo-Pacific strategy include a strong focus on digital trade, following the example of the United States, which has placed the digital economy at the heart of its Indo-Pacific economic framework for prosperity, to which Canada recently applied to join.
As Canada is a rather marginal player in global digital trade – behind the United States, Japan, China, Korea and even Australia – it is necessary to put in place a strategy and measures that will allow Canadian companies to increase their commercial relations with the Indo-Pacific region, and also with the rest of the world.
The development of digital trade with the Indo-Pacific region will not be possible without the development and implementation of a digital trade strategy for Canada as a whole.
Such a strategy is based on three pillars:
- reliable and inclusive access to high-quality digital infrastructure at internationally competitive prices;
- increased digital capability through the adoption of well-established and advanced digital technologies, especially for SMEs, and the development of digital skills among Canadian workers, managers and entrepreneurs;
- the reduction, or even the elimination, of non-tariff barriers to international digital trade, in particular through international agreements.
As part of the third pillar of a digital trade strategy, Canada is already very active in the Indo-Pacific region on digital trade governance. In the spring, he notably asked to join the Digital Economy Partnership Agreement (founded by Chile, New Zealand and Singapore), alongside China and Korea. At the same time, Canada became a founding member of the Global Forum on Cross-Border Privacy Rules, which was launched by the United States as part of its own Indo-Pacific strategy and aims to remove such rules of APEC (to shield them from direct Chinese influence). Finally, Canada is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes a chapter on digital trade.
Since the discussions on these agreements mainly include countries from the Indo-Pacific region, it therefore seems logical that Canada’s Indo-Pacific Strategy aims to strengthen “cooperation on standards and regulations for the benefit of Canada, Indo-Pacific region and rules-based trade”.
While being part of digital trade agreements is important to support the economic portion of Canada’s Indo-Pacific Strategy, it is not enough. Canada also needs to focus on two other strategic pillars of digital trade policy. To do this, it is imperative that Canada adopt a digital trade strategy that is clear, coherent and calls for close collaboration between governments (federal and provincial) and businesses.