The Trudeau government wants a new trade pact with Southeast Asia. It won't be easy

In search of an Asia-Pacific strategy that doesn't rely on China, the Trudeau government has revived its push toward preferential trade with the 10 countries of the Association of Southeast Asian Nations (ASEAN).

Landing a deal that isn't off-brand with the Liberal"progressive" trade agenda won't be easy. This club includes several countries not so much embraced by Canada asbarge-poled for their human rights records.

Nevertheless, when the House of Commonsreturns this week, International Trade Minister Mary Ng willtable the government's notice of intent to reach a trade agreement. It'spart of the more"transparent" approach to international treaty negotiations Liberals agreed to in the last Parliamentafter Opposition MPs complained about rushing through bills implementingdeals they couldn'tfullyreview.

If you're reading this and wondering what an "ASEAN"is,you're not alone.

Prime Minister Justin Trudeau may be awarehis government isabout to spend its political capital negotiating with a bloc unfamiliar to many.

Takingaudience questions about his foreign policy strategyat the Wilson Center in Washingon, D.C. Wednesday,Trudeau asked Ng to explain what was agreed to athervirtual summit with ASEAN leaders the night before but then seemed to realizethere could bepeoplelistening whocouldn't listitsmembers, let alone grasp its significance.

"It's going beyond just, you know, Japan and South Korea," Trudeau said, citingfour ASEANmembersIndonesia, Singapore, Malaysiaand the Philippines "for people who are following along at home."

The other six ASEANmembers areBrunei, Cambodia, Lao People's Democratic Republic, Myanmar, Thailand and Vietnam.

Trudeau, his ministers and diplomats aretrying to formulate and articulatea coherent strategy thatcountersChina's influence in the Asia-Pacific. Closer trade ties with ASEAN, amarket of 600 million people, could help.

But buildingpolitical influence in this region has beencomplicated.

Getting to the table, 3 years later

The timesseemedsimplerwhen Trudeau attended the ASEAN summit in Singapore in 2018 as a "dialogue partner" and suggested negotiations could start the following spring.

Back then, Canada had a reputation to repair withPacific Rim partners like Japan and Australiaafterthe bumpy ride to ratification ofthe Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) without the U.S.

Simultaneously, Canadawasscoping out a trade negotiation with China itself an ideathat's now thoroughly on theback burner.

Huawei executive Meng Wanzhou hadn't been arrested in Vancouver yet. Canadians Michael Kovrig and Michael Spavor were still free and livingtheir lives in China.

COVID-19 hadn't erupted yet. Supply chains across the Pacific had yet to be strained by the pandemic.

Things have changed, to say the least. But Canada's interest in an ASEANtrade pact persists.

"Deepening our ties with ASEAN economies and diversifying trade across the Asia-Pacific will play a crucial role in our recovery," Trudeau said in a videotaped speech to ASEAN representatives last month, re-pitchingthe notion of a "win-win" deal "for all of our businesses and all of our people."

Canada already has preferential trading terms with Singapore and the hot Vietnam market under the CPTPP. (The other two ASEAN members who are CPTPP signatories, Brunei and Malaysia, have yet toratifythedeal.)

To isolatepotential net gainsfroman ASEAN deal, the other sixeconomies are key.

Canada agreed to bilateral talks towardan "economic partnership agreement" with Indonesia last June, suggestingit's eyeing thepotential ofthat market of over 270 million people in more than one way.

It's not clear whether the modellingand public consultationsprepared ahead of Trudeau's2018 pushstillhold, but they provide at least some historic insight into Canada's rationale.

Canada's Office of the Chief Economist predictedgrowth. Butthe projected gains forCanada's GDP weresmall fractions of one per cent.

Meredith Lilly, who served as a trade adviser to former Conservative prime minister Stephen Harper, agrees the economic impact of an ASEAN deal would be "likely quite marginal" for Canada.

"This is about a bigger geopolitical message, versusa trade message," she said.

That's not to say there aren't specific (and politically significant) sectors thatstand to gain.

Who wants this?

Canadian negotiators rarelydisclose their offensive and defensive goals what they hope to gain and what they hope to protect except in private consultations with priority stakeholders.

Butmost talkswith Canada riseor fallon resource exports, and ASEANcountries arehungryforthose.

Even without a trade deal, Canadian agri-food exports to the bloc includingwheat, soybeans, pork, canola oil, potatoes,seafood andanimal feeds have risen exponentiallyover the last two decades.

Across ASEAN countries, growing populations, rising urbanization andan increase in middle class consumersboostthe demand for high-valuefarmcommodities.

But Canada's export-oriented agriculture sectors face apricedisadvantage in this region,as well as a geographic one.

Some of its top agri-food competitorsalready have deals with ASEAN tocut their tariffs: China,India,Japan, South Korea, Australia and New Zealand.

Negotiators will set out to level this playing field for Canada. But 21st-century trade negotiations do more than cut tariffs on goods.

In a 2020report, the Canada-ASEAN Business Council identifiedlabour mobility the difficulty of getting visas for each other's businesspeople as a key barrier to economic recovery on both sides.

In an interview with CBC News this week, Ng said the opportunities for Canada in digital services are growing.

"Businesses have talked to me and our government about how important it is to be able to access those particular markets, but also to be able to attract investments intoCanada from the ASEANas well, as we buildour economy," she said.

The massive size of this market is attractive, but here's the rub: ASEAN has never agreed to a trade deal with labour or environmental standards.

Doing a deal without "progressive" elements would be seriously off-brand for these Liberals.

Raising ASEAN'sstandards

"Canada's free trade agreements are high-standard agreements," Ng said this week. "They have provisions around labour, they have provisions around the environment, they have provisions that provide greater access to small- and medium-sized enterprises."

(That's opposed to, say, the large corporate interests populist criticsaccuse global trade negotiations offavouring. Although the words in her ministerial titlekeep flipping around, Ng likes to remind people she's the minister forsmall business as well.)

Part of the reason starting these talks took so long, she said, was that Canada made sure it was proceeding in a way that would pursue highstandardsto the benefit of both partners.

If Canadian negotiators succeed,it willbe ASEAN'shighest-standard agreement to date.

Other partners that share "progressive" trade goals, like the European Union, have triedbut have found it hard to make progress.

For example, theEuropean Parliamentbannedthe use of palm oil in biofuelsover concerns that it incentivizes deforestation. Malaysia, which along with Indonesia produces most of the world's supply, considersthatban discriminatory, protectionistand a form of "crop apartheid" that hurtsits small farmers.

So how will Canada approach palm oil in its ASEANtalks, particularly afterthe deforestation agreement it signed onto at COP26?

Would it suffice for Canada to require palm oil imports be certified as sustainable? Negotiatorswill have toreconcile sensitive issues like this.

Andprogressives have other reasons to feel uncomfortable about ASEAN partners.

'Capacity building' or compromised?

Earlier this month, UN investigators reportedevidence that Myanmar'smilitary rulers committedcrimes against humanity againstitsethnic Rohingya population.

The UN's Office of the High Commissioner for Human Rights is also highly critical of the human rights situation in the Philippines, where critics of PresidentRodrigo Dutertehave been threatened, attacked and killed.

In the Papua and West Papua regions of Indonesia, human rightsgroups like Amnesty International reportunlawful killings and other serious violations by security forces, as well as violations across Indonesia of the rights of women and LGBT people.

"Capacity building" with things like chapters on gender, labour and environment standards will be one of Canada's goals inthe ASEAN negotiation, Ng said, addingthe talkswill be "guided by what is important to Canadians."

Trudeau is fond of reminding potential trading partners of Canada's progressivereputation. If Canada's too willing to open its marketto human rights abusers, it might jeopardize thatreputation.

Negotiating leverage in doubt

Carlo Dade, the director of the trade and investment centre at the Canada West Foundation, saidthe Trudeau government hasto demonstrate progress on its Asia-Pacific strategy.

But doing a "progressive" agreement with Myanmar? Thatrisks Canada being hoisted with its own petard, Dade said.

"It makes no sense, and it undercuts the importance of the CPTPP," he said."Canada's reputation is still in the doghouse."

Rather than encouraging ASEAN countries to join the CPTPP ahigh-standards agreementthat's already in forceto counter Chinese influence in the Pacific Rim Canada'sproposinga second set of regulations and tariff schedules,addingmore paperwork and bureaucracy for businesses, he said.

Lillyagrees that Canada should promotethe agreement it already has not compete with it.

If anotherASEAN country were to seek entry to the CPTPP, its11 signatories have a lot of leverage to insist onhigh standards.

If acountry doesn'twant to meet those standards, Canada should ask itself if it really wants a partner that lacks that ambition, Lilly said.

In Canada's new talks with ASEAN, the negotiating dynamic will be one country against ten.

"It's hard to negotiate bilaterally with ten countries," she said. "You're the odd one out."