Canada has taken a major step in expanding its presence in the Indo-Pacific by signing a Comprehensive Economic Partnership Agreement (CEPA) with Indonesia, its first trade deal in the region under Prime Minister Mark Carney. According to International Trade Minister Maninder Sidhu, the agreement aims to grant duty-free access for up to 95% of Canadian exports to Indonesia within the next eight to twelve months.
The trade deal, which is expected to be ratified by both governments within a year, is seen as a gateway for Canada to Southeast Asia’s fast-growing markets. Sidhu noted significant opportunities across agriculture, energy, telecom, defense, and aerospace. He also revealed that Indonesia is considering Canadian small modular nuclear reactors, a new technology offering compact and efficient energy solutions.
Currently, Canada’s trade with Indonesia stands at just over C$5 billion annually, far below the C$1 trillion it records with its largest partner, the United States. Despite being a smaller market, Indonesia is already Canada’s biggest export destination in Southeast Asia, and bilateral trade could potentially double within six years under the new framework.
Canada is also looking to strengthen ties with other Asian economies, including the Philippines, Malaysia, South Korea, and Japan, as part of its broader Indo-Pacific outreach. Sidhu emphasized the importance of building visibility in the region and plans frequent visits to advance negotiations.
On China, Sidhu confirmed plans to travel there in November to help deescalate ongoing trade tensions. Carney has been working to repair relations with Beijing, Canada’s second-largest trading partner, after years of strained ties. Carney recently held “constructive” talks with Chinese Premier Li Qiang, signaling progress toward improved cooperation.
Additionally, Sidhu highlighted Canada’s interest in exploring deeper economic ties with India, though discussions remain in the early stages.
With this landmark deal, Canada is positioning itself to reduce reliance on the U.S. market while tapping into Asia’s dynamic economies, paving the way for greater trade diversification and long-term growth.