What Canada’s Asia-Pacific engagement is really telling us
As published on Substack
Since taking office a year ago, Prime Minister Mark Carney has committed his government to diversifying Canada’s trade and investment relationships. More specifically, Carney announced an ambitious goal of doubling non-U.S. exports within 10 years and attracting a significant increase in foreign direct investment over the next five years.
Just a quarter of the way into 2026, we are already seeing what that this diversification looks like in practice. The Prime Minister and members of his cabinet have logged significant international travel, with a noticeable emphasis on Asia-Pacific markets.
From my vantage point in the region, I have seen first-hand how Canadian ministerial visits and business-focused engagements are landing across key economies, including China, India, Korea, Australia, Singapore, as well as in my home base in Japan.
It is always difficult to paint a region as diverse as the Asia-Pacific with a broad brush, given that each country is distinct with varied levels of economic development and interests. Still, despite that complexity, three large themes of opportunity and concern that are clearly emerging in relation to Canada.
- Canada’s place in North America still matters, everywhere
Carney’s diversification strategy has been well received in the Asia-Pacific, but as is often the case with a significant policy shift it has been interpreted differently in different countries.
For example, in some countries an unfortunate narrative has emerged that diversification means Canada will be walking away from our highly integrated North American continental economic partnerships. That assumption is simply wrong and it’s one Canada cannot afford to let harden.
Diversification does not mean divesting ourselves of our most important economic relationships. Canada must continue to make it clear to global partners that renewing the United States-Mexico-Canada Agreement (USMCA) and strengthening economic ties within North America remain our top trade and investment priorities.
I recognize it might seem strange to bring this up in the context of Asia-Pacific engagement, but the two are deeply connected. Major investors from northeast Asia and beyond, both those with existing investments in Canada and those now actively considering investments in Canada, view our country as an attractive trade and investment destination because of our integration with the United States. If the future of that relationship is called into doubt, it could jeopardize billions of dollars in foreign investment in a wide range of sectors.
That’s why upcoming talks to review and renew the USMCA matter just as much in Tokyo, Seoul and Singapore as they do in Ottawa, Washington or Mexico City.
- Defence partnerships are growing.
The decision to procure Australian over-the-horizon radar technology, and to include Korea-based Hanwha Ocean as a finalist in Canada’s submarine competition, should be seen as part of a broader trend rather than isolated choices. Canada is deepening its security partnerships with key Asia-Pacific players, particularly Japan, Korea and Australia.
As geopolitical uncertainty grows and defence budgets expand, we should expect these partnerships to deepen further. Many countries, like Canada, are focusing on developing sovereign defence and security capabilities. Canada has internationally recognized expertise in defence, space, cybersecurity and advanced technologies. It has been encouraging to see Canadian companies making regular visits to the Asia-Pacific region.
If Canada procures Korean submarines, it will be transformational for the bilateral relationship. Canada is not seen as a natural partner for Korea the way that some European countries typically are. It will take continued engagement, but all signs suggest the relationship is evolving. This is encouraging, given defence was rarely if ever featured as a key regional opportunity just a couple of years ago.
- Economic Security is becoming a defining issue.
The conflict in the Middle East is causing havoc for both developed and emerging Asian markets. For the first time in decades, countries are implementing restrictions on energy use, while industries risk shortages of critical inputs for a wide range of goods.
Disruptions in fertilizers could affect the growing season across the region. It will be difficult for economies to navigate in the short to medium term, and even if tensions fully subside, the economic aftershocks could be felt for months if not years.
Fortunately, Canada is in a good position to provide more resources including reliable oil and gas to help alleviate pressure in Asia. The completion of the Trans Mountain Expansion has expanded Canada’s export capacity, but constraints remain.
The need for expanded energy, food and fertilizer export-enabling infrastructure has never been greater for Canada. While the Canadian policy environment has largely moved towards favouring these kinds of major infrastructure projects, we need to move with urgency and use this moment to help attract much needed capital from the Asia-Pacific region.
Rightfully, Canada is putting significant time and effort into the Asia-Pacific, and it is beginning to pay off. Across the region, Canada is seen as a credible, pragmatic partner. As long as we remain engaged and adaptive, such as addressing emerging concerns, Canada will continue to succeed in this increasingly vital part of the world.
