On behalf of Canadian Manufacturers & Exporters (CME), our 1,200 direct members and the nearly 90,000 manufacturers across the country, we are writing regarding the government’s consultation on a proposed free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN).
CME fully embraces Canada’s free trade agenda and we have the utmost confidence in our trade negotiators to obtain beneficial terms for Canada in a deal with ASEAN countries. The focus of this consultation is to determine how Canada should best proceed regarding a possible FTA with ASEAN. CME has always believed that no trade agreement is worth signing unless that deal meets three, high-level objectives:
One: It creates a fair and level playing field for Canadian manufacturers and exporters and ensures that they have an equal opportunity to export to foreign markets as foreign competitors must import into Canada;
Two: It allows value added exports from Canada, and not just the export of natural resources; and
Three: It does not undermine the existing integrated manufacturing supply chains developed through previous FTA’s, especially the NAFTA/USMCA.
More generally speaking, CME believes that Canada must also address our firms’ readiness to take advantage of new trade deals. Free Trade Agreements are only as beneficial as the amount of new value-added trade that they create. Outside of NAFTA, Canada’s exports record with other FTA countries has been mixed. If Canada wants to create new jobs to grow the middle class through expanded trade, we need a plan. This plan should consist of five critical elements:
First, we must improve our domestic business competitiveness.
Secondly, we must ensure FTA’s level the playing field for manufactured goods.
Thirdly, Canada should focus FTAs on countries with natural business ties.
Fourth, we must focus on leveraging existing integrated supply chains. Under NAFTA, Canada’s manufacturing economy has shifted from producing goods for this market, to largely producing parts, materials and ingredients that feed larger supply chains.
Finally, we must support the global growth of SMEs to support their growth at home. Canada has many small businesses but, not enough medium and large companies. Over 95% of manufacturers have under 10 employees, and many do not have the internal expertise or financial ability to expand globally.