Canada to Grow Indonesia Exports, Reduce US Dependence

Canada is advancing plans to gain duty-free access for up to 95% of its exports to Indonesia over the next 8 to 12 months, a strategic milestone in its broader Indo-Pacific trade agenda. 

The agreement, finalised under Prime Minister Mark Carney’s leadership, represents Canada’s first full-scale trade pact in the region and underscores its effort to reduce dependence on the U.S. market.

Trade Minister Maninder Sidhu anticipates that the agreement will be ratified within a year, forecasting that Canadian trade with Indonesia will potentially double over the next five years.

While Indonesia remains a relatively small market, with bilateral trade totalling just $5 billion last year, it presents a promising opportunity compared to Canada’s $ 1 trillion trade relationship with the U.S.

Indonesia, as Canada’s key export hub in Southeast Asia, which provides access to the region’s rapid growth, has been highlighted by the Trade Minister. He also revealed plans to advance a trade agreement with the Philippines and will be actively engaging leaders in Malaysia, South Korea, and Japan to strengthen Canada’s presence in Asia.

Minister plans to visit China in November to support ongoing efforts to ease trade disputes affecting vital sectors in both countries. Prime Minister Carney is focused on rebuilding Canada’s relationship with China, its second-largest trading partner, following the introduction of disruptive U.S. tariffs.

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Carney called his recent discussions with Chinese Premier Li Qiang productive, highlighting plans for ongoing dialogue. Sidhu emphasised Canada’s focus on multi-level engagement and noted that discussions with India on expanding economic cooperation are still in the initial stages.