On January 11, 2021, the Honourable Mary Ng, Canadian Minister of Small Business, Export Promotion and International Trade, announced the launch of public consultations on a possible comprehensive economic partnership agreement (CEPA) with Indonesia.

The press release announcing these consultations explains that “[e]xpanding Canada’s trade and investment opportunities in Southeast Asia’s fastest-growing economy will diversify Canada’s trade portfolio and support our economic recovery from the COVID-19 pandemic.”

Indonesia is one of the member states of the Association of Southeast Asian Nations (ASEAN). Previously, Canada and the ASEAN member states have engaged in exploratory discussions for a possible Canada-ASEAN free trade agreement. The conclusion of these discussions was announced on September 10, 2019, when the Government of Canada expressed its “aim to expand trade and investment with large, fast-growing markets, including ASEAN”, explaining that, taken together, the “ASEAN member states represent the fifth largest economy in the world, and Canada’s sixth largest trading partner”.

Indonesia is Southeast Asia’s largest economy, a G20 member, Canada’s largest export market in Southeast Asia, and the second-largest destination for Canadian direct investment in Southeast Asia. According to the Government of Canada, the value of bilateral merchandise trade between Canada and Indonesia was $3.7 billion in 2019, and the total value of Canadian direct investment in Indonesia totaled $3.84 billion at the end of that year. Notable Canadian exports to Indonesia include agricultural products, including cereals, fertilizers, and wood pulp.

In the notice of the consultations published in the Canada Gazette, Part I on January 9, 2021 (Vol. 155, No. 2), Global Affairs Canada invites “all interested parties” to submit their views by February 23, 2021. The consultations are broad in scope, and “examples of areas where the Government would appreciate receiving views from Canadians” include the following:

• Goods of interest in terms of export opportunities, import needs (e.g., input materials for Canadian manufacturing), and import sensitivities;
• Rules of origin for preferential tariff treatment;
• Procedures vis-à-vis origin (e.g., determining, certifying, and verifying origin);
• Non-tariff barriers (e.g., technical barriers to trade and sanitary/phytosanitary measures);
• Cross-border and customs issues;
• Investment barriers;
• Trade facilitation issues;
• Services of interest in terms trade with Indonesia;
• Temporary entry of business people from Canada into Indonesia and vice versa;
• Electronic commerce;
• Government procurement markets in Indonesia, including at the central, sub-central and local levels, for Canadian suppliers;
• Issues affecting business practices when interacting with state-owned enterprises;
• Indonesia’s application and enforcement of intellectual property (IP) protection rules;
• Matters relating to competition policies;
• Trade remedies with respect to ASEAN member states and Canada;
• Any unfair business practices that may need to be addressed;
• Issues relevant to the development of small and medium-sized enterprises; and
• Matters relevant to Canada’s progressive trade priorities (including, for example, the rights and interests of Indigenous peoples, transparency, rule of law, gender equality, human rights, and environmental protection). In this regard, Canada has also announced its intention to conduct impact assessments with respect to the potential Canada-Indonesia CEPA, including an “initial environmental assessment” and a “gender-based analysis plus”.

Tereposky & DeRose regularly provides advice on international trade agreements. Should you have any questions regarding the consultations outlined above or any other trade matter, we are at your disposal.