Amid the brewing trade tensions and tariff war with the United States, Canada and Indonesia signed a bilateral free trade agreement to reduce 95 per cent of Ottawa's exports to its largest market in Southeast Asia.
Several experts have also said that the two nations have signed the agreement in the context of global economic turmoil, exacerbated by the protectionist policies of the United States. "This is the right deal at the right time with the right partner," Canada's Prime Minister Mark Carney said, adding Indonesia is "Canada's largest export market in Southeast Asia."
Indonesian President Prabowo Subianto called the agreement a "historic moment" during an official visit to Ottawa on Wednesday, as it is the first of its kind with an Association of Southeast Asian Nations (ASEAN) member country.
Subianto said, "I'm very lucky to be the Indonesian president who brings this back to Indonesia.”
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Canada’s exports include wheat, potash, timber and soybeans, among several other consumables. The Comprehensive Economic Partnership Agreement (CEPA) allows Canada to strengthen its presence in the Indo-Pacific region, in line with the strategy that was unveiled by the previous administration under Justin Trudeau.
The agreement also provides for the elimination of more than 90 per cent of tariffs on Indonesian imports, a boon to the export of garments and leather commodities to the North American market. Simultaneously, a defence cooperation agreement was signed aimed at strengthening collaboration in military training, maritime security, cyber defence and peacekeeping.
The recent geopolitical tensions, especially after US President Donald Trump announced reciprocal tariffs on more than 90 countries, have created uncertainties in the global market.
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