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Indo-Pacific: Market overview

Rapid economic expansion. Massive infrastructure projects. Billions of potential customers, including an emerging middle class seeking new products and services. For these reasons and more, the Indo-Pacific region has become a key destination for Canadian businesses seeking trade diversification opportunities. 

Indo-Pacific is home to some of the fastest-growing economies in the world—with demand to match. Collectively, it’s the second-largest trading bloc for Canadian goods and services, with China, Japan, and South Korea ranking among Canada’s Top 10 export destinations.

The region’s sheer size means there’s untapped potential for Canadian exporters. Both the Government of Canada and Export Development Canada (EDC) have made it a priority to increase Canadian trade and investment in Asia and Indo-Pacific, as the region’s diverse and growing markets offer compelling opportunities across key sectors. 

But it’s complex, and inexperienced exporters face many potential pitfalls. 

  1. Business in Indo-Pacific is highly competitive and price sensitive. 
  2. Environmental, social and governance (ESG) risks are elevated in certain countries. 
  3. A significant investment of time and money is required to research business opportunities, establish relationships in the target market, conduct due diligence, navigate language barriers and learn local business etiquette. 

With careful planning, the right partners, and a willingness to commit for the long term, a venture in Indo-Pacific may be the catalyst for your company’s global growth. 

Plus, you don’t have to go it alone. EDC is here to help Canadian companies experience the export impact by expanding globally and diversifying beyond Canada’s traditional trade markets. With trade representatives across Asia, EDC can advise you on your Indo-Pacific strategy, connect you to our powerful network of partners and resources, and fuel your expansion with a full suite of financial and risk management solutions. 

Indo-Pacific country spotlight

Which market in Asia and Indo-Pacific is the best fit for your company’s strategy and capabilities? There are dozens of options, but EDC market intelligence sees exciting potential for Canadian exporters in the following countries.   

         

EDC maintains detailed risk ratings on 48 countries, including major markets in the Indo-Pacific. Create a MyEDC account to access the Country Risk Quarterly report. 

Opportunities and challenges in the Indo-Pacific region for Canadian exporters

  • Young, growing populations
  • Demand from emerging middle class
  • Huge demand for infrastructure and cleantech 
  • Preferential access through trade agreements
  • Tech savvy and open to new digital trends 

By 2040, the Indo-Pacific is forecast to account for 50% of global GDP and 40% of global consumption. As a high-growth region, it’s a promising destination for Canadian companies seeking to diversify beyond North America and expand to new global markets. Demand for a variety of Canadian goods and services is strong, and investment opportunities are plentiful. 

  • Distance from Canada makes it expensive and time-consuming to visit 
  • Language and cultural barriers
  • Red tape and complex bureaucracy
  • ESG concerns in some markets
  • Time commitment required to build relationships 
  • Competitive 

Succeeding in Asia requires careful planning and long-term commitment. The business environment is complex and highly competitive. Canadian companies should be prepared to encounter challenges due to distance, language and culture, ESG concerns, and the local business environment while doing business in Asian markets. 

High-potential sectors in the Indo-Pacific

EDC market intelligence sees alignment between regional demand and Canadian capabilities in the following sectors:    

A hand holds a blue globe and a green plant

Agri-food

With its huge population, Asia is a critical market for Canadian agriculture. Our agri-food products and innovation can help the region’s growing middle class meet its food and nutrition needs. 

A globe with varying cities connected by lines

Infrastructure

Countries across the Indo-Pacific are making massive infrastructure investments to support economic growth, power digital transformation, provide new services and address climate change. 

A factory with a green leaf rising from the smokestack

Clean technology

Canadian capital, expertise and cleantech innovations are in demand as Asia attempts to urbanize and industrialize in a sustainable manner, and to meet its net zero commitments.

A dollar sign beside a globe inside a machine gear

Advanced manufacturing

The region is fast to adopt new technologies for manufacturing and digital transformation, which creates opportunities for Canadian innovation.  

How EDC connects the dots in Indo-Pacific for Canadian businesses

Finding new customers, suppliers and partners, understanding the local business culture and trade laws, and working out the logistics of shipping your goods are just a few of the challenges of doing business far beyond our borders. 

But you don’t have to go it alone. 

Canada has a network of trade-related organizations that work together to help you do business internationally. Working with Trade Commissioner Service’s officers abroad, EDC can connect you with reputable and vetted local agents, distributors, lawyers, accountants, translators, cultural and linguistic interpreters, customs brokers, government representatives and potential buyers throughout Asia and the Indo-Pacific. 

We also offer solutions for financing, managing risk and growing working capital to help Canadian companies do business globally. 

Learn more about how EDC can accelerate your business in the Indo-Pacific.

EDC Singapore: Your gateway to Asia

EDC’s branch office in Singapore is a gateway to Asia for Canadian exporters. We leverage our proximity to Asian buyers to identify new opportunities for Canadian businesses, connect with local partners, provide underwriting and financing solutions to facilitate trade, and act as a catalyst to increase Canada’s trade in the region. The office is also a service hub for our network of trade representatives across Indo-Pacific.

        

Canada’s free trade agreements with Indo-Pacific countries

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

CPTPP is a free trade agreement (FTA) between Canada and 10 countries: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. This huge economic bloc has a combined GDP of C$13.5 trillion and contains 495 million potential customers. 

Once fully implemented, CPTPP will eliminate or sharply reduce tariffs among the member countries, opening markets for Canadian exporters and creating new procurement opportunities for Canadian companies.  

Some Canadian goods such as fish, seafood and forest products can already enter CPTPP markets duty-free. The agreement also includes rules that create a consistent, transparent and fair environment for business and contains language that reflects Canada’s commitments to progressive ESG practices. 

Canada-Korea Free Trade Agreement (CKFTA)

The CKFTA is Canada’s first FTA with an Asian country. It provides Canadian exporters with preferential access to the world’s 11th-largest economy, which is the fourth-largest in Asia. 

Since 2017, 93% of Canada’s exports have had duty-free access to Korea, and by 2032, the CKFTA will eliminate tariffs on virtually all trade between Canada and Korea. 

The agreement also increases market access opportunities across all sectors and strengthens protection for two-way investment, reduces non-tariff barriers and makes it easier for businesspeople to move between the two countries. 

Future trade agreements in Asia

        

        

Further reading: EDC market intelligence for Indo-Pacific and Asia

        

        

Split-screen image of an overhead shot of a tractor cultivating a wheat field (left) and a woman at a grocery store holding a wheat product in her hand (right).

Interested in growing your business in Indo-Pacific? 

Get in touch with EDC. Find out more about how we can help you confidently enter new markets, reduce financial risks and grow your business by sending us a question. Or call us at 1-800-229-0575 on weekdays between 8 a.m. and 8 p.m. ET. Get started


 

Date modified: 2024-06-24