Canada-China Relations Committee on June 3rd, 2024

[Erik Kuhonta, Associate Professor, Department of Political Science, McGill University, As an Individual]

Thank you for having me and for inviting me to discuss ASEAN in the context of Canada's Indo-Pacific strategy.

In my five-minute opening remarks, I'll address three key points. The first is the origins of ASEAN. The second is the principal characteristics that have defined ASEAN. The third is the current internal dynamics of the association.

I apologize beforehand if some of this overlaps with the earlier panel I was watching. Some of these points will overlap, but they will build on the earlier comments.

The main point I intend to make is that ASEAN is a very pragmatic organization that reflects a wide range of interests, but whose raison d'être has always been regional stability. That emphasis on pragmatism and regional stability will shape its relations with countries from outside the region.

ASEAN was established in 1967 to address social, cultural, economic and political issues in the region. The real concern that led to ASEAN's founding was that of security. In the 1960s, Southeast Asia was rife with conflict, problems of external great power interference, and ethnic and communist insurgencies within numerous countries. These risked overwhelming the region.

ASEAN was therefore established—

[The Chair, Liberal, Ken Hardie]

Excuse me, Professor Kuhonta. Can you move your microphone up just a little, so it's between your nose and your upper lip? I think that would be good.

There's also some interference there that I hope works itself out, because our interpreters will have a difficult time following you. Hopefully things will settle down.

Please continue. Go ahead.

[Erik Kuhonta]

I'll try to speak a bit more loudly into the microphone here.

ASEAN was therefore established in order to mitigate regional crises and to create a framework for stability and intraregional co-operation.

Due to this dominant concern over security, ASEAN developed two key principles that have defined its behaviour and actions until this day. These are the norm of non-interference and a specific type of decision-making, known as the ASEAN way.

This norm of non-interference is the central norm that holds ASEAN together today. Its basic tenet is that states should respect the sovereignty of independent nations. This norm has been crucial in maintaining peace in the region. Since 1967, no states within ASEAN have fought a war among themselves. This norm of non-interference ensures that neighbouring states, therefore, do not interfere in others' affairs.

The ASEAN way, the second principle, is a specific type of decision-making that shapes how ASEAN addresses problems and crises. It is based on informality, consensus, accommodation and compromise. Crucially, the ASEAN way shuns binding legal resolutions, majoritarian votes and formal pronouncements. Notably, this principle sets the association apart from the practices and processes of western organizations.

While these two principles of non-interference and the ASEAN way unite the association, in other aspects the association is extremely diverse and reflects very wide-ranging views.

In terms of regime type—the type of government—ASEAN includes democracies, hybrid or semi-authoritarian regimes, and hard authoritarian regimes. The commitment toward liberal values, including human rights, is consequently very mixed within the association.

In terms of economic development, the association also ranges very widely, from very poor countries to middle-income and rich countries.

Finally, in terms of foreign policies and relations to great powers, such as the United States and China, ASEAN states have very different positions and very different interests.

The consequence of this wide internal variation within ASEAN affects the way the association addresses problems and crises in two specific ways. First, the association usually looks for consensus when dealing with a pressing problem, precisely because it encompasses such a mix of nation-states. Second, ASEAN responds to crises in a relatively slow manner, because it tries to satisfy the range of states within the association.

My final point is that ASEAN has also been changing in recent years, particularly in terms of the question of legitimacy and how it is perceived in the international community. That concern is especially relevant for some of the more economically developed countries within the association, such as Singapore, Malaysia and Indonesia. In that regard, ASEAN has recently sought to address problems of human rights and democracy more directly, especially on the question of the 2021 Myanmar coup. However, overall, ASEAN finds it very challenging to address illiberalism in the region, precisely because the association has long championed pragmatism, ambiguity and non-interference.

Thank you.

[The Chair, Liberal, Ken Hardie]

Thank you, Professor Kuhonta.

Again, there's something a bit strange going on with your microphone and your audio quality. We hope it settles down as we get into our questioning round in a little bit here.

We'll now go to Professor Marschke from the University of Ottawa, for five minutes or less.

[Melissa Marschke, Professor, Department of International Development and Global Studies, University of Ottawa, As an Individual]

Thank you, Mr. Chair, for the opportunity to present.

My remarks are going to be about seafood supply chains, distant-water fishing boats, forced labour—or what one might call modern slavery—and migrant workers coming from Southeast Asia.

Much of the seafood eaten in Canada is either caught on those boats—the main distant-water fleets are Chinese, Taiwanese, Japanese or Korean—think tuna, think squid—or processed in Asian seafood processing hubs, with migrant workers coming from the Philippines and Indonesia to work in these hubs in China, but also in Thailand and Vietnam.

In Canada, we're really implicated by this. The working conditions are generally really problematic. Work in fishing is problematic, and we know that's true even here in Canada. However, it's particularly problematic for migrant workers, who face many serious labour violations on these distant-water boats: violence on the boats, both verbal and physical; unpaid wages; long hours while fishing. For example, on the longliners that catch raw tuna for sushi or poke bowls, it's not uncommon to work 18 to 20 hours a day, for days on end, when the fish are running.

Contracts are one to two years. Some of these boats do not come back to port. It's because of transshipment at sea. This means that migrant workers are on boats for a year or two at a time, without any Wi-Fi. Isolation is a real issue for these workers. They're very isolated, and they're at the mercy of their captains. We've seen this all around the globe. There are very few high-seas inspections that actually take place.

At the same time, migrant workers, again from the Philippines or Indonesia, want these jobs, because it's better than what's going on in sending countries. They're making little, given the value of seafood—$500 a month, if they're paid. There are cases where workers get far less. I've heard about cases of $200 a month, and I've heard of a few cases where people have been managing this job for a long time and are making more money.

Shutting down the industry is not the answer, but changing working conditions is critical. Migrant workers on fishing vessels get the most attention, but seafood processing hubs are also an issue. Recent work by Ian Urbina, a U.S. journalist, was able to show how thousands of Uyghur workers and North Korean women were found in Chinese seafood processing hubs, basically imprisoned, with North Korean women being subjected to sexual abuse.

Some of the worst abuses on a larger scale are in China, but it's important to emphasize that unacceptable working conditions are a problem within most seafood supply chains. It's not an Asian problem. Investigative reporting has documented the abuse of migrant workers from Southeast Asia in U.K. or Irish fishing, and research here in Canada has focused on our own temporary foreign worker program and problems in Atlantic Canada and seafood processing.

The industry is based on cheap labour. It's a problem. I think Canadian policy-makers do have a role to play in this, and there is a link with ASEAN and with the Indo-Pacific strategy. I think there are options that are worth pursuing and promising avenues, in fact, supporting labour reforms in distant-water fishing fleets. Taiwan is a great example of a fleet that has really improved in the last few years, with better pay and more inspections, and by taking allegations of labour abuse on fleets very seriously.

We know far less about the Chinese fleet. It would also be really important to think about actually following labour brokers in sending countries like Indonesia or the Philippines.

Another area is due-diligence policy. Due diligence requires companies to be accountable, ensure quality in supply chains and have a system of fines and remedies. Right now, Canada's forced labour policy serves as a checkbox exercise, without companies actually having serious accountability. It would be a game-changer for the seafood industry if we actually had such accountability. The EU is a good model of that.

With regard to import restrictions, we can do more with allegations of forced labour. The U.S. Customs and Border Protection has good policy on that and provides an interesting example. For example, customs officials can issue an order to not allow imports of products and publish the names of companies on a public website—again, something we could be doing.

Something we are doing that I think is really positive is high-seas patrolling. I understand, in talking with the folks at the DFO, that the DFO's Operation North Pacific Guard did patrolling last summer in the north Pacific, and the Canadian crew interacted with over 400 migrant workers. It's an example of fishing policy for illegal fishing really intersecting nicely with labour policy. I think more could be done here as part of the Indo-Pacific strategy.

[The Chair, Liberal, Ken Hardie]

Professor Marschke, I'm wondering if you could wrap up, because—

[Melissa Marschke]

I could. Do you know what? I can stop right there.

[The Chair, Liberal, Ken Hardie]

Okay, that's good. Thank you very much.

Mr. Farmer, we'll go to you for five minutes or less.

[Wayne Christopher Farmer, President, Canada-ASEAN Business Council]

Thank you.

I'll try to keep my comments brief and non-repetitive, because some of what I was going to say has been echoed by previous folks on the earlier panel.

However, just for a quick background.... The Canada-ASEAN Business Council was established in 2012 to be the leading voice for the Canadian private sector in ASEAN. We now represent over 80 members across quite a wide variety of sectors, predominantly Canadian medium to large corporations. Our contact base—and the people who receive our media, our updates and our knowledge papers and who attend our events—has increased to about 10,000 on our social media. It's quite a big difference from when we first started.

The mission for the CABC is obviously to increase trade and investment between Canada and ASEAN for mutual prosperity and growth. The CABC is also Canada's first and only ASEAN-accredited entity, which happened this past January. There are only three private sector bodies similarly accredited by ASEAN. One is the EU-ASEAN Business Council and another is the US-ASEAN Business Council. That did require unanimity amongst the 10 ASEAN member states and the secretariat—to agree on accrediting us. Sometimes ASEAN can agree on things, as it were.

Obviously, ASEAN is made up of 10 members states that are home to about 660 million people, making it the world's third-largest population. I might add that about 50% of that 660 million is under the age of 30, which is astounding if we think about it.

Economically, ASEAN is the fifth-largest economic partner of Canada globally. Canada is the fourth-largest trading partner to ASEAN. Bilateral trade increased about 20% last year, and even in the proceeding years, during COVID, we had tremendous growth, which is impressive given the supply chain disruptions and challenges that were occurring globally. I think that reflects a shift of labour and manufacturing from China towards Southeast Asia, which started before COVID and has been accelerated by COVID, particularly to countries like Vietnam. You're also seeing some of this return to Indonesia, the Philippines and elsewhere. Certainly, the nexus for international business in the region has shifted to Singapore as the international trade hub for the region.

Recognizing these substantial economic prospects that ASEAN has, we've been long advocating for a Canada-ASEAN FTA, which was launched in 2021 and hopefully will be concluded around 2025-26, and for a bilateral discussion with Indonesia, which is expected to conclude in 2025.

I would just like to comment that Canada's being engaged in this ASEAN FTA discussion is a remarkable achievement. ASEAN has everyone at the door asking for a trade agreement, and we were selected over the likes of the EU and the U.K. Even the United States does not have an agreement with ASEAN. I think that's a very positive sign with regard to their interest in Canada and growing our relationship.

Canada was upgraded to the ASEAN-Canada Strategic Partnership in 2023, the last of the dialogue partners of ASEAN to be thus accredited, which was noted earlier. Obviously, CABC was provided ASEAN accreditation as a private sector entity in January, as I mentioned.

During our official accreditation, the ASEAN secretary-general mentioned that that's a result of a high level of trust built over many years—over a decade, in fact, for the CABC—and this thrust into ASEAN, which, again, has similarly been accelerated by the Indo-Pacific strategy. While the ASEAN-Canada Strategic Partnership—and perhaps our accreditation as an organization, the CABC—is symbolic, it is certainly a testament to the foundation for the Canada-ASEAN relationship and provides an opportunity for us, at both the government level and the private sector level, to engage much more deeply and across a wider range of subjects with ASEAN and its member states.

There are a few key areas on policy and in business where interests align: food security; energy transition and sustainability; overall investment, particularly into infrastructure; and the digital economy, where interests, I believe, overlap and where business thrusts, resources and things to offer overlap as well.

The CABC fully supports Canada's Indo-Pacific strategy, which places ASEAN right in the heart of that. It's not only an economic necessity but also, I think, a strategic imperative for regional geopolitical stability and long-term peace and prosperity that Canada partner with like-minded small powers that believe in rules-based trade and keeping access open to the globe and to all our trading partners from around the world.

Obviously, ASEAN centrality has come up, and that unanimity required on decision-making doesn't make it the fastest body to move, but a dialogue is a fundamental part of the ASEAN engagement with its neighbours and the world. I think that's something that Canada should wholeheartedly support.

Economically, ASEAN is driving other dialogues, including RCEP, which is the world's largest free trade agreement. Access to that does require having an agreement with ASEAN preceding that. That's another incentive for why we should be pursuing and concluding our agreement with ASEAN—

[The Chair, Liberal, Ken Hardie]

Mr. Farmer, I'm going to have to interrupt you, because you've gone a wee bit over time.

We need to take some of our remaining time for questions, which we'll get to right now.

Mr. Kmiec, you have six minutes, sir.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

My questions will be for Mr. Farmer first.

You mentioned that Canada is the fourth-largest trading partner of ASEAN. Are there any specific countries that are more represented in goods and services?

Can you give us an overview of which countries we have the most trade with, separating goods and services?

[Wayne Christopher Farmer]

Sure. I would say that within ASEAN, Thailand, Indonesia, Vietnam and the Philippines are the predominant countries that we trade with.

There are different things in different areas. For example, Thailand is the auto hub for the region, so we do have a lot of parts and goods trading there. Singapore is a big service hub. A lot of investment in Singapore is flow-through into the other ASEAN areas. Obviously, that would be banking, finance, insurance and whatnot.

Our insurance companies are particularly active in the region. In fact, in the Philippines, Indonesia and other places, they're almost considered domestic companies, since they have such a long history out here.

Those would be the primary countries that we're trading with in terms of volume of goods and services, to answer your question.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Chair, I'll move on to my next question.

Canada has had seven rounds of negotiations with Indonesia. The next round is the eighth round, in June of this month. There's been talk about an FTA with ASEAN, and negotiations are still ongoing.

If you had to prioritize for me, what are the priorities? There's Canada chairing the CPTPP, there's ASEAN and there are these bilats.

Can you prioritize for me what you think are the most important for Canada to accomplish?

[Wayne Christopher Farmer]

Sure. I think they're very different. The CPTPP is an existing body that binds us to four of the ASEAN countries but obviously not to all of them. That's an ongoing mechanism and an ongoing body. The bar to enter that is extremely high, and many of the other ASEAN countries are not able to meet the conditions to join the CPTPP, so we need to start from somewhere.

Obviously, it would be desirable to get an agreement with ASEAN in place that covers all 10 of the ASEAN nations, particularly those such as the Philippines, Thailand and Indonesia and some of the smaller countries like Cambodia, where we do not have an agreement.

There's a bit of a strategy and a bit of a timing issue on both the bilateral with Indonesia and the agreement with ASEAN. I think we are headed to probably concluding the agreement with Indonesia first. It's easier, as you're dealing with one party rather than 10. The benefit to that is that the challenging chapters in the agreement will largely be the same as the ones that need to be negotiated at the ASEAN level, so they feed off one another quite well.

I do think we're headed for the Indonesian agreement to be done probably early next year. The initial target was the end of this year, but I think it'll be early next year, and hopefully ASEAN will follow—

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Farmer, I'm sorry to interrupt you. It reminds me of a question I wanted to ask you.

Do most of these goods flow through the Port of Vancouver, then?

[Wayne Christopher Farmer]

That's a good question, and I don't know the full answer to that.

Obviously, Vancouver and increasingly Prince Rupert are both big trade hubs with Asia. I would say east coast hubs do ship out to Asia as well.

You'd have to look at particular companies and particular trade flows. The global shipping logistics chains are quite complex.

There is also air cargo. You have Vancouver airport, Edmonton airport and others that ship air cargo to Asia as well.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

With all these agreements coming through and the potential for more goods being shipped out and goods being shipped in, do you have any concerns about the quality of the trade infrastructure that Canada has?

[Wayne Christopher Farmer]

Infrastructure is almost always a limiting factor. I understand there is some room to continue to grow, but we will reach a point where we have limited capacity. I think Prince Rupert is cited as one of our newer, more active ports that has quite an ability to expand. Vancouver may need to look at its long-term future in terms of being able to increase its infrastructure capabilities. I believe there are different dialogues ongoing in Canada around that.

Yes, matching infrastructure to the ability to trade is an important issue, obviously.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

You mentioned the Port of Vancouver needing to perhaps do upgrades. It ranks quite low in terms of its efficiency and performance, and I didn't hear much concern about it.

Is that because you expect most of our shipping to be done through the port of Prince Rupert, through air cargo or through American ports?

[Wayne Christopher Farmer]

I think it's probably a combination of all of the above. I'm not an expert on the Vancouver port or any port, but clearly the higher performing our infrastructure, the better our trade will be. The more resources we have dedicated to trade, the better we can grow our export from the region, and the import as well.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Kmiec.

We'll now go to Mr. Erskine-Smith for six minutes or less.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

I'll stay with you, Mr. Farmer, to start.

We are studying the Indo-Pacific strategy in the context of the Canada-China committee. I wonder, with that view or lens to it, what recommendations would you have? If you're holding the pen for amending the Indo-Pacific strategy, what recommendations would you have for us? What amendments and changes would you want to see?

[Wayne Christopher Farmer]

I think that, as a whole, the Indo-Pacific strategy is quite comprehensive and sweeping. I would say its statements and desires are quite well laid out.

What we have to make sure is that we follow through. Without follow-through, the policy won't mean very much in the end. It's about pushing the Indonesia trade deal to a close, pushing the ASEAN trade deal to a close, using those as building blocks for growing our broader trade relationship in the region, and using the RCEP to diversify our trade in the region so we're not completely dependent on China. At one point, if you talked about trade in Asia, China was the only thing top of mind.

Similarly, although it's out of my remit, we've re-engaged with Japan and Korea on our trading relationships there, which I think is also very important. Korea and Canada have a very robust trade agreement that hasn't been taken advantage of, from my observation, as much as it should be. Japan and Korea are both very major players within the ASEAN region, with their investment in the region, their ownership of some of the factories and the trade infrastructure that goes on there, and their diplomacy, which was noted in the previous panel—particularly Japan, a very trusted partner in the region.

I think all of these are important steps for us to take: getting our agreements in place to build on our trade relationships, and consistently engaging with ASEAN. As I mentioned, it's taken us 10 years at the CABC to get to the point where we've been given such an accreditation as an organization. There have been a tremendous number of ministerial visits on the trade side—and by others—in the last couple of years. All of those touchpoints are very important in this part of the world.

When we launch policy, we need to follow through with the commitments we make.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I take the point that it's less about a change to the policy itself. It's more about implementing and seeing it through.

[Wayne Christopher Farmer]

That's correct.