Introduction
Intra-trade associations between countries have become a common occurrence in the business world. This is a result of globalization which has brought different countries together. Countries with common interests have formed organizations that allow them to enhance their economic growth and prosperity. The Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN) are such organizations. Most of these organizations however consist of members from certain regions. Countries in a given organization have a tremendous advantage in dealing with countries outside the organizations. Canada is a key member of APEC but is interested in gaining access to India and China markets which are growing at a very high rate. The country is also interested in other Asian-Pacific markets that can help it grow and enhance trade with these countries. Unfortunately, these nations are not willing to form relationships with nations from the west such as Canada. This paper will seek to analyze the actions that Canada can take to be able to start relationships with these growing Asian nations.
Canada’s Concern
Canada should be concerned that a large trading group including China and ASEAN is about to be formed because it is interested in the markets of the nations that are forming the group. For Canada to acquire economic growth, it has to conduct trade with the Asian nations especially those that have recently grown at a very high rate. India has taken a step forward to form a free trade pact with the ASEAN. China has already finalized its free trade pact with the ASEAN. The regulations used in the formation of the free trade pacts could affect Canada’s plan in a great way. Canada should negotiate with these nations so that it can be allowed to participate in trade with the nations in Asia. The limitations to the participation of western countries in trade groups in Asia are of great concern to Canada. This is because it limits the capacity of Canada to grow economically and enhance trade with the nations. Canada should be concerned because its economic growth is affected by the formation of the group.
Role of Politicians and Business People
Politicians and business people in Canada have a role to play in taking actions that can help strengthen ties with the newly formed trading bloc. These are the individuals who attend meetings with other trading blocs that relate to this bloc. Since Canada is a key member of APEC, the views of its politicians and business people will be listened to in meetings. The first move the politicians and business people should take is ensuring that the relationship between members of APEC is good and genuine and that all the members cooperate for the success of the group. This means that there will be no conflicts between members and the countries in the ASEAN will admire the relationship between the members.
This will increase the likelihood of countries in ASEAN to consider the integration of western countries including Canada. Politicians and businessmen should also ensure that there is good cooperation between APEC and ASEAN. Since the growing nations that Canada is interested in have made a step forward to join ASEAN, improving its relationship with the bloc will give Canada access to these nations. Free trade pacts between members from APEC and ASEAN will increase trade between countries from the two groups. Politicians and business people from Canada will then approach countries such as China and India and make negotiations for trade agreements. This way, ties between Canada and the trading bloc will become stronger. The politicians and business people from in Canada should therefore present their views to APEC that can help improve cooperation between members within APEC and with ASEAN.
Canada and a Common Currency in the New Trading Bloc
A united currency in the new bloc would negatively affect Canada as a recipient of Foreign Direct Investment (FDI) and Canada’s capital market. Currently, many countries have invested their assets in Canada. This is because they use the value of the currencies used in western economies is quite high compared to the currencies used in the different nations. If the countries in the trading bloc form a common currency whose value is high, they will stop investing in Canada and instead invest in the nations where the common currency is being used. If the trading bloc had their bond market and sold high-value bonds with a strong currency, they would be harmful to the sale of Canadian bonds. Different nations are participating in trade intending to achieve economic growth. They will therefore buy bonds with high currency value that will help them raise higher long-term funds. If the value of the currency in the trading bloc is higher than the value of the ones offered in Canada and the bloc has its bond market, they would invest less than they currently do. This will greatly affect the Canadian government funds. A united currency would therefore affect Canada as a recipient of FDI and its capital market negatively.
An Asian Monetary Currency
The establishment of an Asian monetary currency has some merits for the countries that participate in the trading bloc. This is because the currency would open doors for the start of new forms of business in Asia. For example, the group can start its security markets especially if the value of the currency is higher than the value of currencies offered in other parts of the world. A strong value of the currency would also increase investment in Asia because the returns would be higher. The trading bloc would bring powerhouse countries such as India and China together with developing small, poor nations such as Indonesia and Viet Nam. There is a high likelihood that a new world currency would lead to an organization that is dominated by the powerhouse countries with the poor countries making very little contributions. The south-east Asian countries should work on their trade relationships with ASEAN in addition to OPEC. This is because working on their relationship with ASEAN would help expand their market and eventually increase economic growth.
Conclusion
Canada has interests in India, China, and other Asian markets. Access to these markets would increase its economic growth enhance its market. Countries such as India and China have recently experienced high market growth and are establishing relationships with ASEAN. The aim is to form a large trading bloc that will enhance the economic growth of Asian-Pacific countries. China has finalized its free trade pact with ASEAN. Canada should be concerned that a large group that includes China and ASEAN is about to be formed because it is interested in Asian-Pacific markets. Politicians and business people in Canada should make proposals in APEC that enhance cooperation within APEC and with ASEAN. A united currency in the new bloc would negatively affect Canada as a recipient of Foreign Direct Investment (FDI) and Canada’s capital market. In addition, the establishment of an Asian monetary currency has some merits to countries that participate in the trading bloc.