Canadian Prime Minister Mark Carney announced on Saturday that Canada has concluded free trade agreement (FTA) negotiations with the Philippines and substantially concluded talks on a broader trade pact with the Association of Southeast Asian Nations (Asean). Both agreements are expected to be signed in 2027, marking a significant step in Ottawa's efforts to diversify its economic partnerships beyond the United States.
The proposed Asean-Canada Free Trade Agreement (ACAFTA) would cover a regional market of nearly 700 million people, with a combined economy worth close to US$6 trillion. The agreement is expected to add nearly C$2 billion to Canada's GDP and create around 14,000 jobs once implemented. Ottawa has also announced C$5 million in assistance to help Asean economies prepare for the agreement's ratification.
Carney described the agreements as part of Canada's strategy to build a wider network of reliable trading partners and reduce its relative dependence on the US. The Philippines agreement is part of Carney's broader push to reduce Canada's reliance on the US market, which remains a cornerstone of its economy. Ottawa has set a target of doubling exports to countries outside the US by 2035.
The proposed agreement with the Philippines would eliminate tariffs on more than 90 per cent of tariff lines and cover sectors ranging from agriculture and aerospace to artificial intelligence. The Philippines has an economy worth around US$680 billion and a market of more than 110 million people. According to the Canadian government, the proposed trade agreement could increase Canadian exports to the country threefold by 2035.
Carney also announced C$26 million in international assistance to strengthen cooperation between Canada and the Philippines in areas including nuclear security and safety, climate-resilient agriculture, community resilience, food security and infrastructure. The assistance will also support projects linked to the G7-backed Luzon Economic Corridor.
Carney held lengthy and substantive discussions with US President Donald Trump on trade, but the two countries have yet to reach a deal. The trade dispute has strained one of the world's closest economic partnerships, making the diversification of Canada's trading relationships an urgent priority for Ottawa.