Canada, Indonesia agree to trade pact as threat of U.S. protectionism looms over APEC meeting

LIMA, Peru — Ottawa has concluded negotiations for a trade deal with Indonesia and is proposing nuclear-energy collaboration with Southeast Asian leaders.

The moves are a show of faith for multilateralism as the re-election of Donald Trump in the United States is raising fears of further strain in global co-operation on trade and the environment.

Prime Minister Justin Trudeau and Indonesian President Prabowo Subianto held a bilateral meeting on the sidelines of the Asia-Pacific Economic Cooperation summit in Lima Friday, announcing the end of trade talks that should lead to Canada signing a new deal with the world’s fourth-most populous country next year.

It comes as Trump’s impending return to the White House looms large over the discussions of the APEC grouping, which aims to improve trade among Pacific Rim nations.

Trump’s first presidency saw him pull back from many multilateral agreements, including the Paris climate agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade deal, of which half of APEC nations are members.

He has also promised to slap at least a 10 per cent across-the-board import tax on all goods coming into the United States, which is causing great concern among America’s trading partners, and have been a frequent topic of discussion at the Lima summit.

“APEC is meeting in the context of rising protectionism, intense geopolitical competition, uncertain economic growth and the Trump election,” said Vina Nadjibulla, research vice-president for the Asia Pacific Foundation.

She said Trudeau has been pushing to preserve rules-based trade “that is critical to our prosperity,” especially with like-minded countries.

Foreign Affairs Minister Melanie Joly told reporters in Lima Friday that Trump’s return is actually boosting Canada’s influence in the world.

“If there’s a country in the world that understands the United States, it’s Canada,” she said. “That’s why there are so many delegations, so many countries, coming to see us to ask about how we, they, can adapt.”

Joly also confirmed she expects Trump to visit Canada next year when the G7 leaders’ summit is held in Kananaskis, Alta.

She is, however, still pushing to get things done before Trump takes over. She met Thursday night in Lima with U.S. Secretary of State Antony Blinken, where the two discussed trying to get a new Columbia River Treaty over the finish line before the current administration exits.

The deal that governs how the two manage and share the resources along the Columbia River, and Trump’s campaign comments about turning to Canada to solve Western U.S. water woes have raised concerns about how he might address that issue.

John Kirton, head of the G20 Research Group, said he expects Trudeau and many leaders to have informal talks on the sidelines of both summits to make sense of how to navigate another Trump presidency.

“Trudeau will be in a relatively privileged position, because he’s been with Donald Trump at (several) summits, and we’re the next-door neighbours; we’re a front-line state,” he said.

Nadjibulla said Trump’s re-election likely means a reduced role for the U.S. in multilateral institutions and fighting climate change, as well as greater tension with China over trade, tariffs and technology.

Trudeau and Canada did not have the smoothest relationship with the Trump administration the first time, though the two did conclude a renegotiation of the North American free trade deal. The Liberal government is depending on the experience of dealing with Trump before to guide its efforts to maintain a strong relationship now, including stressing the critical trade ties across the border, continental security and working to diminish China’s dominance in clean technology and electric vehicles.

Canada has also been pursuing efforts to offset China’s influence in Asia with a new Indo-Pacific strategy announced in 2022.

In announcing the conclusion of trade talks with Trudeau Friday, President Subianto praised Canada for being a partner in everything from sustainable fishing to artificial intelligence. The deal should advance digital trade and renewable energy, he said.

Indonesia has a soaring economy, buoyed by a population of 280 million, of which young people make up a large portion. The country has been trying to wean itself off high carbon emissions as it copes with threatened biodiversity.

Also on Tuesday, Trudeau told corporate leaders that Canada was looking to partner on nuclear energy in Southeast Asia, particularly as countries in the region raise concerns about the large amounts of energy needed to power artificial intelligence.

Canada’s Indo-Pacific Strategy made no direct mention of the nuclear sector when the Liberals released it two years ago.

But now, Trudeau says Canada will use its “trade gateway” initiative to not only link businesses but also help broaden local knowledge of nuclear technology, such as how to create a viable market for nuclear goods and adequately train personnel.

Ottawa will also “identify opportunities for Canada’s broader nuclear industry to supply products and services to support Canadian and regional objectives,” Trudeau’s office wrote in a statement.

Joly also met with China’s foreign minister, Wang Yi, on Thursday, discussing Canada and China’s co-operation on air transport and combating fentanyl. She said she also discussed with him the Canadian public inquiry on foreign interference and sent “clear messages to China that we will never accept any foreign interference.”

Canadian officials have been mum on the prospect of Trudeau meeting with Chinese President Xi Jinping, whether in a formal sit-down or an informal hallway chat, either in Lima at APEC or over the weekend when they both travel to the G20 leaders’ summit in Brazil.

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