How much do you know about Vietnam? Peru or Malaysia?
Each is part of the current Trans Pacific Partnership (TPP) negotiations and while relatively small and unknown markets, they may prove to be valuable for Canadian agriculture and agri-food. Our recent Look at Global Trade provided an overview of the TPP; here are a few more facts on three of the smaller participants.
The Asian Development Bank projects that Vietnam’s GDP will increase at an annual rate of 5.8 per cent in 2015. It may even meet expectations to become the fastest-growing of emerging economies by 2025.
Canadian agriculture exports to Vietnam - mostly grains and oilseeds - were 26 times larger in 2013 than in 2009. Consumption of coarse grains over the last decade grew 83 per cent and is expected to continue growing over the next ten years (25 per cent). Vietnam will likely not be able to match the consumption growth with proportional growth in production, opening up opportunities for suppliers in Canada.
Malaysia is another country boasting good 2014 economic growth.
The OECD-FAO Agricultural Outlook predicts total world consumption of beef, pork and wheat will increase 9.6 per cent by 2023. Consumption of these products in Malaysia (among others) is predicted to increase by 25 per cent by 2023.
Canada grew its exports of animal production to Malaysia over the last five years by almost 4000 per cent.
Peru has been South America’s star performer over the last decade. Classified as upper middle income by the World Bank and boasting the world’s 40th largest GDP, Peru is one of the world's fastest-growing economies. Strong consumer income is expected to continue driving growth in food demand – always good news for Canadian agriculture.
Canada’s wheat exports to Peru, our eighth largest importer in 2013, captured 4 per cent of total exports. Peruvian wheat consumption and imports of wheat are forecast to grow 13 per cent to 2023. Canada signed a free trade agreement with Peru in 2008. A positive outcome to TPP negotiations would presumably not change the market access Canadian exporters currently enjoy. It could however alter the dynamics of competition in the Peruvian market if for example, market access privileges are extended to other TPP parties like Australia, with whom they currently have little agriculture trade.
The Trans Pacific Partnership (TPP)
As of 2014, twelve countries throughout the Asia-Pacific region have participated in negotiations on the TPP, which could help Canada gain access to some of the world’s largest markets, representing 640 million people (excluding the U.S. and Mexico) and some of the world’s fast-growing emerging markets.
With negotiations on the trade deal ongoing, be sure to monitor their status.
Martha Roberts, Economic Research Specialist