Canada trade minister says trade talks with Taiwan are part of a larger Indo-Pacific strategy - CNBC

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Canada's decision to enter formal bilateral trade talks with Taiwan is part of a broader strategy for the Indo-Pacific region, its minister of international trade told CNBC Tuesday.

The two sides agreed on Feb. 7 to begin formal negotiations on a trade agreement in order to strengthen trade and investment.

"I was able to launch what we call FIPA — it's a foreign investment, protection arrangement with Taiwan, but it is very much a part of Canada's Indo-Pacific strategy for diversification into the region," Mary Ng, the trade minister told CNBC's "Squawk Box Asia" on Tuesday.

"We went out to the Canadian people and had a very broad consultation before getting to this point, which is launching into this dialogue," she added.

Bilateral trade between Canada and Taiwan reached $5.82 billion in 2022, according to Taiwan's official statistics. Taiwan is Canada's 13th largest trading partner globally, and its 5th largest trading partner in Asia.

Taiwan's exports to Canada amounted to $3.3 billion last year, and Canada exports to Taiwan amounted to $2.52 billion in the same period, according to that data.

The agreement would "establish more resilient supply chains in the post pandemic era, jointly support the rules-based international economic and trade order," Taiwan's ministry of foreign affairs has said.

Indo-Pacific strategy

Besides Taiwan, Canada is also exploring growth opportunities in the region, said the Canadian minister. She said there are ongoing talks with the 10-member Southeast Asian ASEAN bloc on various trade areas for cooperation.

"You'll see in the Indo-Pacific strategy that Canada laid out a very comprehensive plan for how we are going to grow in the region," noted Ng.

"This region is the fastest growing," she said. "By 2030, you're going to have a significant part of the growing middle class. By 2040, I think the numbers are somewhere like half of the world's middle class ... in the region."

"The Indo-Pacific region will play a critical role in shaping Canada's future over the next half-century," Canada said in its long-awaited Indo-Pacific strategy released in November.

"Encompassing 40 economies, over four billion people and $47.19 trillion in economic activity, it is the world's fastest growing-region and home to six of Canada's top 13 trading partners," the official plan stated, highlighting significant opportunities "for decades to come."

China is critical

Canada's Indo-Pacific strategy also underlined its approach to China, a critical part of its framework.

"China is an increasingly disruptive global power. Key regional actors have complex and deeply intertwined relationships with China," the official plan stated. "Canada's Indo-Pacific Strategy is informed by its clear-eyed understanding of this global China, and Canada's approach is aligned with those of our partners in the region and around the world."

China considers Taiwan a breakaway province and says it has no right to conduct foreign relations. In recent years, there have been increased tensions between both sides over Beijing's military activities near the island.