Indonesia Urges Completion of ASEAN-Canada Free Trade Agreement in 2026

Indonesia Urges Completion of ASEAN-Canada Free Trade Agreement in 2026

Indonesia is pressing for the conclusion of the ASEAN-Canada Free Trade Agreement (ACAFTA) by the end of 2026, with negotiations having reached advanced stages after nearly five years of discussions. Foreign Minister Sugiono emphasized the urgency of completing the deal during the ASEAN Post Ministerial Conference with Canada in Manila on Wednesday.

The negotiations, which were officially launched in November 2021 at the Tenth ASEAN Economic Ministers-Canada Consultation, have made substantial progress. As of July 2026, the parties have concluded 19 of the 26 chapters, bringing the talks beyond 80% completion, with seven new chapters finalized in recent meetings.

Sugiono underscored that timely completion of ACAFTA remains a priority for driving inclusive economic growth across the region. The agreement is expected to expand market access, strengthen supply chains, and create new opportunities for micro, small, and medium enterprises throughout Southeast Asia.

Economic Significance and Trade Growth

The deal holds considerable economic weight for both parties. ASEAN represents an economy of approximately 600-700 million people across ten countries and ranks as Canada's fourth largest merchandise trading partner. Trade between the two partners has shown strong momentum, with two-way trade reaching approximately USD 23.4 billion in 2024, up from USD 20.3 billion in 2023. By 2025, bilateral merchandise trade had climbed to about $52.4 billion, representing a 23% increase from the previous year.

Food Security and Agricultural Cooperation

Beyond traditional trade matters, Minister Sugiono outlined several key pillars needed to support long-term regional stability, including enhanced food security, clean energy transition partnerships, and active youth involvement in peacebuilding.

Canada's role in stabilizing ASEAN's food supply chain was highlighted as particularly strategic. The country holds the world's largest potash reserves at around 1.1 billion tonnes and in 2022 exported approximately 21.3 million tonnes of potash, accounting for around 46% of global exports. As a key component of fertilizer, this positions Canada as a vital partner for Southeast Asia's agricultural resilience.

The minister noted that Canada's agricultural strength and expertise, along with its Indo-Pacific Agriculture and Agri-Food Office (IPAAO), offer opportunities to advance food security cooperation. The IPAAO, officially opened in Manila in February 2024 with a $31.8 million federal government investment, demonstrates Canada's concrete commitment to the region. Canada's agriculture and agri-food exports to the Indo-Pacific region reached $22.8 billion in 2023, reflecting the economic importance of this partnership.

Energy and Youth Engagement

Energy transition featured prominently in the discussions following the inaugural ASEAN-Canada Strategic Dialogue on Energy Security. Sugiono praised this initiative as a concrete step toward deeper cooperation in clean energy development.

On regional security, the foreign minister urged engagement of younger generations through the ASEAN Institute for Peace and Reconciliation (AIPR) to advance the Youth, Peace and Security agenda.

Concluding his remarks, Sugiono reaffirmed Indonesia's commitment to a global rules-based order, calling for consistent application of international law without double standards, particularly regarding the ongoing situation in Palestine.

Strengthened Partnership Framework

The Manila meeting formally adopted the ASEAN-Canada Plan of Action 2026–2030, establishing a strategic roadmap for political, security, economic, and socio-cultural cooperation over the next five years. This follows the establishment of the ASEAN-Canada Strategic Partnership in September 2023, which elevated the relationship from Enhanced Partnership status adopted in 2009.

The deepening ties are further evidenced by Canada's long-term financial commitment to the region. Since 2000, Canada has provided $5.6 billion in development assistance to ASEAN, including both regional and bilateral support.

ASEAN and Canada have maintained official dialogue relations since their first formal meeting was held in Manila on February 3-4, 1977. The partnership will mark its 50th anniversary in 2027, providing additional momentum for concluding the free trade agreement negotiations this year.