On November 27, 2022, Canada released a long-delayed Indo-Pacific Strategy (CIPS), which is built on five pillars:

1. promoting peace, resilience, and security;
2. expanding trade and investment in supply chains;
3. fostering people-to-people connections;
4. contributing to environmental sustainability;
5. and establishing Canada as a credible and sustainable partner in the region.

Canada arrived late to this game, and many observers have viewed the CIPS as an attempt to catch up with the U.S. or Japan. However, a Canadian Indo-Pacific strategy represents a long-term commitment to engaging with Asia, the Asia-Pacific, and the broader Indo-Pacific region.

The shift towards the term “Indo-Pacific” is largely driven by the region’s economic significance. Most economic growth over the next 20 to 30 years will emerge from what we now call the Indo-Pacific, stretching from the Pacific Ocean through the South China Sea to the Indian Ocean. Canada aims to be an integral part of this process, ensuring we are involved in rule-making and trade agreements, rather than being excluded.

Importantly, we must also address non-traditional security challenges. This is crucial for understanding the future of the region. Issues like climate change, transnational diseases such as the COVID-19 pandemic, and human trafficking are prevalent. While this region offers significant economic opportunities, it is also likely to experience considerable instability that we need to anticipate and address. If we fail to stay ahead of these instabilities, we will face significant challenges in managing them. Meanwhile, traditional security challenges remain relevant.

As I travel through the Indo-Pacific, I find that while people view Canada positively, they often lack knowledge about us and may hold some negative perceptions. Therefore, it’s vital for Canada to engage credibly and sustainably in the region, ensuring that our presence is recognized and valued.

When we consider Canada’s Indo-Pacific strategy, it’s essential to recognize that it reflects domestic priorities. This includes progressive cultural issues and environmental concerns that may not align with the interests of all regional states. We need to approach the region realistically and pragmatically, and some of our strategies may need refinement in the future.

Nonetheless, engaging in the region remains crucial. Canada believes that democracy, human rights, and the rule of law are not only core values but also essential elements for development moving forward.

Canada needs a sober assessment of our resources and a capabilities-led approach. A capabilities-led strategy involves understanding our comparative advantages. For instance, while some scholars advocate sending naval vessels to the region, the reality is that our naval resources are limited. Therefore, we should focus on utilizing our strengths to foster stability and secure our presence.

In partnership with countries like Japan, there are several key areas for cooperation that could be sustainable and beneficial for the region, such as security, proactive middle power diplomacy, cyber and digital trade, supply chain resilience and diversification, and high-standard multilateral trade agreements.

These areas reflect our comparative advantages and allow us to engage in stable partnerships, particularly with Japan, fostering sustainable engagement within the broader Indo-Pacific region.

First, security cooperation to promote stability is essential. The volume of trade that flows through the Indo-Pacific, particularly the South China Sea, is staggering—about $5.5 trillion USD last year. This trade passes through critical routes like the Malacca Straits and the Taiwan Strait, connecting major economies such as South Korea, China, and Japan. Instability in this region would have far-reaching consequences, impacting jobs in Canada and elsewhere.

Given the significance of semiconductor supply chains, especially those based in Taiwan, any disruption would affect industries globally, from automobiles to electronics. Therefore, Canada must be present to promote security and ensure stable sea lines of communication.

The challenge lies in how we deliver our resources sustainably. We have limited naval vessels, so we need to find ways to contribute to stability in regions like the East China Sea and South China Sea. This presents opportunities within our Indo-Pacific strategy to leverage existing minilateral relationships. We don’t need to be full partners in the Quad, but we can contribute to maritime domain awareness activities that enhance stability.

Moving to middle power diplomacy, Canada has a strong track record and should enhance its efforts in this area. For example, following North Korea’s nuclear tests in 2019, Canada hosted a meeting in Vancouver focused on security in the Korean Peninsula, bringing together multiple countries to discuss denuclearization. We need more initiatives like this.

Another example is the coalition against arbitrary detention, which includes efforts to support individuals like Michael Kovrig and Michael Spavor, who were detained in China. Canada has worked hard to unite countries in addressing arbitrary detention, showing solidarity with nations like Japan, Vietnam, and Australia.

Additionally, Canada has collaborated with Japan and other nations to combat economic coercion, as highlighted in the recent G7 Summit. These examples illustrate how middle powers can work together creatively, providing collective resources and diplomatic pressure.

Cyber and digital trade cooperation is another key area. At the G20 Summit in Osaka, the late Prime Minister proposed the idea of “digital free flow and trust.” This offers Canada a chance to collaborate with like-minded countries like Japan to establish rules for the cyber and digital trade environment.

We hope that once the first round of the Indo-Pacific Economic Framework concludes in January, Canada will join and promote cyber and digital cooperation, addressing cyber threats from various nations in the region.

Supply chain resilience and diversification have become critical lessons from the COVID-19 pandemic. We experienced significant disruptions, highlighting the need for selective diversification of our supply chains. The goal is to pivot quickly to alternative sources during future crises, whether they are health-related or due to other geopolitical factors.

Countries like Japan are leading initiatives to build resilient supply chains. In 2019, Japan, Australia, and India launched a Resilient Supply Chain Initiative to ensure stable flows of goods. Canada can play a role in strengthening these efforts by working closely with these partners.

Finally, we should focus on promoting high-standard multilateral trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). With the UK recently joining, there may be opportunities for other countries to participate as well. The CPTPP emphasizes the protection of intellectual property rights, high labor and environmental standards, and limiting the role of state-owned enterprises, all aimed at fostering innovation and economic development.

Canada and Japan can collaborate to advocate for a potential new agreement that includes the United States, which is crucial given the current political climate in Washington. We need to find ways to engage the U.S. in the Pacific through trade, reinforcing a rules-based trade order that supports free and open trade.

In conclusion, there are five critical areas where Canada and Japan can work together:

1. Security cooperation to enhance stability within the region.
2. Middle power diplomacy promoting multilateralism and non-military solutions to Indo-Pacific challenges.
3. Cyber and digital trade cooperation.
4. Supply chain resilience and diversification.
5. Promotion of high-standard multilateral trade agreements.

Canada and Japan share significant synergies and can create a platform for deepening Canadian engagement in the Indo-Pacific, ensuring that our involvement is sustainable and meaningful, benefiting both Canadians and the broader region.

My YouTube Playlist on Canada and the Indo-Pacific

Stephen Nagy, a distinguished fellow with Asia Pacific Foundation of Canada; a fellow at the Canadian Global Affairs Institute (CGAI); and a visiting fellow with the Japan Institute for International Affairs (JIIA), presents at the in-person discussion on deepening Canada-Japan Relations in the Indo-Pacific. The event was held by The Asia Pacific Foundation of Canada and the David Lam Centre at Simon Fraser University, with support from the Consulate General of Japan in Vancouver

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