Foreign Minister Anita Anand said Canada intends to continue a multilateral trade relationship with the 10-member Association of Southeast Asian Nations. Canada believes the global economy will be driven by the Indo-Pacific region in the years ahead, she added.

Why it matters: While Canada has pursued south Asian and Indo-Pacific markets in recent years, trade tensions with the U.S. have put a spotlight on the need for a greater diversity of trading partners.

“The work is being done with alacrity to finalize the text of the free trade agreement,” Anand told Reuters in an interview, following her meeting with counterparts from the ASEAN bloc in the Malaysian capital.

“It is complex but we are very much looking forward to it being completed as soon as possible,” she said, without providing further details.

Anand said the ASEAN-Canada FTA is one of the ways Canada can diversify its trade relations beyond the Group of Seven nations.

Beyond trade, Canada will also work with ASEAN on energy, food security, digital economy and artificial intelligence, she added.

Canadian companies are boosting trade with allies other than the United States, and with smaller markets, as they try to minimize the economic damage from President Donald Trump’s tariffs, government data has shown.

Canada, the top supplier of steel and aluminum to the United States, faces tariffs imposed by Trump on both metals and on auto exports.

The government is hoping to reach a trade deal with Washington by July 21 and could impose counter-duties on the United States if no agreement is reached.

Anand declined to comment on how the talks are progressing, but said Canada was looking forward to a constructive deal with the United States.

“Our trade negotiators… are engaged in the complex trade negotiations to ensure that Canada’s interests are put forward in the best possible way,” she said.

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Indonesia currently has a mandatory 35 per cent blend of palm oil-based fuel in biodiesel and is seeking to ramp up to biodiesel containing 40 per cent palm oil to cut its energy imports.

The plan, if implemented, could see biodiesel consumption rise to 16 million kilolitres next year.

The move would involve the additional use of 1.5 to 1.7 million metric tons of palm oil, leading to lower export volumes, Oil World senior analyst David Mielke told a palm oil conference in Kuala Lumpur.

“In a situation where we don’t have enough oil, Indonesia increasing the mandate by five per cent would make overall supply tight,” he told Reuters on the sidelines of the event.

“So for the consumer worldwide, it would be catastrophic because there would be even less oil available.”

B40 will boost Indonesia’s palm oil use for biodiesel to 13.9 million metric tons from the estimated 11 million tons needed this year, with B35, Indonesia’s biofuel producers association APROBI has estimated.

In recent years, global palm oil supplies have been affected by lower output in the world’s two biggest exporters, Indonesia and Malaysia, due to a pandemic-induced severe labour shortage, lower application of costly fertilisers, and persistent rainy weather conditions.

Palm oil production is expected to increase by 2.3 million metric tons in 2024/25 compared to the previous season, Mielke said, with the price of rival soybean oil expected to rise at a premium over palm oil at the latest by June next year.

Glenauk Economics managing director Julian McGill told the event palm oil will likely trade at around 4,000 ringgit (C$1,275.60) per metric ton in 2025.

Malaysia’s benchmark crude palm oil futures FCPOc3 are currently trading at a six-month high. Prices have traded at an average of 3,976.50 ringgit (C$1,268.11) a ton so far this year.

The country’s palm oil production is estimated to come in at 19.4 million tons in 2024, compared to 18.55 million tons in 2023, McGill said.

Indonesia’s production was estimated at 54.84 million tons in 2023, according to the Indonesian Palm Oil Association.

—Updated Oct. 9. Changes attribution of Indonesia production statistics to the Indonesian Palm Oil Association.

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