Trade Intensities with Asian Countries: Comparing Australia, Canada and Sweden

In recent years, Canadian government officials have been under increasing pressure to promote increased Canadian economic integration with fast growing Asian economies, especially Southeast Asia. While the Canadian government has become more active in promoting trade with Asia through government-sponsored trade missions and the like, there has been little research documenting the underlying causes of Canada's limited trade and investment ties to the region. This study provides some empirical evidence that Canada's trade performance with Asian countries is consistent with Canada's underlying pattern of comparative advantage. The main policy implication is that a more aggressive pursuit of freer trade and investment regimes with Asian countries might be the most promising instrument for promoting increased exports and outward direct investment to the region.