Prime Minister Mark Carney said on Saturday that Canada has concluded negotiations for a sweeping free trade pact with the Philippines as Ottawa seeks to reduce its reliance on the United States. The announcement came in Manila, where Carney met Philippine President Ferdinand Marcos Jr on the sidelines of the 49th ASEAN Summit.
Why it matters
The deal is about six months away from being signed, Carney told reporters, and it will drop over 90 percent of tariff lines. It covers areas ranging from agriculture to aerospace to artificial intelligence, and total trade between the two countries stood at about 2.4 billion dollars in 2025. Manila said it expected the trade pact to be completed in the coming year.
A broader agreement is also in the works with the entirety of the 11 member Association of Southeast Asian Nations. The proposed ASEAN Canada Free Trade Agreement covers a regional market of nearly 700 million people and an economy worth close to 6 trillion dollars, and it is expected to add nearly 2 billion dollars to Canada gross domestic product and create around 14,000 jobs once implemented.
What happens next
The push is a direct answer to the trade war with the United States, which has ruptured what was once one of the closest economic partnerships in the world. Canada has spent the year looking for new markets, and the Philippines deal is the most concrete result so far of a strategy that treats diversification as a necessity rather than a choice.
For now, the trip continues. Carney next heads to Phnom Penh for a Francophonie summit before travelling north for the Asia Pacific Economic Cooperation meetings in Shenzhen, where he will also meet Chinese President Xi Jinping. The trade deals are the deliverable, and the tour is the message.
The deal also fits a pattern that has defined Carney first year in office. The prime minister has made diversification the centre of Canadian trade policy, arguing that a country cannot depend on a single market when that market has become unreliable. The Philippines agreement is the first major deal to land, and the ASEAN talks are the bigger prize behind it. The strategy will be judged by results, and the Manila announcement gives the government something concrete to point to when critics ask what diversification has delivered.
