When it comes to free trade in North America and Asia, the two continents appear to be heading in opposite directions. The U.S. has withdrawn from the TPP, while the implementation of the ASEAN Economic Community (AEC) has accelerated intraregional FDI to record levels.

Canadian businesses should be participating in the ASEAN region’s robust economic growth curve despite the absence of a Canada-ASEAN FTA. I believe the Canadian government is attempting to pivot and reach out to the Asia-Pacific region through the likes of the APEC Business Advisory Council (ABAC) and Canadian International Innovation Program (CIIP).

Canadian companies are also already perceived to be innovative, collaborative and trustworthy in the ten countries comprising ASEAN.

What seems to be missing, however, is a comprehensive plan to achieve an effective market penetration across the diverse, hugely fragmented, yet inter-related ASEAN countries.

On the fast track towards economic interdependence

With a regional GDP of USD $2.5 trillion, ASEAN is the fastest growing region on the planet. After a 4.6% expansion in 2016, GDP forecasts predict 4.9% growth for both 2017 and 2018. Myanmar is expected to be the fastest growing economy in the region, with a prediction for 7.4% growth, followed by the Philippines at 6.6% and Vietnam at 6.2%. Also expected to grow at a moderately quick pace is Indonesia (5.2%), Malaysia (4.9%), Thailand (3.2%) and Singapore (2.4%).

The region is seeing unprecedented construction activity, presenting an excellent growth opportunity for companies selling construction-related products and services. Earlier this year, Marriott announced plans to open 80 new hotels in the APAC region by the end of 2017, bringing 19,000 new rooms to the region. In addition, an astonishing 437 hotels are being built across the ASEAN region, focused mainly in tourist destinations to meet growing demand. Thailand, Malaysia and Indonesia plan to open 81, 79 and 113 properties respectively in each country in the coming years.

New rail lines will make ASEAN travel easier than ever

In addition to commercial construction projects, Private Public Partnership (PPP) mega-infrastructure projects building new rail lines, airports and seaports are on the rise across the region. A new rail project connecting Bangkok with Southern China with an estimated value of USD $5.2 billion has been approved by the Thai government. Its most interesting characteristic is that China will do the design for the project, and Thailand the construction.

Chinese end-to-end control over mega-infrastructure projects is becoming a contentious issue, and serves as a vivid example of China’s One Belt One Road theory becoming a reality at a rapid pace. ASEAN countries are beginning to negotiate that China-financed infrastructure projects contain local engineering, construction and supplier content.

The Singapore to Kuala Lumpur Malaysia multi-billion-dollar high speed rail (HSR) project has been approved and the EPC (engineering, procurement and construction) contracts awarded. The most notable aspect of this project is the high probability of coinciding commercial and residential construction projects emerging in close proximity to the stations. If you provide people with efficient transportation into the cities, new outlying communities will emerge. The areas near the stations will become urbanized, creating additional commercial and residential construction projects.

Other notable mega rail projects in the region include the Hanoi Vietnam metro project valued at USD $15 billion, and Malaysia’s 600 km East Coast Rail Line (ECRL), connecting the capital city of Kuala Lumpur with Malaysia’s east coast states through 23 stations, valued at USD $12 billion.

Major plans for port expansions and FDI projects provide new opportunities

Singapore continues to invest in major infrastructure projects as well. They have just completed T4 – a new passenger terminal building at Changi Airport, and work on the new Tuas mega-container-port has begun.

The multi-billion dollar mega-port investment project includes plans to move and consolidate all port activity to South Tuas by 2027, opening progressively from 2021 until full completion by 2040.

Construction is well underway, with reclamation ongoing for two out of four phases of the development and more than three kilometres of caissons installed. Singapore is also thinking long term, building for an eventual capacity of 65 million TEU’s (standard-sized 20-foot containers) annually, anticipating significant interregional and intraregional trade expansion.

Commercial construction and infrastructure is one growth story, and foreign direct investment (FDI) is another. FDI is entering the region at record levels as interregional and intraregional manufacturing multinationals move from labor intensive and higher cost locations in Asia to ASEAN countries.

Vietnam in particular is reforming and becoming more accessible to foreign investment. Recent years have evidenced steady and increasing FDI there. In 2016, FDI in Vietnam totaled USD $24.4 billion, with 63.7% (USD $15.5 billion) invested in manufacturing and processing capabilities. South Korea is Vietnam’s largest investor and Samsung has three projects currently under construction valued at USD $5.5 billion. The South Korean electronics giant is constructing a new plant in Northern Vietnam that will employ 30,000 workers, and a research and development center in Ho Chi Minh City.

An effective and coherent strategy, not an FTA, is your key to ASEAN market entry

ASEAN is now the fifth largest automotive market, offering new growth opportunities to companies supplying both OEM (original equipment manufacturer) and aftermarket products and services. The ASEAN region produces 4 million cars and trucks each year and sells 10 million motorcycles annually. China progressed from bicycles to motorcycles to cars over a period of 20 years, and ASEAN will similarly advance from motorcycles to cars rapidly over the next decade – especially in the Philippines, Indonesia and Vietnam, in line with economic development and rising incomes.

ASEAN has arrived as the global growth engine of the next decade and beyond.

The absence of a Canada – ASEAN free trade agreement should not prevent SMEs from capitalizing on ASEAN growth opportunities. Furthermore, an FTA is not the silver bullet to establishing and growing your ASEAN business. An effective and coherent commercial strategy is.

Achieving more effective market coverage and penetration across ASEAN’s diverse, hugely fragmented, yet inter-related market is highly challenging and complex for any company. Basic templates or theoretical “cookie-cutter” market-entry formulae often falls short of delivering desired results.

What companies need is a distinctive market-entry and channel design process that caters for key variables which encompass the necessary agility to synchronize individually tailored business, multi-partner, multi-level network strategies with relevant opportunities, regional cultures and competitive scenarios – eliminating the wasted costs of trial-and-error market entry efforts.

Considering the absence of a Canada-ASEAN FTA, the federal and provincial governments might consider a funding strategy to assist Canadian companies with the expense of retaining outsourced specialty ASEAN marketing services. Procuring regional knowledge, experience, and expertise will make a major difference and help companies grow.

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Sometimes, regions experience a sudden boom in their ability to generate economic success. These markets on the rise can attract a lot of economic interest and international business activity. And as such, it’s a good idea to be informed about which markets are growing.

Here are five markets that are hot and are currently on the rise…

1. India

India currently has one of the fastest growing gross domestic products in the world. Its growth rate is projected to reach 5.5% by the end of 2015

Part of the reason why this market is growing at such a fast pace is because it has a large population, and subsequently a large work force.

In 2012, India had a workforce of over 470 million people. This workforce also has extremely competitive wages, which are attractive to foreign companies looking to outsource.

Another reason why India is on the rise is because its government, under Prime Minister Narendra Modi, is creating new legislation specifically designed to increase business growth.

For example, it has altered its environmental and labor regulations and created investing incentives, all for the purpose of promoting growth.

Furthermore, India has many profitable exports such as gems, precious metals, oil, textiles, and clothing. In short, India’s economy is growing because its government and workforce are both working to promote growth in the market.

2. Indonesia

Indonesia is another country that is on the rise. The GDP of Indonesia is projected to increase by just over 5% by the end of 2015, close behind India as one of the fastest growing economies in the world.

Also similar to India, Indonesia has new government leadership that is attempting to promote growth in the region.

President Joko Widodo is trying to affect change by reducing fuel subsidies, redirecting the money into education and infrastructure. He is also considering lifting raw ore exporting bans.

Further, Indonesia has a rapidly expanding middle class and a GDP of around one trillion dollars. Both of these statistics are important when you consider that Indonesia is the fourth most populous nation in the world.

The country has over 250 million people, and if its economy keeps growing, it could cultivate an economy that is even stronger and more globally significant.

Indonesia exports oil, gas, textiles, electrical appliances, rubber, and a number of other products. These exports are in demand around the world, and help Indonesia remain a market on the rise.

3. Poland

Although many may not consider Poland to be one of the most exciting markets in Europe, its current economic growth is helping it keep pace with some of the fastest growing economies in the world. By 2016, Poland is predicted to have a GDP growth of over 3%.

Some of the key Polish exports helping fuel this growth include aircraft, oil, machinery, pumps, medical technical equipment, copper, plastics, ores and furniture. Poland exports these goods to many different countries, most notably China and the United States.

In addition to these exports, Poland is another country where the political environment is helping to fuel growth in the economy.

The Civic Platform party had been seeking to free up the business environment with more liberal policies, to increase investment by foreign companies, and to improve infrastructure.

After losing both the presidential election in May 2015 and the parliamentary elections in November 2015 to the rival Law and Justice party, however, it remains to be seen whether this trend will continue.

4. Kenya

Kenya’s 2015 GDP growth is predicted to finish even higher than India’s, at 6%. This is due in part to the political stability that President Uhuru Kenyatta has brought to the country. He and the rest of the Kenyan government have increased national security, and are planning to move forward with plans to enhance to country’s infrastructure.

Some of Kenya’s top exports are tea, coffee, apparel, iron, steel, and horticulture, including flowers. By producing these products in great quantities and with high quality, Kenya is able to be very competitive in these markets.

Kenya also has some of the best farmland in the entire African continent.

A whopping 75% of all the jobs in the country are in the agriculture industry. Tea alone contributes to 20% of the nation’s GDP.

Furthermore, Kenya is working in cooperation with some of its neighboring nations, including Rwanda, Uganda and Tanzania, to promote business and trade in the area. Businesses in Kenya continue to work on technological innovation as well, including payment systems for mobile phones, which will support the country’s rising consumer base.

5. China

The Chinese market has been growing for a number of years. With a projected GDP growth rate of 7% by the end of 2015, China is the fastest growing economy in the world. There are a number of reasons why it is growing so fast.

First, as many as thirteen million Chinese people are moving from rural areas to the cities every year in order to seek higher paying jobs. This results in a work force that is making more money and generating more exports. Both of these things increase GDP.

Second, the private sector is increasing in China.

In 1978, private business accounted for only 1.2% of the total Chinese GDP. However, in 2012, it was over 60%.

Third, after the global crash of 2008, the Chinese government created an economic stimulus package of over $US 580 billion and also altered regulations to help increase bank lending. These two things helped the economy recover from the financial crisis.

China also exported over $US 2.3 trillion worth of goods in 2014. Some of its top exports include electronic equipment, such as computers, as well as clothing, machines, furniture, plastics, cars, and medical equipment. The country continues to be a manufacturing powerhouse, attracting foreign business with its competitive labor wages.

All of these factors equate to China remaining a market on the rise. Its growth over the past few decades has been remarkable, and even if that growth slows slightly, it will still be one of the most rapidly growing economies in the world.

Do any of these markets seem like a fit for your market entry strategy? What other markets are on the rise that companies looking to export should consider?

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