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 The U.S. has withdrawn from the TPP, while the implementation of the ASEAN Economic Community (AEC) has accelerated intraregional FDI to record levels.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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Although the country has a relatively large population of more than 30 million people, no one looks to the local market because it’s so small, he says.

Our main income comes from trade, and practically every company and manufacturer dreams of exporting. But the problem is, no one is teaching the business of exporting.

Export and market development grants have been readily available from the Malaysian government for years, but the problem for would-be exporters isn’t necessarily the money. They are participating in exhibitions and attending tradeshows, but there’s a lack of understanding of how to take advantage of and engage in global trade opportunities once they’re identified.

“That’s the reason I retired from the government and started coaching Malaysians to go into international markets,” he says.

From international trade expert to international trade trainer

Dr. Ibrahim served as a diplomat for over 15 years. He was also the Malaysian Trade Commissioner in Belgium for nearly a decade, and in Johannesburg, South Africa for eight years after that. He now serves as the Chairman of the Malaysian Training Providers Association.

In 2007, he took his professional experience, his knowledge of the need for export training in his country, and his general flare and passion for international trade, and created the Malaysian Export Academy—the first and only of its kind in the country and the region.

The Academy offers 100-percent government-funded international trade courses and seminars for business professionals in the region, and is attended by 200-300 individuals each month. This year, Dr. Ibrahim also wanted to offer more comprehensive international trade training, as well as diplomas and the opportunity for global certification to his trainees, as opposed to just certificates of completion. To do so, he made the move to become a delivery partner of the Forum for International Trade Training (FITT).

I was looking for a very reliable well-known international body to support the Academy, and I saw that FITT has a good network.

The Academy is pleased to start offering training toward both the FITT Certificate and the FITT Diploma in International Trade. So far no one is offering this in Malaysia, and the Academy will be the first, says Dr. Ibrahim.

“We are delighted to welcome the Malaysian Export Academy as a FITTskills Delivery Partner,” says Silvia Baptista, FITT’s Manager of Product and Service Delivery. “We really look forward to working with Dr. Ibrahim and his colleagues at the Malaysian Export Academy.”

Malaysia’s export environment

In Malaysia, about 30 percent of exports are commodities, including products such as palm oil, petrol, cocoa and rubber.

As far as manufacturing goes, a lot of American technology companies are building their high-tech products in Malaysia. The country also manufactures a lot of products from palm oil and rubber.

“We are the biggest exporter of rubber gloves in the world,” says Dr. Ibrahim.

The international export of services is another area of growth in Malaysia, including engineering services, architecture and education, he says.

There’s a lot of competition from Asia, especially countries like Indonesia and Thailand, because they produce similar products to us, yet they have cheaper labour.

“This is why we’re moving toward high-tech products and services.”

The competition, coupled with the fact that many nearby countries can still depend on their own markets for growth while Malaysian companies have to look to foreign sales means there is certainly a niche for international trade training, says Dr. Ibrahim.

Developing export skills in SMEs and the future Malaysian workforce

Many of the program instructors at the Academy are local trade experts from within Malaysia, including Dr. Ibrahim himself. Others, however, come to teach from as far as the UK. The trainees also aren’t just travelling from within Malaysia: they’re coming from nearby Indonesia, Laos, Vietnam and Cambodia as well.

Dr. Ibrahim is targeting two main audiences with the program: business executives from SMEs who want to boost their skills in exporting, and individuals who have graduated but want skills like those offered in this program to make them more employable and export ready.

“Our main aim is to teach Malaysian SMEs to go to international markets using your program,” he says.

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