Trade Deal With the Philippines Is Canada's First Test

Canada and the Philippines plan to seal a free trade agreement before the end of the year, Prime Minister Mark Carney said Thursday, marking his government's first concrete move to hit a target of doubling non-US exports.

Carney made the announcement in Vancouver alongside Philippine President Ferdinand Marcos Jr., who is on his first official visit to Canada in 11 years. Bilateral merchandise trade touched C$3.4 billion ($2.4 billion) last year. A deal with the Philippines, a nation of 113 million, would be the first test of whether Canada can turn its diversification ambition into a measurable trade channel.

“In a more dangerous and divided world, economic strength must be reinforced by shared security,” Carney said at the joint appearance.

The meeting reflects separate strategic pivots. Marcos is expanding defense ties beyond Washington, signing a visiting forces agreement with Canada last year as the Philippines looks for partners to counter China's claims in the South China Sea. Carney's government is working to conclude a broader trade pact with the Association of Southeast Asian Nations, or ASEAN. He confirmed he plans to attend the ASEAN leaders summit this fall in Manila, where the Philippines holds the group's rotating chair.

For investors, the timeline matters. A Canada-ASEAN deal would take years. The Philippines bilateral is on a 12-month clock. If Carney's government can finalize it by late 2026, it signals the bureaucracy can actually execute the diversification mandate the prime minister set out. If the negotiations slip past that window, the broader export target – doubling non-US trade in a decade – starts looking aspirational.

The trade talks also test whether Canada can convert diplomatic goodwill into commercial access. Marcos has security reasons to deepen the relationship. Carney needs to show the Philippine market can absorb Canadian grains, aerospace components and education services at scale. The C$3.4 billion figure is a starting point, not a ceiling.

Carney appeared to confirm a return visit. He said he planned to see Marcos again in Manila this fall.