Holding a Fragile Balance Amid Trade Tensions and Global Economic Uncertainty, the Indonesian Embassy's Latest Foray into Canadian Markets Raises Questions About the Country's Growing Influence in the Region.
As thousands of professional buyers from across North America flocked to The International Centre in Mississauga, Ontario, for Toronto Market Week 2025, a distinctive aroma of tropical wood wafted through the air, transporting visitors to a "Mini Indonesia." Amid this vibrant atmosphere, Indonesian SMEs showcased their unique products, including rattan crafts, bamboo weaving, and home textiles. This exhibition marks a significant milestone in Indonesia's economic diplomacy efforts, with close synergy between government agencies, business actors, and the diaspora community playing a pivotal role.
The significance of Indonesia's participation in Toronto Market Week 2025 cannot be overstated. With global trade tensions on the rise and supply chains disrupted by tariffs, countries are scrambling to adapt and capitalize on emerging opportunities. Indonesia's strategic decision to focus on North America represents a calculated move to strengthen its presence in the region, leveraging its rich cultural heritage and natural resources.
Historical background is essential in understanding Indonesia's current push into North American markets. The country has been actively pursuing free trade agreements with key partners, including Canada. In 2019, Indonesia and Canada launched negotiations for the Comprehensive Economic Partnership Agreement (CEPA), which is set to be signed soon. This agreement aims to reduce barriers to trade, increase economic cooperation, and promote investment in both countries.
Indonesia's growing influence in North America is also mirrored by its increasing participation in regional organizations such as the Association of Southeast Asian Nations (ASEAN). ASEAN-Canada Free Trade Agreement (ACAFTA) negotiations have been ongoing, with a focus on strengthening the competitiveness of Indonesian creative products in the Canadian market. According to data from 2024, Indonesia's exports of home décor and handicraft products to Canada reached USD 44.7 million, an increase of 7.2% from the previous year.
"Indonesia's presence here is not merely about attendance, but about impact: building long-term partnerships, driving exports, and reinforcing Indonesia's image on the world stage," Ambassador Muhsin Syihab, Indonesian Ambassador to Canada, emphasized during the exhibition's inauguration.
Key Players and Motivations
Indonesian Embassy in Ottawa: The embassy played a pivotal role in facilitating the collaboration between government agencies, business actors, and the diaspora community.
Indonesia-Diaspora Business: The synergy between Indonesian SMEs and the diaspora community has been instrumental in promoting the country's creative products globally.
Bank Indonesia New York: The bank's involvement demonstrates its commitment to supporting Indonesia's economic diplomacy efforts.
Expert Insights
"The Canadian market still offers significant growth potential for Indonesian SMEs, particularly with sustained assistance to small and medium-sized enterprises (SMEs)," said Dr. Fauziyah Alisjahbana, Director of the ASEAN Studies Program at the National University of Singapore.
"SMEs are crucial in driving economic growth and development. With the right support and infrastructure, Indonesian SMEs can compete effectively in the global market," added Dr. Fauziyah.
Future Outlook
Short-term (next 6 months): Expect Indonesia's participation in Toronto Market Week 2025 to drive exports of creative products to Canada, with a focus on promoting sustainable business networks among SMEs.
Long-term (5-10 years): Indonesia's growing influence in North America is likely to continue, with a strong emphasis on building long-term partnerships and driving economic cooperation between the two regions.