Canada and Thailand have launched a study to determine how the two countries may benefit from a free-trade agreement, Prime Minister Stephen Harper and his Thai counterpart said today.

Harper and Prime Minister Yingluck Shinawatra made the announcement during the Canadian prime minister's official visit to Bangkok, his first stop on a six-day, three-country swing through Asia.

The two countries "will pursue exploratory discussions toward a free-trade agreement," Harper's office said in a statement, released as the two leaders made a celebratory toast during a luncheon at Government House in the Thai capital.

"We are now embarking on a new and exciting era in our relations," Harper said. "The commitments we are making on this trip lead us to being much closer partners, economic partners, security partners, and of course social and cultural partners for decades to come."

Harper said he was "very confident" about concluding a free-trade deal with Thailand.

"We have rapidly expanding trade and investment with Thailand," he said as Yingluck stood at his side.

Yingluck welcomed "Canada's re-engagement in Asia" and noted it has been 15 years since a Canadian prime minister made a bilateral visit to Thailand. Jean Chrétien led the last official visit to Thailand when he brought a Team Canada trade mission there.

Canada's trade deals

Since the Harper government took office in 2006, Canada has signed free-trade agreements with:

  • Colombia.
  • Honduras.
  • Jordan.
  • Panama.
  • Peru.
  • The European Free Trade Association states of Iceland, Norway, Switzerland and Liechtenstein.

It is also in negotiation with many others, including India and the European Union. During Harper's trip to China in February, leaders there also expressed interest in future free-trade talks. Canada also hopes to participate in the emerging Trans-Pacific Partnership.

The PMO said a free-trade agreement with Thailand – one of the fastest growing economies in the world – stands to "significantly benefit farmers and businesses across Canada." Harper told reporters that Canadian businesses were already flourishing in Thailand, particularly in the areas of information technology, agriculture and "clean" (environmentally friendly) technology.

Harper noted that Canada-Thailand trade is up 15 per cent over last year despite extensive flooding last fall that hurt Thailand's economy. Thai business investment is also up, Harper said.

The prime minister noted Friday that he had planned to visit Thailand last fall, but serious flooding in that country forced him to postpone the visit.

"I am delighted to see the resilience of the Thai people and the rapid recovery from those tragic events," Harper told his hosts.

Hopes for new energy markets

As he did last month in China, Harper spoke of the importance of rapidly-expanding markets in Asia to Canada's resource sector, particularly for oil and gas exports.

"Our government believes it is essential that we be able to sell our energy products outside of North America, to partners and countries other than the United States," the prime minister told reporters.

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Minister of Foreign Affairs John Baird, right, and Minister of International Trade Ed Fast participate in a signing ceremony for new trade, policing and cultural exchange agreements at Government House in Bangkok, Thailand on Friday. (Sean Kilpatrick/Canadian Press)

"Obviously that will require some significant infrastructure projects to go forward," he continued, echoing recent comments by Natural Resources Minister Joe Oliver about the government's commitment to "taking steps necessary to ensure we can get timely regulatory decisions on those kinds of projects."

Canada also hopes Thailand can be a gateway to other lucrative Asian markets. The United States is ahead of Canada in free-trade deals with Asian economies, which stands to hurt the competitiveness of Canadian businesses if Canada does not secure equally favourable treatment for its goods and services.

Migrant smuggling co-operation

Foreign Minister John Baird also signed an agreement Friday with his Thai counterpart to further police co-operation to combat migrant smuggling. An official announcement and more details on the agreement are on Harper's Saturday agenda.

Canada also signed a bilateral agreement on cultural exchanges for youth aged 18 to 30. Canada currently has bilateral arrangements on youth exchanges with 32 countries and territories, which saw about 19,000 Canadian youth travel abroad to benefit from international work and study opportunities in 2010.

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Prime Minister Stephen Harper, middle, walks with Canadian Buddhist monk Phra Ajahn Hasapanyo, left, and guide Tanapol Ghangyuen as he visits the Grand Palace in Bangkok, Thailand on Friday. (Sean Kilpatrick/Canadian Press)

Harper's itinerary Friday included a business roundtable and a tour of Bangkok's Grand Palace, one of its most historic cultural landmarks. His tour guides there included Canadian Buddhist monk Phra Ajahn Hasapanyo.

He also signed a book of well wishes and presented flowers to the chamberlain of the country's ailing king, Bhumibol Adulyadej, who has reigned since 1946 and is credited with paving the way for Thailand's transition to democracy in the 1990s.

Harper's Asian tour agenda Saturday includes more events in Bangkok before leaving for Japan later in the evening.