In this section I'm going to talk about the opportunities that Canada and specifically BC has in other

countries of Asia Pacific and some recommendations for companies and investors in forestry
industry.

Let's talk about the world’s five largest markets for wood and wood products, India. Expanding trade
and investment with large, fast-growing markets, including India, is a priority for the Government of
Canada. In 2020, India became the world’s sixth-largest economy and is frequently labelled the
world’s fastest-growing major economy, with an annual GDP growth regularly above 7 percent.
Two-way merchandise trade between Canada and India was $10.1 billion in 2019; however, due
primarily to the COVID-19 pandemic, two-way trade decreased to $8.7 billion in 2020. India’s
economy offers tremendous opportunities for Canadian companies in emerging sectors such as
transportation infrastructure, life-science, clean energy technology and renewable energy, as well as
in traditional sectors such as infrastructure development, natural resources, defence and security,
value-added food products, mining, and oil and gas.

Due to the vast opportunities, the Government of Canada is looking at all avenues to deepen their
trade and investment relationship with India. In addition to trade promotion activities, Canada is
maintaining strong efforts on advancing negotiations on a Foreign Investment Promotion Protection
Agreement (FIPPA) and a Comprehensive Economic Partnership Agreement (CEPA).

In 2010, Canada and India launched negotiations (CEPA). The most recent full negotiating round was
held in August 2017 in New Delhi. At that time, constructive discussions were held on various issues,
including cross-border trade in goods and services, e-commerce, telecommunications, sanitary and
technical barriers to trade.

Since then, Canadian and Indian officials have held several stocktaking meetings, most recently in
June 2021.

India is a high-priority trading partner and the Government of Canada continues to work with the
Indian government to expand their trade relationship to its full potential and create opportunities
for Canadians, including continuing work to make progress on an agreement.

What about India's demand for forestry products?

India is among the world’s five largest markets for wood and wood products, and it represents
significant potential for Canada’s forestry and building-product sector. It is believed that by 2024,
India will be the world’s most populous country and it will require huge volumes of timber for
fulfilling its basic requirements in housing, construction and furniture production. Limited domestic
supplies, coupled with booming retail furniture, handicraft and hospitality sectors is driving demand
for newer species. The country is also largely dependent on lumber imports due to a Supreme Court
ruling banning tree cutting in many of its forests.

India’s annual import of logs, lumber and wood products have increased from $1.3 billion to more
than $2 billion in the past decade. The market share of U.S forest product imports has reached
record levels in 2018, although from a small base. According to the trade data from the Ministry of
Commerce, Government of India, and as you can see in the diagram, imports from Malaysia and
New Zealand constituted almost 30 percent of total imports of forest products in 2017. Export of
forest products from the United States to India in 2018 were valued at $45 million, nine percent
higher than same period in 2017. Imports of forest products from the United States has been
witnessing an annualized growth rate of approximately 14 percent since 2007 until 2018.
Finally, India represents just a small percentage of BC exports, but India’s increasing stability and
strong economy make it increasingly attractive.

Another huge opportunity in Asia Pacific, but as a long-term strategy for BC would be Indonesia.

Much has been made about the rise of Asia or the shift of power from West to East with most of this
focus being on China or India while countries such as Indonesia are often overlooked or forgotten.
This is a mistake and one that Canada appears to be avoiding. With its immense size, growing
population and economy, strategic location and its regional importance, Indonesia is a country that
Canada should be deepening its ties with.

Perhaps, the recent news that Canada and Indonesia have launched negotiations on (CEPA)
agreement is good news not just for Canadian companies who will gain access to a huge and growing
market or Canadian consumers who gain access to new goods, but also to those people who are
concerned about growing the Canadian economy, raising Canadian incomes, improving their quality
of life, and deepening their engagement with a key strategic region of the world.

Indonesia is currently the 16th largest economy in the world, but its growth rates mean that its
economic potential is massive. Projections by PricewaterhouseCoopers suggest that Indonesia will
be the 4th largest economy in the world by 2050 with a GDP of $10 trillion dollars or ten times
bigger than its current GDP. Only China, India, and the United States would be bigger.

With its large population, increasing incomes, and its strong projected growth, Indonesia offers
many opportunities for Canadian companies and investors. With a widely accepted estimate that
Indonesia needs to invest US$500 billion in infrastructure over the next five years to support
continued growth, the Indonesian government has made infrastructure development a national
priority as it looks to upgrade roads, ports, electrical systems, and water systems.

Consequently, we can conclude that India and Indonesia are a big play ground with a lot of
opportunities for BC's forestry businesses. BC’s coastal hardwood species of Yellow Cedar,
Western Red Cedar and Western Hemlock as well as Douglas Fire are ideal exports to India for uses
that require clear knot-free wood, such as windows, doors and furniture. Softwood species like
spruce and pine are also finding a market there. In this way, the government of Canada try to
deepen their footprint in Asia pacific and diversify to other emerging economies in this region. This
will decrease the dependence of Canada and BC on just one country in terms of export and develop
the Canada's market share in Asia Pacific.