THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

EVIDENCE

OTTAWA, Wednesday, December 4, 2013

The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:15 p.m. to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.

Senator A. Raynell Andreychuk (Chair) in the chair. We are pleased to have before us Mr. Colin Robertson, Vice President, of the Canadian Defence and Foreign Affairs Institute, as well as a fellow at the University of Calgary’s School of Public Policy.

Colin Robertson, Vice President, and Fellow, School of Public Policy, University of Calgary, Canadian Defence & Foreign Affairs Institute: By way of background, I served in the Canadian Foreign Service for almost 33 years.  Since leaving the Foreign Service, I worked as vice‑president of the Canadian Defence & Foreign Affairs Institute, a non‑partisan think tank based out of Calgary that is aligned with the School of Public Policy at the University of Calgary.  I should note that, next March, the school is going to host a conference on Canadian geopolitics, trade and the shaping of relationships in the Indo‑Pacific with Robert Kaplan.  I’m also a senior adviser to McKenna, Long and Aldridge, a Washington‑based law firm, and we have Asian clients.  As a volunteer, I serve with great pride as an honourary captain in the Royal Canadian Navy attached to the Strategic Communications Directorate.  I am also current chair of Canada World Youth, a youth leadership program, as many of you know founded by the late Senator Jacques Hebert, and we have long had interests in Asia.  This gives you a sense of where I come from, but my five observations are my own and do not represent those of any of the hats I wear.

I served as consul in Hong Kong for five years with accreditation to China.  I would travel north to Gangzhou to observe the economic progress.  I would take the Star Ferry, then get on the train in Kowloon and travel through the New Territories, crossing in Shenzhen.  During that time, that small town literally changed from bucolic rice paddies and oxen into a thriving, ramshackle city of many millions.  There was no regard for environmental and labour standards, but there was remarkable energy and a determination to get it done.  Shenzhen was the wild west of the Orient.  For me, it visibly illustrated the Deng Xiaoping transformative influence and his conclusion that it doesn’t matter whether a cat is white or black as long as it catches mice.

I’ve travelled much of Asia since then, including India, Pakistan, Nepal, Japan, Taiwan, Thailand, Singapore, Malaysia, Korea, the Philippines, Australia and New Zealand, including a week 18 months ago in Tibet.  I travelled on the Trans-Siberian Express through Beijing, through Mongolia and Siberia to St. Petersburg.

This leads me to my first observation.  While we have a tendency to speak of Asia as an entity, it is a continent of different regions, religions, ethnicities and languages.  There are democracies and there are dictatorships.  Our policies need to reflect these basic facts.  An Asian policy is a misnomer.  One size does not fit all.  If we are to effectively advance Canadian interests, we need to tailor policies by country, by region and by sector.

Everywhere in my travels I would meet people with friends and relatives in Canada.  We are much envied, and this takes me to my second observation.  Through ties of family, Asian Canadians give us privileged entree to Asian markets.  They are our best salespersons to attract more talent to our country as either immigrants or students.

As an example, we just have to look at the composition of this committee, of the Senate and the House of Commons to know that there are a number of members in both chambers that were born in Asia, have come to Canada and are now making a contribution to Canadian life in this very chamber.

Canada is the envy of the world when it comes to practical pluralism, and we need to do more to market this as we grow our population.  We have a large and vibrant Asian community in Canada.  Vancouver has often been called the most Asian city outside of Asia.  We should embrace this identity and present ourselves as a Pacific country.

We have not always appreciated education as a service industry.  It is Australia’s fourth largest export.  Our government is getting its act together after initial ambivalence, but we are playing catch‑up and we are well behind the U.S.A., U.K. and Australia, where once we led.  In Asian culture, the best advertisement is through family ties.

I’m frequently asked by Chinese diplomats why we do not do more with Norman Bethune.  Whatever his politics, he is a Chinese hero, so why should we not draw on this advantage?  Bethune, in my view, should feature more prominently in our outreach to China.  Why not, for example, Bethune scholarships modelled after the successful Fulbright program?

As we reform our Foreign Service, we should also target Asian Canadians who have the practical language skills and family ties that make all the difference.  Let’s use our historical ties, trade ties dating back over a century through insurance, banking and shipping, as well as missionaries, teachers and doctors.

While posted in Asia, I travelled up the Khyber Pass with a Khyber rifle as the Russians were leaving Afghanistan.  In Peshawar, we watched Afghan refugees play buzkashi using the traditional carcass of a headless goat.  On the Afghan side, it was said they played the game with the heads of Russians.

Canadians fought in Asia during the Second World War, Korean War and as peacekeepers in Indochina and the Kashmir.  We are still in Afghanistan.  While in Hong Kong, I would annually lay a wreath in Sai Wan cemetery for Sergeant John Osborn, VC, who they later named the Osborn Barracks in Winnipeg after.

Security is still a life‑and‑death matter in Asia.  If this is to be the Pacific century, then we need to pay close attention to what happens in North Korea and the disputed islands in the north Pacific and south and east China seas.  Given China’s recent declaration of an air identification zone, Canada’s interests in issues of maritime law and freedom of navigation in that part of the world are as important to our long‑term prosperity and security as those in our own waters.

It starts with sea power and maritime command.

It is estimated that 80 per cent of global trade goes by sea.  The busiest sea lanes are those in the Indo‑Pacific.  Shop at Canadian Tire?  At any moment, a third of their inventory is at sea.  The same would apply to the Hudson’s Bay Company and other merchants.

The Canadian Chamber of Commerce is campaigning to get our oil and gas to tide water, and the government has just announced its economic diplomacy initiative.  Both depend on getting our goods by sea across the Indo‑Pacific.  Half the world’s shipping, with cargo valued at $5.3 trillion, passes through the South China Sea.  That’s more than 41,000 ships a year ‑‑ more than double the number that pass through the Suez Canal and nearly triple those that pass through the Panama Canal.

Our trade and commerce depends on these sea routes being secure.  All of this to support my third observation:  We want to trade in Asia, but first we must exhibit our bona fides on security.  If we want into the East Asia Summit and the ASEAN Defence Ministers Meeting, we need to demonstrate that we are as invested and interested in the security of the Indo‑Pacific, especially the North Pacific, as we are in the North Atlantic.  This means building our promised fleet and deploying our submarines, and maintaining the readiness of our expeditionary capacity.

There are a couple of other things we can do to be constructive.  Ten days ago Canada hosted 50 nations at the fifth annual Halifax International Security Forum.  The forum for democracies, originally those of the trans‑Atlantic, it focuses on security and defence.

Apply this model on our West Coast and invite the Indo‑Pacific nations to our Pacific coast and focus attention on trade and security.  If it did nothing more than provide a forum to entangle the facts about the disputed islands ‑‑ a Track Two  approach ‑‑ it would have done good work.

As Churchill observed, “to jaw‑jaw is better than to war‑war.”

And let’s not forget that our engagement across the Pacific starts on this side of the Pacific with the Pacific Alliance, and if they’re interested, the United States.  This would also underline our commitment to the Trans‑Pacific Partnership negotiations that Dr. Curtis has just spoken about.

On North Korea, our policy of controlled engagement is counterproductive and needs to be revised if we are to be helpful to regional security.  Introduced in 2010, it limits discussions with the North Koreans to issues of regional security concerns, human rights and consular issues.  This effectively means no engagement with the north, because they don’t want to talk to us about these.  This does not help our friends in South Korea.  The Kim Jong‑un regime is bad, mad and dangerous, but this is all the more reason why we should be engaged.

This leads to my fourth observation.  It also means being there.  We can’t achieve our economic diplomacy goals without an active, official Canadian presence.  Unlike the West, a government presence in Asia is a big deal.  This means opening more consulates, especially in China and India, and don’t forget Indonesia.

This means having ministers and the Prime Minister lead trade delegations of Canadian business.  This is how business is done.  For decades, partly a reflection of minority governments and austerity, we were out of the game.  Just because Jean Chrétien, a Liberal, pioneered Team Canada Missions of premiers and CEOs doesn’t mean that Stephen Harper, a Conservative, shouldn’t do the same.  Promoting Canadian trade is not about politics; it’s about putting bread on the table.

Jim Prentice has observed Chinese investment into Canada has slowed.  We need to make it clear that we welcome Chinese investment.  At the same time, we should work with our like‑minded partners ‑‑ the U.S., Australia, New Zealand ‑‑ through the Trans‑Pacific Partnership to come up with a code of conduct for state‑owned enterprise investment; make clear the rules of the road.  Governor General Johnson recently made a visit to China and met with President Xi Jinping.  Encourage Prime Minister Harper to do the same and make it a regular practice.  The Australians do.

And let’s put into force our foreign investment promotion and protection agreement.

The Chinese see us as a potential bridge to the West, especially the United States.  It is up to us to build the bridge and profit from the relationship.  Remember Deng Xiaoping’s observation on white and black cats:  It doesn’t matter as long as it catches the mice.

A final recommendation:  Our policy must have a democracy angle; it’s who we are as a people.  Mongolia, Thailand, Indonesia, Malaysia and Hong Kong are all middle‑income countries possesses nascent democratic institutions.  We should engage with them, not just government to government and student to student, but party to party.

In conclusion, we can trade successfully in Asia and the Indo‑Pacific but we need to make commensurate contribution to its regional security.  To protect and enhance our interests and build partnerships, we need to be a credible player, respected by all friends and foes alike.  This requires long‑term strategic engagement in the region with the necessary dedicated assets to make it happen, and being there frequently and often.

Start by making full use of the people‑to‑people relationships we enjoy thanks to our shared history and ties of family, actively contribute to the development of democratic institutions, and never forget the power of the maple leaf in close, continuing engagement in support of Canadian interests.

Senator Downe: Chair, I know others have questions.  I have one quick final one for Colin.

Mr. Robertson, your point four and five, as you know, Canada spends over $1 billion on international assistance in the region.  Would you see our money better spent, if you had a choice, allocated towards a larger presence: embassies, government offices, trade offices?  Or to your point number five about having a democracy, is the money better spent in reinforcing a strong public service, judiciary and institutions within these fragile democracies already in the region?

Mr. Robertson: Senator, I think you can do both.  You have to be there to have effect but, at the same time, working through institutions on the democracy front.  I think it is probably more effective for us and for it to be seen as Canadian.

I’ll give you an example.  When I was in Hong Kong, we brought over the former commissioner of the Northwest Territories.  We brought over the Chief Electoral Officer.  We brought over a whole series of practical experts in how you run elections and how you run a democracy.  That was extremely well received, and still does us good in Hong Kong.  We couldn’t have done that if we didn’t have that presence on the ground.

We worked with the local Chinese, we worked with the government of Hong Kong.  They were happy that we brought these over, and we were simply there to try and help support the growth of representative and democratic institutions.  We weren’t selling them a particular brand of democracy, but saying this is what it was about.  But we couldn’t have done that if we didn’t have the people on the ground.

Senator D. Smith: To relieve you, I won’t muse about my early trip to China when Mao was living ‑‑

The Chair: Thank you.  We have very little time.

Senator D. Smith: ‑‑ or Chrétien or team Canada or even visiting Colin when he was consul.

But I’d really like both of your thoughts on what I regard as a litmus paper issue, and it’s this disputed island issue.  I mean, you’ve seen the videos; they’re rocks.  It’s hard to make a case that it’s a strategic defence thing.  They really don’t have a strong legal case, and it kind of strikes me that this is really a muscle thing.  It’s an ego thing.  It’s kind of a statement, “Look, we’re a world power,” and one of two.  They passed Japan two years ago as the second strongest economy in the world, and they will pass the U.S., maybe not in my lifetime but within a couple decades, I’m sure.

I’m just wondering how both of you interpret this sort of muscle statement that’s got to put their neighbours off a bit, but is there some benefit to this?  How do you interpret this very aggressive disputed island claim?

Mr. Curtis: This is yours, Colin.  I’ll only make one point.  Depends which islands one is talking about.  I’ll assume it’s the ones in the East China Sea, not the south.

Senator D. Smith: Yes.

Mr. Curtis: If one looks at history, my understanding is historically those were Chinese islands, as was Tibet, but in the last hundred or so years they’ve been Japanese islands from the treaty.  I’m not sure that history should dominate everything; it causes all sorts of troubles in other parts of the world, as we all know.  But at least it’s important to understand where China is coming from, not that it’s excusable.  If one at least looks at the history and tried to figure out if there is any basis of these territorial claims.  Really, it’s Colin’s point.

Maybe I can make a final comment.  I always say the Chinese and the Americans basically deserve each other.

Mr. Robertson: Senator, I would say that the history is disputed but, from a Canadian perspective, in the late 1980s and early 1990s we had something called the North Pacific dialogue.  We were trying to be useful on this very subject with China and Japan.  Joe Clark was foreign minister and Brian Mulroney was the Prime Minister.  It was actually a useful initiative which we called Track II, which I know this committee has heard about from other witnesses.  I think that could be something useful that Canada could do.

I was recently at the Japanese ambassador’s residence and they had over one of their scholars who was here to basically give us the Japanese perspective on those disputed islands.

Senator D. Smith: Make their case on it.

Mr. Robertson: And he has a different perspective than that which John just outlined as to who owned what.  But I asked him specifically, I said, “Could we be helpful?”  And he said yes, the whole idea of a Track II, of just getting the facts out.

That’s what I was talking about in my statement.  This is dispute.  Better they should be talking.

Senator D. Smith: What do you think is driving it?

Mr. Robertson: Partly, the new leadership in China has got to somehow try and ‑‑ there has been for a long time an active nationalist movement.  You just read some of the blogs translated from the Chinese.  It would disturb you to read how anti‑Japanese it is.  I witnessed this when I was in Hong Kong since then.  Trying to contain that, they have to let a bit of the steam out and that’s part of what we’re seeing.  There are also those forces within China, because remember we have those who aren’t happy to see the direction the new leadership is taking, which they see as perhaps too western inclined.  So from our perspective it’s important that this not get out of hand.  The danger would be the kind of incident we saw in 2001 when an American plane knocked down a Chinese jet that got too close.  Fortunately, at the time George W. Bush kept that thing from getting out of hand.  You want to avoid this thing becoming more than it is.

I should share with you, I was in Stanford January this year and met with Frank Fukuyama, the great political philosopher, and he said to me the one area of the world he really worried about, I asked him looking forward, was exactly what we are witnessing right now.  He said he thought this could be the new Sarajevo.  Don’t forget, as I observed to the committee, in many ways China today is analogous to where Germany was in the last century, a growing economic power.  We didn’t handle Germany very well in the first half of the last century.  We’ve got to be sure that we handle China much better this century because the stakes are much higher and the weaponry that we can employ are much more devastating.

Senator Johnson: Mr. Robertson, can I ask you something very important?  I know how much work you do with the United States.  Can you tell us what the short‑ and long‑term implications for Canada’s profile are in this region and these regions, with its November 2013 agreement with the United States on Asia‑Pacific defence policy cooperation?

Mr. Robertson: We have managed the North Atlantic through NATO.  We don’t have anything similar in the Pacific, and the United States through its pivot is starting to create a brace of agreements.  They have some going back; they have a certain number of defence agreements already in place with some of the nations there, but the United States is determined it will put 60 per cent of its navy in the Indo‑Pacific.  They are trying to create a network, a kind of de facto alliance, which is similar to what has secured the sea lanes and kept trade flowing in the Atlantic for the last half century.  It is in everybody’s interests, including those of the Chinese, to ensure that those sea lanes are secure, and if this kind of an agreement can help manage that, that’s a good thing.

Senator Housakos: I’ll try to be brief.  Without a doubt, in the last couple of decades, trade between Canada and Asia‑Pacific has been growing exponentially, in large part us shipping out natural resources to Asia‑Pacific and, of course, receiving back finished goods, but if you look at the same period of time as we’ve continued to exchange growth with our two main trading partners, the United States and the EU, two sectors that have also grown in large part have been our technological sector and our service sector.  Those two sectors have grown in leaps and bounds with our trade with the United States and with the EU.

I would like your perspective in terms of those two sectors, vis‑à‑vis how have they been going in the last decade or so in the Far East, in the Asia‑Pacific areas.  What are the impediments, if there have been any, and what are the prospects for increased technological sector trade and service sector trade between Canada and Asia‑Pacific?

Mr. Robertson: Obviously, this reinforces again the importance of having the agreements in place.  What we’re basically asking Asia to do is to sign up for trade architecture that we designed in the west.  That’s, from our perspective, a good thing, the fact that China and India and other nations are doing so, which would take me to answer the FIPA question:  Yes, I think we should put into force the FIPA and continue to move forward because that’s one way to create openings for Canadian companies so they can trade with greater assurance and dealing with problems, intellectual property theft and things like that; but at the same time bringing Asia into how the West does business certainly works to our mutual advantage.

The Chair: I have three other questioners.  I’m going to ask that the questions be put and perhaps both panellists can respond.

Senator Dawson: You are early in our process in the development of this study.  Mr. Robertson, you mentioned Team Canada.  I’m a big fan of Team Canada.  I think it was a very good approach.

We have to start focusing.  Excluding China and India, if we were to have a Team Canada approach, what would be your target? I understand the question of transport, security and the Maritimes, but what are the countries that we should be targeting in our study?

Mr. Robertson: In my view, it’s obviously the big ones.

The Chair: Let’s ask the questions first, and then you can reflect on the answers together.

Senator Ataullahjan: Thank you.  I had many questions, but I think I’ll stick to the shortest one.

You mentioned that Canada needs to make contributions to security.  What are you talking about specifically, current involvement in Afghanistan, where we’re there as teachers and trainers?  Or are you looking at something more?

I enjoyed your references to Peshawar, Buzkashi and Khyber Pass.  You know only the brave and the crazy go through that area now!

Senator Oh: Basically, I would like to make one point.  Mr. Curtis, you mentioned about the disputed island that belongs to China, but back in history, the island was under China’s control for a long time, since day one.  In fact, when World War II was over, China was having a civil war going on.  The Chinese side was in a mess.  They had no one to receive anything after the war, and the island was to be returned to China.

In fact, a few years ago, China was asked to defer the disputed island to the international court.  But for the last 10 years, the new Japanese regime, which is more military style, started disputing the island.  The dispute has escalated until today where so far, internationally, no other country has sided with Japan on the disputed island.

The Chair: I’ll start with you, Mr. Robertson, to answer any of those questions or to make comments, and then I’ll turn to Dr. Curtis.

Mr. Robertson: Senator Dawson, on Team Canada, I think it really does work, particularly because of the importance of having your political leadership be seen visibly to open the doors for business.  This is how Asia works.  It’s not how the West works but it’s how Asia works, so that’s another reason why expanding our diplomatic presence is a very good thing because the flag really does make a difference.

Again, this is not a partisan statement.  Prime Minister Chrétien understood this, as did Prime Minister Mulroney and Prime Minister Trudeau.  The Team Canada approach, in my observation, was the most effective approach because it involved our political leadership at various levels.  The federal level, obviously led by the Prime Minister, makes a huge difference.  The premiers do this already.  The premiers have made several trips in the last few years to effect, particularly from Western Canada.  I think that is something we want to encourage.

You asked about the countries.  Obviously, the countries with the biggest market potential are China, India and Indonesia, but this is where I would endorse and take a hard look at the fine print in the government’s new Global Markets Action Plan, which they have just announced.  They have actually broken things down aggregately:  Here are the markets we want to look at.  This is a very good thing.  Forget about the politics of this economic diplomacy; we actually now have a blueprint of how to approach countries where we can make a difference.  It was done by the hard work of people in the field and at home.

Again, I think there should be a Team Canada mission led by the Prime Minister every year involving premiers.  It would be a very good thing.

On security, I think building our fleet is the biggest thing we can do because that’s the coin of the realm in terms of security.  Being out there, it’s a big ocean, and we do have to protect those sea lanes.  The Americans have already signaled with sequester and budget cuts that they are looking to the allies to play up, and the Asians have told us that if we want to play, they want to see us contributing to that broader security.  And I would align to that, because Canada can do this extremely well.  Both the Asians and the Americans have told me this.  If we were to hold the kind of Track 2 Pacific dialogue we hosted in the late 1980s, early 1990s ‑‑ and I used the Halifax International Security Forum as an example because it’s a splendid example of a Canadian model that works extremely well.  I would apply it, take it to the West Coast and discuss the kinds of issues we are talking about ‑‑ the disputed islands and the rest ‑‑ but I would make it about a balance of trade and security, and I would obviously include countries that are not currently democracies.