Trudeau’s China Trip

Prime Minister Justin Trudeau’s China trip may not have netted the expected free-trade talks, but Canadians should be satisfied on several fronts.

First, the institutional framework is strengthened.

Critics discount this as more bureaucratic jibber-jabber, but in China – as business has painfully learned – it’s the mandarins who make things happen. Last year the prime ministers of Canada and China initiated regular annual meetings. Now, there will be regular meetings of ministers of the environment and energy.

Second, there will be more trade.

Sales of uranium (good for Saskatchewan) and beef and pork (good for Western Canada) will be expedited. Premier Kathleen Wynne has just returned with $1.9-billion in deals that will generate an estimated 2,100 jobs in Ontario.

A crosswalk between climate and clean energy has been created. This should work to Canada’s advantage both commercially as well as in research and development, given the Chinese lead in innovation in renewable energies, especially solar.

Third, the people-to-people exchanges are significantly enhanced.

Chinese tourism – more than half a million visitors last year – has taken off. It’s growing annually at double-digits. More direct flights to Calgary and Montreal, as well as Toronto and Vancouver, are coming from 11 Chinese cities, and we are opening seven additional visa centres. During a visit to Beijing last month, Immigration Minister Ahmed Hussen declared we could “easily double or triple or quadruple the numbers.” China has designated Canada as the preferred travel location for 2018.

Where once it was the Japanese who skied Banff and Whistler, it will now be wealthy Chinese. Hoteliers had better be sure there is a kettle stocked with Chinese teas in every room and that their feng shui is right.

Tourism begets foreign students as well as trade and investment. China is already our largest source of foreign students, although – where we once led – in recent years Australia has done the better job of attracting Chinese students.

But even with these developments, the China relationship is always going to be tricky. Its leadership has a different conception of human rights and the rule of law. China is an authoritarian state. Authority rests with the Chinese Communist Party and its survival comes first.

When things get tough, as we saw in Tiananmen Square, the People’s Liberation Army cracks heads. Information does not flow freely and, as Facebook, Google and earlier media companies have learned, you either play by their rules or you don’t do business. That’s the way it is.

Canadians have a tendency to discount our assets when dealing with China. As Paul Evans recounts in Engaging China, that we were “somewhat independent” and could play a middle power role in bringing China in from the cold were major factors in China’s decision to accept Pierre Trudeau’s invitation to open relations with Canada in 1971.

Legitimacy still matters for China, and closer relations with Canada gives it that. Try as it might, and it did try hard, especially in the later years, the government of Stephen Harper could never really come to terms with it.

The Trudeau government doesn’t have the anti-communist ideological baggage that confounded its predecessors. Instead, its progressive values – labour, environment, gender equality, Indigenous rights – bolster Canada’s position in the Western democratic pantheon. It is a strength, even if the Chinese don’t like it. Their first instinct will be to bully us into submission.

We need to stand up for our progressive values. But they also need pragmatic application if they are to have any effect. Finding that balance is an art, not a science. In his dealings with foreign leaders, Mr. Trudeau demonstrates a high degree of emotional intelligence. He will need it when dealing with China’s leadership.

The Trudeau trip to China moved the yardsticks. Maybe no China free-trade deal now, but all in all, not a bad haul – and the promise of more to come.

When dealing with the Chinese, strategic patience counts. The Chinese measure progress in centuries rather than days or months. Nor should we discount standing firm on our progressive values. The Chinese may not like it, but they respect conviction.

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China Trade Talks

 

In trade talks with China, Canada must have a negotiating position

COLIN ROBERTSON The Globe and Mail Wednesday, Aug. 03, 2016

With Prime Minister Justin Trudeau’s official visit to China a month away, Canadian policy toward the Middle Kingdom is under review. Closer relations will serve Canadian interests, mindful that when dealing with China, the game is long and often tortuous.

The Chinese want a free-trade deal and their objectives are clear: improved access to our energy and agri-food resources and a more relaxed regime for Chinese investment, especially state-owned enterprises.

But what are our objectives?

Recent studies – notably those by Wendy Dobson and Paul Evans, and Laura Dawson and Dan Ciuriak – point out the potential benefits of a free-trade agreement (FTA), and the Canadian business community has been mostly encouraging.

But now we need negotiating positions.

The Harper government’s complementarities studies are now four years old and there is little evidence the Track II dialogue around a maritime energy corridor made any progress. The Trudeau government ruminates about joining the China-inspired Asian Infrastructure Investment Bank but shouldn’t this fit into our larger strategy?

A good starting position should be the recently negotiated Trans-Pacific Partnership and the standards it sets for investment, intellectual property and services, as well as environment and labour.

Launching an FTA with China will startle American policymakers who take for granted the Canadian energy that underwrites their “energy independence.” Getting more of our oil and gas to Pacific tidewater will get us a better price as well as leverage in dealing with resurgent American protectionism.

Talks with China should encourage Japan to resume the nascent Canada-Japan economic partnership negotiations, set aside in favour of the Trans-Pacific Partnership. The TPP is now at risk of becoming a victim to U.S. protectionism.

The Chinese are tough negotiators. As a rising great power they confidently believe they hold the upper hand. They are skilled in playing off Western impatience. For China a tentative “deal” is often just the starting point for serious negotiations.

The Chinese are also masters at “hardball.” The recent public dressing-down of a Canadian journalist, by Chinese Foreign Minister Wang Yi, for her “prejudice” and “arrogance,” is right out of the Chinese playbook on forcing “foreign devils” to kowtow to them. During his 2009 visit to Beijing, Prime Minister Stephen Harper had to endure the public scolding of Premier Wen Jiabao for taking too long to visit China.

Recent Chinese behaviour – that of their Foreign Minister as well as their rejection of the recent international tribunal ruling on the South China Sea – deserves a response.

Prime Minister Trudeau can underline his credentials as a G7/20 leader by speaking before a Chinese audience to the responsibilities of all nations, including China, to the rules, norms and institutions of the liberal international order. Foreign Minister Stéphane Dion, blindsided by Wang Yi in Ottawa, should speak to Chinese students about human rights, press freedom and the rule of law.

Tougher, necessary and behind-closed-doors conversations should also be held around ongoing Chinese cyberespionage and cybertheft aimed at our institutions and on efforts to influence our elected officials. There should be a discussion of Hong Kong as well as the consular case of Kevin Garratt, the Canadian missionary indicted by China for espionage.

Much easier will be the discussions around enhancing our people-to-people ties.

The Harper government achieved “approved destination status” for Chinese travellers. They are now our third-largest tourist source. There are more than 100,000 Chinese students in Canada. Representing one-third of our foreign students, they inject over $2-billion annually into our economy. Recent Chinese immigration has also increased their numbers to over 500,000, the second-largest foreign-born group in Canada. These ever-expanding family ties are an advantage, especially given the overseas Chinese business networks.

Pierre Trudeau once remarked that “Canada has a ringside seat on the Pacific.” But our engagement has been episodic and lacking in sustained strategic direction. We were late, often reluctant, participants in the Trans-Pacific Partnership. Our investment in regional security is minimal. The people flow requires more effective marketing. It’s time to get into the ring, and China is the place to start.

In negotiating with China the Trudeau government needs to be disciplined, focused and patient. Nor should we ever forget that as negotiators the Chinese are more dragon than panda.

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