Another Trudeau goes to China

PET in ChinaJT w Pandas

Canada’s Prime Minister Trudeau is off to China for the G20 meetings and bilateral meetings with Chinese leadership.  There is always great expectation around such meetings and lots of analysis.  Issues of trade and human rights will likely dominate the discussions with the Chinese.  And there are plenty of ways to trip up.  But finding ways to work with China is important for Canada.

The following piece, published today in the Globe and Mail and written by Mr. Derek Burney and Mr. Fen Hampson is an excellent overview of the stakes

(Derek Burney was Canada’s ambassador to the United States from 1989-93. Fen Osler Hampson is a distinguished fellow and director of global security at the Centre for International Governance Innovation and chancellor’s professor at Carleton University.

Why Canada needs a deeper relationship with China

Before meeting President Xi Jinping next weekend at the G20 Summit in Hangzhou, Prime Minister Justin Trudeau needs to reflect carefully on what his government’s strategic approach to China will be, not least because, in many ways, the 21st century is rapidly becoming the China Century.

By some comparisons, notably purchasing power, China is already the world’s biggest economy; the largest market for vehicles, oil and smartphones. While China’s annual GDP growth has dropped below double digits, at around 6 per cent to 7 per cent, it is still more than twice that of Western economies, or Canada’s paltry 1.4 per cent.
It is not just on economic growth where the new weight of China is being felt globally. Whether it’s territorial disputes in the South China Sea, or broader geopolitical issues, China’s swagger under Mr. Xi marks a new global assertiveness, which is souring relations with its neighbours, and with the United States. Whatever the outcome in the U.S. presidential election on Nov. 8, don’t expect relations to get any better.
Earlier hopes that globalization would generate greater common interest between China and the West have evaporated. Instead, the prospect for greater tension, if not outright confrontation, is rising, threatening global stability.

The shift in manufacturing jobs due to fierce Chinese competition is igniting calls for protectionism from both Donald Trump and Hillary Clinton, and also among nationalist parties in Europe. Americans prefer winning to losing, but much of their sunny optimism has disappeared as the U.S. economy sputters and middle-class living standards decline. “Make America Great Again” may be the best slogan of the 2016 campaign, but the prospect of that happening is as slim as Mr. Trump’s chances of winning. His diagnosis of what ails his country has some validity, but his prescriptions are flawed. Meanwhile, both candidates press the protectionist refrain and China is in the bull’s eye.

As well, many of the problems U.S. President Barack Obama has struggled with will not go away, including the fight against terrorism, growing instability in the Middle East and Afghanistan, and the imperialist ambitions of both Russia and China. The risk of an accidental clash between Chinese and U.S. navies grows daily.
When Mr. Trudeau meets with his Chinese counterpart he will have to weigh carefully the shifts under way globally, and the extraordinary manner in which China is moving to centre stage on both the global economic and security fronts. The China of today is not the China of Mr. Trudeau’s father, when the country was weak and looking to make new friends.

Justin Trudeau will certainly need to consider more than rhetorical flourishes on trade or soothing words on the burgeoning dispute over canola exports. Canada must lay solid foundations for much deeper engagement. Asia’s dragon will require much defter handling than the elephant on our southern border. As China-U.S. relations become more fractious, Canada will need to be nimbler. We have a tempering diplomatic and military role to play in Asian security, as our Asian friends constantly remind us.

With rising protectionism in the United States, Canada needs to pivot and assign a much higher priority to China. (Having a second market for our energy exports would deliver additional benefits in terms of price alone.) We can no longer afford to be a straggler or a bystander. Now is the time to engage China seriously and advance Canada’s national interests.

To do so, we will need a comprehensive strategy, one that reaches beyond smiles and symbolism, strikes a responsible balance between opportunity and concerns, including on human rights, and reflects a clear analysis of mutual interest along with a compelling message for Canadians.

There are plenty of ways that the PM can be tripped up on this file.  Irritants like new Chinese standards on Canadian canola exports; Canada’s investment regime that Chinese saw as targeting their interest in Canada.  The emotional issue of human rights.  But by keeping expectations low and leveraging the goodwill towards the Trudeau name and Canada in general in China, the visit will hopefully be a good step forward.

For a good overview of the visit The Globe and Mail had a good feature entitled Eastern Promises



Canada will sign TPP trade deal Feb. 4, but ratification not certain – Politics – CBC News

This is encouraging.  A Canadian signature on the TPP agreement is important at this stage.

The federal government has confirmed it intends to sign the controversial Trans-Pacific Partnership trade deal at a meeting next week in New Zealand. But International Trade Minister Chrystia Freeland said Monday signing the treaty doesn’t necessarily mean Canada will ratify it.

Source: Canada will sign TPP trade deal Feb. 4, but ratification not certain – Politics – CBC News

Due diligence or…just looking for an excuse?

Negotiations to conclude the Trans Pacific Partnership (TPP) Trade Agreement wrapped up on October 5, 2015.  Given that this was in the middle of the Canadian election campaign I suppose it is not a big surprise that the TPP has gained somewhat of a more of a partisan political profile than perhaps otherwise would have been the case.

But at first glance, it is a bit hard to understand.  The Canada Europe Trade Agreement (CETA), the other big trade agreement of the Conservative era, has broad support, including from the Liberal government.  And while they were always a bit wishy washy on the subject, during the election campaign the Trudeau Liberals said they were open to international trade.


Indeed, the new Liberal Trade Minister, Chrystia Freeland, has written on the subject and suggests that trade is key to prosperity to the middle class.  The extract below is from a recent Globe and Mail story.

In 2012, just one year before she entered politics, Freeland published a book that looked at the gap between the world’s richest and poorest people, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. When she was first elected as an MP in a 2013 by-election in a Toronto riding, she made the battle against income inequality and the hollowing out of the middle-class her cause célèbre.

Those positions may underpin her tenure in the trade portfolio. She has argued that free trade is a necessary step to improving middle class prosperity in Canada.

“Canada is a small country. The world economy is huge. And if we want our middle class to be prosperous — which is the core of our agenda — having trade deals with the world is absolutely essential,” she said in August 2014.

And earlier this year, writing in this newspaper, she warned that “anti-globalization and opposition to trade” are the wrong policy responses to helping the middle class.

(Globe and Mail, November 4, 2015. Drew Hasselback)

So you would think that with this kind of perspective, Minister Freeland’s position on the TPP would be clear.  However, it is not… and as a result there is a distinct lack of clarity about what the Liberal Government will do with the TPP.

Start with the instructions from the top.  The “mandate letter” given to Minister Freeland by Prime Minister Trudeau instructs her as follows:

“…Develop strategies to implement the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and consult on Canada’s potential participation in the Trans-Pacific Partnership (TPP)… (emphasis added)

(Mandate letter to the Minister of International Trade)

With these instructions in hand she has dutifully quietly launched “consultations with Canadians” on the TPP which, it must be said, seem to ignore, or at least duplicate, the wide ranging consultations that her department did before and during the negotiations.  And she seems to be taking a tabula rasa approach when back in December she said that it was “not my job right now to persuade anybody TPP is good”.

At times she even leaves the impression that she doesn’t accept certain aspects of the agreement.  Finally stating that while she understands that the TPP negotiations cannot be reopened for anything the Liberal government might want to change, she has allowed it to be mooted that Canada should/could/might seek some additional “side agreements” to clarify Canada’s approach to some issues (she has been silent on what areas these might be and it is not clear any of our international partners would take us up on the idea at this stage).

The Minister has also indicated that the government may even hold Parliamentary Hearings on the TPP in the spring to continue the consultation process.

It is hard to explain the hesitation, particularly when the government has set in motion the machinery to try to get the CETA implemented.

She has lots of support to get on with it. The Canadian business community, the group that would typically be seen as a Trade Minister’s principle constituency, is solidly behind the deal. They have been quietly recently, but their press release in the fall was unequivocal:

Canadian companies depend on trade to expand their markets, create jobs and bring consumers more choice and better prices, which is why Canada has always been at the forefront of global trade cooperation. The TPP is the most important agreement of its kind in over 20 years and would position Canadian companies to compete on a level playing field in the world’s fastest growing region for generations to come.

We strongly believe that a high standard and comprehensive TPP covering 800 million people and 40 per cent of the world economy will open new opportunities for Canadians. It will also build on the hard-fought advantages Canada has secured in past trade agreements with the United States, Mexico and Europe

(Canadian Manufacturers and Exporters Press Release: October 1, 2015)

The views of organized labour and some civil society groups are against the agreement.  These views must certainly be heard and considered by any government.  However, having had essentially the same position on all of Canada’s previous trade agreements and demonstrating a “Chicken Little” track record in this area, they cannot be considered determinative.

There are a couple of other explanations that might help explain Minister Freeland’s reluctance to move too quickly on this file.

In order to take effect the TPP must be ratified by signatories’ individual parliaments.  It must be approved by six countries, as a minimum, and these countries must represent a minimum of 60 per cent of the GDP of the 12 members.  In effect, that means that either Japan or the US must sign before it can come into force.  With the US election season upon us, it may be some time (perhaps the lame duck session in the fall?) before we know how they will dispose of the TPP.  It is never smart to get too far out in front of the US on anything, particularly trade.  The Minister may simply be wise to keep Canada’s final decision to herself for now.

Less charitably, however, it may also be that Minister Freeland, like her Prime Minister and some of her other colleagues, is not yet in governance mode.  There have been other examples where the members of the new Liberal government seem to prefer the easier work of photo ops, selfies and glad-handing to actually taking a position on difficult issues. Particularly on an issue that has their political opponent’s fingerprints all over it…perhaps it is easier to be in election mode.

While the Minister consults, the TPP process continues to move forward. Questions are now being asked whether Canada will participate in a possible TPP event upcoming in New Zealand which, it is reported, will see a number of countries “sign” the agreement.  Signature is a long way from ratification, but you can’t ratify if you haven’t signed.  The Minister did nothing to clarify Canada’s position when she has stated that

“Canada is a long way from signing the agreement and no decision has been made as to attendance at the New Zealand meeting.

(CBC News website, January 14, 2016)

While it is not clear how many countries will be ready to sign at this time, the fact that Canada is still consulting and may not show up to the meeting if it takes place, means that new questions and doubts will be raised about Canadian intentions.  This cannot be reassuring to either the Canadian international business community or to our international partners.

The Minister has had opportunities recently to meet with a number of her colleagues from other TPP countries.  It is hard to imagine the subject of Canada’s next steps not coming up.  But there has been no additional clarity provided.  For now, we have to take the Minister at her word… that she is engaged in a legitimate consultation… and we must wait on that process to run its course.

Except that I would have expected more from such a knowledgeable individual who, by her writing, has demonstrated she well understands the importance of international trade to Canada.

‘Real coup’ for Canadian wineries buried in TPP deal will combat ice wine counterfeits overseas | Financial Post

It is not often that one story touches on two of my passions…Canadian wine…and international trade policy.  This is one of the many reasons that the Government of Canada needs to ensure ratification of the Trans Pacific Partnership trade agreement.  It became a hot potato during the last election campaign, but with the need for rhetoric past, our new Canadian Ministers should be paying attention to stories like this.


Ice wine is in many ways the origins of the Canadian wine industry. New protections in global trade deals show how the industry and its candied vintages have come of age

Source: ‘Real coup’ for Canadian wineries buried in TPP deal will combat ice wine counterfeits overseas | Financial Post