Ex-diplomat says time is ripe to ink trade deal
THE TIME IS NOW FOR CANADA, SAYS FORMER AMBASSADOR
As Ottawa’s former ambassador to China, Guy SaintJacques held no illusions about the authoritarian nature of the regime with which he was dealing.
But he says the time is now right to launch free trade talks with the Communist government. And he predicts a deal can be reached successfully within three years, much quicker than the decade it took the Australians to conclude an agreement.
“I am reasonably optimistic. In my view, we don’t have much choice,” the now retired career diplomat said.
He first served in China in the 1980s and ’90s, when Canada played a much more prominent role in the country’s affairs, helping establish its dairy and pork industries.
“There is still a lot of goodwill, but we have been standing still and other countries have been quicker to exploit opportunities.”
There is reluctance, bordering on revulsion, in some quarters at doing more business with the Chinese, particularly among Conservatives.
François-Philippe Champagne, the trade minister, defended the Liberals’ diversification strategy during a refuelling stop in Alaska late Saturday, part of the federal entourage heading to China. He said Canada has to be more present in the growing Asia-Pacific region.
“Canadians expect us to engage in a responsible fashion. But we are doing it on our timetable — and with our eyes wide open,” he said.
The point apparently ignored by the critics is that we are already doing business with China — merchandise exports rose to $21 billion last year from $2.4 billion in 1997.
Justin Trudeau arrived in Beijing last night to see if that business can be done more cheaply and easily — for example, by eliminating the 35 per cent tariff on blueberries the Chinese covet — without making concessions that would cost jobs at home.
In the summer of 2012, Stephen Harper arrived at the same decision point on whether to launch formal free trade talks. A complementarities study had suggested the two countries’ economies would mesh well together. An announcement on free trade negotiations was imminent when the sale of oil producer Calgary-based Nexen to a Chinese state-owned enterprise raised the domestic political stakes and the moment was lost.
Saint-Jacques said the Chinese remain more keen to strike a deal than Canada.
“They are standing at the altar, but they won’t wait forever if we don’t negotiate after four rounds of exploratory talks.”
The former ambassador said doing business in China remains difficult — knowledge hard won from the experience of rescuing Canadian companies that found themselves in trouble.
Xi Jinping’s comments at the Communist Party conference in October have signalled that political liberalism is further away than ever — there will be more controls and more censorship. A new social grading system is planned, in which critics will find their ability to travel or be promoted curtailed — a system that has been called “digital Leninism.”
But Saint-Jacques says Xi’s plans may create opportunities for Canada.
He said when Trudeau visited China last year, the Prime Minister said he would not agree to free trade negotiations unless they included chapters on the environment, labour rights, state-owned enterprises and public procurement. Much to the ambassador’s surprise, the Chinese agreed. He said he believes Xi wants to strike a deal with a G7 country — having signed agreements with third-tier countries like Australia, Chile and Switzerland — then use it as a template for negotiations with even larger blocs.
Saint-Jacques speculated that a labour rights chapter may even help Xi transform the economy to one more focused on services and consumption than on cheap manufactured goods.
If Trudeau can prise open sectors like public procurement or oil and gas that have been closed to Canadian companies, the Chinese market might fulfil the promise it has long held.
“In my view, the time is right,” said Saint-Jacques.
There are perils in negotiating with a much larger partner — particularly one with intent on reclaiming what it considers its rightful place in the centre of the world stage.
The Canadian negotiators must have a clear mandate to protect sovereignty. The Australians allowed the Chinese to buy large farms and there has been an influx of foreign students and workers. But tough bargaining can win concessions.
The Australians managed to impose a condition that foreign workers imported to work on Chinese infrastructure projects must be paid a comparable local rate.
“I suspect this will be very controversial,” said SaintJacques.
The veteran China hand said there was an element of naivete in the Canadian belief that economic reform in China would lead to more political pluralism. “We have to be realistic — it hasn’t.”
But even within the limitations of Communist rule, he said Canada can help bind China to a rules-based system.
Trudeau has instituted annual leaders’ meetings, while a group of senior bureaucrats from both sides meets regularly to discuss national security and rule of law — the latter included at Canadian insistence. Saint-Jacques said this venue has been used to raise sensitive consular cases.
“It allows us to go sideways at questions on human rights,” he said. “At least if we can intervene at the margin, it allows us to call for better administrative justice and tell
IT ALLOWS US TO GO SIDEWAYS AT QUESTIONS ON HUMAN RIGHTS.
them we expect them to implement their law and constitution in a fair manner. It helps that we are not perceived as a threat.”
Much of this has been dismissed by those such as my colleague Terry Glavin, who believe we should have no truck with this “monstrous gangster state.”
But the world is as it is — not as we might wish it to be.
The Economist concluded a recent article on Xi, saying: “The world does not want an isolationist United States or a dictatorship in China. Alas it may get both.”
It’s a reminder that a middle power such as Canada doesn’t get to choose how its trading partners behave — the best it can do is try to persuade them to play by the rules.