National Post (National Edition)
FINANCIAL POST
‘Restated that we are partners and friends’
OTTAWA • Canada is trying to patch up frayed relations with the Japanese government after holding out on signing a major Pacific Rim trade deal championed by Prime Minister Shinzo Abe.
Tensions flared between the two countries after Canada effectively blocked progress on a deal to salvage the Trans Pacific Partnership, an 11-nation trade deal anchored by Japan after U.S. President Donald Trump quit the pact. Canada continues to push for revisions that leave the deal, created in part as a check on China’s economic clout, in limbo — days before Canadian Prime Minister Justin Trudeau heads to China himself.
Trade Minister FrançoisPhilippe Champagne said he discussed the issue with Japan’s ambassador to Canada in a meeting in Ottawa on Tuesday. “We cleared a lot of the issues and restated we are partners and friends in many things, and have made progress toward trade in the Asia-Pacific region,” he said in an interview Wednesday. “And I think this is understood now by both sides.”
John Manley, the head of a major Canadian business group who traveled to Japan this month for meetings with government and business leaders, urged Trudeau to call Abe before he heads to China.
Manley is a former foreign affairs minister and deputy prime minister in a Liberal government, the party Trudeau now leads.
“Before landing in Beijing, it’d be wise for him to call Mr. Abe,” Manley, president of the Business Council of Canada representing chief executives, said in a phone interview after his trip to Japan. “The concerns are at the top of the house in Japan.”
Canada ruffled feathers when it balked at an agreement to save the TPP, since rebranded as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), after the U.S. abandoned it.
Japan took the unusual step of issuing a second statement after Abe met Trudeau in Vietnam earlier this month, specifying that a planned TPP summit had been postponed because the Canadian leader had said he was not ready to endorse an outline agreement reached at ministerial level. Japanese media have since mused about proceeding without Canada.
In a speech Thursday, Champagne said changes made so far to the deal include stronger labour and environment provisions, each subject to dispute settlement procedures.
“Our government has recently made some real progress towards what is now an emerging and potentially more lucrative and more viable agreement for Canadians to access this market,” he said Thursday at the Toronto Region Board of Trade. He gave little indication of if Trudeau will open trade talks in China. “We have been clear from the start with our Chinese friends, throughout exploratory talks, that should we move forward, this will take time.”
Canada is pressing in part for changes to cultural rules, while Champagne said the auto sector has been another topic of discussion. Manley said that Canadian business wants the trade deal implemented.
“The consensus of people who are interested in it is ‘get it done’ — both for the business opportunity and the important message that completing TPP will send,” he said. It will show that the world’s multilateral trading system is alive and well despite Trump’s exit, he said.
Trudeau announced this week he’ll travel from Dec. 3 to Dec. 7 to China. The TPP was once seen as a hallmark of U.S. engagement in Asia and a buffer against Chinese clout.
Then-Defense Secretary Ash Carter called it more strategically important than having another aircraft carrier battle group in the Pacific.
The trade deal is “an opportunity to have an economic zone in Asia where all of the rules aren’t made by China,” Manley said, adding that Canada’s stance on the CPTPP has confused other nations. “In Japan, they were very explicit that they didn’t understand what Canada was intending. And the Australians told my office the same thing, that they didn’t know what Canada’s intention was.”
Dan Ciuriak, a trade consultant and senior fellow at the Centre for International Governance Innovation, said the U.S. withdrawal from TPP allows Canada to be more aggressive in negotiations. “Canada joined TPP late, and basically was given a fait accomplis,” he said. “The deal that was on paper was basically less favourable to Canada than they would have normally wanted or offered.”
Champagne said Canada continues to participate in talks toward reaching a deal to save the CPTPP. Mexico and Malaysia also each have outstanding issues with the TPP, he said.
“There was a misunderstanding about expectations, mostly regarding timing,” he said. “As you know, trade is tough.”