The promise and peril of a Chinese trade deal
China’s invitation for Canada to forge new trade bonds with it could not be more welcome or timely.
Once our closest and most trusted international friend, the United States led by Donald Trump is no longer reliable — or even that friendly.
Battered by the president’s tariffs on our steel and aluminum, threatened with new duties on the autos we make, and bullied through months of harrowing negotiations that served up a rehashed North American trade deal inferior to the one it replaced, Canada needs other trading partners who will treat us better.
No wonder it sounded like music to Canadian ears when Chinese Foreign Minister Wang Yi announced last week that his government is keen to “advance the establishment of a China-Canada free-trade zone.”
And no wonder Prime Minister Justin Trudeau said Ottawa will now turn its attention to trade talks with China. Who could resist so tantalizing an offer?
But whatever compelling reasons exist for opening trade negotiations with China, there are equally strong arguments for Ottawa to proceed cautiously and with its eyes wide open.
More trade? Yes. Free trade? Not yet.
To be sure, the potential gains from a free-trade zone with the world’s second biggest economy would be enormous.
Canadian exporters would have greater access to China’s 1.4 billion consumers. The decades-old goal of diversifying our export markets and decreasing our dependence on America — which currently buys three-quarters of what we sell abroad — could finally be realized.
Not only would that enrich us, it would make us more secure and truly sovereign. Take our wheat, fish and oil, we could happily say to the Chinese. And take that, we could say to Trump.
It’s true that Canada’s exports to China are just onefifteenth of what they are to the U.S. But the world is changing fast. America is unpredictable. China is on the rise and its growing ranks of middle class consumers want to buy much of what Canada can provide.
We should seize the opportunities China offers. Assuming of course we can avoid the serious pitfalls that have accompanied closer ties between China and other countries.
Let’s be frank. China is an authoritarian state that tramples human rights at home while freely trying to dictate to other nations that desire to benefit from its wealth. Its money comes with strings attached.
In Africa, journalists and human rights advocates have been silenced or strong-armed by governments trying to appease China — and keep its enormous investments flowing. Grateful for China’s cash infusions, Greece blocked a European Union statement to the United Nations that criticized China’s human rights abuses.
There are obvious security risks, too, that would follow a greater Chinese presence in Canada and greater Chinese access to our natural resources and technology. And it’s challenging the U.S. as not only the world’s pre-eminent economy but its greatest military power.
Fully aware of such security threats, the Trudeau government rightly stopped a state-owned Chinese firm from buying Canadian construction giant Aecon.
So yes, let’s talk to the Chinese. But let’s commit to defending Canada’s interests. That means that rather than aiming for an all-encompassing trade deal we should first establish specific sectoral trade agreements.
That more modest approach would also boost our exports to China without bringing us into conflict with the U.S. under the terms of the United States-MexicoCanada Agreement.