Trudeau’s visit to China won’t change a thing, certainly not for the better

HAVING RECENTLY WRAPPED UP a trip to China, did Prime Minister Justin Trudeau accomplish anything more than a few sightseeing photo ops? Probably not.

Certainly there was nothing of substance for the concerns Canadians – and much of the world – have about China, namely levelling the playing field on issues such as lax labour laws, environmental degradation, human rights abuses, espionage, currency rigging and colonization/territorial disputes.

Well, really, we’re concerned about the cheap crap they export here, much of it unsafe, while they attempt to acquire natural resources (and price people out of the real estate market in Vancouver and Toronto).

Most often, the profusion of Chinese crap is associated with the globalization movement that has stripped us of manufacturing jobs, a big deal in Ontario, once the heartland.

Hit by a tsunami of free trade deals, U.S. downturns, fluctuations in the dollar and poor governance (see, particularly, energy prices), the province’s manufacturers have shed more than 300,000 jobs in the past decade, down from a peak of 1.1 million jobs in 2004.

It’s been a similar story at the national level, and indeed across much of the Western world. There’s been much angst, but no solutions. Except for more trade deals and globalization, it seems.

Normally open to trade agreements, manufacturers grow sceptical where China is concerned, however.

With Trudeau in China last week, the president of the Canadian Manufacturers and Exporters, Jayson Myers, issued an open letter expressing concern that the Liberal government may move to recognize China as a market economy, a move that would make it harder to limit illegal Chinese imports into Canada.

According to the Canadian Steel Producers Association, granting China market economy status could cost Canada 60,000 manufacturing jobs, $9.1 billion in GDP and $1.2 billion in federal tax revenues.

Representing companies that employ some 1.7 million in the sector, the CME echoed many of the concerns that have been raised by critics of all stripes. They include major differences in environmental, labour and other fields of regulation; direct and deliberate government manipulation and influence in various Chinese industries including many sectors of manufacturing, such as controlling exchange rates, direct subsidization of firms, and ongoing manipulation of regulations that restrict foreign company access to the market; Chinese firms frequently ignore World Trade Organization rules related to dumping in foreign markets, including Canada; and China’s poor record in the area of protecting and enforcing intellectual property rights.

Perhaps most tellingly for manufacturers, they point out that Canadian exporters have limited access to the Chinese market when it comes to valueadded products. They want our resources, preferably firsthand, but not our finished goods.

All of this adds up to treading lightly where deals with China are concerned, says the CME’s Myers.

“As a result, there is significant concern across Canada’s manufacturing and exporting sector over the possible recognition of China as a market economy. It is our strong belief that Canada should maintain its stance that China is a non-market economy,” he writes in the open letter. “This stance does not preclude progress towards potential trade liberalization. In fact, we see proof that China is willing to liberalize access into its markets in a meaningful way for Canadian goods, services, and investment as a pre-condition for recognition as a market economy.”

Boiled down, China doesn’t play fair. Just as with every other foreign visitor, Trudeau’s stop there hasn’t changed that reality.

Manufacturers in this country have shed hundreds of thousands of jobs in the past decade. Everything from higher labour costs to red tape and a strong loonie have been blamed at times for the crisis. It’s cheaper to make goods in China or Mexico, so that’s where those intent on short-term gains go to do business.

The workers displaced by plant closures – offshore transplants or recession-invoked bankruptcy, it doesn’t matter – find themselves looking for work in a tough environment. Those lucky enough to find another job typically take a pay cut, reducing buying power and ultimately contributing to the overall economic malaise.

A Statistics Canada study shows that those Canadian workers displaced by closures and mass layoffs who find other jobs suffer an average decline of 25 per cent in earnings, implying a loss of about $10,000 a year for a typical manufacturing worker. Given the disappearance of one-quarter of a million manufacturing jobs, the total loss of Canadian earnings is now probably more than $3 billion annually.

In Ontario, which has seen about two-thirds of the country’s job losses, the hit taken by manufacturers worsened the impact of the Great Recession. While there has been a bit of a recovery since then, it’s been a jobless one.

That’s a fact conveniently overlooked by politicians desperate for any good news in the manufacturing sector. Sales may be up, for instance, but the number of employees has not increased, nor have Canadian manufacturers invested much of their proceeds into their businesses or the wider economy.

An Industry Canada report, made public last year by a request under the Access to Information Act, suggests some manufacturing jobs have disappeared permanently, with the job-

less recovery likely a longterm trend.

With the decline of manufacturing and resultant job losses, there’s a growing awareness that shipping jobs overseas has a downside that far outweighs the plethora of cheap goods at Wal-Mart and the dollar store, retail locations almost synonymous with Chinese products.

More than just junky plastic trinkets, however, offshore locations are making more complex and value-added products, not to mention taking on the service jobs that are supposed to be the salvation of our economy.

Stop buying Chinese products and maybe we’ll have some impact on the future of manufacturing in this country.

That’s easier said than done, of course. We’re happy with the low prices that come from China’s lack of labour, environmental and safety regulations, even if manufacturers and retailers aren’t passing on the full savings they enjoy by doing business there.

There’s no sign the status quo is going to change, at least not for the better.