CHINA TRADE TALKS FALL FLAT
‘Don’t see eye to eye on some issues’
Only two years ago Canada’s trading future seemed assured. With NAFTA solidly in place, new free trade treaties with Europe and the Asia-Pacific region signed (though not yet ratified), and preliminary talks towards the same end under way with India, Japan and even China, Canada looked set to become one of a very few countries — and the only large one — with guaranteed access to all of the world’s major markets.
Today, much of this is in doubt. The European deal was successfully concluded, albeit after some late drama. But the attempted renegotiation of NAFTA is a hideous mess, and may well collapse utterly in the new year. Last month’s summit meeting of prospective members of the Trans Pacific Partnership ended in acrimony, with Canada widely blamed as the spoiler; furious at our intransigence, baffled by our strategy, even close allies like Australia and Japan are talking of pressing on without us.
And now the latest trade debacle, the extraordinary failure to secure the expected launch of formal negotiations on a free trade deal with China, notwithstanding the prime minister’s visit to the country for that purpose. It is unusual enough for a meeting of government leaders to fail: they are only held, as a rule, to put a seal on progress already achieved in lower-level talks. But twice, as they say, looks like carelessness. Or … something.
Not all of the disarray in Canadian trade policy is the Trudeau government’s fault. It was Donald Trump who insisted on reopening NAFTA, and whose preposterous demands are largely responsible for the impasse in the talks. Likewise, Trump’s withdrawal from the TPP, initially thought to have doomed the pact, has forced all of its member states to reconsider their bargaining position, withdrawing at least temporarily concessions made to secure American participation.
But after such repeated, indeed compounding setbacks — its overweening posture at the TPP may have been driven in part by a belief that its noticeable tilt to China was about to pay off — the government may wish to consider whether it is pursuing the optimal negotiating strategy. If there is a common thread, in particular, it seems to be the Liberals’ insistence that agreements on liberalized trade should also commit the signatories, disparate in outlook and development though they may be, to Liberal Party of Canada policies on labour, gender, Indigenous rights and climate change.
It is not clear what business these have in a trade deal, or why the economic interests of this country should be hostage to the project of imposing “progressive” values on other countries that are not even universally shared in our own. Certainly our negotiating partners have a right to be wary, for fine-sounding principles have a way of being turned to protectionist ends: seemingly even-handed environmental policies, for example, that just happen to hit other countries’ industries harder than our own.
Lest the Liberals be thought to be suffering only from an excess of idealism, their unconsummated lust for a free trade deal with China suggests otherwise. As much as it might push for some voguish language on gender or climate change to parade before its supporters, the government seems strangely unconcerned by some of China’s more obvious and longstanding sins: from its appalling human rights record, on which the government has been noticeably silent, to its frequent attempts to compromise Canada’s national security.
Far from rebuffing the Chinese government on these fronts, the Trudeauites seem positively eager to appease it. The infamous sale of Vancouver-based Norsat International to China’s Hytera Communications, for example, was given the green light, notwithstanding its sensitive military technology, without conditions being attached or even a proper security review. Neither has the government ruled out signing an extradition treaty with China — a proposal Australia, which signed its own free trade agreement with the Communist dictatorship in 2015, was persuaded to reject.
Well, which is it, I hear some readers say: is the government to be condemned for failing to secure a free trade deal with China, or for seeking one in the first place? Neither, necessarily. It depends, rather, on the terms. China is neither such an international pariah nor so insignificant a market that Canada can or should refuse to trade with it altogether: nothing much would be accomplished by it, at any rate, for if we don’t others will.
Certainly we can trade with it. The notion, now being put about by the Conservatives of all people, that trade between our two countries should be restricted on account of the low wages paid to Chinese workers is protectionism of the rankest kind. So far as China’s comparative advantage lies in low-wage, labour-intensive production, it is to our interest as much as China’s to import those goods from them, and to focus scarce productive resources in areas of our own greatest relative efficiency.
But if we are to trade with such an odious and adversarial regime, we can and should do so at least cost to our principles. Whether or not we should seek to impose Canadian labour and environmental policies on China, we should be vigilant against any attempt by China to impose its policies on us: by demanding that Chinese takeovers of Canadian firms be exempt from national security reviews, for instance, or by insisting Chinese nationals on our soil be delivered up to the mercies of the Communist legal system.
It is a question, in other words, of properly identifying our objectives: moral, economic and otherwise. The chance of a free trade deal — with China, the U.S. or anyone — ought not to be jeopardized for the sake of showy appeals to the Liberal base. But neither should bedrock Canadian interests and values be sacrificed, as a previous prime minister once put it, on the altar of “the almighty dollar.”