Free trade with China to be decided this fall
Move would tell U.S. Canada has choices: experts
OTTAWA • While all eyes are on NAFTA, Canada is trying to move quickly on trade in the Asia-Pacific region, with decisions on a China free trade agreement and an updated TPP coming this fall.
Diversifying trade with market access in Asia would offer major opportunities to Canadian business, say experts, and send a signal to the United States that while the North American Free Trade Agreement is important, Canadian exports can go elsewhere.
“The world is rushing and has been rushing to China’s door since China’s own economic miracle began about 15 years ago, and we need to have a foot clearly in that door,” former Conservative trade minister Stockwell Day told the Post. “To not be dealing with the fastest-growing economy in the world, in terms of sheer volume, would just be folly.”
Day added dealing with China sends a signal to the U.S. that Canada is not “captive” to its market.
“It reinforces in their minds the fact that Canada has alternatives.”
“The reality of the world is China is unavoidable. China’s part of our life whether we like it or not,” said former Quebec premier Jean Charest, who helped get the European Union on board with trade negotiations. He noted the president of Mexico also recently expressed interest in a trade deal with China.
“I think the Chinese are probably more interested in Canada than they were before the election of the Trump administration, because we are a counterpoint to the Trump administration,” Charest told the Post.
“We make the point to them, and to the world, that China has the ability to get along and work with developed countries.”
Charest said he thinks the relationship should be intensified but Canada might not be quite ready for a fullfledged free trade agreement. “I think (the government is) right to be cautious. They obviously are sensitive to public opinion in Canada, and public opinion is fickle on this issue,” he said.
Not everyone is keen on China. Conservative Party leader Andrew Scheer has publicly nixed the idea, and polling shows Canadians have mixed views.
An Asia Pacific Foundation poll in late March found 55 per cent of Canadians support a deal, 36 per cent oppose and nine per cent don’t know. By contrast, an Angus Reid Institute poll released Thursday finds 29 per cent support, 31 per cent oppose and a full 40 per cent don’t know. The polls were both taken online, with margins of error of 2.4 and 2.5 per cent respectively.
If Canada launched trade negotiations with China it would be the first G7 country to do so. This might give Canadians a better deal, said Yves Tiberghien, director emeritus of the University of British Columbia’s Institute of Asian Research and a senior fellow with the Asia Pacific Foundation.
“The worst situation is to be a late mover,” he said. “We lose out eventually.”
Tiberghien predicted others may soon line up: the United Kingdom, for example, will be looking for big trade partners after its exit from the European Union.
According to a Canadian government official familiar with the matter, formal exploratory talks with China wrapped up in July. Officials are crunching numbers and are expected provide analysis to trade minister François-Philippe Champagne before the end of the month.
Cabinet could be discussing a decision by October, and Champagne could be on his way to China in December if there’s a green light, the official said.
A trade deal with China is not the only iron in the fire.
A trans-Pacific Partnership sans Trump is shaping up in earnest, spearheaded by Japan and Canada. Officials are expecting a road map for an agreement will come alongside an AsiaPacific Economic Cooperation summit in November. The expectation is this would take months, not years, said the official.
Canada is also nearing the conclusion of a foreign investment protection agreement with India.
WE NEED TO HAVE A FOOT CLEARLY IN (CHINA’S) DOOR.
Prime Minister Justin Trudeau is greeted by Chinese President Xi Jinping at the G20 summit in 2016.