Trade negotiations with China stall
Trudeau set to meet ‘paramount leader’ as goal to begin talks put on hold
BEIJING— Expectations that Canada was primed to launch formal free trade talks with China crashed on Monday, when Prime Minister Justin Trudeau came out of discussions with his Chinese counterpart pledging only to continue exploring the possibility of pursuing an accord.
Both leaders painted their dialogue as warm and productive, yet Trudeau and Premier Li Keqiang told reporters that the shared goal of beginning formal trade negotiations between Canada and the world’s second-largest economy was held up for the time being. Trudeau said that China is “very aware” it would be a substantial precedent to begin trade negotiations with a G7 country for the first time, but added that there was no single issue that kept the two sides from agreeing to launch discussions.
“We believe that, done properly, a trade agreement would benefit both countries, creating jobs, strengthening the middle class and growing our economies,” Trudeau said shortly after he finished his bilateral meeting with Li in Beijing’s opulent Great Hall of the People.
“We are both very much in agreement that we need to get this right and move forward at the proper pace,” Trudeau said.
While officials from the Prime Minister’s Office have billed the trip as an effort to set the stage for greater trade and investment ties with China, Trudeau’s visit comes at a time of heightened tensions in Asia, with North Korea and the United States posturing on the brink of war. Human rights campaigners in Canada have also called on Trudeau to press the Chinese leadership on at least three cases of Canadian citizens imprisoned in China — including an ethnic Uyghur man from Hamilton who has been jailed on terrorism charges since 2006.
The prime minister will have a chance to discuss these issues — as well as the lingering push for free trade — with China’s “paramount leader” Xi Jinping on Tuesday. Trudeau is scheduled to have dinner with Xi at the Diaoyutai State Guesthouse in Beijing for his second official tête-à-tête with the Chinese leader.
Diana Fu, a professor of Asian studies at the University of Toronto, said Xi has worked to consolidate his authority since he assumed the presidency in 2013, and is generally seen to be positioning himself in the pantheon of Communist party leaders that includes the modern country’s founder, Mao Zedong, and Deng Xiaoping, who is credited with kickstarting the economic reforms that spurred China’s massive growth in recent decades.
A hallmark of Xi’s rule has been his crackdown on corruption. Leading figures from the ruling Communist party and People’s Liberation Army have been arrested and even executed. He has also tried to stoke nationalist sentiments by placing the “great rejuvenation of the Chinese nation” at the heart of the government’s priorities, and — according to a leaked internal party document that was widely reported in 2013 — wants China to reject western notions of “constitutional democracy” and universal values as “perils” that could undermine “party discipline” in Chinese society.
“This is a leader who does not bow to western powers or to any powers,” said Fu, adding that this dynamic places Canada in a difficult position as it tries to set the parameters of possible trade talks.
Trudeau’s Liberals have emphasized their vision of “progressive” trade with China that would include agreements on gender rights, the environment and labour standards, and Fu suggested that differing ideologies in Beijing and Ottawa could stymie an agreement to launch formal talks.
“How do you negotiate with a country that officially rejects your political values?” she asked.
Yet, on Monday, Premier Li and Trudeau sounded sunny notes on the tenor of their discussions thus far. Li said during their meeting that China continues to push for “liberalized” global trade, while Trudeau called the talks “wonderful and fruitful” and said Canada is “deeply interested in further engagement and trade across the Pacific.”
Instead of a deal to launch free trade talks, Trudeau and Li inked three less comprehensive agreements. These included a pledge to expand trade in agriculture, a joint statement to co-operate on climate change and uphold the Paris Agreement to curb emissions and a memorandum of understanding for a joint learning initiative.
The Trudeau Liberals have made doubling trade with China a goal. Bilateral trade was worth $85 billion in 2016 — with Canada in a $43billion trade deficit — while there was $34.6 billion in two-way foreign direct investment.
Business groups representing some of Canada’s top export products to China, including mining and agriculture, said last week that one of the prime benefits of a trade agreement would be to create a sense of stability for Canadian firms and industries doing business in China.
Not everyone is keen on free trade with China, though. Groups such as the United Steelworkers union have voiced worry that fewer barriers to trade could allow China’s stateowned companies to flood the Canadian market and wipe out businesses with excess production of goods.
The question of trade with China adds to the list of potentially imperiled trade talks for Canada. U.S. President Donald Trump has repeatedly vowed to rip up the North American Free Trade Agreement, while talks on reviving a deal on the Trans Pacific Partnership — a trade agreement between 11 countries in Asia and the Americas, excluding China and the U.S. — faltered last month during a summit in Vietnam.