A step back on trade

It may take some time to figure out exactly why things went sideways for Prime Minister Justin Trudeau in China this week.

But this much is clear: He went all the way to Beijing holding out the promise that Canada and China would open talks toward a full-scale trade agreement.

But unless he pulls a last-minute rabbit out of his hat, he’ll be flying home pretty much empty-handed. No formal trade talks; just an agreement to keep talking about talking.

Does it matter? On one level, not really. Negotiating with the Chinese, especially now that they’re flexing their muscles on the world stage, will be fraught. There’s a persuasive school of thought that says Canada is better off going slow and avoiding giving up too much to China.

And in the real world, working out a deal with China would “take years,” as Trudeau himself acknowledged in Beijing. In the meantime, two-way trade continues apace under the rules of the World Trade Organization. That won’t change.

But all this does matter in a couple of important ways.

First, it doesn’t say much good about Canada’s ability to deal with a country that is very much on the rise, filling the power gap being vacated by the United States under Donald Trump. Not for nothing did The Economist magazine recently label President Xi Jinping as “the world’s most powerful man.”

The key thing in such visits is that there’s no point in the prime minister travelling half way around the world unless he can count on getting something concrete to show for it. Apparently, according to various reports, the Canadian side thought the Chinese were on board with Trudeau’s idea of beginning formal talks toward an ambitious deal that would include “progressive” chapters on labour, the environment and women.

But once he got into a one-on-one meeting with Premier Li Keqiang, the agreement he thought was in his hand melted away. The leaders could only agree to keep on with preliminary discussions. Having come all that way, Trudeau looked, frankly, foolish.

There were also some odd slip-ups, according to reporting in the National Post. A Canadian pool cameraman was “manhandled”; the prime minister’s official photographer was barred from a photo session; the Chinese suddenly cancelled a joint news conference by Trudeau and Li.

Small things, perhaps, but nothing in such meetings happens by accident. Last year the Chinese “forgot” to roll stairs up to Air Force One when Barack Obama landed there for his last visit as president, forcing him to forgo the usual red-carpet arrival. Few doubted it was Beijing’s way of sending a blunt message to Obama: you don’t matter anymore.

Were the Chinese trying to send a message to Trudeau by allowing him to come all the way to Beijing and then fail to produce what he had expected and promised? We can’t know at this point, and it’s not at all clear why they would want to do so.

But the reality is that unless there’s a last-minute deal (not unthinkable, given that Trade Minister François-Philippe Champagne stayed behind in Beijing to continue work on that even as Trudeau left the capital), all this will certainly undermine the prime minister among those who focus on trade issues.

Most importantly, it won’t impress the Trump administration’s negotiators who are holding Canada’s feet to the fire on the North American Free Trade Agreement.

Aquick move by Canada to open trade talks with China would, in the straightforward words of a Wall Street Journal report, “signal to the U.S. that Ottawa has other trading options should NAFTA collapse.” The failure to get that done will send quite another signal at a time when the U.S is ratcheting up pressure on Canada.

Bottom line: There’s no big rush to reach a deal on trade and investment with China. But going down that path and then having the carpet pulled out from under you is worse than nothing at all. It’s a setback that risks costing Canada in areas where the stakes for this country are much bigger.

The failure to start trade talks with China will send a bad signal at a time when the U.S. is ratcheting up the pressure on Canada