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Prime Minister Mark Carney meets with President of China Xi Jinping at the Great Hall of the People in Beijing on Friday.Sean Kilpatrick/Reuters
Well, that got their attention. Since the Prime Minister’s visit to China, the American media – and social media – have been filled with expressions of shock and amazement.
For critics of Donald Trump, it was payback for his bullying and abusive treatment of America’s nearest neighbour and historic ally. For the President’s supporters, it was a sign of Canadian perfidy, if not grounds for invasion. Canada will “surely regret” gives you the flavour of it.
But all agreed it was a seismic shift. Canada had “aligned” itself with China against the United States. It had “cozied up” to the Communist dictatorship. In the wilder imaginings, it had “invited China into our neighbourhood,” as if there were now Chinese troops stationed along the U.S. border.
Even Canadian critics got in on the game. Why, just last spring the Prime Minister had described China as the most significant foreign threat to Canada’s national security. And now he was signing trade deals with them? What could possibly account for this about-face?
Canada reaches tariff deal with China on electric vehicles, canola
What in fact did the two countries agree to, in substance? In trade terms, it is largely restricted to two areas: agricultural products and electric vehicles. Canada “expects” China to lower tariffs on canola seeds, from 84 per cent to 15 per cent. It also “expects” relief from Chinese tariffs on canola meal, lobster, crabs and peas, at least for the remainder of this year. And it “expects” a resumption of Canadian exports in beef, pet food, and certain other products.
In return Canada agrees to admit up to 49,000 Chinese electric vehicles a year – less than three per cent of the Canadian auto market – at a most-favoured nation tariff of 6.1 per cent. There’s talk of future Chinese investment in the Canadian auto industry, but nothing binding or explicit.
There’s also some very minor stuff about steel and aluminum. And there are some non-binding “memorandums of understanding” on things like food safety, cultural exchanges, “modern wood construction,” and fighting crime. The rest is a lot of “process architecture” – talks about talks, committees to discuss committees.
Thus there’s a commitment to “reinvigorate the high-level Canada-China Economic and Financial Strategic Dialogue,” not to mention “a renewed Canada-China Joint Economic and Trade Commission,” a “Ministerial Energy Dialogue,” and of course “the Third Agreement to Extend and Amend the Chinese Yuan/Canadian Dollar Bilateral Currency Swap Arrangement.”
And that, besides some ritual nods to the United Nations, the World Trade Organization, and the like, is about it. No sweeping tariff reduction, no extension from goods into services, no dispute resolution mechanism, none of the stuff of real trade agreements, let alone historic realignments.
Opinion: It’s clear Carney is now dealing with the world ‘as it is’
Don’t get me wrong. Like the former Canadian diplomat – and Chinese hostage – Michael Kovrig, I could have done without the smiley photo shoot between the Prime Minister and Chinese President Xi Jinping. The reference to a “new world order” was likewise probably ill-advised, though the same phrase has been used by everyone from George Bush the Elder to Tony Blair.
And the risks of engaging China even this far are real. The Chinese regime has not changed: it remains as vile in its treatment of its own people and as aggressive in its designs on its neighbours as before. It has a long history of cultivating dependence on its trade and capital, then using this as a lever to force compliance with its foreign policy – as Mr. Trump is trying to do now.
Therein lies both the opportunity and the danger in the Prime Minister’s “strategic partnership” with China. In seeking to lessen our dependence on the United States, Canada must guard against becoming too dependent on China.
Okay, then: how exposed are we after this agreement? Exports to China currently amount to $30-billion annually, or less than 4 per cent of all Canadian exports. A government background paper sets an “ambitious new goal” of increasing exports to China by 50 per cent by 2030. But exports would be expected to rise anyway, in line with growth in the Chinese economy: by about 25 to 35 per cent, on current trends. And Canada has similar ambitions of expanding trade with other, non-U.S. countries.
So the total impact, in trade terms, of this great pivot/tilt/reset might be to increase China’s share of Canadian exports over five years from a little under 4 per cent to maybe 5 per cent. That’s not nothing. It’s symbolically important. It shows we have options. As part of a larger project of diversifying our trade, it’s probably worth doing.
But a sellout of Canadian interests? A surrender to dictatorship? Even a return to the status quo, pre-2018? Come on.
