Monday could have been a turning point in China-Canada relations. Instead, it was a false start.
Prime Minister Justin Trudeau’s latest trip to China was preceded by a slew of signals the countries would launch free-trade talks. Canadian lawmakers said flatly that was the goal; exploratory talks had just wrapped; Canada released a public consultation teeing things up; and Trudeau’s trade chief, Francois-Philippe Champagne, spoke about the allure of the Chinese market—while also warning no decision had been made.
Then came Monday, the first day of Trudeau’s state visit. A scheduled news conference with Premier Li Keqiang was scrapped as China and Canada bickered over the format of the event.
Chinese officials blocked Canadian media. When Li and Trudeau finally emerged, they gave statements, announced smaller agreements and didn’t launch talks.
It’s a setback for Trudeau as he advances a “progressive” trade agenda that emphasizes matters like the environment, labor and gender as an antidote to populist backlash. He is finding it’s a tough sell, as China tends to prefer pared-down trade deals that skirt such issues.
Canada angered Japan last month by balking at a deal to salvage the Trans Pacific Partnership (TPP), and is pressing to add similar elements to the North American Free Trade Agreement (Nafta), which United States President Donald J. Trump has threatened to quit.
This time around, it’s unclear which nation balked. Trudeau said neither wanted to launch anything they couldn’t finish.
Canada will only proceed in talks if it has “confidence that what we start, we’re going to be able to complete,” Trudeau told reporters late on Monday in a Beijing hotel, after his meeting with Li.
He said Canada was “committed” to its progressive trade agenda, and that China considered the issue a precedent case, while downplaying what the sticking point was. “There wasn’t one specific issue.”
The two countries had been in talks through Monday on whether to launch full negotiations but didn’t reach an agreement, a Canadian government official said, speaking on condition of they not be identified. Talks are ongoing and full negotiations could still be launched before Trudeau’s trip concludes on Thursday, the official said. Trudeau’s team “is trying to thread the communications needle on trade for domestic audiences and is confusing our trading partners,” Mark Warner, a Toronto-based trade lawyer with Maaw Law, said by e-mail.
‘The objective’
Canadian officials had hedged their bets in the days before Trudeau’s departure. Champagne said they had “yet to make a decision,” though Innovation Minister Navdeep Bains told Global TV last Sunday that launching formal talks was “the objective.” Both ministers are accompanying Trudeau to China.
“Should we enter into negotiations with China, the government will secure a deal in the best interest of Canadians,” Champagne said on Monday in a written statement released by his spokesman.
Plans changed several times on Monday at the Great Hall of the People. Chinese officials tried to block access by Canadian journalists, who were initially told the leaders would take questions before Trudeau’s aides told them that would no longer be the case as the countries haggled over the format. The two leaders eventually emerged and spoke.
They agreed on the need to “uphold global trade liberalization” and would continue exploratory talks and “feasibility studies” on a full free-trade agreement (FTA), Li said. “China is open to such talks,” he said, adding: “It is only natural that we don’t see eye-to-eye on some issues.”
David Mulroney, a former Canadian ambassador to China, said the Chinese were probably very surprised.
“I think this was a loss of face for the Chinese premier,” he said in an interview with the Canadian Broadcasting Corp. aired on Monday.
“It is surprising that we got this far and came out with so little,” Mulroney said. “As long as the prime minister’s in Beijing, there’s a chance a rabbit could be pulled out of the hat, although I think it’s unlikely.”
What now?
It was a puzzling development for Trudeau, who is the first Canadian prime minister to visit China in back-to-back years. A separate government official, speaking on condition of anonymity, said it wasn’t Canada’s demands for “progressive” elements that were holding up FTA talks. Instead, the countries wanted to be sure they could finish any talks that they started, the official said.
The path forward is unclear. Champagne has said any trade deal with China, should talks be launched, will take time to complete. Meanwhile, another trade deal meant in part to challenge China’s clout—the TPP, whose recent rebrand as the “Comprehensive and Progressive” TPP has Canadian fingerprints on it—remains in negotiation. “More work needs to be done on some outstanding issues,” Champagne said in his written statement.
Warner, the trade lawyer, fears the fallout from Monday. “The government is going to have to decide whether they want to start with China and finish with Japan on the basis of what is doable now, or whether they want to hold out for more while stalling for time on Nafta,” he said. “They are going to have to be clearer to trading partners or this is going to keep happening, and each time that it does they will lose some credibility.”
Image credits: Fred Dufour/Pool Photo via AP