Better not to kowtow to China

It’s too bad China didn’t offer Canada everything Canadians had hoped for in the Prime Minister’s just-completed trip. Many were hoping that Canada and China would officially agree to beginning negotiations towards a free trade deal, but that frittered away with Justin Trudeau pushing labour and gender rights and some amongst the Chinese leadership appearing to think we should be crawling towards them, begging for favour.

But it’s great Canada isn’t leaping too fast into any deal with a country that really doesn’t seem to believe in free trade. We can negotiate deals all we want with China, and China can agree to all sorts of stuff that sounds great on paper, but as we’ve seen repeatedly with China, the country only grudgingly accepts trade rules, and only in order to advance selfish interests.

Does anybody really believe China’s concerns about blackleg are legitimate? Their sensitivity about the fungus seems to wax and wane based on domestic supply and demand of canola and rapeseed. The country blocks Canadian companies from investing in many parts of its economy, even though China’s companies can invest relatively freely in most areas of Canada’s economy. The country has little respect for the sort of intellectual property issues that are key to Canada’s future.

China might talk about being a supporter of trade, but it’s always in terms of negotiated trade. Often, when dealing with optimistic and naive free trading nations like Canada, it seems to take advantage of gullible partners. It grudgingly accepted World Trade Organization rules in order to get access to countries like Canada, but hasn’t been too true to the WTO spirit.

Apparently the Chinese have backed off from being too enthusiastic about embracing a trade deal with Canada because the Chinese leadership assumes Canada is desperate for a deal because of U.S. President Donald Trump’s threats to tear up NAFTA and his administration’s other attacks on Canada’s economy.

It’s no doubt true that the federal government has been chasing after the Chinese for a deal as a bargaining chip to use against Trump’s actions and as a hedge against Canada’s never-ending over-reliance on the U.S. market. That’s why there’s such a big push on to get Alberta crude to the Pacific coast and break free of reliance on the North American market. Channelling a bigger and bigger proportion of Canada’s exports to the Pacific Rim and especially the growing Chinese market seems a natural thing to do, and it’s something even your humble scribe here has called for in this blog space.

But the Chinese are showing they’re no better than Trump, and in the long term Canada can rely much more on fairer trading practices from a post-Trump U.S. than it ever will be from a China that presents itself as a free trader, but in fact has a mercantilist’s soul. It’s worth getting a trade deal with China, but it’s got to be a deal that helps Canada as much as it does China, and right now there’s no reason to believe China is willing to agree to something like that.

China presently sells about double the amount of stuff to Canada that Canada sells to China, so the country doesn’t need to panic if the Chinese seem to be growing cold. For farmers it’s obviously a more anxious situation, with canola sales Canada’s biggest export to China and canola’s biggest export market, and that country’s growing middle class showing wonderful potential for growing beef and pork consumption.

But making a naive free trade deal with China wouldn’t guarantee anything, so if we need to wait a while to make a deal that protects our exporters as much as it protects theirs, then so be it.

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