Don’t expect too much, no matter what happens with Meng

Whatever happens Wednesday, China will not be a market we can count on again

Tomorrow (Wednesday) a B.C. Supreme Court judge will release the ruling on whether or not to uphold the validity of Huawei executive Meng Wanzhou’s arrest and detention on a U.S. extradition request.

A lot of people are hoping Meng gets released, goes back to China, that China calms down, the two Michaels are released and – most important for farmers – the effective bans on much of Canada’s canola and threats to other farm products will be lifted.

But even if Meng is released and gets out of North America, and China becomes non-hostile with Canada again, what kind of a trading relationship will exist? Certainly it won’t be one that Canadian farmers can ever count on again, as so many farmers and ag-related-types (including me) once naively believed it could be. Chinese purchasing of and interest in Canadian ag products might return to a pre-December 2018 level, but it won’t be a factor that anyone will breezily include in equations for future growth and sales. Only a fool would think China isn’t likely to immediately leap into trade retribution the next time the giant and increasingly belligerent nation is offended by something Canada does or says. With China’s myriad sensitivities over foreign reactions to its aggressive expansion into the South China Sea, its abuse of its Uighur minority, its attempts to subdue the cilvil rights of Hong Kong people, and its responsibility for allowing COVID-19 to escape China and infect much of the rest of the world, there will be an endless danger of offending China in the future.

In fact, in the days before the court ruling, rather than coming to understand the Canadian justice system and the functioning of the rule-of-law in a country like Canada, China has been doubling-down on threats to Canada if the court doesn’t rule in Meng’s favour. If anybody hoped to de-escalate the situation and walk back from confrontation, this wasn’t the way to do it. ( See Days before B.C. Court decision on Huawei’s Meng, China threatens ‘damage’ to relations with Canada.) After this kind of bluster, it would be hard for the Chinese government to accept a negative result for Meng tomorrow without doing something dramatic.

It’s further proof that China’s approach to diplomacy, politics and trade hasn’t just remained far apart from that of Canada and most of the developed world, but has dramatically become more inimical to Canada’s approach and interests. Canada wants a rules-based international trading order in which politics is kept out, and in which disputes are adjudicated even-handedly. China doesn’t want any of that now, if it ever did. Some believe China fooled the West when it joined the World Trade Organization and never meant to move towards a free trading system governed by laws. That’s probably unfair. The Chinese government seems to at times have genuinely believed it could square its hopes for economic development and trade in a rules-based globalized context with its authoritarian political nature and nationalistic bent. That’s clearly not the case today.

Canada will always want to sell stuff to China. It’s a big market. China will always want to buy the kinds of things Canadian farmers produce. It’s food-insecure and wants access to quality products that are often scarce on the world market. But there’s little hope for any real integration of the Canadian and Chinese markets, as Canada has with the United States and Mexico within NAFTA2, nor hopes for steadily growing integration of supply chains, as we may with the European Union, the Trans Pacific Partnership nations or the U.K. The future is more likely to see growing disentanglement.

We’ll do business with each other, as we did with the Soviet Union during the Cold War and as we do now with countries that sometimes verge on hostile. But nobody will be back in that hopeful mindset many of us had back in November 2018, when a growing friendship and deeper relationship with China seemed the answer to our hopes and prayers. Whatever happens with Meng Wednesday, we aren’t likely to be that naive again.

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