Prof. ST Hsieh
Director, US-China Energy Industry Forum
May 17, 2023
Terence Corcoran’s suggestion “Keep politics out of Canada-China trade” makes sense and it also applies to any other bilateral trade relation say the US-China trade. Unfortunately, in reality it does not work and cannot work.
- By common sense, “politics” covers every aspect of human activities. It is impossible to separate “politics” and “trade,” especially bilateral trades.
- Professional politicians’ full-time jobs are playing politics and they are in charge of the government. Traders, or commonly known as “businessmen” only have limited influences on politicians and thus government actions.
- Canada is a member of the exclusive club of G7 where “containing” China is now the focus of G7 summit. G7 is dominated by the US, the big brother south of Canada. Naturally Canada now seems to follow the US vs China every step of the way.
However, Canada as a sovereign nation should consider her national interest as the top priority. There is no good reason to challenge China all the time just because US and China have major issues. US and China are competing for global dominance, it is the reality. But it also the reality that China poses NO direct threat to Canada. Basically, Canadians should consider:
- The top priority for Canadian politicians is to keep Canada safe and prosperous.
- Canadians and Canadian politicians must have a clear understanding on China’s people and policy. They also have to be realistic on the relative strength of global powers before committing her very limited national “hard power” to distant regions of the world.
- In terms of the fierce US-China competition to the top of the world, Canada could play the productive role of unbiased peace makers and trade with both the US and China on equal terms.
Terence Corcoran: Keep politics out of Canada-China trade
Wed, May 17, 2023 at 3:00 AM PDT
The political tensions between China and Canada — and between the United States and China — have produced justifiable concerns about growing risks of trade wars. Amid the daily barrage of China conflict issues, balloon shoot-downs, TikTok scares, political interference reports, imprisoned Canadians and expelled diplomats, a general sense is emerging that China is enemy territory, economically and ideologically. Voters are getting the message. But it is the wrong message.
Anti-China trade sentiment, already rising over the past year, appears to have gained even more traction over the past few months. A new opinion survey by Maru Public Opinion found that 82 per cent of Canadians believe Canada should be working closer with American companies to reduce Canada’s reliance on importing Chinese goods. Even more Americans, 86 per cent, believe the United States should be working closer with Canadian companies to reduce America’s reliance on importing Chinese goods.
The Maru cross-border polling results are a troubling update on a Nanos Research poll last week that showed three in four Canadians view China negatively, which follows a Nanos survey finding last December that showed six in 10 Canadians think Canada should decrease trade with China, a sixteen-point increase compared with December 2020 when less than half of Canadians supported a decrease in China trade.
By extending the survey range to U.S. residents, the Maru poll captures the expanding negative mood of Canadians and Americans re China. On both sides of the border, there is a willingness to engage in risky economic and trade policy manoeuvres as an appropriate response to complicated and unrelated political issues.
The Maru survey also found that 71 per cent of Canadians believe Canada should “make it easier” for U.S. companies to export to Canada. On the U.S. side, 79 per cent of Americans think Canada should be included in the Biden administration’s “Buy America” regime.
The polls, in other words, idealize a cozy Canada-U.S. trade relationship that can and should be expanded at the expense of China. But cozy bilateralism is not the way the global trading system operates. It is dominated by inter-corporate competition.
Recent developments in world trade, especially China trade, point to the non-political economic reality behind the conflicts — realities that might change the views of Canadians. For example, last week Germany reported that China accounted for 28 per cent of imported electric cars. No made-in-China EVs arrive in Canada, but how would Canadians respond if they were asked this survey question: “Would you prefer a more expensive Detroit EV product to cheaper EV imports from China?”
Canada’s entire carbon transition is based on the idea of forming partnerships with countries that are seen as friends, especially the United States. But voters could get side-swiped in the fluctuating vicissitudes of U.S. trade policy.
Voters are getting the wrong economic message!
When Joe Biden became president in 2021, he was in no rush to abandon tariffs and other aspects of the U.S.-China trade-war tactics initiated by Donald Trump. But times have changed. The latest developments between the two countries — and between China and other nations — suggest the global environment is not what Canadians think it is.
Fresh signs that economic realities are overtaking Canada’s beat-back-China movement are everywhere.
• Last week Chinese and U.S. officials met, in a demonstration that the two nations can come together on pragmatic issues — part of what one commentator described as a “hair-raising” course correction on the part of the Biden administration.
• U.S. climate envoy John Kerry recently told Reuters he will go to China in ”the near term” to work together to address climate change.
• The United Kingdom last month outlined a “new China policy,” calling for a constructive approach and opposing moves to isolate China. “No significant global problem — from climate change to pandemic prevention, from economic stability to nuclear proliferation — can be solved without China,” said British Foreign Secretary James Cleverly.
• Australia’s trade minister said last week he is “pleased” with recent trade talks with China. The news was another signal of the end to a years-long trade-war relationship between the two countries. There was even talk of the possibility of China joining the Trans-Pacific Partnership, of which Canada is a member. Three months ago experts claimed that the Aussie trade war with China showed no signs of abating.
• China last week signed a “free trade” agreement with Equador in South America, a pact that Equador says will allow it to export 99.6 per cent of its products to China without tariffs.
• In nearby Honduras, the Caribbean nation announced last week that it was entering free trade talks with China — after it had ceased to recognize Taiwan. Trade will focus on coffee and shrimp.
• While Canadians muse about finding alternatives to China trade, Canada’s trade with China hit records in 2022, including $100 billion in imports. A record was also set in the U.S., where the country imported US$538 billion in Chinese goods.
The reality is that China remains a vast production machine and global consumer. Trade is an essential global activity driven by competitive business developments, not politicians. Now is not the time for Canada to start confronting China over trade.