Prime Minister Mark Carney shares a laugh with Jean Charest, co-chair of the Canada-UAE Business Council, at the Canada-UAE Investment Summit in Abu Dhabi on Nov. 21.Sean Kilpatrick/The Canadian Press
Seldom have we seen such a flurry of activity overseas from a prime minister like we have from Mark Carney over the past few months.
His decrease-the-dependence-on-America campaign sees him trying to open trade channels everywhere in a bid to make up for the exports shortfall brought on by Donald Trump’s beggar-thy-neighbour tariff assault.
Mr. Carney not only faced the high tariff wall with the U.S. when he took power: Relations were in a deep freeze with China, our second-largest trading partner, the split initially triggered by Ottawa doing a favour for the U.S. in arresting a Chinese tech executive on our soil.
And there was also the rupture with another global giant, India, where relations crumbled following the killing of a Canadian Sikh activist in British Columbia.
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Canada was alone, ostracized from the big powers; a trading nation with anemic trading prospects. But the dark clouds are lifting. With both China and India there’s a reset, a putting of relations back on track. It’s a development of major significance.
Ottawa is making progress in building new trading alliances with other countries as well, which should help make up for some of the lost U.S. trade. Hope springs fraternal.
It’s all in keeping with what Maine Senator Angus King termed last week was a “cultural break” with the U.S. “Canadians don’t think of Americans as their friends and neighbours, but as adversaries.” he lamented.
On China, it was Beijing that did the pushing for a normalization of relations more than our side. Mr. Carney and President Xi Jinping met last month and set the reconciliation process in motion. Mr. Carney, who called the meeting a “turning point,” will travel to China in the new year.
As for India, Mr. Carney met with Prime Minister Narendra Modi in Johannesburg on Sunday, where they agreed to start trade talks aimed at a comprehensive economic partnership, and to “enhance diplomatic staffing levels.”
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The rapprochement with the megapowers required that Ottawa put the priority on economic relations over human-rights abuses by these nations, as well as evidence of their political interference in Canada. The determination was that it would be too costly not to do business with them on account of their falling far short of conforming to our democratic moral standards.
Beyond China and India, other advances include a new EU-Canada strategic partnership covering trade, security and defence; accelerated negotiations on a new free-trade agreement between Canada and the 11-member Association of Southeast Asian Nations; a free-trade deal with Indonesia; free trade talks with the Philippines and Thailand; and free-trade negotiations with the United Arab Emirates, as well as a pledge from the UAE to invest $70-billion in Canada.
“The last time a Canadian prime minister was here was 40 years ago,” said former Quebec premier Jean Charest, co-chair of the Canada-UAE Business Council, of the Carney visit last week.
While it all sounds promising, it need be borne in mind that the proof is in the pudding – that the pledges and promises are only pledges and promises until fulfilled.
Prime ministers going all the way to John Diefenbaker, who had a futile wish to divert trade back to Britain, have made efforts aimed at substantial market diversification. Pierre Trudeau was an avid pursuer of alternatives via his Third Option policy. Jean Chrétien led seven Team Canada trade missions abroad, at least three of them to China. Stephen Harper’s government negotiated free-trade agreements with the European Union, South Korea, Colombia, and Panama. Justin Trudeau finalized the EU agreement and entered into a free-trade arrangement with 10 Pacific Rim countries.
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All those efforts failed to achieve a major reduction in American market dependence, as the U.S. continued to gobble up well over 70 per cent of Canadian exports.
Will it be much different this time?
Mr. Chrétien’s China missions resulted in exports to that country rising only from 1 per cent to barely 2 per cent in his years as PM, though they did help set the table for future increases. Today, China gets 4 or 5 per cent of Canadian exports, a number which optimists say could double in a few years.
Trade people in the know say that it’s possible, with the China and India reset and other new trade agreements, that exports to countries other than the U.S. could increase in the neighbourhood of 10-to-15 per cent in several years.
That hardly represents a great break from our American dependency. But it would be far more than before, and would do the important deed of compensating for the market loss from U.S. tariff muggings over a similar period.