Trade High on Agenda as Canada's PM Visits China

November 27, 2017 04:12 PM
 
Justin Trudeau

Trade will be high on the agenda when Canadian Prime Minister Justin Trudeau visits China next week in a bid to boost business ties with the world’s second-largest economy.

The Dec. 3-7 trip comes as Trudeau wrestles with free-trade pacts in North America and with other partners in Asia. The visit is aimed at promoting a "progressive trade agenda and tourism initiatives that will create good, middle class jobs" and seeking greater cooperation on fighting climate change, according to a statement Sunday from Ottawa.

“A closer relationship also means more opportunity to hold regular, frank dialogue on human rights issues like good governance, freedom of speech, and the rule of law,” Trudeau said in the statement. “I look forward to meeting again with China’s leaders to strengthen our relationship and set the stage for even greater trade and investment cooperation.”

Canada has explored opening full-blown free trade talks with China, and the National Post newspaper earlier this month cited unidentified diplomatic sources as saying the next trip there would open those discussions. But Sunday’s statement didn’t mention this, and Trudeau in the past has suggested an agreement with China could be difficult because of differences over human rights and other issues.

"The feasibility study and exploratory talks are almost done," China’s Ministry of Commerce said in response to a request for comment about the National Post report. "To facilitate a free-trade agreement between China and Canada is not only significant to deepening bilateral economic ties, it would also be conducive to boosting economic integration in the Asia-Pacific region," according to the statement from the ministry.

"This definitely is significant," said Gai Xinzhe, an analyst at Bank of China’s Institute of International Finance in Beijing. "If it’s announced, it would be China’s first new free-trade talks with a major developed economy following the 19th Party Congress, which emphasized a greater opening up."

China earlier this month announced a major change to give foreign investors more access to its financial system following President Xi Jinping’s pledges for greater reform during a twice-a-decade Communist Party meeting in October. Next year will mark the 40th anniversary of China’s historic reform and opening up that spurred decades of rapid growth.

Trudeau’s office said he’ll meet with President Xi Jinping and Premier Li Keqiang in Beijing, then visit Guangzhou to meet with Li Xi, the recently appointed party chief of Guangdong province, the southern industrial powerhouse with an economy larger than Mexico’s.

China was Canada’s second-largest trade partner after the U.S. last year, with almost $70 billion in total trade. Merchandise shipments to China rose 4 percent to almost $21 billion in 2016, led by forest and agricultural products, copper and iron ore, and motor vehicles, according to the government’s statement Sunday. The Asian nation is Canada’s largest and fastest-growing source for foreign students and the third-largest source of tourists, it said.

Canadian trade negotiators are already in talks with the U.S. and Mexico on a modernized North American Free Trade Agreement. Canada is also part of the 11-nation Trans-Pacific Partnership, though it has held up a deal to salvage the pact as it pushes for some changes.

The TPP doesn’t include China and is seen as a potential check on the country’s expanding economic clout in the region. Talks on the China-backed Regional Comprehensive Economic Partnership, an alternative trade pact, are set to drag on into next year.

 

Copyright 2017, Bloomberg News

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