Donna Kennedy-Glans: Premier Scott Moe goes to China

It’s been six years since a Canadian premier led a trade mission to China. Much like Alberta Premier Danielle Smith’s forays into Washington, D.C., to shore up oil exports there, Saskatchewan Premier Scott Moe is heading to China this weekend. It’s expected he’ll wave the province’s flag in support of improved market access for Saskatchewan’s bumper crop of canola.

It’s a tricky situation for the premier to navigate. Trade friction with and between its largest markets — China and the U.S. — has put Canadian canola in the crosshairs.

To be clear, Moe isn’t trying to supplant Ottawa’s role in defusing trade tensions with China; for any deal with China to get done, he acknowledges it will ultimately have to involve the prime minister. To that end, Moe had invited Prime Minister Mark Carney to join him. On Thursday, Carney announced instead that parliamentary secretary Kody Blois would join the Saskatchewan-led delegation to China.

As they head to China, Moe’s team would be well-advised to read Between the Eagle and the Dragon: Managing Canada-China Relations in a Shifting Geopolitical Reality, a report released a few weeks ago by a cross-Canada team of foreign policy wonks.

Politicians are prone to look askance at aspirational policy papers; viewing the lofty rhetoric impractical in the real world of cut-and-thrust politics. Yet, after sitting down to talk through this report with the expert group’s co-chair, Perrin Beatty — a former politician himself, including a short stint as a Progressive Conservative foreign minister — I’m all-the-more convinced this report could be useful to Moe’s delegation.

First off, the report’s authors don’t sugarcoat the retaliatory nature of the tariffs: “The intensification of the U.S.-China rivalry and President Donald Trump’s protectionist trade agenda have irreversibly altered the conditions in which Canada must operate. Canada responded to U.S. pressure and Chinese practices by imposing 100 per cent tariffs on Chinese electric vehicles and 25 per cent tariffs on Chinese steel and aluminum. China retaliated with sweeping tariffs on Canadian canola, pork and seafood exports.”

To make matters worse, in August, nearing the end of a year-long, anti-dumping investigation, Beijing imposed a hefty 75.8 per cent duty on Canadian canola seed — in addition to existing tariffs on canola oil and meal.

Second: Perrin understands Moe’s dilemma. While this is technically federal jurisdiction, Moe has a constituency to represent; Saskatchewan is one of the largest producers of canola in the world. “Even if you look back into the 1960s,” Perrin shares, “at a time when the rest of the world was avoiding them,” we were selling China wheat. Today, he argues, China needs Canadian commodities: our potash, canola and energy.

Third point: what Perrin and his peers are recommending isn’t fuzzy, subtle or wishy-washy. It’s a dramatic change in approach. “We see ourselves as a moral superpower, whose job it is to tell the rest of the world what they’re doing is wrong,” he asserts. To make his point, he shares the head-scratching story of Justin Trudeau’s flubbed negotiation of the Trans-Pacific Partnership agreement.

To please Canada, Trudeau convinced all of the other partners to change the name of the free trade deal to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, “then refused to sign it because it wasn’t sufficiently progressive for him,” Perrin sighs. “Then, in a matter of weeks, he filled planes with cabinet ministers and news media to fly to China, ostensibly to sign a trade agreement with China, which he evidently believed would cause the liberalization of China.”  It didn’t.

Another deep sigh from Perrin. “We need to be a bit more worldly in how we manage our international relations,” he grimaces.

“We’re not the Vatican,” I quip. “We’re not,” he agrees with a smile. “We have both interests and principles and we need to advance both of those,” he acknowledges. “But we need to understand the difference between the world as it is and the world we would like to live in,” he suggests. “We have to today deal with the one that we’re living in, whether it’s in dealing with Washington or in dealing with Beijing.”

“There was naiveté,” he continues, “that most of us and certainly every Western nation fell prey to at the time of China’s accession to the WTO (World Trade Organization). It was the belief that if we trade together, if we bring China into global institutions, that they will change their behaviour and conform with international norms.

“That didn’t happen,” he says sombrely. “They’ve moved in the other direction. They are less free, more assertive in terms of military and diplomacy than they were before.” The time for naiveté is over.

As recently as October, Donald Trump talked about putting a wedge between China and Russia in much the same way Richard Nixon was able to do many years ago. But watching what unfolded this past week, with Vladimir Putin in Beijing for a massive Chinese military parade, it’s obvious Trump is driving them closer. Countries historically at each other’s throats are coming into Beijing’s orbit — because they agree on only one thing: that they feel threatened by the approach the Americans are taking.

“We better disabuse ourselves of the false notions about our ability to change the fundamental elements of China as a political entity or a society,” Perrin concludes, “and focus instead on areas in which we have shared interests, in which it would be in China’s interest to have a good relationship with Canada and Canada’s interest to deal with China.”

The poignancy of what Perrin is saying causes me pause; I’ve been waiting my entire career to hear this call for realism, maturity and unapologetic focus on Canada’s national interest from someone steeped not just in the world of politics, but business. Until his tenure ended last August, Perrin was the longstanding CEO of the Canadian Chamber of Commerce.

Redirecting our conversation back to Premier Moe’s trade mission to China, I ask if Perrin would recommend dialling back the 100 per cent tariffs imposed on Chinese EVs by Canada. Moe has not been shy about pointing out the scope and size of the $43-billion canola industry versus the size of the nascent EV industry in Canada.

Perrin pauses to think that over. “Not at this point,” he says. “You know, we are up to our ears right now with the attempt to destroy the auto sector. I think one of the things we need to do is to be more aggressive and be more active in the United States in making a case, from a perspective of American self-interest, that if Trump is successful in destroying the automotive sector in Canada, and with Canada being the single largest export market for American vehicles, it is in America’s self interest to ensure that the integrated automotive sector we have today can continue.”

“What we do have to dial back on,” he adds with a grin, “is the preachiness.”

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