As the global trade landscape changes, one expert says it would be in Canada’s best interest to strengthen its economic relationship with China, despite the many disagreements between Ottawa and Beijing.
“China’s our second largest trading partner and it has a very different system, both politically and economically,” Jeff Mahon, the director of StrategyCorp’s International Business and Geopolitical Advisory, told BNN Bloomberg in a Monday interview.
“That shapes the way China looks at human rights and offers differing and of course less political freedoms to its own citizens (compared to) Canada, but at the same time, China is the world’s largest population, and it is the world’s second largest economy.”
Mahon argued that there are “economic complementarities” between the two countries that shouldn’t be ignored, even though there are ongoing tensions between China and Canada stemming from disputes over trade, human rights, foreign interference and more.
“We’re not going to be able to agree on everything, but we need to be able to engage with China diplomatically and commercially across a number of different vectors including human rights,” he said.
“We absolutely need to find ways to be able to work with China so that we can benefit both from economic and trade relations.”
Ongoing tensions
The most recent diplomatic disagreement between Ottawa and Beijing came this month, when Foreign Affairs Minister Mélanie Joly condemned China after the country executed four Canadians earlier this year.
It’s Ottawa’s latest criticism of the treatment of Canadians by China’s judicial system since the 2018 detention of Michael Kovrig and Michael Spavor by Beijing on national security charges.
Ottawa called their detention “arbitrary,” and it was seen by many as retaliation for the arrest of Chinese telecom giant Huawei’s chief financial officer just days before at the behest of U.S. officials. All three were released in 2021.
Mahon said that while diplomatic relations may remain strained between the two countries for the foreseeable future, Canada should be willing to “test out” if China would be willing to move trade negotiations forward in good faith.
“Right now, we are in a very precarious time… the situation we have with the Unites States is putting a bit of an existential crisis and a new reckoning on what Canada’s identity as a sovereign country but also as a trading nation is going to mean,” he said.
“So, when it comes to dealing with China, there are a lot of fundamental problems both politically and economically when the two systems intermingle, but that is creating various sorts of spiraling-out-of-control retaliatory actions.”
Mahon said the recent implementation of tariffs and counter tariffs on goods traded between the two countries has caused “serious damage” to Canadian exporters, particularly in the agricultural sector.
Late last year, Canada placed a 100 per cent levy on Chinese-made electric vehicles and a 25 per cent tax on aluminum and steel products.
China responded to those tariffs earlier this month by imposing a 100 per cent levy on Canadian canola oil and meal, as well as peas, along with a 25 per cent tax on seafood and pork.
China has ‘sent some signals’
Despite those counter measures, Mahon said he believes China has “sent some signals” in recent years that it may be willing to work with Canada on a more beneficial trade partnership, though the political climate has kept any meaningful talks from taking place.
Mahon noted that a recent report from the Chinese ministry of commerce – the same report that gave Beijing its “internal justification” for the counter tariffs it imposed on Canadian goods – said the two countries may be able to come to a trade consensus through consultations.
“That is a way for the government of China to send – not through a big, loud press release but through a report, an official government document – a signal to Canada that it does want to have discussions about this,” he said.
“And that’s precisely why I’ve called on the government of Canada to engage China on those discussions. From there we’ll be able to see where we have mutual interests, where some of the points of contention lie, and if there’s a path forward.”
With files from The Canadian Press and Bloomberg News
