Canadian Manufacturing

Has the time finally come for a Canada-China free trade deal?

Canada's chief banker and a Liberal MP leading a delegation to China next month are beginning to sound bullish about an accord with Beijing, but so far, even agreeing to begin talks has proved to be a touchy issue


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Critics say a free trade deal with China could kill Canadian jobs, including in the manufacturing sector

OTTAWA—Canada’s central bank governor and a Liberal MP currently leading an all-party delegation to China are sounding bullish about a free trade agreement with the People’s Republic.

Bank Governor Stephen Poloz and MP Bob Nault, the chair of the House of Commons foreign affairs committee, are speaking favourably about a possible free trade pact with China as Prime Minister Justin Trudeau prepares to visit the country next week.

But their enthusiasm is up against two sobering facts: the Liberals remain noncommittal about actually starting formal free trade talks, while a recent government consultation with Canadians uncovered a wide range of concerns about a possible trade deal.

When asked about China, Poloz told reporters Nov. 28 that trade agreements offer much needed certainty to business.

“Any agreement which opens up more opportunities for Canadian companies is a good thing,” Poloz said.

“That also opens up opportunity for us so our consumers have less expensive things that are made in China. That gives us more money to achieve our own personal plans.”

Nault says that it is time for many Canadians to overcome their reservations towards China and for Trudeau to formally announce that substantive trade talks ought to get started.

“The sooner Canadians get to know China a lot better than they do, then some of the myths out there will dissipate simply because China is a more modern society than people think,” Nault said in an interview prior to his arrival in Beijing this week.

He is leading an all-party committee on a long-planned trip to meet Chinese political officials, business leaders and non-governmental organizations. The committee is independent of the Prime Minister’s Office and will eventually table a non-binding report in Parliament recommending how the government ought to move forward with China.

Nault says Trudeau has two options next week in China: either continue exploratory talks or announce Canada will start formal free trade talks.

“I think we’re ready for formal discussion,” Nault said. “So I’m hoping that is indeed the case when the prime minister goes to China.”

Senior government officials, speaking on the condition of anonymity because they are not authorized to discuss the trip, say it is not likely that free trade talks will get the green light next week in China.

The government recently released the results of consultations with more than 600 businesses, academics and civil society groups.

They said a free trade deal with China could kill Canadian jobs, including in manufacturing, and reduce the ability to compete against lax labour standards, lower environmental requirements and Chinese state subsidies.

In announcing the trip earlier this week, Trudeau’s office made no mention of free trade and government officials have said no decision has been made on whether to pursue such negotiations.

“A strong relationship with China is essential to creating jobs, strengthening the middle class, and growing the Canadian economy,” Trudeau said in a 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 co-operation.”

Canada intends to continue frank dialogue with China on topics like human rights and good governance, the statement said.


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