Canada-China Relations Committee on Feb. 24th, 2020

[Carlo Dade]

I think the data speaks for itself. In addition to the trade relations, you'll note that the western provinces all have on-the-ground representation in China and throughout Asia. I was just in Beijing, and I spent days with the Alberta office and the various staff that the Alberta office has on the ground. Indeed, other provinces—la belle province, bien sûr—but certainly the western provinces are on the ground, and they have deep relations and staff.

That's a benefit to the entire country. By working together with the provincial officials, we have greater reach at lower levels of government, and it's an assistance for us. It's an indication, though, as you mentioned, of the importance.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I only have two minutes, so if I could, I'll put this to Professor Paltiel and then to Professor Tiberghien.

We heard from Professor Paul Evans in the previous meeting this morning. He recommended a few ways forward for Canada on this relationship we have with China. One suggestion he made was pursuing a strategy of coexistence, as he put it. To quote him, this would involve “finding ways to live with China” and “co-operating” where we can on common issues. The former ambassador, Phil Calvert, also said that we ought to find “specific issues” where we can work “collectively”.

Is there low-hanging fruit that we can identify or that both of you esteemed colleagues can suggest, low-hanging fruit that Canada can reach out and identify so that we can move forward in a meaningful way and perhaps enhance this thaw we're seeing in Canada-China relations right now?

[Dr. Jeremy Paltiel]

Professor Evans mentioned peacekeeping. I think that's an obvious one.

My colleagues here mentioned that agriculture is one that has been identified for a long time. It's a vital interest in both countries.

On health care, the whole area of health care and long-term care and things having to do with aging in China are non-controversial things that we can work together on.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Mr. Tiberghien, did you want to add to that?

[Prof. Yves Tiberghien]

I'll add a couple of things.

First, we have Bruce Aylward, a Canadian from the WHO who is on the ground in China right now and doing press conferences. Public health is a huge one right now.

Climate change and green tech are enormous. In city management and urban planning, there's enormous progress in China. Then there's the G20, the work around the G20, and the WTO. China is one of the 17 countries that have signed with Canada on the potential short-term fix, or at least the mediation mechanism, to replace the dispute settlement mechanism at the moment.

[The Chair, Liberal, Geoff Regan]

Mr. Bergeron, you have six minutes.

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

I think that all the opinions, all the comments and all the analyses tell us that the Communist Party has taken control of the state apparatus in a very intense and intimate way. There's a close relationship, I would say, between the party apparatus and the state apparatus.

Mr. Paltiel, you've carefully pointed out that there's been a paradigm shift with the arrival of the current president, Xi Jinping.

Do you think there is indeed a connection to be made between Xi Jinping's personality and his control of the state and this paradigm shift that is taking place, which has had quite dramatic implications for Canada?

As you said, can we expect—we don't know when, we don't know how—such a change with a different character at the head of the Chinese state?

[Dr. Jeremy Paltiel]

Thank you for your question. I will answer in English.

Yes, Xi Jinping's personality has played a role. I would say that it's a combination of factors—that is to say, China has risen. It has become more powerful. The difficulties that the west saw in the 2008 crisis, the difficulties in the United States and the ongoing problems with wars in the Middle East have given an opportunity to China. Xi Jinping has seized on this.

The other reason is that many Chinese were aware of the fact. This hypothesis that China will eventually converge with the west is not something that is heard only in the west. Many Chinese Communist officials—and I believe Xi Jinping himself—are worried that as China becomes more integrated into the global rules-based system, the Chinese will begin to question whether there's any role or rationale for the Chinese Communist Party. We've seen, since Xi Jinping came to power, a real effort to try to re-emphasize the ideology, role and practices of the Chinese Communist Party.

To the last part of your question, I recently wrote part of a debate on the coronavirus and its effect on Chinese politics. I believe that in some sense Xi Jinping is overstretched; this assertiveness is gone. I can't predict when or how changes will take place in China. It's like predicting earthquakes. We know where the fault lines are, but we don't know when the earthquake is going to happen.

I think that underneath the surface there are some questions about the handling of governance and that these will eventually bubble up, and yes, this will be a part of perhaps a change over time. I did go on the record as thinking that I'm not sure he will serve out a third term. That's my own personal speculation, but it's based on my knowledge of how Chinese Communist processes work.

[Stéphane Bergeron, Bloc, Montarville, QC]

Once again, Mr. Chairman, we have seen that the witnesses had more to say than they could manage in the time allotted to them.

If either of you wish to add to your testimony, you may do so in writing and send it to the clerk for the benefit of this committee.

Quebec Premier Jacques Parizeau used to say that globalization is like the tide: you can't oppose the tide, all you can do is adapt to it. I think we are still in the process of adapting to the effects of globalization, as Professor Tiberghien mentioned a few moments ago.

That said, I was struck by the difference between the testimony of this second group of witnesses and that of the first.

The first group of witnesses seemed to be calling for us to be firmer with China, while the second group was calling for us to work more closely with China. How can we around this table reconcile these seemingly different views between the first group of witnesses we heard and this second slate of witnesses?

[The Chair, Liberal, Geoff Regan]

Is the question addressed to me, Mr. Bergeron?

[Dr. Jeremy Paltiel]

I would say the challenge is adaptation.

We have to adapt ourselves to the new reality of China, and we also have to adapt to the reality of China itself. That's to say that the world has changed, and not just in China. The United States has changed in response to it. We have to adapt to this world. Our traditional policies haven't worked and aren't working. We can't simply rely on our ally to protect us, because our ally has turned its back, in some ways, on the rules-based international order.

We saw in fact that the January 15 agreement is a managed trade agreement. The United States will now be playing a role in which they take unilateral gains from their relationship with China based on their market size, not on the rules-based order. We actually have to work to protect the rules-based order, and our best partner may not be the United States. This is a new world.

[The Chair, Liberal, Geoff Regan]

Thank you very much.

Mr. Harris.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair.

I want to thank all of the witnesses for bringing forth their perspectives, particularly on the historical dynamics and the change in our relationship over the years. I'd say that all three presentations, including Mr. Dade's, were dependent upon and/or suggesting how we ought to be improving and buttressing the rules-based international order.

In some cases, Mr. Dade, I'll ask you about it specifically, but the question for all of you is this. How do we go about doing that? If we did have a rules-based international order, it might be easier to solve the problems that we have right now with China with respect to human rights or with respect to trade. We've been vulnerable to their taking action against us.

Of course, we've been vulnerable to the United States doing the same thing, but in respect of China, how do we actually achieve that goal? Do you have any suggestions for us lay people who are trying to find solutions to recommend to the government?

[Carlo Dade]

We'll start.

It relates to the question from Mr. Bergeron. If you look at the data, the data indicates that we are tied to China. The data indicates that in the private sector across Canada individual consumers, businesses, producers and farmers are making a decision that's increasing our trade. When times have been good, trade has been increasing. When times have been bad, trade has been increasing. The question is how we manage that reality. You could have different views as to whether or not that's good, but fundamentally, how do we manage that reality?

[Jack Harris, NDP, St. John's East, NL]

If I could interrupt, Mr. Dade, given your concerns about certainty in market access, if the trade-off is investment, which I think you actually encourage, how do we avoid further vulnerability, where instead of having the percentage of trade from western Canada in agriculture being beneficial, all of a sudden production is all owned by the Chinese and they're feeding themselves with our land and our resources? How do you avoid that?

[Carlo Dade]

We haven't seen that elsewhere. I would have you take a look again at the example of Brazil.

How do we manage this? The rules-based system has been important to Canada and our history. We're facing a time, though, when the U.S. is trying to destroy or undermine the rules-based system, so we have to try to reinforce it with reaching out with like-minded countries or work with Japan. Joining the TPP was the single biggest statement we could make in trying to keep the rules-based order.

[Jack Harris, NDP, St. John's East, NL]

Thank you. Can you leave time for Professor Paltiel and...?

[Dr. Jeremy Paltiel]

I was going to echo that.

First of all, we have to change our mindset. We are a Pacific nation, but we think like an Atlantic nation, and we have to stop doing that. We have to start thinking like a Pacific nation, which means including the west, and therefore, we have to build on those partnerships of the CPTPP to try to build wider networks, especially in Asia, to project the rules-based order. We should look, as Professor Evans and others have said, towards expanding the CPTPP to include China and other actors so that we can extend the rules-based order. The problem is that it is not likely we will have a bilateral free trade agreement anytime soon, or that one would protect our interests, but we could still work multilaterally through the CPTPP to achieve some of the same ends and to work with the countries involved.

[Jack Harris, NDP, St. John's East, NL]

Thank you.

Can we hear briefly from Professor Tiberghien?

[Prof. Yves Tiberghien]

Yes. Thank you, Monsieur Harris.

Essentially, my idea would be to differentiate among issues. We cannot take a cookie-cutter approach, a one-size-fits-all approach with China. There are issue areas in which we have to be protective, when it comes to espionage activities and the like or cyber issues. There are issues on which we can work with China, because China is supporting the rules-based order—on the Paris Agreement, on the G20, etc.—and then there are issues on which we need allies to have any leverage. The prime allies should start with Europe and Japan, and then the others. Of course, in other cases, we can work with the U.S. when the U.S. is on board with some dimensions of the rules-based order.

It's a differentiated approach for a very complex moment.

[Jack Harris, NDP, St. John's East, NL]

Thank you very much.

[Carlo Dade]

It is apparent that the rules-based order has failed. If the Americans continue with this managed trade track, we need to have a plan B to follow the Americans.

[Jack Harris, NDP, St. John's East, NL]

Yes, and I do want to follow up with you, Mr. Dade, because I think it's important. On your suggestion that the model that Mr. Trump and the U.S. have been using with China is one that we should attempt to emulate, I'm wondering how we could manage to do that given the strength of the U.S. market and the tactics that were used to achieve that result. It's not a free trade agreement, obviously. It's a clearly managed trade agreement that excludes Canadian production and some of the elements of that.

How exactly would Canada achieve a positive result using that sort of approach? What leverage do we have and what percentage—we talked about percentage improvement—of our agricultural trade, for example, is with China?

[Carlo Dade]

That data is available in what we've handed out. In terms of how we manage this, look, I'm not suggesting we adopt the Trumpian world view, but on the very specific issue of market certainty on agriculture, the Americans have managed to come up with something new. The idea is that we don't have the leverage that the U.S. has, but if we completely flip the script, completely turn it around, the Americans cannot offer the Chinese certainty that America will not use food as a political weapon. We can serve as an example. It's immoral to do so. Canada is a moral country. It's anti-progressive to do so. China will destroy the world if it's going to practise agriculture in ways that aren't at the cutting edge of science and technology.

[Jack Harris, NDP, St. John's East, NL]

Part of the knock on China—