Canada-China Relations Committee on April 19th, 2021

[Stéphane Bergeron, Bloc, Montarville, QC]

Thank you, Mr. Chair.

Thank you, Mrs. Bartholomew, for being with us. Your comments are most helpful and relevant to this committee's study. You mentioned President Biden's words about working with China on some issues and confront China on others.

The more we hear from witnesses, the more it sounds like China is using every opportunity it gets to position itself for what's next, especially on trade. Your testimony seems to go directly in that direction. It's well known that Chinese companies have to comply with the Chinese state's security obligations and that some of them, including Huawei, share information with Chinese authorities that they have gathered in the countries where they do business.

How can we think about working with the People's Republic of China and its companies, knowing that they are looking for every opportunity to use this collaboration for long-term political purposes?

What precautions should we take to avoid getting into a situation where, by trying to co-operate, we would ultimately just be giving them more tools to act against us?

[Carolyn Bartholomew]

That's a good and complicated question. If I had the answer, we would all be in much better shape, but I'll try.

The reality is that we have to figure out ways to engage with China. The question is about the terms of the engagement that is taking place. China is so embedded in the global economy now. I just don't see that we could cut off relations completely, partly because there would be concern in other countries. I'm watching, with concern, what is happening with Germany and France right now. They're putting all their eggs in the economics and trade basket.

There are a number of places where we could work on these issues. There are the national security concerns, of course, about what Chinese companies are doing, but there's also the whole system of subsidies and protective tariffs that the Chinese government is imposing.

In addition to reforming the WHO, we also need to reform the World Trade Organization, because we have to get to the heart of what is creating this unfair competition. I used to serve on the board of an American manufacturing company, which actually has a plant in London, Ontario. I know that American and Canadian workers can be the best in the world, but they are working in an unfair field. We need to make sure that we address all of these subsidies.

There's growing awareness and concern around the world about China's rise, and the way it's rising. China is being, in some ways, its own worst enemy with this stomping around, insulting people, and what people are calling “wolf warrior diplomacy”.

There's opportunity, but we live in a world where we're not going to be able to cut them off completely. China has 1.4 billion people. The reality is that we're going to have to figure out a way to work together with them in places where we can, and continue to push in the places where we can't.

[Stéphane Bergeron, Bloc, Montarville, QC]

You are absolutely right. It's quite a challenge, because you can't suddenly stop economic relations with such a giant. It's a question of whether you can collaborate without losing out geostrategically.

In your report and opening remarks, you talked about the influence that the People's Republic of China seeks to have in international organizations. We've seen this at the World Trade Organization and the World Health Organization. An article on Politico.com in April 2020 revealed that the secretary general of the International Telecommunications Union and former Chinese communications ministry official tried to use his influence to promote Huawei in the 5G market.

Should we also be wary of the influence of all the officials from China who are allegedly working for the Chinese government in all the decisions made by these various international bodies?

[Carolyn Bartholomew]

I think we need to be aware. We need to be far more attentive than we have been.

I just wanted to mention something on the geostrategic issue that you raised. I've been working on U.S.-China issues since June 4, 1989, the Tiananmen Square massacre, and a number of us raised concerns through the 1990s and early 2000s that China was building its military strength on the back, basically, of the U.S. economy. It was benefiting so much from the strategy it had. It was using the currency in order to build its military.

We're being shut down.

I'll just say that it's an honour for me to talk to all of you. If there's an opportunity to address the questions further, outside of this context, I would be happy to do so.

[The Clerk of the Committee, Ms. Marie-France Lafleur]

Mr. Chair, you are on mute.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Chair, you're on mute.

[The Chair, Liberal, Geoff Regan]

I think I had it unmuted and just muted it by mistake. Thank you so much for that, folks.

I was just saying, Ms. Bartholomew, thank you for your understanding. We do have agreed rules about how much time each party has, so those are what I'm following.

Now I'll turn to Mr. Harris for six minutes.

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

Let me get my timer on, Chair. My machine has just gone blank on me. I have to let it see me to turn it on.

Thank you, Ms. Bartholomew, for joining us. It's been most interesting testimony so far.

In 2012, Canada entered into a foreign investment promotion and protection agreement with China; we call it FIPA. It's been criticized as being, in key respects, non-reciprocal in favour of China. For example, there's a general right of market access by Chinese investors in Canada, but not the other way around in China, and it allows wider scope for investment screening by China than Canada. Also, it omits a long-standing Canadian reservation for performance requirements that favour indigenous peoples, and it dilutes Canada's established position on transparency in investor-state arbitration.

Your commission recently did a study, in 2020, last year, on this whole issue in the United States. Could you tell us, first of all, what you think of this kind of one-sided agreement, part of it based on historical realities in Canada-China trade prior to then? What's your view on that? What recommendations have you made and how successful have they been in getting policy changes?

[Carolyn Bartholomew]

We've made a number of recommendations. Congress takes some and doesn't take others. I think we're going to see a whole lot more moving. There are some really large packages of legislation on U.S.-China relations that are about to move through the U.S. Senate. We'll see if that stays bipartisan.

I think the issues and questions you raise about the one-sidedness of market access are certainly something that the EU and China.... I'm going to throw it to the EU again. When I heard they were making this bilateral investment agreement, I actually thought, why on earth do they think the Chinese government will comply with this agreement any more than it has complied with other agreements? There is a lot of concern about that. There's a lot of opposition to creating new trade agreements with a country that's not abiding by the agreements it's already made.

I'm not sure if some of what you were asking about was about our CFIUS process and the reforms to the CFIUS process about Chinese investment in the U.S. Was that one of the questions you were asking?

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

I guess that's part of it.

[The Chair, Liberal, Geoff Regan]

Sorry, but before you do that, I'm just pausing the time.

I've been asked by the clerk, Ms. Bartholomew, to indicate, as it says here, that your microphone is not selected as the microphone for the computer right now. I'm wondering if you can either unplug and replug it, or else select it in your settings. If you see where the mute and the microphone is, the little upward arrow beside that, if you click on that arrow you can ensure that you've selected the right microphone.

[Carolyn Bartholomew]

Let me try that one.

Is that better?

[The Chair, Liberal, Geoff Regan]

Madam Clerk, is that better?

We have a thumbs-up.

[Carolyn Bartholomew]

Okay, great.

[The Chair, Liberal, Geoff Regan]

All right, Mr. Harris, we'll go back to you, sir.

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

Thank you very much.

I'm not familiar with that particular aspect of it, so I'll move to another question, if you don't mind.

One thing our committee has talked about quite a bit over the past year, because we've been operating since then, was on concerns about China's not wanting to follow the rules-based international order. How do we get it to do that? That's with a lot of things, not just the arbitrary detention of individuals like Mr. Spavor and Mr. Kovrig, which is part of it, but in general terms not following the rules, whether on trade and investment or the other things we were just talking about.

I'd like your advice on this. What I hear you say is that they're trying to create new norms, whether that be human rights being watered down, different ways of engaging with other nations and that sort of thing. Is this something we can actually influence in some way with the help and coordination of other nations, or are we in a gridlock on that as well?

[Carolyn Bartholomew]

I think we have to try. To give up would be to cede the field completely to the Chinese government and their authoritarianism—the ideology they are trying to spread.

I'll note a couple of places of concern. One, of course, is the national security law they passed that has destroyed Hong Kong as one country, two systems. It includes a provision that they believe allows them to basically reach into any country at any time if any of us has violated what they think is their law. As I just saw yesterday, there is a new push whereby they intend to promote Chinese rule of law around the world and make all of us comply with Chinese laws.

I think we need to engage in the judiciary, in the legal system, to make sure that people are clear and engaged in it. Again, we need to figure out which countries are going to be the most concerned about that and figure out ways to have our own united front, frankly. I'll use that phrase.

It is, I believe, a clash of ideologies that is happening, and I don't think we can give up. I'm not always sure how to handle it, but if we give up we have lost completely.

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

Another issue that your group has written about is China's attempts to influence academic institutions in the United States, like think tanks, through financial dominance and whatnot. We have similar concerns in Canada.

First of all, how effective have their efforts been to influence these institutions through financial endowments and other methods? How dependent have some of these places become on the receipt of support from Chinese interests when it comes to being able to operate?

[Carolyn Bartholomew]

They have become, I think, way too dependent. When we talk about that, how do we make sure that the Chinese students who are coming to U.S. institutions are coming here to learn and are not necessarily coming here to take back, especially on high-technology things, what they are learning? I think that for some of it, we all have an obligation to make sure that we fund these institutions of higher education sufficiently, because one of the things that are happening is that if schools lose the tuition from Chinese students, a lot of them are going to be in real trouble.

That said, I think there needs to be transparency about which scientists—for example, researchers—are taking money from what Chinese company or from the Chinese government. I have always said they should not be mixing that with U.S. taxpayer dollars. U.S. taxpayers need to know—

Okay, I'm getting the time signal.

[The Chair, Liberal, Geoff Regan]

Look, Ms. Bartholomew, I'll cut you off, but if you want to finish a sentence, usually that's okay, just so you understand what's going on.

[Carolyn Bartholomew]

It's a serious concern. I think that transparency is one of the answers, as is, again, making sure that our institutions have the resources they need.

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

Thank you.

[The Chair, Liberal, Geoff Regan]

Thank you, Mr. Harris.

We'll now go to the second round.

Mr. Genuis, you have five minutes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chairman Bartholomew. It's a pleasure to have you here.

Your government, across two administrations, has recognized the Uighur genocide. Our Parliament has also recognized the Uighur genocide, although our government has yet to. There's been, I know, much debate in the U.S. about strengthening supply chain measures.

In Canada, our system for preventing supply chain slavery—the use of forced labour in our supply chains—is essentially complaints-based. Our Border Services Agency adjudicates complaints when it receives them, but the mechanisms by which any investigation would be undertaken are still being worked out. It would be virtually impossible to conduct a meaningful investigation inside of China, and the new measures haven't led to any shipments being stopped.

By contrast, in the United States you have the Uyghur forced labor prevention act proposed by Representative McGovern, which was supported by a vote of 406 to 3 in the lower house and is now in the Senate. This bill would, as I'm sure you know, create a presumption that forced labour is involved in products coming out of Xinjiang, unless it can be proved otherwise.

What is your view on the Uyghur forced labor prevention act? Could you share a bit about why it has such strong bipartisan support and reflect on whether other countries should consider a similar model, recognizing the realities of a complaints-based system and the impossibility of it working effectively?

[Carolyn Bartholomew]

I think that it's an important and serious attempt to try to get to the very issue you are mentioning. There is so much stuff coming over. We did a hearing a number of years ago on Chinese seafood, and we learned the realities of how much product comes in through our ports and how few people we have tracking it. All of those issues are part of the solution too.

I absolutely support the Uyghur forced labor prevention act. The fact that it had such a huge margin of support in the vote demonstrates the serious concern that people have about what is going on with the Uighurs. It would be useful for all of us to figure out a way to do it.

That said, I have to be realistic about the implementation of something. Again, with the seafood, we learned that when things were turned away from one port, the cargo simply went to another port. We need to make sure of all that. Of course, there's nothing stopping companies from changing their labelling, so I think some of it has to be about recognizing what products are being produced and really focusing on those products.