Canadian ministers dine with senior Chinese officials as trade conflict looms with U.S.

Marie-Danielle Smith | April 27, 2017

OTTAWA — While a potential conflict looms with the U.S. over trade, the Canada’s Liberal government is continuing to cozy up to China.

Canadian ministers had high-level discussions and a private dinner this week with powerful Chinese officials, including the vice-premier who was seated next to President Xi Jinping at Donald Trump’s Mar-a-lago resort at the beginning of the month.

According to a Canadian government official, Finance Minister Bill Morneau and International Trade Minister François-Philippe Champagne sat across from Vice Premier Wang Yang (one of four vice-premiers directly under Xi) at a boardroom table before being treated to a “very traditional Chinese banquet” afterwards. It capped off a six-day mission to China led by Champagne.

The meetings, to launch a “Canada-China Economic and Financial Strategic Dialogue,” took place at Diaoyutai State Guest House. The official said this is “an honour reserved for few guests,” and the last guest was former American president Barack Obama in September.

The “dialogue” will probably be annual, and focuses on “mutually beneficial co-operation,” the official said. Morneau and Champagne asserted Canada’s “commitment to progressive trade” and where there’s “space to grow.”

For some sectors, Canada “reiterated that we have clear and necessary processes in place for possible approvals,” the official said. The Canadian government recently faced criticism for approving the Chinese takeover of a Montreal tech firm with weapons capabilities.

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The energy sector was discussed but specific companies or timelines weren’t, according to the official.

As Canada pursues closer ties to the Middle Kingdom, polling numbers from Abacus Data say Canadians trust China more than the U.S. on many indicators.

In an online poll of 1,500 Canadians this week, majorities said they felt China was more “stable and predictable” than the U.S.; doing more to maintain peace and avoid conflict; showing a better example of world leadership; and doing more to grow the world economy. Conservative voters tended to trust China less, while Liberal voters trusted China more. The margin of error was 2.6 per cent 19 times out of 20.

Canada has been vocal about its desire to pursue closer relationships in the Asia-Pacific, especially after the U.S. pulled out of the Trans-Pacific Partnership trade deal. That includes meetings to explore a free trade agreement with China, and an upcoming dialogue with TPP countries at Asia-Pacific Economic Partnership talks in May.

Champagne used this week’s trip to promote Canadian forestry companies to Chinese buyers, after the U.S. imposed new duties of three to 24 per cent on Canadian softwood lumber imports Monday.

Canada is awaiting a pending renegotiation of the North American Free Trade Agreement, which Prime Minister Justin Trudeau discussed with Trump during a phone call Wednesday.

The U.S. remains Canada’s biggest trade partner by an enormous margin. According to the Canadian government, bilateral goods and services trade is $841.1 billion annually. Canada-China two-way trade was about a tenth of that in 2016.