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Yuen Pau Woo

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Harper Should Lobby for Free Trade with China

Posted: 01/13/12 10:42 AM ET

Canada Post has just issued its annual Lunar New Year stamp series, featuring a wide-eyed dragon that looks more surprised than menacing.

Coming after a year that saw a devastating earthquake in Japan, political upheaval in the Middle East, economic crisis in Europe, and the emergence of the "Occupy" movement, it is not hard to see why the dragon might be reluctant to take its turn in the lunar calendar.

As if the world did not have enough uncertainty to deal with, 2011 ended with the death of North Korean leader Kim Jong-il, ushering a period of leadership transition in a perennially insecure regime that is armed to the teeth.

The United States is also going through a leadership transition -- in terms of its place in an increasingly multipolar world -- as well as domestically, as the presidential race dominates American politics and policy for the next 11 months. Recent statements by the Obama administration -- on the foreign policy "pivot" to the Asia-Pacific region and on a defence strategy that is increasingly focused on China -- open a new chapter in the contest for influence in Asia.

China will also see leadership renewal in 2012, and while the contest is less public and more predictable, Chinese leadership hopefuls are susceptible to political posturing and populist actions, as are their counterparts in the United States. The risk of trade conflict has risen in the last year, and will likely continue to mount in an environment of sluggish world growth.

With Asia now prominently on the world's centre stage, the challenge of building relations with countries in the region has become much more than trade and investment promotion. For Canada, it means embedding Asia into business, educational, and community strategies and building long-term relationships with Asian counterparts that demonstrate Canada's commitment to be a serious player in the Asia-Pacific region.

It comes as welcome news therefore that Prime Minister Harper will visit Beijing next month. Harper should use the opportunity to signal his version of a "pivot" to Asia -- without the overtones of geopolitical positioning that invariably accompany U.S. foreign policy.

An excellent way to do so would be to propose a Free Trade Agreement with China. Coming on the heels of his statement of Ottawa's desire to join the U.S.-dominated Trans-Pacific Partnership (which China has so far been excluded from), a proposed economic partnership agreement with China would not only expand Canada's options but also demonstrate an awareness of the bigger game that is being played out in the region.

Such an announcement would also underscore and put substance behind the Prime Minister's recent comments about the need to diversify Canadian exports (especially oil and gas) to be less reliant on the U.S. market. Free trade talks with India are already underway and an FTA with Japan is being studied by both governments. Adding China to the list would be a major achievement -- and would require significant political commitment to get the deal done.

The First Day covers issued by Canada Post include a description of dragon years as "marked by innovation, exploration and risk, ultimately culminating in achievement on a grand scale." With his trip to Beijing scheduled shortly after the start of the Lunar New Year, Harper should travel with precisely the level of ambition expected of a dragon year.

 

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