Trade deals take years to negotiate especially if involves unequal partners. The Canada/European Union deal took over 10 years. Its all part of a diplomatic/bureaucratic dance that government officials seem to engage in to keep themselves busy. The idea seems to be that there needs to be some economic/political/ideological rationale from which both countries can gain some advantage. Even after a deal is finalized, technical roadblocks are raised to thwart trade as the European deal now proves. For instance, thanks to EU bureaucratic mischief its unlikely Canadian beef exports will even moderately increase for at least two years if ever. That’s because by then the EU is expected to finalize similar free trade deals with Australia and New Zealand and guess what exports they want to increase to the EU – beef of course. The ink on the EU agreement was barely dry when Italy announced that they would be implementing non-tariff barriers against Canadian durum wheat imports insisting on labeling requirements on pasta products. The only hope is that there are dispute settlement mechanisms which might overcome such trade mischief.
It seems that Canadian government trade officials and their political masters determined that the EU trade was such a success it is a sure-fire template for a deal with any other country. But alas as our Boy Scout Prime Minister found out that doesn’t impress the Chinese who Trudeau thought were chomping at the bit for a free trade deal with a genuine G7 country. He got a rude awakening – China doesn’t need Canada for anything. They are an economy that involves trillions of dollars and if a small player like Canada wants to deal with them you had better come as supplicants begging for mercy – especially if you have nothing to offer that they desperately need.
In what must be one of classic deluded trade positions of all time – Canada put forth so called “progressive” pre-conditions to opening any discussions on free trade. They involved, human, indigenous, gender, worker and environmental rights that China must agree be included in a new free trade agreement. To illustrate their progressive image, the Canadian side of the table featured a politically correct group that was gender and ethnically diverse. The Chinese side was a phalanx of middle-aged men with similar haircuts, ties and suits. I think there was a message there that escaped the naïve Canadian side. Chinese officials at every level must have fallen off their chairs laughing at the sheer dumb innocence and naiveté of the Canadian demands. China has existing free trade agreements and other arrangements with many trading countries around the world – I expect not a single one of those agreements contains even the slightest reference to any progressive rights agenda. What were the Trudeauites thinking – that China would suddenly come to their senses and willing sign on to something so alien to their authoritarian rule just to get more Canadian maple syrup and blueberries. Most trading countries stick to facilitating trade and refrain from trying to interfere with changing the governing culture of other countries if they expect to do any business. Except for the Boy Scout brigade of Justin Trudeau, who want to save the oppressed of the world. The approach taken by Trudeau will setback free trade discussions with China almost indefinitely.
But the Chinese ever polite and wanting to show that his trip was not a complete failure threw Canada a few trade crumbs. They agreed to a pilot project that would see the importation of new classes of chilled beef and pork products from Canada. Before it was more restricted and had to be frozen. It was suggested that might incrementally increase beef exports by $20 million per year. But there is a limit, Australia, New Zealand and the USA already have better access to the Chinese beef market. The last time Trudeau was in China he got some trade crumbs on better canola access. It must exasperate Canadian trade officials that all the Chinese are interested in are our agricultural and resource commodities mostly from western Canada. I am sure Trudeau would have been over the moon had China announced that they were going to buy a dozen Bombardier jets from Montreal. But then why should they be interested – they can buy similar planes from some other country that doesn’t present them with self-righteous preconditions to trade discussions. After this Trudeau trade fiasco – Canada should be thankful China will still be buying our ag and resource products.