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Canada John Ivison: Canada risks China's wrath with overture to Taiwan but so be it

15:49  11 january  2022
15:49  11 january  2022 Source:   nationalpost.com

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International Trade Minister Mary Ng has opened talks aimed at strengthening economic ties with Taiwan. © Provided by National Post International Trade Minister Mary Ng has opened talks aimed at strengthening economic ties with Taiwan.

Most Canadians want less trade with China but worry about the economic cost of taking a stand against the bullies in Beijing.

A new poll by the Angus Reid Institute suggests that three in five Canadians support measures such as the diplomatic boycott of next month’s Winter Olympics but are concerned about negative economic consequences.

Those fears are justified, judging by China’s track record of economic coercion, most recently an unofficial trade ban on the Baltic state of Lithuania.

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Canada runs a grave risk of incurring similar sanction with the announcement by Trade Minister Mary Ng on Monday that she spoke to Taiwan’s minister without portfolio, John Deng, and agreed to begin exploratory talks on a possible foreign investment promotion and protection deal.

Beijing’s ambassador in Ottawa, Cong Peiwu, did not respond to requests for comment. But Taiwan is the third rail for China — Lithuania found itself punished simply for allowing the opening of a “Taiwan Representative Office” in Vilnius. (China tolerates such offices to be named after the Taiwanese capital Taipei but does not accept Taiwan’s right to have state-to-state ties.)

In the months after the office opened, China declared unilaterally that each country’s representative embassy would be demoted to an office headed by a charge d’affaire. The Lithuanians were concerned that this meant loss of diplomatic immunity and pulled their staff out of China. The Baltic state subsequently found its exporters were unable to list Lithuania as a country of origin when trying to clear Chinese customs. There were further stories that German and French firms were warned not to ship goods with Lithuanian components. The European Union and United States have expressed their support but it is clear, as it was when Canada’s canola exports to China were restricted, that Beijing is quick to use trade as a weapon (and then deny it is doing so).

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Other countries have signed investment protection agreements with Taiwan, notably with Japan in 2011 and Singapore in 2013. China didn’t lodge a serious protest in either case — but that was before Xi Jinping rose to power and the Chinese became intoxicated with a nationalism that many Indo-Pacific watchers equate with Japanese bellicosity in the 1930s. The assumption is that Xi will be less receptive to a trade deal with Taipei than his predecessors.

The Chinese will no doubt claim any talks contravene Canada’s one-China policy, which does not recognize Taiwan as a sovereign state or its government as a national government. At the same time, Canada already has an investment promotion and protection deal with Hong Kong — technically, a special administrative region of the People’s Republic and not a sovereign state either.

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The implications for Canadian exports are obvious. While there is upside to this country’s $5.5 billion trading relationship with Taiwan, that is dwarfed by the prospect of a freeze in the $100-billion relationship with China.

Yet, even as the political relationship chills — in a recent poll in the state-run Global Times, Canada was ranked the least favourite country of Chinese citizens — the business relationship is blooming. Exports from Canada were up 23 per cent on pre-pandemic levels to $14.8 billion in the first six months of last year, compared with 2019. This country was the beneficiary of the Chinese falling out with Australia, which it relies upon for coal, among other resources.

It may be that any price to be paid for a recalibrated China policy is lower than anticipated. The Chinese have their own problems at home, as they emerge from a two-year “zero-COVID” lockdown policy that has left the population with virtually no antibodies to Omicron. If they need Canadian resources to stop their economy from stagnating, political irritants may be less significant.

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But whatever the price, it will have to be paid. After years of trying to accommodate the Chinese — and seeing its naivete exploited — the Trudeau government has resolved to adopt a firmer line.

Foreign Minister Mélanie Joly has been mandated to develop a “comprehensive Indo-Pacific strategy” to deepen diplomatic, economic and defence partnerships in the region.

Justin Trudeau signalled in a year-end interview with Global TV that democratic countries should “show a united front” against Beijing’s “coercive diplomacy” to avoid being played off against one another. “We need to do a better job of working together and standing strong, so that China can’t … divide us against one another,” he said.

Talks about an investment promotion deal with Taiwan may be just an opening engagement. Certainly, the Taiwanese hope that it will act as a stepping stone to entry into the Trans-Pacific Partnership trade deal, of which Canada is a member along with 10 other countries including Australia, Japan and New Zealand.

Taiwan and China have both applied to join the pact and will need support from all members who have ratified the deal. Taiwan could meet the required conditions much more easily than China and Canadian backing would be a boost for its bid.

Guy Saint-Jacques, a former Canadian ambassador in Beijing, said he was pleased to see the news on the exploratory talks with Taiwan. “I’ve been advocating more support for Taiwan for quite some time. It’s a vibrant democracy and we should support its application to join the (Trans-Pacific Partnership),” he said.

Saint-Jacques also advocates Canada sending a minister to Taipei for the first time since then Liberal industry minister, John Manley, visited in 1998.

“China will react to all of this but business is business and Taiwan is an importing trading partner, one with which we could do a lot more,” said Saint-Jacques.

The risks of upsetting an antagonistic China are real, as the Lithuanians can testify. But the scales have finally fallen from the eyes of official Ottawa — you cannot operate in good faith with a government that does not intend to play by the rules of the international community.

It used to be said that the main focus of foreign policy was to maintain both trade with the United States and Canada’s self-respect. The same now applies to China, but it may well be that the two goals are not compatible.

• Email: jivison@postmedia.com | Twitter: IvisonJ

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