Business in Vancouver

What to expect from Justin Trudeau’s trip to China

Climate change declarations are likely; trade deals, not so much

PUBLISHED : Saturday, 27 August, 2016, 5:20am
UPDATED : Tuesday, 30 August, 2016, 4:34pm

Prime Minister Justin Trudeau is likely to form partnerships and announce pacts related to business and the environment during his weeklong trip to China that starts August 30.

But don’t expect much headway on a future Canada-China free trade agreement, according to academics and international trade lawyers.

More likely, said Asia Pacific Foundation CEO Stewart Beck, is that Trudeau will announce that his government will review and refresh the Canada-China Economic Complementarities Study, which the former Stephen Harper government released in 2012.

That study assessed potential benefits of deepening the two countries’ bilateral trade and economic relationship.

Much has changed since 2012, Beck said, not least of which is soaring e-commerce growth, and that justifies updating the study on the value of free trade with China.

Indeed, Alibaba CEO Jack Ma is expected to mingle with Trudeau and other members of the G-20, who are scheduled to meet September 4 and 5 in Hangzhou, China.

Ma and Trudeau might announce a partnership similar to the memorandums of understanding that Ma entered into with the French and Italian governments in 2014, said Yves Tiberghien, director of the Institute of Asian Research at the University of British Columbia.

Those pacts saw Alibaba encouraging French and Italian brands to use its e-commerce platform by providing express enrolment, special promotion and marketing support.

For example, Italian wines will be at the forefront on September 9, when Alibaba has its first “WineDay.”

“Canadian small- and medium-sized enterprises are finding ways to export in a big way to China,” Tiberghien said, “and Alibaba is used to dealing directly with prime ministers and governments, as they are three times larger than”

He added that other Trudeau announcements could relate to slowing climate change.

Tiberghien pointed out that, while China is a major greenhouse gas emitter, it has also been investing heavily in renewable energy to reduce those emissions.

Chinese companies have similarly been investing in BC ventures that aim to reduce global fossil-fuel use.

China’s Zhongshan Broad-Ocean Motor, for example, closed a deal August 19 to buy 10 per cent of Burnaby-based fuel cell developer Ballard Power Systems for C$28.3 million (US$21.75 million).

With climate change near the top of Trudeau’s priorities, Tiberghien said any agreements with China on that front will be valued.

He believes Canada can start negotiating a free trade agreement with China and that the leaders might indicate that negotiations are not far off – perhaps by creating a working group.

But Lawrence Herman, an international trade lawyer at Herman & Associates, doubts that will happen because Canada will not want to spread its trade negotiators’ workload too broadly.

“Possibly China would be a candidate for trade negotiations, but I think it would probably come a little down the queue,” he said. “Much more mature than any possible negotiations with China is a bilateral trade agreement with Japan. That has been in the works for many, many years and was sidetracked because of the Trans Pacific Partnership [TPP].”

Herman said the TPP, which includes 12 Pacific Rim nations but not China, is on “life support” because of anti-TPP sentiment among the American public, mild opposition from Democratic presidential candidate Hillary Clinton and strong opposition to the deal from Republican contender Donald Trump.

Trudeau’s official visit will include stops in Beijing, Shanghai, Hangzhou and Hong Kong and include time with Chinese Premier Li Keqiang before the two attend the G-20 summit. His trip will also include a September 1 stop at the Canada-China Business Council AGM in Shanghai.