The Beaver and the Panda: “It’s Complicated”

Carl Hageraats

International politics is a game of courtship, and many have wondered whether the Beaver and the Panda would make a good match. Stephen Harper’s current visit to China marks a notable advance in the two countries’ previously frosty relationship, with energy security at the top of the agenda. There is good reason to be optimistic about this, considering Canada’s need for closer trade partners during a slower than expected recovery from the recession. Though it would be unwise to break out the champagne just yet, for there are several layers to Canada’s China policy, layers that could get us wrapped up in a commitment that is too good to be true.

Now jump back three weeks. The recent Keystone XL pipeline issue starkly divided the United States of America, caused President Obama to flinch, and showed that our neighbours to the South aren’t ready to take any big risks before November’s election. The project could have been mutually beneficial for both Canada and the US, but its environmental cost churned up such a storm among the Democrats’ voter base that it became politically impossible in the medium term (See Erica’s column for more analysis on this issue). Prime Minister Harper took the opportunity to clarify his next move. If the PM saw Asia as plan B, he hardly left Canadians guessing, having stated that exporting energy products accross the Pacific is a national priority. Now that shipping more oil South won’t be an option for some time, shipping oil West will require some careful diplomatic moves.

Canadians can rest assured that the government is serious about deepening trade ties with China, and this becomes particularly interesting if we look back to the government’s early months in office. In 2006, Harper told reporters that Canada wouldn’t sell out its values to “the almighty dollar” and in 2007 met with the Dalai Lama during a highly publicised visit in Ottawa. These moves did nothing to improve ties with the People’s Republic, but times have changed since. Beijing is now sending a pair of pandas to Toronto, and the Prime Minister just landed on Tuesday. There are several reasons to commend the government on simply getting there.

First, Canada needs to diversify its trade partners, and improved ties with China could very well provide an opportunity to lessen economic dependance on the United States. This is hardly a new question, as Canada’s foreign policy has often sought to distinguish it from the US, from the Iraq War to proposed trade agreements with Europe. Now that the Eurozone is on financial dialysis and Canada’s jobless rate slowly climbs, it’s a good moment to reassure Canadians that they’ll have a job tomorrow even if US consumer demand stops driving exports. Sending oil and gas to China will no doubt boost the already hot natural resource sector, which arguably carried Canada through the recession and prevented further collapse in growth.

Second, international political capital has been scarce for Canada since losing its seat on the UN Security Council in 2010, and new ties to Asia could partially restore its international standing. Short of guaranteeing DFAIT officials free spots at upcoming talks for the new Trans Pacific Partnership (TPP), it would at least position Canada favourably in relation to the biggest animal at the table: the Panda. Harper will also be in a position to negotiate with China on the Middle-East, a sticking point for the West as China clogs diplomatic pressure on Iran and Syria.

Third, the visit will not only seek new markets for Canadian exports, but also new ways to increase student mobility between the two countries. As Canada faces an aging population and lagging productivity, our long-term economic well-being depends on our ability to attract fresh talent from abroad.

A more intimate link between the Beaver and the Panda may seem promising, though we should think carefully about what this could mean after the honeymoon. There are several reasons Canada could be barreling down a dangerous path, one from which it will become increasingly difficult to stray.

First, in an attempt to diversify – presumably away from our good old neighbours to the South – we may end up creating another relation of dependence in which China’s growth hiccups will be felt more and more here in Canada. China now faces dangerous bubbles in financial and real estate markets, and its unprecedented growth is arguably unsustainable at current levels. Not to mention that rising social unrest, which undermines investor confidence, could also hurt growth in China should it spiral out of control. In short, the robustness of China’s sought after markets is debatable, and the greater the likelihood of economic collapse or even slowdown, the riskier a close trade relationship becomes.

Second, the initiative may eliminate several long term options in the domestic energy sector. Harper has been selective in his support for green technology, and has been clear as day on resisting international pressure to reduce Canada’s emissions. While this may serve Canada’s short to medium term economic growth, it will make a green economy an impossible illusion as labour and technology resources are used up for extractive industries. As our economy becomes more reliant on oil and gas exports to China, having a conversation about green technology becomes next to impossible.

Third, Harper will no doubt use the talks as a platform for negotiation with the Chinese leadership on its Middle East policy, but convincing them to abruptly change course is unlikely. Furthermore, a closer relationship with China may make it harder for Canada to promote human rights abroad, as the government will refrain from using such damning rhetoric as it did in 2006. With human rights hustled to the foreign policy backburner, Canadians may start to think the values they feel strongly about are no longer represented.

To sum up, closer Canada-China ties may lead to path dependency that reliquishes our sovereignty – International-Relations-speak for a lesser ability to act on our own. The Panda and the Beaver could very well become friends as a result of Harper’s current trip, but the Beaver may find that it doesn’t wear the pants. Their relationship status may still read “it’s complicated” but despite the Panda’s baggage, at least the Beaver is trying.