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Carney and Xi’s joint statement doesn’t reset the world order in one fell swoop. The two leaders signed a series of nonbinding memoranda and letters of intent that, on paper, simply roll several things back to where they were a few years ago.
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In 2017, Carney’s predecessor, Justin Trudeau, bounded into Beijing with hopes of a “comprehensive” trade deal. That effort quickly fizzled and, 12 months later, Canadian police arrested Huawei Technologies Co. Chief Financial Officer Meng Wanzhou in Vancouver on a provisional US extradition request, causing China to detain two Canadian citizens and leaving the relationship in tatters.
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Carney’s step is a banker’s hedge — a “backing off,” said Jeff Nankivell, chief executive officer of the Asia Pacific Foundation of Canada, who was formerly posted in China as a senior Canadian diplomat.
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“It’s fair to assume that the task for the Canadian negotiators was to see what’s the minimum concession we can make on the EV tariff that would be enough to get the Chinese side to agree to significant reductions on their tariffs,” he said. “This is that deal.”
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“The first job of a national leader, and especially in times of economic duress, is to keep the country’s options open,” he added.
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One of the two Canadians detained by China for nearly three years during their diplomatic nadir, Michael Kovrig, now works as an analyst and adviser on geopolitics and security.
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“The Canadian government was in the land of bad options,” he said. “China is not an avoidable country.”
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Friday’s announcement nonetheless gave him “a bad feeling in the pit of my stomach,” he said.
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Farmers from Canada’s vast prairies are suffering from Chinese tariffs on canola and peas, and China’s message, in Kovrig’s view, was “open your markets to our massively subsidized overproduction of electric vehicles and other things, or we will hurt you.”
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He said Carney’s stoic comment Friday that “we take the world as it is, not as we wish it to be” made him sound like “a very strange sort of Davos man.”
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Carney may prefer a world of freer trade that focuses on efficiency, but it appears he’s acknowledging “we’re not living in that world any more,” and that requires radically different behavior, Kovrig said.
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Carney’s visit to China reflects a ruthless economic focus for which Canadians elected him. US protectionism and Trump publicly coveting Canada as a “51st state” helped lift Carney to power last year with a mandate to diversify trade.
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“We never want to be in this position again,” he said on Bloomberg’s The Mishal Husain Show in October.
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Under Trudeau, Canada pursued a values-based foreign policy, focusing on human rights and gender equality. Some in Carney’s base still want him to champion those issues, but trade and economic growth are clearly higher on his agenda.
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To some, Carney’s approach is a welcome recalibration.
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“Well done, PM Carney and Co.,” Derek Holt, head of capital markets economics at Bank of Nova Scotia, said of the China deal in a note to investors. He hailed the shift from the previous government’s approach, which he said “subjugated bilateral commerce to virtue signaling and often hypocritical finger-wagging.”
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“Commerce is in charge now,” Holt said.
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English (US)