Opinion: China deal reflects Canada’s new trade reality of being forced to sink or swim

Like it or not, Canada must be willing to adapt and to trade a little less in our values while we derive more value from the strategic trade-offs we’ll need to make. Photo by Sean Kilpatrick/THE CANADIAN PRESS/Postmedia files

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As Prime Minister Mark Carney underscored last week in Davos, the world of trade and international relations has radically changed over the past few months and with two-thirds of our economy tied to import and export trade, Canada cannot afford to tread water. We must navigate the waters we find ourselves in, waves and all.

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Canada is right to re-engage with the world’s second-largest market, but how we do so will present us with new dilemmas and a host of questions that need consideration.

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Cybersecurity. Chinese electric vehicles (EVs) have been called roaming surveillance devices, with hundreds of monitoring components both inside and outside the vehicle. How they can be accessed, monitored, overridden, compromised or even weaponized is unknown.

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Canada can play a leadership role in the development of common North American data standards and cyber safeguards for the EV sector, as a Senate report recommended as far back as 2018.

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Affordability. The case for Chinese EVs is often that they offer eco-conscious consumers cheaper options. But that overlooks that they are broadly subsidized and their raw materials, such as steel and aluminum, are manufactured with some of the world’s most carbon-intensive coal-fired production.

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Meanwhile, Canada’s domestic players are among the greenest globally. For balance, the government may have to consider carbon border adjustment mechanisms, or tariffs on products that appear cheaper because they don’t meet the same environmental standards as our domestic industry.

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Jobs. It is still unclear whether opening ourselves to Chinese EVs means finished goods coming to our shores or new entrants into our manufacturing sector under Chinese ownership.

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If it’s only finished products, then it’s reasonable to expect more chaos and deteriorating conditions for our workers in aluminum, steel and automaking, unless the government introduces new requirements, such as investment in local manufacturing for those Chinese companies that want access to our market.

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Trade. As we’ve already seen, any closer integration between China and Canada will raise concerns in the United States about how rules of origin are being applied to parts and materials used in North American products under the Canada-U.S.-Mexico Agreement (CUSMA), so we don’t become a backdoor for entry into the U.S. market.

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Given that the U.S. is and always will be our largest trading partner and that we have so much at stake in a shared continental future, we still need to carefully listen to our neighbour’s concerns.

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Underlying these concerns is another loaded question: Can Canada ever succeed if we continue to let ourselves be divided and pitted against ourselves: premier against premier, region against region and sector against sector?

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China knows what it’s doing when it inflicts maximum pressure on our agricultural sector in a fight over manufactured goods. U.S. Treasury Secretary Scott Bessent knows what he’s doing when he mentions separatist sentiment in Alberta.