The question that remains unanswered, however, is whether Canada is at all interested.
According to briefing notes prepared for Joe Oliver when he was appointed natural resources minister last year, the Chinese offer was made in fall, 2010.
“China asked Canada to consider the feasibility of an FTA (Free Trade Agreement) as part of a study into the ways in which the Canadian and Chinese economies are complimentary,” the note reads.
“Canada accepted China’s proposal for an economic study and to consider an FTA thereafter.”
Analysts agreed this represented a turn of events from what has become the standard practice of Canada expressing interest first.
“Most, if not all of the time it’s us out there chasing down the partners,” said Kathleen Sullivan, executive director of Canadian Agri-Food Trade Alliance.
While the document notes natural resources “represent a strategic focus of the Canada-China relationship,” it does not indicate why the Asian nation would be interested in pursuing a free trade agreement with Canada.
Trade consultant Lawrence Herman said the fact China approached Canada is significant because it is selective in which countries it chooses to pursue free trade talks with.
China may want to use Canada as a testing ground before launching negotiations with larger and potentially more complicated trading partners such as the United States or European Union, Herman said.
Hungry for Canadian energy and natural resources, it may also want to establish a framework around which to expand its involvement in the oil sands and mining sectors.
China has emerged as Canada’s second-largest trading partner after the United States and a major source of foreign investment — including $10 billion into Alberta’s oil sands and B.C.’s shale gas deposits.
Jean-Michel Laurin, vice-president of the Canadian Manufacturers and Exporters industry association, said the fact China was the one to express interest first would help with any negotiation.
“If you’re the only demander in a negotiation it puts you in a weaker position,” he said. “At least if both countries are willing to negotiate something, it puts us more on an equal footing, at least in the beginning.”
But despite the offer and the Harper government’s obvious interest in free trade agreements, it remains unclear whether Canada is truly interested in pursuing talks with the emerging Asian giant.
Canada and China launched a joint study during Prime Minister Stephen Harper’s trip to China in February that is aimed at determining ways to enhance trade and economic activity between the two countries.
The study was to be completed by the end of May, but it still hasn’t been released.
At the same time, opinions remain split over whether China would be a good free trade partner for Canada.
A recent Asia-Pacific Foundation of Canada survey of 465 individuals engaged in Asia through their professional, research or personal interests found nearly half felt the government should prioritize trade talks with China over other partners such as Japan, India and the EU.
But not everyone is convinced, and analysts say the Conservative government has taken an advisedly cautious approach with China.
“The relationship is probably not mature enough between Canada and China to start free trade talks,” Herman said, noting Canadian business activity in China remains low.
In addition, he said, talks with China would require a large number of resources that would pull attention from ongoing negotiations with the EU, India and the new Trans-Pacific Partnership.
Laurin said the fact China is not an open, market-based economy is also an issue, and the Asian nation needs to take a few more steps to reassure potential trading partners it can play by the rules.
“Thinks are moving in the right direction,” Laurin said of the Canada-China trade relationship, “but I think we’ve got to move one step at a time.”
Original Article
Source: ottawa citizen
Author: Lee Berthiaume
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