{"id":5224,"date":"2018-04-13T12:41:05","date_gmt":"2018-04-13T16:41:05","guid":{"rendered":"http:\/\/business.financialpost.com\/?p=1574952"},"modified":"2018-04-13T12:41:05","modified_gmt":"2018-04-13T16:41:05","slug":"canada-must-wade-into-the-china-u-s-trade-spat-but-how-this-game-should-be-played-might-surprise-you","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2018\/04\/13\/canada-must-wade-into-the-china-u-s-trade-spat-but-how-this-game-should-be-played-might-surprise-you\/","title":{"rendered":"Canada must wade into the China-U.S. trade spat, but how this game should be played might surprise you"},"content":{"rendered":"<div class=\"pmYTPlayerContainer video-container\">\n<div id=\"pn_video_470873\"><\/div>\n<\/div>\n<p><script type=\"text\/javascript\">( function() { pnLoadVideo( \"videos\", \"pgJGk7Gmu7w\", \"pn_video_470873\", \"\", \"\", [] ); } )();<\/script><br \/>\nMost old trade hands think this business between China and the United States will blow over. Too much at stake, they say. The gods of the international economy simply are playing games with each other, like they used to do in Homer\u2019s day.<\/p>\n<p>That doesn\u2019t mean the gods still aren\u2019t taking notes.<\/p>\n<p>\u201cJust give us another 24 to 48 hours,\u201d Larry Kudlow, director of President Donald Trump\u2019s National Economic Council, <a href=\"https:\/\/www.foxbusiness.com\/politics\/trade-coalition-of-the-willing-to-take-on-china-larry-kudlow\">said<\/a> April 6. \u201cYou\u2019re going to see a trade coalition of the willing.\u201d<\/p>\n<p>Kudlow, who until a month ago was the business television equivalent of Don Cherry, appeared to be rounding up a posse to join Trump in blocking China\u2019s highly subsidized conquest of the high-tech economy.<\/p>\n<ul class=\"related_links\">\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/tpp-nations-welcome-trumps-interest-dont-want-renegotiation\">TPP nations welcome Trump&#039;s interest in joining deal, but renegotiation? Forget about it<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/canadas-economy-is-maxing-out-and-businesses-have-a-big-decision-to-make\">Canada&#039;s economy is maxing out, and businesses have a big decision to make<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/how-a-u-s-china-trade-war-could-help-and-hurt-canadian-industries\">How a U.S.-China trade war could help \u2014 and hurt \u2014 Canadian industries<\/a><\/li>\n<\/ul>\n<p>Canadian leaders, like many others, have their issues with China\u2019s industrial policy. Yet they have avoided direct comment for now. But what if there is no neutral ground in this fight? China\u2019s ambassador to Canada thanked Prime Minister Justin Trudeau\u2019s government for zipping its lips. \u201cA neutral position is a help to China,\u201d Lu Shaye <a href=\"http:\/\/www.cbc.ca\/news\/politics\/chinese-ambassador-canada-trade-1.4609078\">told<\/a> Vassy Kapelos, host of CBC News Network\u2019s Power &amp; Politics. \u201cWe have noted that the position of the Canadian government is objective,\u201d Lu said. \u201cIt\u2019s very good.\u201d<\/p>\n<p>So Canada, how do you want to play this game, if that\u2019s what this is?<\/p>\n<p>Shall we side with the autocratic regime in Beijing that might trade our support for a free-trade agreement? Maybe you prefer the democratically elected president with autocratic tendencies in Washington for sentimental reasons? Or might there be a way to triangulate our way out of this situation?<\/p>\n<p>The choice matters because it will send the world a message about the kind of country we want to be: a global player or forever an appendage of the U.S. economy.<\/p>\n<p>Many of you probably think this is an easy decision. Canadians and Americans have shed blood together on battlefields around the world for a century. The U.S. buys three quarters of our exports and essentially all of our international shipments of energy. Of course we have its back.<\/p>\n<p>But what if I put it in terms that managers of professional sports teams would understand? Say circumstances are such that you only have room on your roster for the aging superstar or the emerging phenom who might someday break all the veteran\u2019s records? Who do you keep?<\/p>\n<p>You keep China of course. Even some Americans are leaning that way. His president might be courting a trade war, but BlackRock chief executive Larry Fink, who oversees the management of assets worth more than US$6 trillion, said his firm\u2019s future was in the country that Trump describes as a menace. \u201cOne of the most critical priorities for BlackRock today and into the future is increasing our presence and penetration in high-growth markets around the world, particularly in Asia and especially China,\u201d Fink <a href=\"https:\/\/www.blackrock.com\/corporate\/investor-relations\/larry-fink-chairmans-letter\">wrote<\/a> in his annual letter to shareholders.<\/p>\n<p>There is disquiet in Canadian policy circles over whether the Trudeau government will get the China-US standoff right. Experts see no international strategy beyond the all-hands-on-deck response to Trump\u2019s assault on the North American Free Trade Agreement. Formal trade talks with China sputtered on the launch pad, and Trudeau nearly botched Canada\u2019s entry into the Trans-Pacific Partnership (TPP). Trade Minister Fran\u00e7ois-Philippe Champagne salvaged the latter situation, yet he appears to be in no rush to seek formal ratification in Parliament.<\/p>\n<p>So while the government talks about a pivot to Asia, its actions suggest it\u2019s afraid to do anything that might upset the White House. Why no bipartisan advisory committee on China, like <a href=\"https:\/\/www.canada.ca\/en\/global-affairs\/news\/2017\/08\/nafta_council_membersandnewdiplomaticappointees.html\">the one Foreign Affairs Minister Chrystia Freeland assembled for NAFTA<\/a>? What message is Trudeau sending to the world when he tells his foreign affairs ministers to spend almost all of her time dealing with Washington?<\/p>\n<p>\u201cThe approach appears myopic, too U.S.-focused,\u201d said Gregory Chin, a professor of political economy at York University and a former Canadian diplomat in Beijing, \u201cIt appears to be lacking adequate strategic and tactical coordination with the other two sets of negotiations with China and the TPP.\u201d<\/p>\n<p>Said Omar Allam, another former diplomat and chief executive of Allam Advisory Group, an Ottawa-based trade consultancy: \u201cWe need to step back and think about how we are going to move forward on trade. What we\u2019re doing in the U.S. is good, but we\u2019re spreading ourselves too thin elsewhere and we don\u2019t realize it.\u201d<\/p>\n<p>Here are some thoughts about how Trudeau should approach the U.S.-China showdown, based on my own experience abroad and conversations with Chin, Allam, and others who spend their time thinking about such things.<\/p>\n<p>Canada should by no means join Kudlow\u2019s anti-China coalition. There already is an alliance in place to deal with disagreements among the world\u2019s big economies. It\u2019s called the Group of 20. Trudeau should use whatever influence he has to de-escalate tensions by involving other countries in a broader discussion about trade. Talks would include Trump&#8217;s&nbsp;capricious use of retaliatory tariffs and China\u2019s insistence that any company that does business there must share its intellectual property.<\/p>\n<p>Trudeau has a reason to get involved. Andreas Schotter, an assistant professor of international business at Ivey Business School, worries Trump\u2019s trade policies will cause China to turn away from North America and focus its attention on its backyard. Global investors would follow, crushing the notion that Canada could become a bridge between Asia and Europe.<\/p>\n<p>Going to the G20 doesn\u2019t mean appeasing Beijing. Trump is right to confront China over its confiscation of intellectual property. But you don\u2019t resolve that problem by taxing imports of things that have nothing to do with high tech. If Beijing refuses to compromise, the right response is to force Chinese companies such as Huawei Technologies Inc. to share their innovations with Canadian partners, said John Curtis, a senior fellow at the C.D. Howe Institute and a former economist at the Trade Department.<\/p>\n<p>The final piece should be deploying the full-court press used for the NAFTA talks to other parts of the world. Most agree that effort has been effective and Allam would like to see it become a template.<\/p>\n<p>We just need to decide where else we want to go. Trudeau doesn\u2019t seem to know at present.<\/p>\n<p><em>\u2022 Email: <a href=\"mailto:kcarmichael@nationalpost.com\">kcarmichael@nationalpost.com<\/a> | Twitter: <a href=\"http:\/\/twitter.com\/carmichaelkevin%E2%80%9D%20class=\">CarmichaelKevin<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kevin Carmichael: Does Canada want to be a global player or forever an appendage of the U.S.? The world is watching<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/5224"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=5224"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/5224\/revisions"}],"predecessor-version":[{"id":5226,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/5224\/revisions\/5226"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=5224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=5224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=5224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}