January 18, 2016

China Wants A Trade Deal With Canada, But Will Trudeau Government Be Able To Meet Its Demands?

Last Monday Connecting the Dots reported that Canadian Prime Minister Justin Trudeau is “pursuing” a free trade agreement with China. According to a Globe and Mail story three days later, Chinese officials are looking forward to negotiating a pact as well. 

According to the newspaper, Chinese Vice Minister of Financial and Economic Affairs Han Jun said, “During the term of Prime Minister Justin Trudeau there are rare, historical opportunities between China and Canada.” To successfully achieve a deal, however, the vice minister said Trudeau’s government would have to commit to building an energy pipeline on the coast and to lifting  restrictions Canada has in place on Chinese state-owned investments in Canada’s oil and gas sector. 

Han said China is particularly interested in gaining better access to Canadian energy and agricultural products. The Globe and Mail noted the Canada China Business Council has estimated a trade deal between Canada and China could increase Canadian exports by $7.7 billion over the next 14 years and create an additional 25,000 Canadian jobs. Canada currently runs a significant trade deficit with China. 

According to The Globe and Mail, analysts believes one of Han’s demands – a pipeline along the coast – “may prove impossible to achieve” given the fact that Prime Minister Trudeau’s new government “effectively killed the Northern Gateway pipeline when it banned all crude-oil tanker traffic on the North Coast of British Columbia” and British Columbia’s government “has refused to support the $6.8-billion expansion of the Trans Mountain pipeline.”