Mark Carney, the Canadian Prime Minister, made a significant diplomatic visit to China this week, marking the first such trip by a Canadian leader in nearly a decade. Carney’s meeting with Chinese President Xi Jinping resulted in the announcement of lower tariffs and several agreements aimed at enhancing energy and trade cooperation between the two nations.
With Prime Minister Justin Trudeau to have been the last Canadian Premier to visit China in 2017. Carney’s visit now seems a historic high watermark in the developing relationship between Canada and China. This trip comes at an opportune time as both countries look to deepen their mutual economic relations. Canada is almost as dependent on China, its second-largest trading partner. Last year, two-way merchandise trade between the two countries topped more than C$118 billion.
During their discussions, Carney and Xi announced a significant reduction in tariffs, signalling a potential reset of their countries’ relationship. Beginning in January 2024, Canada will apply a tariff rate of 6.1% on a limited number (49,000) of Chinese electric vehicles allowed to enter its domestic market. In exchange, China has agreed to cut tariffs on Canadian canola oil from 85% to 15% by March 1.
Though Carney has to be feeling hopeful about recent, reciprocal thawing of the once-frozen Canada-China relationship. As he puts it, engagement is more “formulaic” in recent months. He called the discussions with Beijing “realistic and respectful,” and highlighted the value of direct communication.
“We’re very clear about where we cooperate, where we differ,” – Mark Carney
Ahead of his visit, Carney articulated Canada’s commitment to fostering a “more competitive, sustainable and independent economy.” He acknowledged the new reality of a changing world and proclaimed, “The world has changed dramatically.” His other claim was that our positioning will have long term effects.
Carney went one-on-one with Xi and attended closed roundtables with C-suite executives from China’s top firms. These ranged from an electric vehicle battery manufacturer and the largest energy conglomerate in the world. Every meeting ended on a positive note, embodying a shared desire to deepen economic connections and find new opportunities for partnership.
Xi Jinping echoed the importance of a stable relationship between the two nations, stating that “the healthy and stable development of China-Canada relations is conducive to world peace, stability, development, and prosperity.” This feeling is demonstrative of the larger ramifications of their bilateral partnership on other world issues.
Carney gave equal importance to the call for discipline in our efforts as we seek out collaboration with China. He explained that being able to build those relationships takes in-person discussions, not public statements or Twitter shaming.
“But to have an effective relationship, we have direct conversations. We don’t grab a megaphone and have the conversations that way,” – Mark Carney
The Canada-China agreements struck during this historic visit are a positive step toward renewing Canada-China relations. These relations have been under intense turmoil in recent years. The electric vehicle and canola oil tariffs are a reminder that both sides clearly still have much to discuss, but are willing to work through their differences. They are indeed keenly seeking bipartisanship.
Michael Kovrig, distinguished international diplomat in residence, commented on the need for disciplined and principled engagement with China. He reiterated that a sustained positive approach to the relationship is key to its long-term success.
“That’s why engagement has to be handled with discipline,” – Michael Kovrig