While Japanese Prime Minister Shinzo Abe’s US visit (April 26-27, 2019) understandably drew immense attention, his Canada visit (April 27-28, 2019) and meeting with Canadian Prime Minister Justin Trudeau was important from a strategic and economic dimension.
The China factor was an important component of the discussions between Trudeau and Abe. It would be pertinent to point out that Canada’s ties with China have significantly deteriorated after the detention of Meng Wanzhou, the finance chief of Huawei, in December 2018. Meng Wanzhou had been arrested on charges of theft of technology, bank fraud and misleading the US government with regard to its business transactions in Iran.
China has taken some strong retaliatory measures against Canada. Two Canadian citizens, Michael Spavor and Michael Kovrig, have been held in China since December 2018 on accusations of spying. In addition to the detention of the Canadian citizens, Beijing has also taken some important economic steps. China has revoked the licenses of two Canadian companies, Glencore Pvt Limited and Richardson International to ship canola to China. The reason cited by Beijing for stopping imports of canola from Canada was contamination with pests. This move is important, because China buys an estimated 40 percent of Canada’s canola exports. Canadian imports to China were estimated at USD 2.7 billion. China is also reducing the imports of other agricultural commodities such as soyabean and peas.
As a consequence of China’s recent steps, Trudeau has been under immense pressure domestically. Trudeau’s challenger from the Conservative Party, Andrew Scheer has urged Trudeau to take a tougher line against China, and explore other trade alternatives. He also spoke in favor of pulling out investments in the Asian Infrastructure Investment Bank.
Trudeau said that China needed to be prevented from imposing its approach globally. Abe on the other hand, was more nuanced. Over the past year, ever since imposition of tariffs by the US, Japan has been seeking to mend ties with China, and has expressed its openness to joining the Belt and Road Initiative (BRI). Japan and China are also exploring joint investments in third countries. The two countries held the first forum for joint investments in infrastructural projects in third countries in October 2018.
Abe made the point that engagement with China was essential, and it needed to be part of the world system. The Japanese PM said that the global community should work jointly in this direction.
It was not just China, but also US policies which were discussed. Both Trudeau and Abe have been hit by US’ inward looking policies. One of Donald Trump’s first steps after taking over as US President was withdrawal from the Trans Pacific Partnership (TPP). This decision did not go down well with a large number of countries including allies of the US, such as Japan, Singapore and Canada. Eleven countries have revamped the TPP and negotiated the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Trudeau hailed the agreement, saying that it had benefited both Canada and Japan. While speaking at a joint conference, Trudeau stated that the CPTPP was a clear contrast to rising protectionism promoted by the US. Trudeau also referred to the rise of Canadian beef exports to Japan.
Abe was not so direct in his criticism of the US. While stating that Japan and Canada shared similar positions on trade issues, he emphasized on the need for more efforts towards persuading Washington to don the mantle of leading the free world.
While Abe and Trump share a good personal rapport (they have spoken to each other over 40 occasions), the same cannot be said with regard to the equation between Trudeau and Trump. At the 2018 G7 Summit, Trump refused to sign a joint communiqué and dubbed the Canadian PM as dishonest and weak, after they had a public disagreement over NAFTA renegotiations and a joint communiqué to be issued by G7 leaders. Trade issues are likely to occupy center stage during the upcoming Canadian election in October 2019. Many believe that Trump protectionist policies could be an important election plank for the Liberal Party led by Trudeau.
Slowly but surely, Japan-Canada economic ties have been rising. Their bilateral trade in 2018 was estimated at USD 29.7 billion. Significantly in February 2019, (the second month of the CPTPP being in effect) Canada’s pork imports to Japan were estimated at 14,403 tonnes, not far behind US imports to Japan — estimated at 14,599 tonnes.
There is scope for other
countries which are apprehensive of China’s rise but equally concerned about
Trump’s short sighted policies to work jointly with Canada and Japan which both
stand for globalization and a liberal world order.
There is scope for other countries which are apprehensive of China’s rise but equally concerned about Trump’s short sighted policies to work jointly with Canada and Japan which both stand for globalization and a liberal world order.
During Abe’s visit, important memorandums were signed for giving a boost to economic ties. This includes the Memorandum of Cooperation, between Invest in Canada and the Japan External Trade Organization. This memorandum seeks to enhance FDI linkages. Japanese investment in Canada, in 2017, was estimated at USD 29.6 billion, while Canada’s investment in Japan was estimated at USD 4.7 billion.
The Memorandum of Understanding between the National Research Council of Canada and the Advanced Telecommunications Research Institute International of Japan will support joint research and development in fields like robotics and telecommunications. These are both important areas, and both countries have the infrastructure and resources for promoting fruitful cooperation in these spheres.
Both Canada and Japan have their importance. Japan is an important bridge between the West and the developing world. It is building a counter narrative to China, and is involved in a number of infrastructural initiatives in Africa, as well as in Asia through the Partnership for Quality Infrastructure (PQI) which is dubbed by many strategic commentators as a counter to BRI. With the US not being pro-active enough, it has also been argued that Japan should play a greater role in the Free and Open Indo Pacific. Japan has one big advantage vis-à-vis western countries — it is not viewed as patronizing.
With most Western countries choosing populist leaders and moving away from liberal values, Canada is opening up its immigration as well as liberalizing work visas. Two clear examples of Canadian farsightedness are: the GTS program which will result in faster processing of work visas of individuals from STEM; and the Student Direct Stream program has introduced important changes with regards to student visas of individuals from China, India, Vietnam and the Philippines. Student visas of individuals with financial resources and English language skills will be processed within 45 days, as opposed to 60 days.
Canada has been able to attract a number of professionals from other western countries and has also been able to attract a large number of international students. As of 2018, there were 572,415 study permit holders (after the US and UK, Canada emerged as the third largest host of foreign students). Canada has drawn a large number of students from both India and China. According to estimates in 2018, the number of Indian students arriving in Canada on student visas was 107,795, while the number of Chinese students arriving in Canada was estimated at 85,825. A total of 1,72,000 students holding Indian citizenship held study permits for Canada, while the number of Chinese citizens possessing study permits was estimated at 1,42,000.
Japan and Canada are both also examples of US allies whom Trump has rubbed the wrong way due to his myopic approach towards complex issues. Interestingly, during Abe’s US visit, Trump focused on increasing Japanese manufacturing in the US, and job creation, while ignoring other important strategic issues. Pushing forward US economic interests is understandable, but it should not come at the cost of US strategic interests, and its ties with crucial allies.
The Canada-Japan relationship is important, in both contexts of the US and the China factor. They cannot adopt identical policies given their different geographical locations as well as respective national interests. However, there is scope for other countries which are apprehensive of China’s rise but equally concerned about Trump’s short sighted policies to work jointly with Canada and Japan which both stand for globalization and a liberal world order.
While a number of such countries are already part of the CPTPP, countries which are not part of the TPP should join such a partnership. Abe’s attitude towards China is also important. Apart from being a part of initiatives such as the Indo-Pacific, Tokyo also has the potential of being a bridge/gateway between the West and China. Canada on its part is amongst the few countries in the Western world which stands for liberal values and open borders. The Tokyo-Ottawa relationship is an important one in the current geo-economic context, and the recent Trudeau-Abe meeting where a number of issues, bilateral and global, were discussed was crucial in giving a further fillip to ties between both countries.