On June 9, Canadian Foreign Affairs Minister, Mélanie Joly, announced the creation of an Indo-Pacific Advisory Committee entrusted with overseeing Ottawa’s new Indo-Pacific Strategy. The committee is comprised of a wide range of Canadians, including representatives of the private sector, civil society, and government. Both the new committee and overall strategy embody Canada’s attempt to readdress its relations with Indo-Pacific nations, with particular attention to actors other than China as a means to weaken Beijing’s existing dominance in the region.
Historically Canada has maintained relatively positive Indo-Pacific relationships, marked by numerous trade agreements and international cooperation. However, in recent years, China-Canada relations specifically have taken a significant hit. This was most evidenced by Ottawa’s 2018 arrest of Huawei’s tech executive, Meng Wanzhou, which swiftly prompted trade restrictions by China and the jailing of two Canadian journalists in Beijing. While all three were released last year, relations have steadily soured with Justin Trudeau most recently calling out China for playing “aggressive games” with Canadian democracy in response to a report that China had funded 11 candidates in the 2019 federal election.
Focus on Regional Partnerships
The new Indo-Pacific Strategy aims to freeze these tensions and work towards more amicable Canada-China cooperation. Yet, the strategy also highlights key partnerships with other actors in the region and encourages further development of these as a way for Ottawa to expand away from its reliance on Beijing. The strategy champions expanding and deepening regional partnerships as well as boosting innovation for engagement in ‘people-to-people’ ties.
Global Affairs Canada further outlines new bilateral and regional trade agreements in the strategy as well as emphasizing an expansion of foreign investment promotion and protection agreements. In doing so, Ottawa is hoping to build stronger economic ties throughout the Indo Pacific region. Further diversification will also come about through enhanced deals with the Pacific Alliance and Mercosur. The strategy also targets possible new trade agreements with ASEAN and Indonesia thus expanding Ottawa’s reach in the Indo-Pacific and demonstrating the vast potential of future trade partnerships.
A progressive and unified Trans-Pacific Partnership with China could, ironically, lead to both regional diversification and assuage Chinese hegemony. Other regional economies will most likely follow Beijing’s lead if a strong foundational relationship with Canada is established first. This economic expansion is only strengthened through the comprehensive Export Diversification Strategy within the report, emboldening Canadian exporters and innovators to compete in global markets. This diversification will impact both Canada domestically and the Indo-Pacific region as markets become more integrated through innovation and investment.
Reconfiguring Ties with China
The case of China is a delicate one. Relying on China to gain access to other regional markets is a fragile plan in and of itself. As Ms Joly put it last week, China has become an “increasingly disruptive, global power” leaving Canada no choice but to reconfigure its position in the Indo-Pacific vis-a-vis Beijing. She further evidenced the threat China presents by warning Canadian companies conducting business in China of potential risks. The strategy touches on this by encouraging Canadian relations with other key players in the region as means to weaken its dependence on China. India has clearly emerged as a valuable contender. The two countries already have a history of collaboration, having been involved in development aid projects in Africa and in cosigning bilateral agreements about issues ranging from nuclear cooperation to double taxation.
Furthermore, in 2021, India was Canada’s 14th largest export market and its 13th largest trading partner overall. As Canada looks to strengthen its economic ties in the Indo-Pacific, India can easily facilitate discussions towards a sustainable Comprehensive Economic Partnership Agreement and a Foreign Investment Promotion and Protection Agreement (FIPA). To date, both countries are interested in deepening their commercial relationship and have committed to regular discussions about their evolving trade and investment opportunities. As opposed to Canada-China relations, the success of a Canada-India partnership lies in both shared democratic values and the common belief in a liberal rules-based world order.
As discussed, Canada’s new Indo-Pacific Strategy bears in mind China’s rising power and proposes to counter it through strengthening partnerships around the region. Aside from India, Canada has slowly built partnerships with other regional economies in the past couple of years. Jonathan Berkshire Miller, a director of the Indo-Pacific program at the Macdonald-Laurier Institute, noted Canada’s diversification through the expansion of Canada-Vietnam relations, already a free-trade partner since 2018. Although establishing impactful trade negotiations and being open to future collaboration with Taiwan are on the agenda, a new Indo-Pacific order is yet to be seen.
While Ottawa cannot underplay the importance of Beijing in the Indo-Pacific region, after all China has become Canada’s second largest trading partner despite diplomatic strains, it also cannot allow it to dictate relations with countries like India, another major economic player in the region. Thus, Canada should approach this new era in the Indo-Pacific by balancing both its existing relation to China and its desire to explore relations outside of it. In doing so, Canada should also seek to distinguish itself from other Western nations and their partnerships in the Indo-Pacific region, namely the United States.
Furthering the Indo-Pacific Outlook
Relations with China were once again thrown back under the spotlight last month after President Xi defined the CCP’s priority as being matters of state security rather than strengthening economic ties. While excluding China from international forums is rather impossible, if not naïve, collaboration is key to be able to tackle pressing global challenges in development and climate change for example. Importantly, China will chair a UN biodiversity conference this upcoming December in Montreal.
Ahead of several Indo-Pacific summits that Trudeau is set to attend in the next coming weeks, namely the G20 in Indonesia and APEC in Thailand, Ms. Joly has hinted at Canada’s Indo-Pacific strategy being revisited from the original version first presented last June. While she did not share any details, given the current strained political climate surrounding Canada-China relations, one can expect Ottawa to take a more stringent position on issues of security and trade.
To conclude, Canada must continuously seek to collaborate with Japan, India, and the United States under this new strategy to develop a sustainable presence in the Indo-Pacific. It is in Canada’s best interest to encourage a rules-based consensus across the region to be able to deliver meaningful change on global issues like development and climate change.