Canada must act quickly to seize opportunities in Asia, report says
October 19, 2011 – Canadians are beginning to grasp the significance of Asia’s growing economic and political importance, but bold leadership and a much more focused strategy are needed to support and advance Canada’s interests in the region, says Wendy Dobson, one of Canada’s leading economists.
“Canada has a reputation in Asia of showing up there but not being serious about establishing long-term relationships,” Dr. Dobson points out in a report published today by the Canadian Council of Chief Executives (CCCE) and the Canada China Business Council (CCBC).
Titled “Canada, China, and Rising Asia: A Strategic Proposal,” the report says it is time to move beyond ad hoc arrangements by developing both closer ties with Asia and a stronger Canada “brand” based on ambitious targets for trade and investment.
“These targets and relationships should be pursued on an ongoing, non-partisan basis supported by a coordinated strategy among the federal and provincial levels of government, the private sector, and other key stakeholders,” the report says.
“Central to a Canadian Asia strategy should be the active pursuit of our interests through regional and bilateral trade and investment liberalization.”
The report notes that Asia’s rise “is transforming the world’s economic and geopolitical landscape” at a pace unprecedented in human history. Six of the world’s 10 largest cities are there and, within 20 years, so will be three of the four largest economies: China, India and Japan.
Massive urbanization and the rapid growth in the ranks of Asia’s middle-class consumers between now and 2030 will generate big increases in demand not just for energy and natural resources but for financial services, education, cleaner technology and environmental improvements, “all of which Canadians do well”.
For the most part, however, Canada is poorly positioned to take advantage of these trends. Our country’s “reputation in Asia has declined in recent years with our neglect of bilateral relationships and regional institutions,” the report says.
“Canadians active in the region are often told that some regard us as unreliable. Canadian governments and businesses, when they turn up, make demands out of proportion to their importance and then often fail to follow through. Having invested little in understanding Asian norms and conventions, Canadians often appear to be out of step with the region’s long-term thinking and evolving relationships.”
The report outlines two approaches that would be “potential game changers” in enhancing Canada’s ties with Asia:
- Canada could seek to join the Trans-Pacific Partnership (TPP), a proposed regional trade agreement currently being negotiated among Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam (Japan and South Korea may also enter the talks). Joining the TPP “would be the most efficient way for Canada to deepen its integration with other Asian economies,” the report says, but only if Canada is prepared to enact reforms in two areas where we are widely seen as being out of step with global standards: our supply-management systems that restrict imports of milk, poultry and eggs, and our relatively lax enforcement of intellectual property rights.
- Alternatively, or in conjunction with that approach, Canada could pursue deeper economic ties with China. Based on the experiences of other developed economies that have tried – unsuccessfully so far – to negotiate free trade agreements with China, a comprehensive bilateral agreement is probably not a realistic goal, the report says. “More promising might be to negotiate a series of confidence-building agreements structured to deliver liberalizing momentum as they enter force, and to create a framework for future talks” as the Chinese economy evolves. One example would be an agreement to ensure predictable and transparent regulation of foreign investment by Canadian firms in China and by Chinese enterprises in Canada.`
The CCCE and the CCBC jointly commissioned Dr. Dobson’s report in an effort to promote closer ties with the world’s fastest-growing economic region. The study is being released today in advance of the 5th Canada China Business Forum, to be held November 21-23 in Beijing and Chongqing, a city of more than 32 million people in southwest China.
Dr. Dobson is a professor at the University of Toronto’s Rotman School of Management and co-director of the Rotman Institute for International Business at the University of Toronto. A former Associate Deputy Minister of Finance in the Canadian government, she is the author of several books including “Gravity Shift: How Asia’s New Economic Powerhouses Will Shape the 21st Century”.
About the CCBC
The Canada China Business Council (CCBC) is the country’s Canada-China bilateral trade and investment facilitator, catalyst and advocate. Founded in 1978 as a private, not-for-profit business association, CCBC provides unparalleled insight into Sino-Canadian trade and investment issues and develops connections that ensure its members’ business success. In addition to its focused and practical services, the Council is also the voice of the Canadian business community on issues affecting Sino-Canadian trade and investment.
About the CCCE
The Canadian Council of Chief Executives brings CEOs together to shape public policy in the interests of a stronger Canada and a better world. Member CEOs and entrepreneurs represent all sectors of the Canadian economy. The companies they lead collectively administer C$4.5 trillion in assets, have annual revenues in excess of C$850 billion, and are responsible for the vast majority of Canada’s exports, investment, research and development, and training.