Asia’s economies are increasingly the world’s growth engine, and the consumer markets in China and India alone could be worth as much as $20 trillion by 2020. Canada has finally woken up to this reality.
Last October, Canada joined the Trans-Pacific Partnership (TPP), a trade pact that aims to be the “gold standard” for future free trade deals. South Korea, Japan, and Taiwan have all said they want to join the TPP. If they do, Canada will have access to three tough-to-crack markets and access to a group of countries that together make up more than one-third of the world’s GDP.
In the fall, the prime minister travelled to India. While ostensibly a trade mission gaining only a relatively modest $2.5 billion of deals, the trip also laid the groundwork for Canada’s nuclear energy firms to resume business with India, something they had been prevented from doing since India’s 1974 nuclear test. Asia also turned towards Canada, as China’s CNOOC and Malaysia’s Petronas invested close to $21 billion in Canada’s oil and gas sector in 2012 alone, which prompted a revision of Canada’s policies towards foreign takeovers by state-run companies.
In Burma, one of the most isolated countries in the world, Canada’s foreign minister applauded its democracy movement with the election of opposition leader Aung San Suu Kyi to parliament. Recognizing the country’s economic potential and the fact that Canadian mining companies are already active in Burma, Ottawa not only eased trade sanctions against the regime, but also plans to open an embassy there.
There is a sense of urgency in all this given Canada’s slow economic recovery and the degree to which this government is tying its political fate to the belief that our oil and mining sectors can be the core engine of growth for the Canadian economy. Though the federal government deserves a passing grade on its Asia policy, it still needs to communicate a clear and comprehensive vision of what closer relations with Asia will entail for Canada’s security interests.
Canada’s overtures to the region have mostly been about economics: selling oil, making trade deals, supporting diaspora groups at home and tapping into their investment dollars. This reflects the government’s prioritization of economic growth, perhaps even at the expense of its much touted quiet-diplomacy approach to human rights and democracy in regimes like China and elsewhere. With a stubbornly high unemployment rate here at home, this emphasis on economic growth is practical in the short run. But does Canada’s new Asia policy risk being swamped by emerging geopolitical problems?
Despite Harper’s efforts to place Asia near the top of Canada’s foreign policy priorities, warm economic relations cannot hide some key political differences that we have with Asia.
For example, America’s “Asia Pivot” means that the Pacific Ocean will be the new “front line” of its defence policy, which is now aimed (implicitly, at least) at deterring China. Canada – whether we like it or not – will be caught up in this policy shift. Meanwhile, China and Japan continue to squabble over the Diaoyu/Senkaku islands. South Korea and Japan both recently elected nationalist leaders, with Japan aiming to increase its military spending for the first time in a decade. North Korea’s ever-increasing ballistic missile capability means that Pyongyang is not just sabre-rattling. Instead, it is a real threat to stability in the region. India has tested new nuclear missiles, and has plans for anti-satellite weapons. With the launch of its new nuclear-powered submarine, India appears to have strategic objectives that extend well beyond its enduring conflict with Pakistan.
In 2012, the government in Ottawa made a strong effort in looking after Canada’s economic interests. That strategy is consistent with Prime Minister Stephen Harper’s focus on domestic politics and the economy at home. If Asia began to matter for Canada in 2012, the hard part in 2013 and for the rest of this government’s tenure will be developing a comprehensive strategic plan that continues to secure our interests in an increasingly competitive and insecure part of the world.