Canada’s Re-engagement with Asia

Check Against Delivery

Thanks for taking the time to hear my point of view. My remarks are about Canadian re-engagement with Asia, but I’ve also done some work on maritime boundary disputes in East Asia, so I’m happy to address those in the Q&A if you like, including issues of China’s “core interests”, role of the US, etc.

I’ll begin with my impression of what’s driving Canada’s shift to Asia. It seems to originate from the government’s jobs and growth agenda and seems aimed to address the fact that Canada’s economy remains tied to some very mature and stagnant economies in North America and Europe. Therefore it is necessary to diversify Canada’s trading partners and focus on emerging markets in Asia, including China, India, and South Korea and Latin America including Brazil and Peru. I can’t fault this logic, but can fault the timing. The “Asian Century” really began in earnest in the early 1970s, so Canada is a bit late to the game.

I would also point out that the government seems to understand what needs to be done to improve trade ties with Asian countries. Asia is a region where business is done with friends, where the business climate is not yet mature and where there remain concerns about inter-state war over disputed rocks, islands and associated maritime claims. It is also host to two unresolved civil conflicts between the Koreas and the Chinas, both of which feature a nuclear armed participant.

Canada’s re-engagement with Asia confronts three challenges.

1. Canadian involvement in regional security issues will necessarily need to involve China, which is increasingly seen with suspicion in the region. Simultaneously, China is the most appealing Asian economy for Canadian business and improved economic relations are integral to Canada’s prosperity agenda. There could be tension between these two prerogatives.
2. Canada confronts considerable budgetary constraints that are compounded by distance.
3. Despite calls for Canada to do more, Canada may be perceived as so disengaged that its efforts may be met with scepticism.

It seems to me that the government of Canada understands that it will take more than economic overtures to improve ties with Asian countries. As Minister Baird suggested to the Canadian Council of Chief Executives, “security and prosperity go hand in hand.” So the government is boosting its presence at regional dialogues, contributing money to ASEAN for various projects and addressing issues like people smuggling with Thailand.

These overtures are important because some in the region expect that Canadian economic statecraft will be matched by wider initiatives as a function of its legacy in the region as a founding member of the ASEAN Regional Forum and as a founding member of the Asia-Pacific Economic Cooperation forum. Former ASEAN Secretary-General Surin Pitsuwan made it clear that ASEAN countries expected more from Canada before it could be considered for membership in the East Asia Summit and the ASEAN Defence Ministers Meeting plus. On this basis, it is appropriate for the government of Canada to engage in projects that boost Canada’s profile and prestige in East Asia with three aims.

1. To improve relations with Asian countries, which will open doors to regional clubs and can help move along trade negotiations.
2. Improve the climate for Canadian business by strengthening the rule of law.
3. Improve the security climate in Asia, the stability of which makes trade possible. For example, stable maritime boundaries provide the opportunity for offshore resource extraction.

This raises the question of what overtures could Canada make to Asia as a region and as a set of individual states that could help boost Canada’s prestige. It is typically in this context that Asian interlocutors raise the issue of the Canadian International Development Agency funded South China Sea dialogues that were hosted by Indonesia. This is Canada’s legacy in the region and it has been suggested that a renewal of this initiative would be welcomed. I’d like to take a moment to address this question in some detail, because I’m asked about it quite a bit.

Canada funded these dialogues between South China Sea claimants for a period of about ten years in the 1990s. They were a useful way to build confidence between claimant states and did a great deal to boost Canada’s reputation with the region and with China in particular. There are three reasons why I don’t think a resumption of these dialogues is feasible.

1. The region has changed and become much more antagonistic and this climate has permeated regional multilateral track 2 dialogues. Participants, particularly China, don’t engage in meaningful dialogue anymore. Everyone is busy picking sides.
2. China has changed – it no longer requires guidance or assistance on the conduct of multilateral diplomacy. It is far more confident and it seems less interested in participating in meetings where it will be publicly vilified.
3. Combined, it will be difficult for Canada to play a constructive role without risking deterioration of our relationship with China, an eventuality the government will be reluctant to consider since we’ve only just improved ties to China. In fact some traditional Canadian partners may expect Canada to choose sides.

So what directions are there for Canada to re-engage the region in a way that meets the three objectives above?

A number of pathways in different issue areas are worthy of consideration. These proposals are preoccupied with addressing the maritime issues in ways that do not antagonize China and which boost Canada’s prestige. As a consequence they are on the costlier side of the equation, but if in fact Canada’s future lies with Asia, they are worth it. I focus on maritime issues because these are the issues with which the region is currently preoccupied, and thus these offer considerable bang for the buck in terms of reputation building.

1. On the dialogue side, Canada could invest in a series of bilateral track 2 dialogues with important regional states including China, Japan, South Korea, Indonesia, Vietnam and Singapore. These dialogues could address topical regional security or economic issues. Dialogue is important as a way to promote new thinking on pressing issues and as a way to deepen understanding between countries.
2. Canada could emulate Australian efforts to build transparency with the Chinese military through naval diplomacy and joint exercises. Canada could also facilitate naval interactions between China and other navies in East Asia, or in the Gulf of Aden.
3.  Canada could use its position within the North Pacific Coast Guard Forum to improve cooperation between Chinese, South Korean and Japanese coast guards. Canada could also boost its participation in the Asian Coast Guard Forum. Like Canada, many East Asian states need to police large Exclusive Economic Zones with scarce resources.
4. Canada could leverage its competency in resource extraction to facilitate dialogue between claimants to the South China Sea on resource exploration in disputed waters. Chinese, Vietnamese and Philippine state oil companies have considered this possibility in the past.
5. Canada could explore interest in the establishment of a regional fisheries management organization in Southeast Asia.
6. Borrowing from my colleague Pierre Lize at Brock University. Canada could push for Myanmar/Burma to join APEC in an effort to reward good behaviour and to promote the rule of law.

There are others ways forward, which I’m sure you’ve already heard about so I won’t dwell on them here. In any event, Canada’s regional economic ambitions are served by initiatives that build confidence, increase capacity and foster dialogue. These would increase Canada’s regional profile, contribute to regional stability and over time improve Canada’s economic relations with Asian states. Canada’s interests are not served by initiatives that appear defined by the increasingly divided nature of Asia.