Election 2019: International investment the new foreign policy, say analysts

Observers say Ottawa needs integrated diplomacy, trade approach, regardless of who wins

For all the major parties leading up to this fall’s federal election, two things are clear:

•Ottawa’s foreign policy can no longer be viewed in isolation from trade and investment, and

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•neither foreign policy nor trade can be viewed in isolation from Canada’s social and economic domestic situation.

That is the view of several Canadian foreign affairs observers, who note that, while the Liberals and the Conservatives may have dramatically different ideological views, both would need to provide a more comprehensive, integrated vision of how Canada is to engage other countries and bring maximum benefits to the Canadian public.

“The economy, trade and foreign policy will all be front and centre for the next prime minister,” said Omar Allam, founder and CEO of the Allam Advisory Groupand a former Canadian diplomat. “They all go hand in hand; international investment and trade is the new foreign policy.”

The prime issues are obvious, said Carlo Dade, director of the Canada West Foundation’s Trade & Investment Centre.

“The U.S. is No. 1, and Asia is No. 2. Everything else is No. 10.… The question is, if the Liberals are re-elected,  whether [Foreign Affairs Minister Chrystia] Freelandwants to spend more time in markets like Venezuela or Europe, or whether she wants to spend her time when she doesn’t have to deal with the U.S. towards Asia. Because there has to be a singular focus, and I unfortunately don’t see them being able to do that.”

Former diplomat Allam agreed that Ottawa often makes “knee-jerk, short-term” reaction-based policy decisions, such as a sudden shift in moving trade away from China after last December’s arrest of Huawei Technologies Co. Ltd. CFO Meng Wanzhou, without having comprehensive, long-term plans. That is going to have to change for whoever wins the election this fall, Allam said.

“Let’s look at dealing with the Brexit, for example,” he said, noting that Canada would have to negotiate a deal separate from the Canada-European Union Comprehensive Economic and Trade Agreement as Great Britain divorces from the EU. “How do we negotiate with the U.K., and how do they view us in relation to all the other countries they have to talk to? Where can we realistically compete? Do we have the necessary resources on the ground? That’s what we have to do with many markets around the world … to do well globally and to attract investment to key sectors domestically.”

Dade said he sees some key variations between a Liberal government and a Tory government – majority or minority – with foreign relations. The Liberals, he said, may continue down the same path of piecemeal agreements and efforts in several places, including continuing talks with Mercosur, a four-country bloc in South America led by Brazil and Argentina. But while Central Canada may be keen on the investment possibilities from the deal, Dade said Western Canada is much less keen to have an agricultural producer like Brazil compete with domestic players within Canadian borders.

The key, Dade said, will be for western Canadians to speak up during the upcoming election campaign, as the United Automobile Workersunion did in 2015 ahead of the approval for the Trans-Pacific Partnership (TPP) trade bloc.

Dade said he sees a Conservative government moving closer with India, another major growing economy with a large diaspora in Canada. But Dade added that, if that’s the case, Ottawa needs to approach any talks with a strong economic case and not simply pursue closer ties for geopolitical reasons, such as to counter cooling ties with Beijing.

Dade added that the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the original TPP’s successor agreement, signifies another major foreign policy priority for Ottawa under either a Liberal or a Conservative government.

Dade said current CPTPP members next January will start considering the ascension of other markets to the group – which will afford Canada a rare chance to take the initiative in expanding foreign market access.

“Adding countries to the
CPTPP allows us to take advantage of the supply chains we’ve built and gives us access to markets like Thailand and Taiwan, where we can take market share away from U.S. companies.”

Dade added that relations with CPTPP partner Japan may be the rosiest in years, which could open other trade opportunities globally for Canada.

In Asia, of course, the conversation cannot veer far from China, whether it is with the ban on Canadian meat and canola exports or with the mass demonstrations in Hong Kong affecting as many as 300,000 Canadians living there.

Dade said little will change as long as the Meng detention continues; Allam said that even if the Liberals are re-elected, Canada needs to change course.

But Dade said the No. 1 issue remains the United States, adding that any sense of security from the signing of the Canada-United States-Mexico Agreement is false.

The yet-unratified deal, he said, “is going to do next to nothing to take care of the major problems of a president’s unilateral actions on tariffs.”

Canada will now need to do more, not less, groundwork in Washington and at the state government level to engage and maintain Canadian interests, he said.

“The steel and aluminum tariffs have not been ended, and while there’s a partial break on the auto sector, almost everything else in the Canadian economy is subject to presidential tariffs.”

Dade added that the potential of a minority government after the election, one where the NDPcould inject labour-sector concerns or the Green Party of Canadacould add environmental concerns to trade talks with other countries, may add challenges for an effective and decisive foreign-policy process in Ottawa.

Allam, however, said the likelihood of a minority government in this case may be a good thing.

“Minority governments slow things down, no doubt about it. But this is a chance for us to reflect internally on what’s working and what’s not working. We are dependent on exports … and we need to look at our domestic fabric to see how we should work globally. This may be a good chance for us to move away from old, divisive arguments, to see things from multiple points of view.” •

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