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How China could benefit from a divided Canada-U.S. trade relationship · THE DAILY BRIEF

• 0:00
  Speaker 1: Okay, so this ongoing current trade war between Canada and
• 0:03
  Speaker 1: the United States we know is being monitored closely internationally.
• 0:07
  Speaker 1: Some say the United States is no longer the stable
• 0:10
  Speaker 1: trading partner it once was, leaving a vacuum for other
• 0:13
  Speaker 1: countries to either step in or start new partnerships, and
• 0:16
  Speaker 1: certainly Canada is looking into that as well. So to
• 0:18
  Speaker 1: dig deeper into all of that, we have invited Veena Najibullah,
• 0:21
  Speaker 1: who is the co-founder and CEO for the Centre for
• 0:25
  Speaker 1: Strategic Statecraft. Veena, always good to see you.
• 0:27
  Speaker 2: Thanks for making some time. Good morning, Natasha. Thank you
• 0:31
  Speaker 2: so much for the invitation.
• 0:33
  Speaker 1: Veena, let's begin with China, because there is editorial after
• 0:37
  Speaker 1: editorial about this trade war between Canada and the United
• 0:41
  Speaker 1: States is really a win for China. I wonder what
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  Speaker 1: your interpretation is of that.
• 0:48
  Speaker 2: So given U.S.-China strategic competition, any time U.S. makes itself
• 0:54
  Speaker 2: unreliable and unpredictable, or anytime U.S. weakens its own position
• 0:58
  Speaker 2: with its allies, that, of course, benefits China. And it
• 1:02
  Speaker 2: creates an opening for China economically, as well as reputationally,
• 1:06
  Speaker 2: because we're seeing more and more people in countries like Canada, Europe,
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  Speaker 2: and Asia are seeing now China as a more predictable
• 1:15
  Speaker 2: partner than the U.S. And that is really something that
• 1:18
  Speaker 2: undermines U.S. position. For decades, U.S. relied on its allies network,
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  Speaker 2: its partners to have an advantage over China. And China
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  Speaker 2: really didn't like that. I mean, it was a huge
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  Speaker 2: irritant for China that the U.S. had these alliances. And
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  Speaker 2: of course, now U.S. is engaging in these self-defeating policies.
• 1:36
  Speaker 1: That is really interesting. So what is the degree of
• 1:39
  Speaker 1: awareness for Americans, and specifically the Trump administration, that these
• 1:44
  Speaker 1: are self-defeating policies?
• 1:47
  Speaker 2: I mean, of course, with the Trump administration, we know
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  Speaker 2: that there are many different voices and there are, of course,
• 1:52
  Speaker 2: some in the administration that still see the competition with
• 1:55
  Speaker 2: China as really important and want to make sure that
• 1:58
  Speaker 2: the U.S. maintains his advantage. But of course, President Trump
• 2:02
  Speaker 2: himself is quite unpredictable in what he's doing. And so
• 2:07
  Speaker 2: it's been really difficult to make sense of US policies
• 2:09
  Speaker 2: towards China. But I think for countries like Canada and
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  Speaker 2: European Union countries, as well as allies, democratic allies in Asia,
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  Speaker 2: like Japan, South Korea, Australia, while they're reducing reliance on
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  Speaker 2: the US, while they're diversifying and hedging, they're still being
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  Speaker 2: careful about China because all of the concerns about China
• 2:29
  Speaker 2: and its policies around coercion or overcapacity or subsidies in
• 2:35
  Speaker 2: terms of key industries, those haven't gone away. So the
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  Speaker 2: economic security concerns with China are still there. So the
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  Speaker 2: answer for countries like Canada and European and Asian allies
• 2:45
  Speaker 2: is to deepen relationships among themselves. So to build these networks,
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  Speaker 2: these purpose-built coalitions among themselves, while at the same time
• 2:54
  Speaker 2: having to manage the relations with both China and the U.S.
• 2:57
  Speaker 2: and have as much stability as they can in those relationships.
• 3:02
  Speaker 1: The problem many would state is that the United States
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  Speaker 1: and China represent such a vast amount of the economic
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  Speaker 1: potential globally. So it's great if Norway and Japan want
• 3:15
  Speaker 1: to trade, but when you've got these behemoths, Canada, excuse me,
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  Speaker 1: United States and China available and you have to sort
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  Speaker 1: of make deals with them, how do countries that are
• 3:27
  Speaker 1: still operating under the old world order move forward?
• 3:32
  Speaker 2: You're right. U.S. and China, of course, will remain important
• 3:36
  Speaker 2: for countries in terms of economic engagement. But if you
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  Speaker 2: look at the CPTPP, which is the Comprehensive Partnership, Trans-Pacific
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  Speaker 2: Partnership Agreement, which brings together Asian economies with Canada and UK,
• 3:48
  Speaker 2: as well as when you look at Europe together, those
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  Speaker 2: two trading blocks represent about a third of global trade.
• 3:55
  Speaker 2: So that is a significant trading block. And of course,
• 3:58
  Speaker 2: we do need to deepen relations with them. At the
• 4:00
  Speaker 2: same time, we have to engage with the U.S. and China.
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  Speaker 2: There is no solution. So it's really not sort of
• 4:06
  Speaker 2: pivoting away from the U.S. or pivoting away from China.
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  Speaker 2: It's having strategies that add a diversification that make U.S.
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  Speaker 2: plus or China plus one strategies. And that's what we're
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  Speaker 2: seeing increasingly. Of course, with China, for Canada and others,
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  Speaker 2: it's selective engagement. Whereas when it comes to, for instance... India,
• 4:26
  Speaker 2: where we had this week a big meeting between our
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  Speaker 2: finance minister and Minister of Finance of India. For Canada,
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  Speaker 2: that represents a huge potential and a promising market of 1.4
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  Speaker 2: billion people. So India does bring the kind of scale
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  Speaker 2: that both US and China bring to bear. And it's
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  Speaker 2: really important for Canada, as well as for the European Union, Japan,
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  Speaker 2: and Australia and others to also do more with India now.
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  Speaker 2: And of course, for India, they're finally are also beginning
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  Speaker 2: to open up their economy to international partnerships and trade.
• 4:56
  Speaker 1: I'm really glad you brought up India because that is
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  Speaker 1: where the conversation naturally progresses. The fastest growing economy in
• 5:02
  Speaker 1: the world, massive population, massive expansion. It doesn't have the
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  Speaker 1: same imperial culture that China and the United States do.
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  Speaker 1: But there are still people in this country that are
• 5:16
  Speaker 1: weary of India because they, you know, in the past,
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  Speaker 1: our two countries have been at odds. There's been accusations
• 5:23
  Speaker 1: of some degree of involvement of the Indian government in
• 5:26
  Speaker 1: the assassination of political activists here in Canada. What is
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  Speaker 1: the state of the validity of those concerns and how
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  Speaker 1: do we manage that?
• 5:39
  Speaker 2: Yes. So over the last year, we've seen tremendous progress
• 5:43
  Speaker 2: in the reset and rebuilding of Canada-India relations, especially when
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  Speaker 2: it comes to the political and economic tracks. So we're
• 5:50
  Speaker 2: seeing a lot of momentum on particularly the economic markets.
• 5:54
  Speaker 2: We are negotiating a comprehensive economic partnership agreement. We're having
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  Speaker 2: dialogues between our energy ministers, our finance ministers. So all
• 6:03
  Speaker 2: of that is progressing really well. But of course, for
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  Speaker 2: that partnerships to be durable, we do need to address
• 6:09
  Speaker 2: the serious security and foreign interference concerns, which caused the
• 6:13
  Speaker 2: breakdown in the relationship two years ago. And while there
• 6:16
  Speaker 2: has been some progress on that track, Natasha, we need
• 6:20
  Speaker 2: to hear a lot more from Ottawa and from Canadian
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  Speaker 2: government about what is really happening on that track, how
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  Speaker 2: well those discussions are progressing. because we have to rebuild
• 6:30
  Speaker 2: public trust. So what you mentioned in terms of there's
• 6:32
  Speaker 2: still weirdness, that's real. Only about 51% of Canadians have
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  Speaker 2: favorable views of India, according to recent polling. And for
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  Speaker 2: that to change, we do need to have a lot
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  Speaker 2: more transparency and information on what's happening on foreign interference.
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  Speaker 2: While at the same time, of course, we have to
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  Speaker 2: maintain momentum on the political and economic side. And the
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  Speaker 2: economic complementarity and the potential is huge. genuinely enormous, and
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  Speaker 2: the political momentum is there. Okay.
• 7:02
  Speaker 1: Veena Najibullah, always great to speak with you. Thank you
• 7:04
  Speaker 1: so much for your time.
• 7:06
  Speaker 2: Thank you.