Tories’ new foreign-affairs vision shifts focus to ‘economic diplomacy’

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Stephen Harper's Conservative government will make "economic diplomacy" in service of private industry the centrepiece of this country's foreign policy, marking a historic shift in Canada's approach to the world.

In a major report to be released Wednesday, the Department of Foreign Affairs and International Trade is instructed to "entrench the concept of 'economic diplomacy' as the driving force behind the Government of Canada's activities through its international diplomatic network.

"… All diplomatic assets of the Government of Canada will be marshalled on behalf of the private sector" to fulfill an ambitious agenda of opening new markets to Canadian goods and services, declares the Global Markets Action Plan, the equivalent of a foreign-policy white paper. A copy of the report has been obtained by The Globe and Mail.

The new orientation is the result of a direct order that Prime Minister Stephen Harper gave Ed Fast when he was appointed Minister of International Trade after the 2011 election, according to a government official who spoke on background. The Prime Minister wants trade to become the dominant focus of Canada's foreign policy, and Mr. Fast was to come up with the blueprint for making that happen. The Global Markets Action Plan is that blueprint.

The plan was stiffly resisted by many senior officials within the department itself, according to a government official speaking on background. Calling the new directive "a culture shift" for Foreign Affairs, the official said the action plan sends a message to Canada's diplomats: "Take off your tweed jacket, buy a business suit and land us a deal."

The Conservative government has previously signalled its interest in tying foreign policy and trade. Earlier this year, the government eliminated the Canadian International Development Agency and merged its functions into a new Department of Foreign Affairs, Trade and Development. It has also said it would integrate commercial and foreign-policy considerations with international development efforts that have traditionally focused more exclusively on poverty reduction.

The market-first approach to foreign policy will offer fresh ammunition for critics – not least among them former prime minister Joe Clark – who allege the Harper government has adopted a ham-fisted approach to foreign affairs that neglects engagement in collective security and foreign aid through multilateral forums such as the United Nations in favour of simplistic nostrums and a single-minded obsession with trade.

But the plan already has the support of figures such as former Liberal foreign minister John Manley, head of the Canadian Council of Chief Executives; Catherine Swift, who chairs the Canadian Federation of Independent Business; Perrin Beatty, head of the Canadian Chamber of Commerce and Jayson Myers, president and CEO of Canadian Manufacturers and Exporters. All of them served on an advisory panel that helped draw up the action plan.

The plan targets three sets of countries. The first includes emerging markets where Canada could make broad gains, because of rapid growth in the market and a natural fit between what the country needs and what Canada sells. Such countries include China, Indonesia, Brazil, South Africa, Russia and Turkey, among others.

The second set consists of emerging markets with specific opportunities for Canadian businesses, such as Mongolia, Uruguay, Ghana and Kazakhstan, while the third consists of developed economies.

The document points out that Canada will be the only G8 nation with preferential access to both the European Union and the United States, once the proposed free-trade agreement with the EU is ratified.

The new strategy will "ensure that all of the Government of Canada's diplomatic assets are harnessed to support the pursuit of commercial success by Canadian companies and investors," says Mr. Fast, in the text of a speech to be delivered to the Economic Club of Canada in Ottawa Wednesday morning.

The new strategy places a heavy emphasis on improving emerging-market access to small and medium-sized companies, known as SMEs. The goal is to increase the number of Canadian SMEs that sell into emerging markets from 11,000 to 21,000 by 2018.

To reach that goal, the government will pursue new trade agreements, foreign-investment protection agreements, taxation agreements, air transportation agreements and science and technology agreements. A core mandate of Canadian diplomats and other officials will be to "open doors, generate leads and resolve problems" for SMEs and other Canadian businesses, according to the action plan.

As well as initialling the Comprehensive Economic and Trade Agreement with the European Union last month, the government is heavily involved in the Trans-Pacific Partnership talks, which would include Canada and 11 other nations, as well as in bilateral talks with Japan, India, Thailand and South Korea, among others, although final agreements have proved difficult to reach.