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China's leaders are chasing Trudeau less now that they think he needs them

Justin Trudeau now knows his trade agenda is stuck between a rock and a harder place.

One is U.S. President Donald Trump, and the other is a Chinese regime that is no longer so anxious to do a free-trade deal with Canada.

Chinese leaders once chased the Prime Minister. Now, they think he needs them.

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That is clear after Mr. Trudeau's high-level meetings in Beijing didn't lead to a quick announcement that formal free-trade negotiations will be launched. There was a grumpy reception from Premier Li Keqiang, who cancelled a joint news conference, signalling that even if the differences are hammered out and free-trade talks go ahead – and that's still likely – the Chinese will make it tough.

That makes it harder on Mr. Trudeau. Canadian business leaders are anxious about Mr. Trump's protectionism and the potential crack-up of the North American free-trade agreement. Many are pushing Mr. Trudeau to expand market access elsewhere. A deal with big, fast-growing China is an ambitious alternative.

But a free-trade deal with China was also going to be a difficult thing to sell to Canadians, and Mr. Trudeau has to steer it through skeptical public opinion. So he told Canadians he'd insist on high standards, including a "progressive trade" agenda of labour and environmental standards and gender equality.

Now, Beijing doesn't have much time for all that.

The significance is not simply that Mr. Trudeau might have to tone down the "progressive trade" stuff to make a deal. That could be politically embarrassing, but not fatal to Canadian interests. The larger signal is that China is not chasing Canada any more. The Chinese don't think they have to make so many concessions for a Canadian deal.

"We're needier," said Daniel Schwanen, vice-president of research at the C.D. Howe Institute. Beijing knows Mr. Trump has thrown NAFTA up in the air, and the Trans-Pacific Partnership is stalled, too. Guy-Saint Jacques, the former Canadian ambassador to China, said Beijing is the "demandeur," believing a deal with Canada could be a template for other G7 countries and advance its goal of recognition as a "market economy." But if Canada won't do it, Mr. Saint-Jacques said, others probably will.

When Mr. Trudeau first came to power, Chinese officials remembered his father and were quick to proclaim a "golden era" of Canada-China relations. Beijing, which doesn't like other countries poking their noses into its domestic affairs, never liked Mr. Trudeau's "progressive trade" agenda or the precedent of putting things such as labour rights in trade deals. But they still chased Canada.

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When Mr. Trudeau visited China in August, 2016, his meeting with Mr. Li was very different. China wanted to announce "exploratory" talks on free trade, Mr. Saint-Jacques said, but Mr. Trudeau insisted they must include environment, labour standards, state-owned enterprises and procurement. Mr. Li didn't immediately commit – but told the press the two countries had agreed to exploratory talks. Mr. Saint-Jacques had to deny it; China agreed a few weeks later to include those four topics.

This time, it was Mr. Li who backed out of announcing talks – apparently unwilling to bend.

That's not just a political embarrassment if Mr. Trudeau can't get China to pay lip service to his progressive trade agenda. It's a changed dynamic that suggests China will be less willing to put new elements into a trade agreement to get a deal with Canada.

That's critical because a good trade deal with China requires novel provisions. China has agreements with a few countries such as Australia and Switzerland, which lowered tariffs on goods and allowed expanded access to Chinese markets for some services. But a more ambitious trade agreement means obtaining guarantees that Canadian companies really will have fair access to Chinese markets which the centralized, authoritarian state cannot block with arbitrary regulations, fees, inspections, prosecutions and so on. That requires novel provisions on "how the market functions in a non-market economy," as Mr. Schwanen puts it.

Without that, a Canada-China trade agreement won't be a good deal. And if Beijing is less willing to make concessions for a deal with Canada, that kind of deal is less likely.

Only 18 months ago, it seemed Mr. Trudeau was fielding trade-agreement opportunities. Now, he is a Prime Minister facing a cold, harsh trade squeeze, between less-friendly partners. Mr. Trump is threatening to break an old trade alliance, and China's leaders are no longer so ardent in chasing him to make a new one.

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The PM met with Chinese Premier Li Keqiang in Beijing Monday but the two did not announce the start of formal free trade talks. Justin Trudeau says Canada is looking for “progressive” trade deals. The Canadian Press
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