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China’s envoy in Canada calls for formal free-trade talks ‘sooner than later’

Lu Shaye, Ambassador of the People's Republic of China to Canada, addresses the media during a visit to Halifax, on Nov. 7, 2017.

Andrew Vaughan/The Canadian Press

China’s envoy in Canada says the two countries have reached broad consensus on many aspects of a trade and investment pact and should begin formal trade talks as soon as possible to strike a blow against rising global protectionism.

Ambassador Lu Shaye told reporters on Tuesday that a free-trade deal between a G7 country, such as Canada, and China, the world’s second-largest economy, would send a powerful message at time when U.S. President Donald Trump is pushing an “America First” agenda.

“China stands ready to start the negotiations of FTA [free-trade agreement] with Canada at any time,” Mr. Lu said. “If China and Canada start the negotiation of an FTA, it will send positive signals to the international community that China and Canada are upholding the flag of supporting free trade and economic globalization.”

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The envoy said the stumbling block to launching formal talks is Prime Minister Justin Trudeau’s insistence that labour standards should be included – a proposal China rejects.

“We have reached many consensus on extensive issues but there still remain some differences on so-called progressive trade factors,” he said, citing labour standards. “We just want to emphasize that we don’t want those kind of ideas to be implemented among the negotiations between China and Canada.”

Efforts to launch free-trade talks during Mr. Trudeau’s visit to Beijing in December of 2017 went off the rails after the Chinese balked at Canada’s demand to make public the fact that labour standards would be up for negotiation.

Mr. Lu said China does not want Canadian labour standards foisted on Chinese companies.

“We [don’t want] to impose our ideas on the Canadian side,” he said. Similarly, he said, “the Canadian side should not impose your standards and your ideas on the Chinese side.”

The Chinese envoy argued that Mexico – Canada’s partner in the North American free-trade agreement (NAFTA) – feels the same way. For instance, the envoy said, Mexico is unhappy about pressure at NAFTA negotiations to raise wages for its auto workers.

“It is not acceptable for the Mexican side,” Mr. Lu said, predicting “if the Mexican side accepts such kind of standards, many of the factories [would] have to close down and their workers [would be] laid off.”

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Guy Saint-Jacques, a former Canadian ambassador to China, has said that China does not want a public announcement that Beijing is open to discussing labour standards. He said trade unions in China are “token organizations,” and Beijing is adamant about not emboldening would-be activists who might agitate for change.

Beijing has long sought negotiations with Canada, in part because such talks would help it attempt to persuade other G7 countries to follow suit. China has signed deals with jurisdictions ranging from Australia to Peru to Iceland, and recently wrapped up an agreement with the Palestinian Authority.

Mr. Lu said exploratory trade talks with Canada have been going on for more than a year and both sides have made great progress on a number of trade and investment issues but refused to provide further detail.

The ambassador said Beijing did not have a deadline to begin formal negotiations, but said, “We should start the process sooner than later.”

Mr. Saint-Jacques said Beijing and Ottawa should start this year, before the 2019 federal election.

Mr. Lu would say not say whether talks could be affected if the Trudeau government rejects the $1.5-billion takeover of Canadian infrastructure firm Aecon Group Inc. by Beijing’s state-owned China Communications Construction Company.

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The acquisition is undergoing a full-scale national-security review. The Globe and Mail has reported that the government would not allow Aecon to bid on the $4.8-billion Gordie Howe bridge that will connect Windsor and Detroit – the busiest trade conduit between Canada and the United States − if it was owned by China.

Mr. Lu said Canadians are “too sensitive” about the takeover, saying Aecon “is just a construction company” and China is only interested in it for business reasons. He said China would not comment until after the national security review.

Aecon – a 140-year-old Canadian firm – is also involved in other infrastructure across Canada, including nuclear-energy installations, pipelines, transit and hydroelectric projects such as the Site C dam in British Columbia.

On China’s demand for an extradition treaty, Mr. Lu said there have been no formal discussions with the Trudeau government.

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