Canada needs to chart a new path for the fast-growing Indo-Pacific region to diversify trade in Asia beyond China and shift military commitments away from Europe and North America, according to a new book.
Academics, former diplomats and business leaders contributed essays to The Indo-Pacific: New Strategies for Canadian Engagement with a Critical Region, to help influence the thinking of Foreign Affairs Minister Mélanie Joly as she crafts a new policy for the region. The book is being released Wednesday.
The authors argued Canada can’t rely on the United States for continued prosperity and must develop a Team Canada approach to boosting trade in the Indo-Pacific region, which accounts for 60 per cent of global GDP and 60 per cent of the world’s population.
“Being present and active in the Indo-Pacific region is more important than ever,” writes Goldy Hyder, president of the Business Council of Canada. “Canadian companies cannot risk missing out on this colossal growth opportunity.”
While Canada must continue to trade with an autocratic and increasingly assertive China, given the sheer size of its economy, Ottawa needs to be vigilant about the risks of deepening ties to a country that flouts basic human rights and ignores trade and investment rules, several of the authors argued.
“Some sectors of the [Canadian] economy, like critical infrastructure and high-tech, should simply be off limits to Chinese investors,” writes former Canadian ambassador to Washington Derek Burney and Fen Hampson, chancellor’s professor at Carleton University.
Mr. Burney and other authors said Ottawa should join an informal four-country defence and security alliance involving the U.S., Japan, Australia and India. This alliance, known as the Quad, is taking on greater significance in the Indo-Pacific amid rising concerns over China’s expanding military and political influence in the region.
The four Quad countries hold military exercises, semi-regular summits and forge co-operation on matters from protecting supply chains to cyberdefence in an arrangement that is seen as a counterweight to China’s growing power.
The book said Canada should also ask to join the AUKUS defence pact, which is made up of the U.S., Britain and Australia. Prime Minister Justin Trudeau has dismissed AUKUS, saying it’s really little more than an arrangement to sell U.S. nuclear submarine technology to Australia.
But AUKUS members are also jointly developing technology to launch and intercept hypersonic missiles, which travel five times the speed of sound and can change course in midflight. And the allies are also working together on electronic warfare, which is the use of the electromagnetic spectrum to disrupt enemy operations.
By not joining AUKUS, Michael Small, former high commissioner to Australia, said Ottawa could be relegated to a lesser role among the Five Eyes intelligence-sharing alliance that includes the U.S., Britain, Australia and New Zealand.
“There is a clear risk for Canada that this unique relationship will turn into ‘Five Eyes in two tiers’ with Canada parked in the lower tier, with reduced access and benefits to follow,” he writes. “Minimizing this risk should be a priority of Canada’s Indo-Pacific strategy.”
On trade matters, several authors urged Canada to support Taiwan’s membership in the 11-country Comprehensive and Progressive Trans-Pacific Partnership, a trading pact that includes Canada but not China.
“China’s application should be rebuffed until the country curbs its distortionary trade practices and makes ambitious commitments to broaden trade liberalization and high standards,” said academics Meredith Lilly and Amily Li.
Leonard Edwards, a former deputy minister at Global Affairs who also served as ambassador to Japan and South Korea, said, however, that Ottawa should also ask to join the new Regional Comprehensive Economic Partnership, a trading group made up of 12 countries including Japan, Australia, New Zealand and China.
The authors say Canadian businesses need to focus on the Asian powerhouses of Japan and South Korea as well as Vietnam, Indonesia, Malaysia, Thailand and Cambodia. Of particular importance is India, an economy that is expected to grow from $2.5-trillion annually to $5-trillion over the next decade.
“We cannot afford to ignore any longer the significance of India’s rise, its economic and corporate weight, its global influence and strategic importance as a counterweight to China,” Mr. Edwards said.
Nadir Patel, former high commissioner to India, said Canadian outreach to India from trade to the Quad could be a “game changing” opportunity.
“A stronger economic partnership with India will lead to new jobs and growth in both countries,” he writes. “India provides a particular partner for Canadian strategic defence interests across the Indo-Pacific.”
Many countries in the Indo-Pacific are keen to buy Canadian liquefied natural gas. They get their gas and oil from either Russia or the Middle East because Canada doesn’t yet have any LNG facilities. One is being built on the West Coast and should be operational by 2025.
These countries worry that Russia is unreliable and shipments from the Middle East could one day be blocked by China. LNG ships from the Middle East pass through the South China Sea, which Beijing claims as its exclusive economic zone.
In the introduction to the book, Mr. Hyder, Mr. Hampson and Tina Park, CEO of the Park Group, urged Ottawa to work with industry to accelerate regulatory approvals for LNG facilities and negotiate long-term contracts with Indo-Pacific nations.