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It’s got a progressive reputation, expertise at fighting COVID-19 and potentially lucrative markets for Canada – but Beijing has punished other countries for getting too close to it. Here’s how Canada’s Taiwan policy looks now, and how experts and ex-diplomats think it should evolve

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Kinmen, Taiwan, Aug. 23: Soldiers wear masks at an event marking the anniversary of the Second Taiwan Strait crisis, a 1958 skirmish between Communist China and the island then ruled by China's former leader, Chiang Kai-shek. Since the Chinese civil war ended in 1949, Beijing and the island government built by exiled Nationalists have each claimed Taiwan belongs to them.Ann Wang/Reuters

As a career diplomat, Winston Chen is professionally obliged to remain optimistic.

But after two years in Ottawa, the trim and dapper envoy for the self-governing island of Taiwan is clearly impatient.

Canada is being repeatedly urged to diversify trade beyond major partners such as the United States and China, to lessen the impact of protectionist actions by Washington and punitive embargoes from Beijing. Mr. Chen, 60, has been pleading with the federal government to look to Taiwan as part of the solution.

What might give Canada pause is the fact that China bridles whenever other countries seek to deepen ties with Taiwan, casting these actions as de facto support for Taiwanese sovereignty. Beijing lays claim to the island even though the ruling Communist Party has never governed it; and right now, Canada-China ties are already strained – over Ottawa’s arrest of a Huawei executive on a U.S. extradition request, and Beijing’s incarceration, in an apparent tit-for-tat retaliation, of two Canadians.

But Mr. Chen argues that Taiwan, a vibrant democracy with a population roughly the same size as Australia, is particularly suited to the progressive outlook of Prime Minister Justin Trudeau’s Liberal government.

Taiwan was the first Asian jurisdiction to legalize same-sex marriages. It has embarked on major reconciliation efforts with its significant Indigenous population. It has a transgender cabinet minister.

“On many issues, from freedom of speech to gender equality to LGBTQI rights ... and a multifaceted civil society, Taiwan is light years ahead of most, if not all of its neighbours,” J. Michael Cole, a senior fellow at the Macdonald-Laurier Institute, said.

Like Canada – which is trying to secure freedom for the two jailed Canadians, Michael Kovrig and Michael Spavor – Taiwan has been repeatedly bullied by China. Taiwan’s government is offering advice to Canada on dealing with Chinese pressure.

Taiwan was also quick to tame the COVID-19 pandemic. Although it has a population of 23.5 million and significant trade with neighbouring China, it recorded only 514 infections and seven deaths. It’s offered to share its virus-fighting knowledge with Canada.

But Mr. Chen is still waiting for Ottawa to take up his offer. “What I think is extremely important is we need action,” he said in a recent interview. “I am not just here to talk. I want to facilitate and make things happen.”

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Taipei, 2019: Fireworks explode from the Taipei 101 after the New Year's Eve countdown.HSU TSUN-HSU/AFP/Getty Images

Back in 2018, things looked promising. Canada was planning exploratory talks on what’s called a foreign investment promotion and protection agreement (FIPA) with Taiwan. Such an agreement, often regarded as a stepping stone to a full free-trade agreement, would seek to stimulate two-way trade by enshrining legal protections for Canadian investors in Taiwan as well as Taiwanese investors in Canada.

But talks got derailed. They were delayed over and over again, until December, 2018, when Canadian foreign relations were disrupted by China locking up the two Canadians in apparent retaliation for Ottawa’s arrest of the Huawei executive.

Mario Ste-Marie was Canada’s top diplomat in Taiwan until July in 2018. He said delays in commencing FIPA talks with Taiwan were related to fear of upsetting relations with China. “There was always something happening: a major visit of a Chinese minister to Canada or vice versa. And you remember it was the time when the Canadian government was flirting with the idea of having a trade agreement with China and they didn’t want to make the Chinese mad by moving [ahead] with something with Taiwan,” he said.

Mr. Ste-Marie, now retired after a career in Canada’s foreign service, said Taiwan in 2016 agreed to lift a temporary ban on Canadian beef, which it had imposed after an outbreak of mad cow disease in Alberta, with the understanding that Canada would reciprocate. “They reopened the market ... and then we had to deliver our part of the deal, which was FIPA. But it didn’t happen.”

Finally, at the end of 2018, China’s jailing of Mr. Kovrig and Mr. Spavor was used as a rationale to shelve FIPA talks with Taiwan.

“Now it’s the Michaels, before it was something else. Before the Michaels, it was ... the Prime Minister’s going to China, we don’t want to do that, or there’s another high-level Chinese visit coming to Canada, we don’t want to do that,” Mr. Ste-Marie said. He said reticence to upset China can always be used to justify holding off with Taiwan. “You will resolve the Michaels but then the next thing will be ‘Oh well, now we have to rebuild our relationship with China’ so therefore we won’t do it with Taiwan.”

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Taichung, Taiwan, July 16: AH-64 Apache helicopters take part in a live-fire exercise to simulate an enemy invasion. Beijing has run its own military drills to simulate an invasion of Taiwan.Ann Wang/Reuters

Taiwan, which is not recognized as a sovereign state by most countries, including Canada, has been increasingly isolated in recent years as China steps up pressure on Taipei’s remaining diplomatic allies.

Taiwan is a self-ruled island with its own military and foreign policy, which the Communist Party-run People’s Republic of China claims as part of its territory. It’s where defeated Nationalist forces retreated in 1949 after they lost the Chinese civil war on the mainland to Mao Zedong’s Communists. The Chinese Communist Party has never ruled over Taiwan.

Beijing has repeatedly conducted military drills simulating the invasion of Taiwan and, in recent years, it has sent bombers on “encirclement” flights. Beijing has never ruled out the use of force to bring Taipei under its command.

Under Ottawa’s One China policy, Canada does not recognize Taiwan as a sovereign state and does not maintain official government-to-government relations with Taipei.

Jonathan Manthorpe, a long-time foreign correspondent and author, said many people misinterpret what Canada signed up for when it ended official diplomatic relations with Taiwan in 1970 and instead, under then-prime minister Pierre Trudeau, recognized Red China. It didn’t embrace Beijing’s claim on Taiwan, he said. The 1970 communiqué issued by Beijing and Ottawa said: “the Chinese government reaffirms that Taiwan is an inalienable part of the territory of the People’s Republic of China.” But then comes a caveat: “The Canadian government takes note of this position of the Chinese government.”

Canada never recognized or accepted or even acknowledged Beijing’s view of Taiwan. Mr. Manthorpe said the then-prime minister had insisted on “takes note” instead of a stronger term. “He didn’t recognize China’s claim on Taiwan.”

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Ottawa, 1984: Chinese premier Zhao Ziyang applauds prime minister Pierre Trudeau at the House of Commons. Mr. Zhao then addressed the joint session of Parliament, the first Communist Chinese leader to do so.The Canadian Press

Mr. Ste-Marie, who was the executive director of the Canadian Trade Office in Taipei, an ambassadorial-level appointment for an office that is the de-facto embassy for Canada on the island, said Taiwan offers tremendous economic opportunities for Canada. It can help companies scale up or expand, but also protect their intellectual property from theft.

“The Taiwanese are very good about taking innovation to the stage where it’s ready to be produced en masse. When it’s ready they move the production to China. And the way they produce it in China, they separate the different steps. It’s almost impossible to steal the technology. The Taiwanese know how to do business there," he said.

“Taiwan is what China would have become without the Communist Party taking power in 1949.”

The Canadian government, when contacted recently, offered a different rationale for not moving ahead on a FIPA with Taiwan, saying it has been very busy examining how to make trade deals more inclusive of women, small businesses and Indigenous peoples. “In 2018, a review process was launched by the government of Canada toward a modernized and inclusive model FIPA. Canada is not pursuing substantive FIPA discussions until the review is complete,” Sylvain Leclerc, spokesman for the department of Global Affairs, said.

Two members of Parliament with the governing Liberal Party say it’s time to deepen relations with Taiwan, which currently ranks as Canada’s 12th-largest trading partner and fifth-largest in Asia, behind larger economies such as China and Japan. About 200,000 people of Taiwanese descent live in Canada and 60,000 Canadian citizens live in Taiwan.

Earlier this year, Canada spoke out with other countries in favour of allowing Taiwan to participate in World Health Organization meetings, an organization it’s blocked from joining because of China’s objections.

But these MPs say Canada has to go further.

John McKay, who was chair of the Commons public safety and national security committee before the government prorogued Parliament in August, said Canada should stop “spending a lot of time worrying about what the Chinese government thinks of Canada’s relationship with Taiwan ... and we should recognize Taiwan for what it is: a responsible, robust democratic country that largely adheres to the ways and norms of the World Trade Organization and the rule of law in Western democracies.”

Judy Sgro, who chairs of the Canada-Taiwan Parliamentary Friendship Group, said she thinks the reluctance to embrace Taiwan is “because we’re tiptoeing around China as we have been for three or four years now, with an admirable goal of trying to get additional trade with China.” She was chair of the Commons international trade committee before Parliament was prorogued and had wanted to examine if there was a way to deepen relations with Taipei. Taiwan is “battling a giant and I have tremendous respect for them.”

Jung-Chin Shen, a business professor at York University, said Canada-Taiwan relations have progressed little in the past 20 years as Ottawa’s attention turned to the rising economic might of China. “They have basically stalled," he said of ties between Canada and Taiwan.

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Taipei, 1995: Election workers rehearse at the vote-counting centre ahead of the island's first direct presidential elections, the result of a gradual transition to multi-party democracy.Rob Man/Reuters

David Mulroney, a former ambassador to China who also previously served as Canada’s top representative in Taiwan, said Canada has not updated its approach to the island from the days when it was a one-party dictatorship. Back then, it was easier to justify ignoring Taiwan.

Through the late 1980s and early 1990s, however, Taiwan peacefully transitioned to a multiparty democracy.

Before democratization in Taiwan, Ottawa regarded both the Communist Party in Beijing and the ruling Kuomintang Party (KMT) in Taipei as equally problematic. Both of them were active in Canada’s Chinese community. “They tended to see Canada as a place where they would fight their battles with mainland China and score political points rather thinking about deepening the relationship with China," Mr. Mulroney said of the KMT.

As democracy took root in Taiwan – voters directly elected their own president for the first time in 1996 – Canada didn’t change course. The federal government, under the leadership of then-prime minister Jean Chrétien, was increasingly focused on building ties with China, where economic reforms were fuelling massive investment and trade opportunities.

“We were slow to understand what democratization meant in Taiwan because by then we were into the full flame of our romance with China,” Mr. Mulroney said.

Even in the absence of official relations, Taiwan and Canada can still conduct productive diplomacy, Mr. Chen, the Taiwanese envoy in Canada, argues.

He noted other countries are stepping up. The president of the Czech Republic’s Senate, Milos Vystrcil, recently led a 90-person delegation to Taiwan. U.S. Secretary of Health and Human Services Alex Azar and State Department Under Secretary Keith Krach also made similar visits. Former Japanese prime minister Mori Yoshiro, twice in the same month, led high-level, cross-party parliamentary delegations to Taiwan to pay respects to the late president Lee Teng-hui and meet with current President Tsai Ing-wen and other leaders.

For Canada, however, the last visit of a Canadian cabinet minister to Taiwan was 1998, when then-industry minister John Manley stopped by.

“There is no good reason why Canadian leaders should refrain from visiting Taiwan, particularly as it pertains to battling the pandemic and rebuilding the economy,” Mr. Chen said.

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Taipei, 2020: President Tsai Ing-wen plays host to a succession of international visitors, including U.S. Secretary of Health and Human Services Alex Azar, top; former Japanese prime minister Yoshiro Mori, bottom left; and Czech Senate President Milos Vystrcil, bottom right.Taiwanese Presidential Office via Reuters and AP

While a foreign investment promotion and protection agreement would be the quickest way to deepen economic ties, Taiwan is still holding out hope it might be admitted to the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPPTP), a trade deal among 11 countries in the Pacific Rim including Canada, Japan, Australia, Mexico and Vietnam. This deal created the third-largest free-trade area in the world and participants have reduced or eliminated tariffs imposed on products from member countries.

This Pacific trade deal is looking to expand. Nikkei Asian Review reported earlier this year that Japan plans to expand the bloc and reduce its reliance on China and is considering Taiwan, among other candidates.

The Canadian government declined to say whether it will support Taiwan’s inclusion. However, last year Ottawa consulted Canadians on whether they would back expanding the CPPTP to include six other jurisdictions including Taiwan; Mr. Leclerc, the Global Affairs spokesman, said consultations “revealed broad support” for the inclusion of these economies.

Wenran Jiang, a retired political science professor from the University of Alberta, said Canada should pursue closer trade ties with Taiwan as part of this country’s drive to diversify markets for its goods.

He said however the Trump administration is using deeper ties with Taiwan as a "political tool to confront and contain China, and Ottawa should be mindful of that.

“Signing an investment protection agreement or a potential free-trade deal in this regard should benefit both sides. But deepening economic and cultural ties with Taiwan should not be at the expense of maintaining Canada’s overall relations with the Chinese mainland, which has no substitution as the largest market in the world,” Mr. Jiang said.

Mr. Mulroney, the former ambassador, said Canada has to get creative. The Prime Minister, Defence Minister and Foreign Affairs Minister can’t visit Taiwan. But many others can.

“There is no reason why we couldn’t send a trade minister, a minister of energy, an agriculture minister and have a real exchange with Taiwan in all kinds of areas,” he said.

“There are all kinds of social issues, economic issues, cultural issues where we could be talking and comparing notes on. ... We’ve got to go from this kind of useless passivity to a very thoughtful engagement.”

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