Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
OTTAWA, Thursday, May 23, 2013
The Standing Senate Committee on Foreign Affairs and International Trade met this day, at 10:30 a.m., to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
Senator Percy E. Downe (Deputy Chair) in the chair.
[English]
The Deputy Chair: Honourable senators, the chair unfortunately had to be away today so, as deputy chair, I will fill in. I ask for your cooperation and we will get through the meeting.
Today the Standing Senate Committee on Foreign Affairs and International Trade is continuing our study on security conditions on economic development in the Asia-Pacific region, the implications for Canadian policy and interests in the region and other related matters.
Joining us today in Ottawa is Mr. Palamar, a researcher with the Centre for International Governance Innovation. I understand, Mr. Palamar, you have an opening statement, as brief as it may be, and I ask you to give that now.
Simon Palamar, Researcher, Centre for International Governance Innovation: Thank you for the invitation and opportunity to speak here.
I will provide a brief, high-level overview of one issue in particular that I feel ought to be emphasized and provide a bit of context in which any future discussions about Canadian policy towards Asia ought to be situated. That is specifically this notion of China's rise, which has been bandied out in media and the press quite a bit. Interestingly, there is a bit of a debate about whether it will happen and how big will China's economy be 20 years from now. These sorts of forecasts about the future are not always useful to debate because there is no way to know if you are right until it happens.
Instead, I would suggest that China's rise, if you want to call it that, has already occurred. China has witnessed tremendous economic growth in the last 20 years. It has gone from 5 per cent of global wealth to over 10 per cent in approximately a decade.
China now accounts for 8 per cent of military spending. This has meant that where there was a large gap between Chinese wealth and American wealth 30 years ago, and a large gap between Chinese military capabilities and American military capabilities 30 years ago — when the United States was the predominant Pacific country — has changed.
China is not going to overtake the United States in per capita wealth or military spending or political influence around the globe in the foreseeable future, but the important thing is that the gap between the two has narrowed. What we now see as a more assertive, confident, richer China, with tremendous interests in the region, obviously, and China will want to protect and assert them.
We have seen that it has taken a while in the rest of the region for this reality to catch up with a lot of governments in Asia and the American government. It has only been in the last couple of years that this reality has caught up in Canada. There are a few disturbing trends that are happening.
There has been the idea that, in fact, there is no security competition going on in Asia. Simply, if we look at the data — and I tend to work with a lot of large data to draw my conclusions — we are suddenly seeing increased military spending in a lot of countries around China, in the ceiling periphery of Asia, in Vietnam and Indonesia. We are seeing more assertive action from Japan on a number of issues. We have seen stable military spending in Taiwan and Korea where, after the Cold War, most military spending dropped dramatically. In a few countries it actually stayed quite stable and there is room for growth.
We have seen unease about China's new wealth and military power. In Japan, South Korea and Australia there has been a serious debate about whether China constitutes a threat. That has not happened in Canada yet. Part of me wonders if maybe it is time to have that debate. I am not saying I believe China is a threat, but it is important to consider the implications here.
Most important for Canada is that the United States has caught up to this reality and their department of defence has reoriented its entire policy toward the Pacific. The United States is in a prolonged period of slow growth; nevertheless they have decided to dedicate their military resources to maintaining predominance in the Pacific. That is not so much to contain China but to reassure allies in the region in relation to the fear of doing something rash or taking more aggressive action against China, which they find threatening.
For Canada, our interests in Asia are predominantly commercial. They are economic, involving trade. Historically Canada has not played a large role in intra-Asian geopolitics. The challenge, however, is how to protect these interests; how to take advantage of a growing middle class in China, India, Indonesia and Vietnam; and how to get involved in the region at the same time as this backdrop of soft competition for security and influence.
The big risk I see here is not that there is a hot war or even a cold war in Asia. These are very low probability events. The risk is instead what we see as intensified disputes like the Diaoyu/Senkaku dispute. We see that intensifying. We see these countries beginning to link issues, such as sovereignty over sea lanes, and restrictions on trade are a possibility. Canada may be confronted with a situation where it must choose a side or lend political support to one country or another.
The India-China relationship holds another example of minor disputes, like who owns the line of actual control in the Himalayas. Where does it go if that dispute were to escalate? It may not go to a conflict but to a situation where each side is jockeying for influence and trying to protect its interests and, perhaps, tying one issue to another. We have seen this in the past. We saw disputes about fishing vessels that quickly turn into disputes about rare earth imports and exports between China and Japan.
That being said, it is always an option simply to not get involved in intra-Asian politics. Canada has no formal commitments in Asia, or very few compared to the United States, which has committed to providing security for South Korea, Japan and others. I think Canada has had that option. However, if the Canadian government wants to take a more active approach, and attempt to take steps that would mitigate the likelihood of an intensified competition in the region so Canada does not have to choose who they support in a dispute over sea lanes — for example, freedom of navigation on sea lanes would be a core Canadian interest in the region — any Canadian overtures to the region would then have to be seen as serious and need to deliver some tangible goods to some of the governments there.
Whether it is an earned or unearned reputation, my informal impression is that Canada does not have a lot of credibility among many of the governments along the Asian coast. In the past, Canada has been involved in informal mediation efforts to resolve tensions around the South China Sea, but Canada has withdrawn from those and now the concern is simply that we do not have credibility.
If Canada were to get involved in an effort to help alleviate tensions or find solutions for territorial disputes that are ongoing and simmering in the region, Canada would have to have some stake in it. It is simply not good enough to be the honest broker and provide good offices. You need to do something like provide a credible signal that Canada is interested and willing to put some political capital or, to put it simply, money on the table.
I think that is the strategic situation that we are seeing there now. We have a part of the world, if you go from India to China and up the Pacific coast and the Indian Ocean coast, that has more people than the rest of the world combined. That will be the future of innovation, consumer-driven demand and economic growth. In layman's terms, that is an action Canada wants to get in on.
The challenge is how do we get in there and how do we protect those interests if what is now a simmering and almost latent competition becomes a little more pronounced. That would be the sort of dilemma or scenario that I think we ought to think about.
The Deputy Chair: Thank you for your interesting, informative comments. I already have a list of senators who have questions. However, before we turn to those senators, I would like to welcome our next guest who, through the wonders of technology, is joining us from Vancouver this morning, where it is quite early. I am sure we all appreciate your coming in early to be here today. Mr. Woo is the President and CEO of the Asia Pacific Foundation of Canada. I assume you have an opening statement. If so, please start.
Yuen Pau Woo, President and CEO, Asia Pacific Foundation of Canada: Thank you, Mr. Chair. It is a pleasure to speak to the committee again. Let me open with a few remarks on the current state of economic and some political developments in Asia. Let me then talk a bit about the state of the Canada-Asia relationship and what other countries in our OECD and G8 cohort are doing to respond to the rise of Asia.
I do not think I need to recite the standard factoids on Asia's growing importance in the world economy. You are all familiar with the weight of Asia, led by China, India and Japan, in the global economy. What I want to stress is that we are currently seeing in Asia not just robust growth but also economic transformation that will be extremely important for Canadian interests in the future.
I am referring to the efforts on the part of the Chinese government to shift the economy away from a reliance on exports and on investment to more spending domestically, particularly on social services and on consumer demand. This comes not simply from a realization that the world economy is not able to absorb all of the exports that China might want to send into the world, but also that the Chinese development model has not generated the kind of benefits for the population that will win support for the government.
Of course, China, being an authoritarian, one-party state, derives its legitimacy not from the ballot box per se but from economic performance. We are now at the stage where the party realizes that it must filter more of the benefits of economic growth to the Chinese population. They are doing that through a series of measures to shift the sources of growth away, as I say, from exports and investment to domestic demand. What this essentially means is greater emphasis on what I would call quality-of-life type products and services. It will mean greater emphasis on soft infrastructure. It will mean more focus on the safety of products, the quality of products and standardization, and more emphasis on education, health care, social security and the distribution of income and wealth across the country. It is a very tall order, but the Chinese really have no choice but to work in this direction if they are to continue to lift Chinese people out of poverty to satisfy the aspirations of the growing numbers of middle-class, urban residents and to address the desire for greater liberties across the country.
It is not just China that is going through economic transformation. We, of course, have heard, in recent months, about the efforts of Prime Minister Abe to kick-start the Japanese economy. This is a very bold experiment, the outcome of which, of course, has yet to be seen. If the Japanese are successful in restarting their economy, in introducing some inflation and in stimulating consumer spending, which will then lead to business investment domestically and new lending for projects within Japan, that will, we hope, lead to a revitalized Japanese economy that will not only be good for the rest of the world because of the increased demand coming from that country, but will also create a new dynamic in the region. In the last two decades, we have seen China, of course, and India to a lesser extent rise almost singularly in the region at the expense, in some senses, of Japan. The Japanese very much feel that they have been left behind not only by China but also by Korea to some extent and, if they are successful in economic rejuvenation, that will have both economic and political implications.
In the rest of the region, we also see a very determined effort to reform economies. The debate in the next tier of economies has to do with what they call escaping the middle-income trap. We are talking about countries like Malaysia, Thailand and, to a lesser extent, the Philippines and Indonesia, all countries that have already achieved remarkable economic progress and improvement in the quality of life. However, they are finding it difficult to move to the next level of economic development where they see a more affluent middle class, more urbanization, greater value- added in their manufacturing and expansion of the services sector, all the sorts of things that western economies went through in going from the industrialization period into one in which services and quality-of-life issues became more important. Whether these economies are successful in escaping the middle-income trap will again be very important for the world economy. It will also be very important in the continuing shift of political weight toward Asia.
There are the latecomers, if you will, to the economic growth story, and there are still some in the world, particularly in Asia, Myanmar being the most notable example. It has been in isolation for a number of decades. The aspirations of the Burmese people have been suppressed. They are now going through both a political and an economic reawakening fraught with difficulty. However, there is no question in my mind of the determination of both the government and the opposition in Myanmar to try to bring rapid change to this country, which has enormous potential as a player in South and Southeast Asia.
Things are happening on three fronts: first, China is trying to shift demand and growth away from its traditional sources to a more balanced, more value-added style of growth; second, the middle-income or lower middle-income countries are trying to move up the ladder; and, third, the least developed countries are looking to fill the space that the middle-income countries will be vacating.
All of this economic churning is set in the context of the rise of Asia and the growing assertiveness of Asian countries to defend their interests, both economically and territorially, as well as, perhaps paradoxically, a desire on the part of Asian economies to band together and to find ways of expressing Asian regionalism through new institutions. I will put less emphasis on the assertiveness and the conflict. The previous witness discussed some of those issues. I do not worry too much about the territorial conflicts in the region, though I am happy to discuss them.
I do want to draw your attention to the nascent regionalism in Asia, which is still experimental, but which is showing up in the form of institutions such as the East Asia Summit; the ASEAN Plus Three; most recently a new trade agreement called the Regional Comprehensive Economic Partnership; the ASEAN Regional Forum, of course, to a lesser extent; and the Shangri-La Dialogue for defence ministers. All of these are efforts on the part of Asians to lead the development of regional institutions for governance of economic, military and security issues in the region, but potentially have implications for global governance as well. We would be wise not to ignore or stay away from these fora, because they very much have the potential, as I say, to change the rules of the game and to affect not only regional governance but also global governance.
Let me quickly move to the Canada-Asia relationship. It is a big topic. What I want to leave with you is that we have had a very good run, particularly since 2008 and the time of the great recession, when Asian demand, particularly Chinese demand, essentially saved the Canadian economy from a more severe recession. To take just one example, Chinese purchases of wood products were able to help the forestry industry in this part of the country and also in Quebec, to some extent, avert a disaster. The same is true of many other natural resource industries.
The easy part of Canada-Asia trade is over. We have been able to switch demand, if you will, or switch our exports from the United States to Asia by shipping commodities without very much modification or effort, if you will. If you accept what I say about transformation in China and in the middle income economies, the next phase of how Canada benefits and taps into Asian markets will require a lot more effort. It will mean more than simply shipping one container of copper from destination X in the U.S. to destination Y in China. It will mean the customization of manufactured goods for Asian markets. It will mean understanding social, cultural and political systems in Asia in order to sell services to that market. It will mean understanding health care needs in Asia that are not the same as health care needs in North America, and so on and so forth.
I fear that the hard part in building a stronger economic relationship with Asia is not simply that we have to work harder in Asia, but also that we are going to have to work a lot harder right here in Canada. The reason is that we see, through the research of the Asia Pacific Foundation of Canada, a continued and maybe even growing antipathy — perhaps even resistance — to closer ties with Asia.
Next week, we will be releasing a national opinion poll of Canadian attitudes about and views on Asia. A sort summary of those findings is that, while Canadians understand that Asia is important and that China, India, Japan, Korea and Indonesia will all be vital for Canadian prosperity, Canadians are not willing to embrace the changes required and they continue to be fearful of and even against deeper economic ties with Asia, such as investment from Asian entities, including state-owned enterprises; free trade agreements with Asian countries; investment agreements with Asian countries; and so on and so forth.
There is a lot of work to be done, not just in Asia in terms of trade promotion and marketing and ministerial visits, but also in terms of building the capacity in this country to have the skills to be successful in Asia and training the next generation of Canadians on Asian matters.
Finally, we are playing catch-up in Asia. We are, of course, playing catch-up vis-à-vis our Asian partners, but we are also playing catch-up vis-à-vis our G8 cohort. The previous witness talked about the American rebalancing toward Asia, what used to be called the pivot. It is not simply a military rebalancing. It is also a full-court press that includes an economic and a diplomatic focus on Asia. The Europeans are doing the same.
The Australians have been doing this for a long time and very recently came out with a white paper on Asia strategy. Let me just share with you two or three things from that paper, and I will conclude with those observations.
The Australian white paper talked about the goal by, I believe, 2020, for every Australian student to have the opportunity to learn an Asian language throughout the school system, K to 12. Every Australian student will have the opportunity to learn an Asian language.
Another target set out in the Australian white paper is for all Australian boards to ensure that they have a number of board members with direct experience and knowledge of Asia so that those companies can be grounded with advice, experience and contacts — not just abstract knowledge, but also real experience — in the region.
These are just two of the many recommendations in the Australian white paper, which demonstrates their commitment to stronger relations. I think we need to think about how we can also come up with a Canadian strategy.
Senator Ataullahjan: I have two questions. I have a question for you, Mr. Palamar. We have discussed the challenges in creating a political and economic relationship with certain countries in the Asia-Pacific region, given that we do not share common values. We could use China as an example. Since your research is in governance, I am wondering how you see the Chinese political system evolving in the future and how that would affect its relationship with Canada.
Mr. Palamar: That is a good question. I would suggest that if we expect any change out of the Chinese political system in the future, it will be incremental. I do not see a big-bang democratization coming up. As long as the Chinese economy continues to deliver gains and spread wealth around, like the last witness said, the consumer-driven rebalancing is successful, we see an improved social safety net and better health insurance in China and they can deal with the unemployment problem that they have growing in the background, I suspect that the current political system has quite a lot of durability.
If those conditions are not met, then forecasting is much more difficult. You could see some greater demand for openness and for accountability of the government if they cannot deliver on this implicit promise.
I think the consequences for Canada are not crystal clear. However, if growth continues, not at the torrid pace we have seen in previous years, because I think China has moved out of that phase in their development — and I would be interested to hear what the other witness has to say on that — but at a reasonable pace that keeps a limit on unemployment and allows the Chinese to see some standard of living increase year over year, then the important thing for Canada is that it makes political conditions there predictable. We have a good idea of what conditions will be like a year down the road and how the government might behave a year down the road. Predictability is useful.
In terms of whether I see Canadian and Chinese cultural attitudes or attitudes about human rights or political speech converging and making a relationship easier, I do not foresee that. Among my colleagues, I am told I am rather pessimistic about this. I think that, if we see that growth continue at some reasonable pace, then that does add a lot of predictability. That is useful in and of itself. If it does not happen, then I do not necessarily see that as being a good thing for fostering closer Chinese-Canadian relations at the governmental level. The Chinese government will be very concerned with meeting the needs of its own citizens and keeping its credibility and legitimacy. Foreign relations with Canada, which is an important trade partner to China, though they are more important to us than we are to them, might fall down the priority list quickly.
Senator Ataullahjan: Mr. Woo, you speak about understanding the socio-economic needs in the Pacific region. The latest statistics from Canada's National Household Survey show that Asia is now the nation's largest source of immigration. When we talk about engaging with Asia-Pacific nations, are we taking into account the large diaspora that exists? What kind of people-to-people links currently exist, and how can we use those to deepen our relationship with the nations in those regions?
Mr. Woo: Thank you for your question. Canada is a country that has received many immigrants from Asia. Asia, indeed, has been the most important source of immigrants for at least a decade, probably two decades. You are all aware of the large populations of Koreans, South Asians, Chinese and Filipino Canadians in various cities. They are, without question, an asset in Canada's relations with Asia. Many of them maintain ties to their native countries, which generate business and cultural connections for this country, and we should celebrate and, to some extent, encourage these developments.
However, let us not forget that many immigrants, from anywhere in the world, come to Canada to be Canadians and to establish new lives that are rooted here with their families, in new professions and careers, and so on. They might or might not be interested in connecting for political, business, social or diplomatic reasons with their native countries. We should not generalize about the Asian population helping to connect to Asia.
My own view on the challenge for Canada is that we should look to the entire population to be more Asia-oriented rather than to the so-called diaspora communities. We, as a country, will not be successful in Asia politically, diplomatically and economically unless it is embedded within broader Canadian society that Asia is vital to Canadian interests.
The debate on state-owned enterprises investing in this country cannot be a debate that is led by Chinese-Canadians or Korean-Canadians alone. It has to be mainstream. I would say that, while the Asia-Canadian community is a vital symbol of our connection with Asia as ambassadors and as conduits for trade and other ties with the region, we need to look far beyond the Asian-Canadian community.
[Translation]
Senator Fortin-Duplessis: My first question will be for Mr. Palamar. You said that there had currently been an increase in military spending in the Asian countries that surround China. I thought that the countries had increased their military spending because they were concerned about North Korea. What makes you think that it is China that might be bellicose and aggressive?
You also mentioned the problem between China and Japan concerning a fishing boat; what else makes you think that it is China that could become dangerous?
[English]
Mr. Palamar: Thank you for the question. I should make it clear that I do not believe that China is, in and of itself, dangerous or bellicose. I do not consider myself to be particularly hawkish on China. What we do see around China's periphery is that there are a lot of unresolved territorial disputes and disputes about where economic zones, EEZs, begin and end.
For the first part of the question, North Korea is always a concern for South Korea. However, given South Korea's geographic location, North Korea is not the only thing that they worry about. They do take into consideration the military affairs in Japan and China as well.
A good, specific example is Vietnam. Vietnam has been purchasing, for example, attack submarines lately. These are an excellent tool to monitor incursions into their EEZ. They have a number of long-simmering disputes with China. They have had historically poor relations during and since the Cold War. From the Vietnamese side — and I am not going to cite an exact number because I do not quite believe them — most of the estimates I have heard about Vietnamese plans to develop their exclusive economic zone, their gas, oil, fisheries, et cetera, say that this could be worth as much as a quarter of their current GDP.
This dispute between China and its neighbours about where China's territorial waters in the South China Sea are, for a country like Vietnam, is not simply an issue of credibility or honour; there are actually significant stakes there. We are seeing some significant growth in military budgets. Indonesia and Vietnam historically have no conflict with North Korea. Certainly there is that part of it.
In terms of Japanese and Chinese relations, for example, I do not necessarily see China as bellicose. The problem is that when you do have outstanding differences about who owns an island chain and who has rights to the seabed; and when one side wants the ability to at least monitor their claim, send ships there and assert sovereignty over it, you do introduce the risk of one side — by accident or by miscalculation — resorting to a show of force to assert their claim.
I think that an outright armed conflict is a low-probability event, but below armed conflict we have all sorts of other conflicts, such as political conflict, where countries can link issues and trade. You see tit for tat with visas and whatnot.
I do not think China is bellicose. I apologize if I gave that impression in my opening statement. However, what we do see is some anxiety in the region about this very rapid growth in China's economy and, therefore, its ability to protect what are very legitimate national interests.
[Translation]
Senator Fortin-Duplessis: I have a question for Mr. Woo. I appreciate your comments. Like you, I think it is essential to strengthen our investment ties in high-growth markets in the Asia-Pacific region as a whole.
Do you think the Government of Canada's strategy to establish strong trade links with the entire Asia-Pacific region is effective?
[English]
Mr. Woo: Thank you very much for the question. We have seen a sharp increase in government efforts to strengthen trade and investment in the region, particularly since 2008. I think these efforts are paying off, in particular with the increase in visibility of the Prime Minister and many ministers in Asian countries on a regular basis. It is an important signal of Canada's commitment in the region and a start in regaining some of the credibility that we lost.
As the previous witness has said, we perhaps are not as believable recently as we used to be because we were absent for a long time. The fact that we have stepped up our visibility through high-level visits is important. Likewise, the initiation of free trade agreements, and the opening of some new consular and diplomatic and trade posts, particularly in China and India, is all very useful.
However, as I said in my opening statement, the easy part is over. What I described was the easy part. It is relatively easy for us to simply respond to the demand for more commodities by switching one container or one cargo ship from destination X to destination Y. It is relatively easy for us to initiate a free trade agreement. It is relatively easy for us to send our ministers and the PM to Asia on a regular basis.
The hard part will be to respond to the changing economic demands in Asia, the growing political weight of Asia and its assertiveness, its place in the global economy; and it will be more difficult for us to get Canadians to support deeper economic and political ties with Asian countries, in the form of these free trade agreements, in the form of investment from Asia, and in the form of closer political ties.
While I think we have responded appropriately through the economic crisis and have succeeded in having Asia provide a buffer for our economy, it will be more difficult to do so in the years ahead, and we will have to step up our efforts across the board.
[Translation]
Senator Fortin-Duplessis: I have one last question. Are Canadian businesses facing barriers that might harm bilateral trade between Canada and countries in the Asia-Pacific region?
[English]
Mr. Woo: If you are referring to trade barriers, the answer is yes. These are barriers that are erected both in Asia and in Canada. It happens on both sides of the Pacific. We do not have time to go through all the trade barriers, but this is the reason why the government has launched trade agreements with a number of Asian countries, ostensibly to negotiate those barriers away.
All I would say there is that we should focus on the economies where the barriers are the greatest and the highest. The one economy where we do not have a free trade agreement, where there are severe barriers, is, of course, China. China has offered to negotiate a free trade agreement with Canada. We have not accepted. This is something that your committee perhaps will take up. It would seem to me that if we are in the business of removing the most important, the most difficult barriers, and there is an opportunity to do so with China, then we should take it.
Let me also say that there are barriers on this side of the pond. We put barriers on ourselves. We put barriers on investment from Asian countries, particularly state-owned enterprises. We put barriers on the ability of some of our industries to export because of various supply-management practices. We put barriers on interprovincial trade that reduce the efficiency of our businesses. There are things we can do here and there are things we can do with our Asian partners.
The Deputy Chair: Before we go to the next senator, I have a short question.
You referred, Mr. Palamar, in your opening statement to your analysis of the data. What confidence do you have in the quality of that data that you review from China, in particular?
Mr. Palamar: That is a very good question. As someone who works with the data, I get it a lot.
It is something you always have to be cognizant of. I do not want to get too academic in analysis, but with data, whether qualitative or quantitative, you have to be rigorous in screening it and making sure you know what you are looking at. Data coming out of China is often difficult to interpret. Trade data, in particular, is very vexing. Some of the big questions amongst military analysts when looking at Chinese military spending is how much of this, for example, is going to internal security. It is a very large portion of the Chinese military budget, and it is not a portion that is particularly threatening to its neighbours or concerning its neighbours in the South China Sea.
You always have to be careful, so I tended to work with different data sets, different sources. Some sources explicitly try to account for what they call ``shadow budgeting.''
That is unofficial spending that is nevertheless happening. It is simply an analytical matter and one that we always have to be careful about.
The Deputy Chair: Can you trust the numbers?
Mr. Palamar: I think you can trust them with a degree of confidence. This is the same problem if we talk about the trade numbers. Those are perhaps more difficult to interpret in some ways. What we can look at is changes in trends, and that is significant.
Generally, there are ways to assess the quality of the numbers. What I tend to do is not use numbers that are purely only from official Chinese sources but other estimates as well.
Senator Johnson: I am referring now to a question I have with regard to the opinion poll you did at the Asia Pacific Foundation about 18 months ago with regard to saying that ``two thirds of Canadians said that promoting human rights in Asia should be a priority.'' Then it goes on to say that ``Western nations, however, fail to recognize the complexity of Asia's domestic policies.''
Given these difficulties, is there a best way for Canada to promote human rights in Asia? Also, based on what you were just talking about, that we are not embracing changes, could you comment on this? I then have a couple more follow-up questions to that.
Mr. Woo: Thank you, senator. Canadians have consistently said that the promotion of human rights is an important part of Canadian foreign policy, and it is no different when it comes to Asia. In our poll that came out very clearly, but a companion question also revealed that Canadians feel we should be cognizant of our own human rights challenges domestically before we become too assertive about preaching human rights practices to other countries. I would say that there is a qualified support for an aggressive human rights advocacy in Asia.
I would also share with the committee that when we ask Canadians if they feel the human rights situation in China has improved in the last decade, all our polls, year after year, suggest that a majority of Canadians agree with that proposition. They believe that human rights have improved in China.
In terms of how we might go about a human rights policy in Asia — or in China, more specifically, because often it boils down to China — I think the key is to construct a clear idea of what we want to promote to embed a human rights policy within a larger framework of diplomatic and economic relations with China. We then must ensure, while we will be disciplined, principled and committed to our human rights policy, that it is seen within the larger context of the relationship with China and that the human rights dimension by itself will not be allowed to overtake, overshadow or jettison the larger relationship.
We are currently, I think, in an environment where we do not have a very clear idea of exactly what our human rights approach to China is. Therefore, we alternate between permissiveness, if you will. On the other hand, we run the risk of allowing a human rights issue to overtake the relationship as a whole. If, for example, next week a Canadian citizen in China is arrested on some pretext, there is the potential for this incident to damage the relationship as a whole. We need to find a middle ground where we are clear on what we want to promote, which is understood by the Chinese, which is embedded within the larger relationship and that we execute this policy within the larger framework.
Senator Johnson: Please elaborate further on balancing the Government of Canada human rights with our political commercial interests. Could you tell us a bit more about that?
Mr. Woo: Yes. I am of the view that China's economic liberalization, its growth and its integration into the world economy, will bring with it a greater expansion of freedoms, first in the economic sphere but also into the social and eventually the political sphere. This is, I think, empirically true. Chinese citizens have more liberties today than they have had in the last 40 years, and it is growing. We see that certainly in terms of economic choices they make, but we also see it in the form of the media, in terms of social media and blogging. We see it at the local level, where residents have the ability to protest, with restraint, of course, but across a wide range of social and economic activity. Chinese citizens have more freedom today than they had in previous years. A lot of that is because of China's opening up to the world.
The short answer, senator, is that I think we should not use economic policy or economic relationship as an instrument of human rights policy. I think we should help the Chinese where they want help. It is very clear they want to improve the rule of law. They want to strengthen the judiciary. They want help with enforcement of rules in the provinces and at the local level, far away from Beijing. This all works toward human rights. We can help them there. However, it will not help them if we link economic relations with human rights issues.
Senator Johnson: I want to refer as well to the next generation that you were talking about. This is a very important matter you brought up about training the next generation on Asian matters. We have 5 million Asians who live in Canada. It is one of our biggest populations and the fastest growing one. I think it is at the 57 percentile now, is it not? What is the one key thing we could be doing that we are not doing now or that we could start to do?
Mr. Woo: Work with the provinces, of course, because they have constitutional responsibility for education; introduce more teaching about Asia; and provide options for learning Asian languages in the school system, the K to 12 system. This absolutely has to be a priority because, if we do not understand and we do not have the knowledge or the experience about Asia, then we will not be successful in Asia. It is as simple as that.
To go to the previous question about whether the government's policy is effective in Asia, I would say yes, it is effective. However, if we do not have the next generation of Canadians who can take up the opportunities that will be opened by trade agreements, trade missions, and so on, it will be all for naught.
The responsibility for training Canadians about Asia is not just with the schools; it is also with corporations. Businesses have to make Asia a core priority, not something they work off the sides of their desks. The VP for human resources has to think about an Asian human resources strategy. If you are going to be deriving 40 per cent of your profits from Asia, as Manulife does, they have to hire a workforce that understands Asia and that, in turn, means providing the training programs, the placements and the internships that will allow their staff to have that kind of knowledge.
Senator Johnson: Thank you so much, Mr. Woo.
Senator Robichaud: Mr. Palamar, you spoke about a lack of credibility in the region. How do you measure this lack of credibility? What are the different things you consider to come to this assertion that we lack credibility in the region?
Mr. Palamar: It is a good question, senator, and I would be interested to hear Dr. Woo's answer as well, if you will permit him to answer.
This is an informal conclusion I have come to from discussions with colleagues and East Asian governments, statements, public statements. The chairman of ASEAN the other year suggested that Canada simply does not have any credibility. It is not an issue that Canada is not wanted in the region, but it is this impression that Canada has sort of a fair-weather attitude toward getting involved in Asia and that, if the going gets tough, Canada will not stick around.
It is an informal impression that I have, and I want to stress that. It is a hard thing to measure, but largely it is from private conversations, so I cannot say with whom. You can generally gauge from the way Canada is received at various multilateral fora in the region that Canada is welcome, but there are some apprehensions about how committed the Canadian government is to really investing itself in the region.
Senator Robichaud: Mr. Woo, would you care to comment?
Mr. Woo: I can give you a good example of the credibility problem. When the ASEAN Defence Ministers Plus was formed, all the countries that are dialogue partners with ASEAN were invited to take part except Canada. When I asked ASEAN friends why this was the case, the answer was not that they were trying to slight Canada but that Canada just never showed up at various meetings and it was assumed on the part of our Asian friends that Canada was no longer interested. Our absence from regional fora has sent an impression that we are no longer interested, and I think that is where this question of credibility comes up.
I will stress that I agree with the previous witness that a lack of credibility, if that is the right word, does not mean that Canada is disliked necessarily or that we are not wanted or that we would not be welcomed back, but we have to prove ourselves. We have to work to earn our right to be a player in the region again. It is not sufficient that we have a Pacific coastline. We have to invest in the diplomatic, political and economic resources to demonstrate that we are a credible player in the region.
Senator Robichaud: Mr. Woo, are you saying that the efforts on the diplomatic front are not sufficient at this moment? You say that we have to increase our efforts in that area.
Mr. Woo: What I am referring to is the focus of resources and the priority that is given to key relationships. One example is the recognition of ASEAN as a bilateral, diplomatic partner. We were late in appointing an ambassador specifically to the ASEAN countries, and ASEAN is widely seen in the region as the kind of point group for regional institutions in east Asia. The Americans, the Australians, the New Zealanders and the Europeans had appointed ambassadors specifically to ASEAN well before we did.
Likewise, we were late in promoting free trade agreements with Asian countries. As it stands, we still have not closed a single agreement with an Asian partner, whereas our peer group — the Australian, the Kiwis, the Americans, the Europeans — has deals in Asia already.
I use the word ``diplomatic'' loosely, but we simply have not demonstrated that Asia is a priority. It is not that we are absent from Asia, and we are not, and our diplomats work very hard in Asia and are terrific representatives of this country. However, it just does not come through in Asia that Asia is a priority for Canada.
Senator Robichaud: Would you like to add, Mr. Palamar?
Mr. Palamar: I am in agreement with everything Dr. Woo said. That is my impression as well.
Senator Dawson: I am old enough to have been here on the Hill in 1984 when you were created as an organization. When you said the easy part was over, after 30 years, I guess that you still deserve a lot of credit for those 30 years as an organization. I know you were too young to be there at the beginning, and I was 12 when I was here in 1984.
You mentioned that the easy part is over, and I sort of agree that the growth has given us many opportunities in the past, but you talked about priorities. Where should we prioritize, not only geographically but also in what sectors of activities? We have limited resources. The objective of the committee is to try to come out with a report saying, ``Here is what we think, after having studied this with people who have experience.'' What should we prioritize, and where should we prioritize? You said it. The easy part is over, after 30-odd years, and the easy part is behind us. We would like to listen to your recommendations, because that is what we are going for.
Mr. Woo: Thank you, senator. We have to try to close the trade agreements we have started. We have begun negotiations with India, Japan and Korea. The Korea deal, for example, has been out there now for eight years. We started before the Americans, but the Americans closed before us. Now they have a preference over our exporters, and it is hurting our pork and beef exporters and so on. We have to find a way to close that.
We have to find a way of regaining our credibility by being able to close our deals in Asia. If we cannot close any deals in Asia, our Asian friends basically will say that we are just playing around and are not really serious.
Then we have to ask ourselves where the most important markets are and where the biggest barriers are for Canadian exporters, and surely the answer is China. I know it is difficult politically to move very fast on stronger economic and political relations with China, but there is an offer on the table from the Chinese to negotiate a free trade agreement and they do not make this offer to any country. I do not know if the offer is still on the table today, but, to the extent that it is, how can we as a country come to a political and public consensus that this is important for Canada and that we want to make it happen? It will give Canadian companies an edge over the competition to access the Chinese market.
Within China's market, to me it is very clear that the sectoral priority, not to the exclusion of all the other sectors in Canada, but the generic priority, surely is services. If China is going through the transformation I described, if it is looking for quality-of-life type development rather than just pure, high growth based on investment, that will require massive expansion of its totally outdated, antiquated and highly protected services sector. We are very good in this country when it comes to education services, health care services, business and professional services, architectural services, engineering, the whole range of soft skills, if you will, that make an economy work.
Senator Dawson: The departmental officials who were here yesterday talked about the fact that the more we go east, the less people care. Obviously you do not have that problem in Vancouver. You face the Pacific every day and you see it as an opportunity.
I recognize that education is a provincial responsibility, but there is a lot of social communications that could be done. I again congratulate you on the success of the foundation. What is missing that we could convince people in the province of Quebec, in the Maritimes and in Ontario that China is and has to be considered a priority for the Canadian government?
Politicians and political parties, when addressing the next campaign, will have to be able to tell Canadians we want to concentrate our program and we want to concentrate funds on developing economic ties with Asia-Pacific. We have to do education to do that, since I do not think we can count on only the provinces. What do you recommend we do to communicate with people the importance of the Asia-Pacific region?
Mr. Woo: We have currently a very major campaign going on called the National Conversation on Asia. We are taking this across the country coast to coast. We have been in all the provinces and territories to talk about why Asia matters at the local level, not some abstract notion of Asia as a rising power, but what Asia means for maple syrup producers in Quebec. You may well know that Asian demand for maple syrup is a major determinant of the success of that industry. We want to talk to the seafood producers of Nova Scotia to help them understand why Asian demand for higher quality seafood is keeping that industry alive.
At the local level, the sectoral level, at the city level, we are coming up with the data and speaking with the leaders in these groups to get them to be advocates for why Asia matters to their interests. We are just launching a project called Asia Matters where we will be diving more deeply at the provincial level, at the city level and at the sectoral level, to show with data and with case studies how Japan, Korea, Indonesia and China matter to Gander, Newfoundland, or Hamilton, Ontario. We hope this type of data collection and dissemination exercise will drive home the point to Canadians that it is not a Pacific Coast phenomenon but a national issue.
The Deputy Chair: Colleagues, on everyone's behalf, I will thank the witnesses for their presentations and participation today. We found it very informative and, as you can tell by the questions, very interesting.
The meeting is adjourned.
(The committee adjourned.) |
