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IPEF Leaves out Trudeau Despite his Soft Stance on Xi

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At the recent APEC summit, Justin Trudeau made headlines by refusing to label Chinese President Xi Jinping a “dictator.” This cautious stance contrasted with Biden’s more forceful condemnation of China’s authoritarian government during the summit, but despite that, Canada is not included in Biden’s IPEF Framework

Relations between Canada and China have nosedived under Justin Trudeau’s leadership. However, Trudeau’s diplomatic tiptoeing around China failed to win Canada any favors. In a striking snub, Canada was excluded from Biden’s new Indo-Pacific Economic Framework, a key pillar of his Asia policy.

While talks on Canada-India trade relations remain stalled due to a rift that has festered under Trudeau, India’s inclusion in the new US-led IPEF framework shuts Canada out of key economic engagement with the emerging giant.

The exclusion also signals that even Canada’s closest ally, the U.S., is abandoning it on key trade deals.

Under Trudeau’s leadership, Canada finds itself isolated on the world stage.

With strained ties on multiple fronts, Trudeau’s foreign policy seems to be all talk and no action. Is Trudeau out of step with the realities of global power politics?

At the recent APEC summit in San Francisco, Prime Minister Justin Trudeau declined to call Chinese President Xi Jinping a “dictator” which reminds of 2013 when he previously said he “admired” China’s dictatorship under Xi. 

This comes in contrast to President Biden, who directly referred to Xi as a dictator during the summit. Biden has been working to stabilize relations between the US and China, holding lengthy talks with Xi and securing agreements on restarting military communications and cracking down on fentanyl trafficking. 

However, after the APEC summit, Biden called out China’s authoritarian government, while Trudeau avoided using such direct language about Xi. 

Trudeau’s refusal to call Xi a dictator, despite having previously expressed admiration for China’s “basic dictatorship” in 2013, demonstrates his hesitance to provoke or antagonize the Chinese leadership, but despite that, Canada still finds itself left out of Biden’s new Asia-focused economic partnership.

The Indo-Pacific Economic Framework (IPEF) is a new economic partnership initiated by the United States aimed at enhancing cooperation among countries in the Indo-Pacific region. It currently has 14 members, including major economies like India, Indonesia, and South Korea. 

The IPEF has four key pillars related to trade, supply chains, clean energy transition, and anti-corruption. It involves efforts to align standards and rules across its members to facilitate economic integration in the region. However, unlike traditional trade agreements, the IPEF does not include market access commitments or reduced tariffs at this stage.

Ian McKay, Canada’s ambassador to Japan, attempted to downplay the significance of the IPEF, stating that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that Canada participates in is “much more compelling.”

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or the CPTPP, is a free trade agreement between Canada and 10 other countries in the Indo-Pacific region: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The CPTPP is a comprehensive agreement covering virtually all aspects of trade and trade barriers between member countries.

Canada has stuck to its progressive trade principles, as Trade Minister Ng highlighted by touting the “progressive rebranding” of the CPTPP and its focus on supporting women, Indigenous groups, and SMEs. 

However, as Hyder stated, “It is not the time to preach…It is time to be pragmatic.” Sticking to a values-based approach has not gained Canada any favors. 

As Carlo Dade, director of the trade and investment center at the Canada West Foundation, assessed, “Canada does not help you make an impression in Asia. Canada does not bring anything of substance, even on the military front.”

Canada’s exclusion from the IPEF stands in contrast to the participation of allies like Australia, which manages to have a seat at more international tables despite taking a more pragmatic foreign policy approach. 

As Business Council of Canada President Goldy Hyder pointed out, “Australia manages, by taking a more practical approach, to sit at more international tables than Canada, serving its national interests well.” 

He suggested Canada’s government needs to “read the room and understand how things have changed,” 

Exclusion from the IPEF also raises questions about the effectiveness of Canada’s Asia policy. Ambassador McKay claimed that “the work that we need to be doing with our partners in the region is being done” through the CPTPP. 

Canada is already struggling to make progress negotiating a trade agreement with India, one of the largest economies in Asia. Talks between the two countries have stalled due to ongoing diplomatic tensions related to the murder of a Canadian Sikh activist. 

Trade Minister Ng has directly stated that restarting formal trade negotiations is contingent on India’s cooperation in investigating this murder. Without an agreement in place, Canadian businesses face high tariffs and barriers exporting to and investing in the massive Indian market. 

Inclusion in the Indo-Pacific Economic Framework (IPEF) deal could have provided Canada an alternate forum to engage India economically and work on aligning standards and rules to facilitate trade. 

Being left out of the IPEF represents a missed opportunity for Canada to advance its trade priorities with major Asian economies like India. Gaining access to the Indian market remains an ongoing challenge for Canada, and rather than gaining trade advantages from its cautious foreign policy, Canada finds itself relegated to the sidelines in the Indo-Pacific economically. It’s clear that Trudeau is denied a seat at the table.

While the government upholds the CPTPP deal, the IPEF represents missed opportunities for cooperation on supply chains, emissions reduction, anti-corruption measures, and other areas. 

Like India, relations between Canada and China have been filled with tensions in recent years, including the arrest of Huawei executive Meng Wanzhou in 2018 and China’s detention of two Canadian citizens. 

Diplomatic expulsions have continued tit-for-tat between the two countries, with the latest coming in May 2022. Additionally, Canada has launched an inquiry into alleged Chinese interference in recent federal elections.

At the G20 summit in Bali in November 2022, tensions between Trudeau and Xi spilled into public view. Video footage showed Xi sharply criticizing Trudeau, accusing him of making their private conversation public. Xi claimed Trudeau had leaked details about their meeting to the media, stating, “everything we discussed has been leaked to the paper; that’s not appropriate.” 

At the recent APEC summit, Trudeau notably did not arrange any direct talks with President Xi , missing an opportunity to engage China at the leadership level. Additionally, like India, the inclusion in the Indo-Pacific Economic Framework (IPEF) could have provided a multilateral forum for Canada to connect with China economically, despite ongoing political tensions.

The exclusion not only affects Canada in terms of trade with the Asia-Pacific region, it also shows that the U.S. does not want Canada in its deals, which echos badly worldwide. It demonstrates the perception that “America leaves us on the outside of something as important to them,” as Goldy Hyder stated. He added that being left out of the IPEF “suggests they don’t want us in there.” 

This signals that the U.S. is willing to exile Canada when it comes to key regional economic architecture in the Indo-Pacific. 

As Hyder explains, “The perception of Canada from the rest of the world is directly proportionate to how America perceives us.” Therefore, Canada’s inability to leverage its relationship with the U.S. to gain inclusion in the IPEF is “troubling” in terms of impacts on Canada’s international influence. 

Canada being left out of the IPEF shows the problems with Trudeau’s foreign policy. Even though Trudeau has tried to be cautious with major powers like China, relations have still gotten worse under him. 

He did not meet directly with President Xi at the APEC summit to help improve Canada-China ties. 

Trade talks with India remain stuck because of diplomatic conflicts. 

On trade deals, Canada finds itself excluded from important new agreements like the IPEF in Asia even though it shares goals on issues like supply chains and climate change. 

Its close ally, the U.S., seems willing to leave Canada out when it comes to Asia. 

Trudeau has not adapted Canada’s foreign policy to new global realities. This has resulted in Canada’s lack of influence over key economic and strategic interests in Asia, including with China, India, and even the U.S. itself. 

With relations struggling in many areas, it looks like Trudeau’s international approach needs major changes if Canada hopes to have a seat at the table. Or perhaps Trudeau himself should be the one to go for Canada to advance both politically and economically.

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