In this special edition:
Experts weigh in on Canada’s pending Indo-Pacific strategy and what it will mean for Western Canada.
This is an extension of our quarterly spotlight feature where, in addition to our usual review of the news, we ask a few practitioners for insights on a question of importance to Western Canada–China engagement. For this issue, we’ve decided to focus only our quarterly question. With the Canadian government scheduled to launch its long-delayed Indo-Pacific strategy this month, what does Western Canada need from a Canadian Indo-Pacific strategy?
Western Canada is the country’s literal and figurative gateway to the Indo-Pacific. As the federal government prepares to announce its long-anticipated Indo-Pacific strategy it is critical that there be a public record of western views on what is needed in a Canadian strategy for the region. This special edition of the China Brief presents a range of views from the West on what’s needed in a Canadian Indo-Pacific strategy. The views provide good insight into the thinking in Western Canada but are neither exhaustive or fully representational of the West. Watch for a forthcoming policy brief expanding on issues raised here.
What we asked the experts
The Canadian government has repeatedly stated a desire to enhance economic engagement in the Indo-Pacific region, an area that is arguably more important for western Canadian exporters than others in Canada. Yet despite the importance of the region, Canada is one of the few major economies lacking a published policy framework for its engagement.
As the federal government moves to finalize its strategy, what are some elements in a strategy beyond the obvious issues of national importance that are important for western Canadian stakeholders and may be missed by those outside of the region.
The Honourable Jeremy Harrison, Saskatchewan Minister of Trade and Export Development
Saskatchewan has one of the most competitive business environments in the world, and we continue to increase our international presence by co-locating with Canada in a number of strategic locations.
We are the world’s leading agriculture exporter. This continues to be a key economic driver for our provincial economy and has gained importance because we have the food security that the world needs.
It’s important that the federal government recognizes and advocates for Western Canada as a safe and sustainable supplier of food and fuel as that assists us in growing our market access to the Indo-Pacific region with supply chain and logistics optimization, as well as advocacy on specific food safety requirements.
Gordon Houlden, Director Emeritus China Institute, University of Alberta
The Government of Canada’s long-anticipated Indo-Pacific Strategy (IPS), which could bring Canada’s regional foreign policy into closer alignment with the United States, Japan, Australia, is likely to consist of a basket of initiatives that include security, economic and diplomatic measures.
One potential challenge that Alberta may face is that while China is Alberta’s largest Asian trading partner, China views the IPS as a Canadian contribution to U.S.-led efforts to build coalitions aimed at “containing” China’s rise. While the IPS may facilitate the conclusion of particular trade enhancement measures such as a free trade agreement with the Association of South East Asian Nations (ASEAN) it will do nothing to improve trade access to the PRC, which while a potentially lucrative market is also difficult to penetrate due to a range of tariff and non-tariff barriers.
While it is highly unlikely that China would retaliate against Canada simply for announcing the IPS, the development will be viewed negatively in Beijing. Maintaining and growing Alberta’s already substantial exports of agricultural and wood products to all Asian economies should remain a provincial priority, along with a sustained effort to boost energy and hi-tech exports.
It is conceivable that should the already net negative relations between China and western nations deteriorate further, trade with and investment from China would diminish. China has also developed substantive supply chains that run from China to other Asian states, Africa, Latin America and the Middle East, which if accessed by Alberta firms can serve to boost our exports. Developing closer ties with the democratic states of the Indo-Pacific is a sensible foreign policy goal, which will maintain alignment with our allies. However, for export-dependent Alberta we should hope the implementation of IPS does not damage our access to the Chinese market – our second largest and where some Alberta firms and export sectors have found success.
Robert J. Hanlon, Associate Professor at Thompson Rivers University and Director of the “Canada and the Asia Pacific Policy Project”
Academics, analysts and activists need be mindful of short-term political fallout coupled with long-term economic opportunity in the Indo-Pacific Strategy and its announcement.
On the one hand, the ‘Free and Open Indo-Pacific’ origin story is a narrative born out of traditional security doctrine that seeks to exclude those deemed not ‘free’ or ‘open’. Pundits for and against the idea of an ‘Indo-Pacific’ policy will immediately cast the document as a political statement directed at the People’s Republic of China.
Stakeholders should look beyond the political theatre where China denounces the strategy while Canada publicly asserts and aligns itself with what appears to be a bi-partisan U.S. intent on containing China.
China’s protest will be loud but also temporary. With any luck, Canada’s Indo-Pacific strategy will ultimately be seen as an opportunity and invitation to connect with like-minded actors interested in preserving principles of free trade, good governance and international law.
As the Indo-Pacific language gets mainstreamed, stakeholders in Western Canada should pursue areas that are less politically charged rather than where the region excels, e.g., agri-trade, energy security, education, the environment, and humanitarianism, while carefully weighing the risk of politically charged sectors as identified by the federal government.
At the same time stakeholders should be mindful how quickly any of these sectors can and do become politicized. For clues, industry should familiarize themselves with the Indo-Pacific Economy Framework for Prosperity (IPEF) convened by the Biden administration which focuses on connected, resilient, clean and fair economies.
In the end, the Indo-Pacific strategy will not displace other frameworks such as the economic construct of the Asia-Pacific or geopolitical narratives such as East, South or Southeast Asia. An Indo-Pacific strategy is but one mechanism contributing to the broad and robust foreign policy toolkit desperately needed by Canada.
Leanne Fischbuch, Executive Director at Alberta Pulse Growers Commission
The Indo-Pacific region holds great opportunities for the western Canadian crop sector. Many countries within the region are already key export destinations but there is still room to grow. The pulse sector views the Indo-Pacific as an opportunity for diversification and growth. It also is key to supporting food security and a link in the advancement of the sector’s “25 by 2025” strategy to grow and diversify.
To capitalize on this goal farmers, through their industry associations, have supported a request for the development of an Indo-Pacific Diversification Office. The office will allow Canadian agriculture to establish in-region centres of excellence that build on Canada as a trusted trading partner and maintain contact with agriculture policy makers and regulators to provide rapid responses addressing barriers to non-tariff barrier and market access issues.
Insights into emerging trends and increased and timely awareness of issues and challenges is vital for effective trade relationships. Bringing technical experts closer to the market and building trusted relationships with stakeholders in the region is a critical component of assuring that Canada has the awareness and capacity to respond.
Canada’s farmers are experts at producing high-quality sustainable crops to feed the world, and nurturing engagement through the Indo-Pacific region in the development of an Indo-Pacific Diversification Office will benefit Canadian farmers and help the growth of western Canadian agriculture.
(Read more about the case for an Indo-Pacific Diversification Office in this paper co-released by Pulse Canada, Canola Council of Canada, and Cereals Canada.)
Stewart Beck, Canada-Asia Foreign and Trade Policy Expert and Former President of the Asia Pacific Foundation
Although our partners and allies hoped for release of the Indo-Pacific strategy paper sooner, putting Canada’s role in the Indo-Pacific into the proper perspective is fundamental and should not be rushed. Asia, the Indo-Pacific and Canada’s role in the region should play to our strengths, one of which is not carrying colonial baggage into our relationships with many of the countries. Maintaining a certain degree of flexibility is fundamental. It will also mean supporting our allies on the crucial issue of a rules-based order and, at times, taking a Canadian path when it is central to our national interests.
Canada has a vital role in the Indo-Pacific concerning non-traditional security threats, and Western Canada leads in this area. Nothing is more critical to the region than food and energy security. China is already a substantial importer of pork and oilseeds from Western Canada, while in 2021, 77% of India’s dried and shelled lentils were imported almost exclusively from Western Canada. We will be a substantial supplier of LNG to Japan, Korea and China, and with added pipeline capacity, there is potential to supply oil to North Asia and India with energy exports from both coasts.
No doubt, the Indo-Pacific Strategy will emphasize the need for diversification. For example, we will build our links to Southeast Asia and India through trade and security agreements or by establishing technology relationships to solve some of the region’s substantial climate or health-related challenges. Here Western Canada can lead the way with its demonstrated Agri-Tech, geospatial and climate mitigation expertise.
Asia will be the twenty-first century’s economic driver, with over 60% of global growth coming from the region by 2030. An Indo-Pacific strategy will focus on the importance of diversification and the need for a coherent and sustained presence. This strategy must be a Canada First Indo-Pacific Strategy, and Western Canada is a principal actor in the script.
Alberto Velasco-Acosta, Director of Foreign Direct Investment and Ryan Kuffner Vice President, Sales and Business Development, YES! Winnipeg
A Canadian Indo-Pacific strategy is a much-welcomed initiative for Manitoba’s international business community. The region is already home to a few of Manitoba’s top 10 export markets (Japan, China, Australia, Indonesia & South Korea) and to some the province’s top import sources (China, Japan, Taiwan & Vietnam). When it comes to foreign direct investments, Japan is among the top five sources of investment flows into Manitoba. This trade and investment activity stands strong even without a solid strategy to secure a path to building and maintaining robust relationships with this key economic region.
The vast majority of new permanent residents to Manitoba originate from the Indo-Pacific region, with India, China and the Philippines leading as the top three sources of immigration. Continued labour mobility from the Indo-Pacific will be critical to future economic growth in Manitoba. It is important that labour mobility gets a priority place in Canada’s strategy for the Indo-Pacific region.
Western Canada, as our country’s gateway to the Indo-Pacific region, has the opportunity to support positioning Canada as a leader in Asia-North America relations. As a trusted partner to the United States, Canada has a unique opportunity to lead as the interlocutor that supports the development of stronger partnerships between the Indo-Pacific and North America. A Canadian strategy for the Indo-Pacific region can provide the framework and pathway for Western Canada to coordinate common efforts in an effective way toward this opportunity to lead the building of stronger inter-continental relations.
Carlo Dade, Director of Trade and Investment Centre at the Canada West Foundation
There is a large body of work by CWF and others on the importance of the Indo-Pacific region for Western Canada. There is an even larger accumulated body of work on specific narrow interests of exporters and importers, cultural groups, provincial governments and others. From this body of work, four themes emerge
First, an Indo-Pacific strategy must treat China as a global and regional actor beyond the bi-lateral focus that defines much of the current public discussion in Canada. China is the dominant political and economic actor in the Indo-Pacific with arguably the largest influence on the markets and policies of the countries to which Canada wants to diversify its trade. This includes being the largest funder of the infrastructure that will move the products Canada wants to sell. Even if Canada tries to run away from China by diversifying into the Indo-Pacific region, it’s going to run smack into China. An Indo-Pacific strategy must have this reality front and centre and build capacity in Canada to manage in a region, and a world, where China is a dominant influence.
Second, the economic and trade elements of the strategy need to be proactive. The federal government has moved its trade policy beyond traditional concerns that drove past agreements such as tariff reduction. This evolution has focused on ‘progressive’ elements. Similar attention is needed to focus on developing the capacity to be more proactive on things like anticipating and nipping non-tariff barriers in the bud.
Third, the strategy must include mechanisms to improve coordination with provincial governments which are increasing their on-the-ground presence in the region. Consultation followed by unilateral federal action is not coordination. The type of formal, regularly scheduled Team Canada approach, as opposed to ad hoc coordination done during the Trump administration’s re-negotiation of the North American trade agreement, could be adapted here.
Finally, a strategy needs to clearly delineate cooperation versus competition with the Americans and other allies. Security concerns cannot reflexively outweigh economic concerns without deliberation. Stating this upfront is a critical signal to a region that often questions our independence to be a reliable supplier and a neighbour to our south that forgets to consider our independence when asking for favours.
The Canada West Foundation would like to thank all the contributors to this special edition.