Ignoring Tectonic Shifts
As the Asian world has risen, Canada has paid little attention
Canada’s population of Asian origin has been growing consistently since the early twentieth century, today exceeding fifteen percent of our overall populace and fast heading considerably higher. Yet modern Canada has remained resolutely trans-Atlantic in its orientation, with interest in the Pacific Ocean region and Asia modest and fitful for the majority of Canadians.
While Asia’s economic growth and, consequently, its economic and social development—powered by China and latterly India—has been little short of astounding over the past twenty-five to thirty years, a consequential number of robust middle powers has also emerged in the region.
South Korea, Indonesia, and Malaysia may lead the field statistically, but impressive niche players like Singapore, Hong Kong, and Taiwan have each excelled in a variety of ways, not least in higher education. Canadians are aware of, but not much moved by, these facts. This carries the risk that this country’s international profile and its ability to support its interests will be reduced. Importantly, this is coming at a time of increased political tension between Canada and China.
The events that followed the arrest last December of a senior executive of the Chinese telecommunications giant Huawei seem to have taken the Canadian government by surprise, doubly so perhaps given its policy of seeking closer trade ties with China. The detainment of Meng Wanzhou, the daughter of Huawei’s founder, was done on a request from the U.S. government, which is seeking to extradite her to face U.S. fraud charges. It came at a time when Ottawa is said to be considering some form of restrictions on Huawei’s access to Canadian telecommunication networks.
At the time of writing these lines, no solution is apparent, and anxiety runs high. Nevertheless, such deeply worrying episodes generally are encouraged to a close through negotiation, often involving sympathetic third parties. These events, though, remind Canadians that we live in a suddenly much more unpredictable world, in which newly assertive governments tend to bump into others more frequently than in the past, with worrying consequences. Rhetoric is much less disciplined by diplomatic norms than was the case even in the recent past, as illustrated by a brief, vicious squall this past January between Turkey and the United States, NATO allies no less. This is a world all Canadians, myself included, must strain to understand better, not least because our economic model requires Canada to engage energetically not just in trade but also in various other forms of international exchange, and because so many of us travel and work abroad.
The United States has been the globe’s dominant power for more than 100 years and, throughout most of those years, Canada’s towering economic partner and mostly reliable friend. Its global reach expanded as a result of its military might but also as a result of its single-minded focus on the global interests of American companies. Until recently, an assumption that informed calculations lies at the root of most American decisions affecting other countries was well founded. However, that clearly is no longer the case, with knock-on consequences for Canada and the world.
Canadians are not alone in following Asian developments fitfully. The Western media generally tend to focus on the trans-Atlantic world (and, to a degree, on the Middle East), as has the scholarship of international relations and law, in spite of Asia’s impressive recent rise. Consequently, the relationships of Asian countries among themselves and with Canada has received comparatively little academic attention, notwithstanding the fine work of a number of Canadian scholars; Brian Job and Paul Evans, both of the University of British Columbia, spring to mind. Claws of the Panda: Beijing’s Campaign of Influence and Intimidation in Canada, a new book by Jonathan Manthorpe, a long-time Canadian columnist and foreign correspondent, may shed further light on China’s strategies toward this country.
In the United States, the bitter conclusion of its calamitous military adventure in Vietnam in the 1960s and 1970s produced an amnesiac response to a distant Asian humiliation. Washington was long soothed by a number of bilateral alliances and staunch friendships in the region—such as Japan, South Korea, Australia, Singapore, Thailand, Malaysia, and the Philippines. But the United States now sees China as a global rival, and its traditional Asian friends are increasingly at risk of being drawn into Beijing’s orbit. This shift in calculus toward wariness of China has been made by large swathes of business and other leading sectors of U.S. life, not just by President Donald Trump. As well, Russia remains and is likely to remain a meaningful third military power and rival of the United States.
Asian friends of the United States remain nervous and are developing new international security and economic strategies of their own, in one of which Canada is a founding participant: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (still widely known as TPP, its original name until the United States defected from it in early 2017). Meanwhile, China is working hard on its own international networks. Globally, weaker international economic performance since the 2007–08 economic crisis has reinforced geostrategic concerns of individual governments and regional formations, including in Asia, with many Asian countries highly dependent on exports.
Statistics on Canada’s international economic relations tell a fairly clear story with respect to Asia. Canadian foreign investment directs itself to familiar markets that seem reassuring to Bay Street executives: the United States, the United Kingdom, France, Australia, and other traditional markets dominate (as do, interestingly, notorious Caribbean and European tax havens). Any entrepreneur open to risk might argue that the economically fastest-rising continent—Asia—might be worth a growing share of investment portfolios. Canadian entrepreneurs have tested those waters and remain invested in China in modest proportions. But beyond Japan, Australia, and (to a lesser degree) China, Canadian investment in the region might charitably be described as apathetic. Canadian investment in India is only twelve percent of that in China and Hong Kong combined. While India has often been woefully unwelcoming to foreign investment and remains prone to politically driven economic policy decision-making, this figure is surprising. Indian companies for their part require little encouragement to invest in Canada as a bridge into the U.S. market.
Canadian trade with Asia reflects a somewhat different trend than investment, with China well out in front, followed by Japan and South Korea as our biggest partners in the region. But on trade, despite repeated, high-profile trade missions, Canada runs a threefold deficit with China, produced by anemic exports and a large tide of imports. With Japan and South Korea, the deficits are high, though less striking. Each of East Asia’s economic powers has long cleaved to postwar Japan’s model of export-driven growth and has excelled at it. Canada is, to each of them, a secondary and modestly scaled, safe international market.
On some other fronts, different patterns emerge. Immigration, which Canada requires to keep its own flat demographic trends in modest growth mode, today hails overwhelmingly from Asia, at fifty-four percent of the total figure in 2017. For industrialized countries, Canada is a niche proposition as a migration prospect, often linked to university studies or driven by political and economic instability at home.
Canadian universities, increasingly pressured by their hybrid business models and limited government support, seem more entrepreneurial than Bay Street. They are touting aggressively, and successfully, for international business, with political dysfunction and increasingly astronomical tuition charges in the United States thereby making Canada an evermore attractive destination for Asian students. In 2017, Indians topped Canada’s foreign student charts, followed by Chinese and Korean students, but pretty well every Asian country of any size is now represented on Canadian campuses.
The international outlook of most countries is shaped by history, geography, and capability. In Asia, the burden of history seems particularly strong. For example, divergent interpretations of events leading up to and during the Second World War bedevil relationships among Japan, China, and Korea, and continue to rankle in each today. Colonial and post-colonial grievances are nursed and rehearsed constantly, much more so than within the West.
The United States was created with apprehension of “foreign entanglements,” as articulated by George Washington. Nevertheless, it soon adopted the Monroe doctrine establishing the Americas as a sphere of its own influence. Relative to Asia, the United States took over the Hawaiian islands in 1898 (they attained full statehood only in 1959). Washington’s ill-fated colonial adventure in the Philippines, starting with a U.S. military government that same year, thereafter taking a variety of forms and ending definitively only in 1946, produced few happy memories. Vietnam left the Americans shattered domestically.
The United States, ever with trade on its mind, had stakes in the opening of China to commerce in the nineteenth century and forced Japan to open itself to foreign trade in the 1850s. But Japan then turned from isolation to dreams of economic and territorial colonization, soon inflicting both on Korea and Manchuria, and eventually spawning a perverse logic that required it to attack Pearl Harbor in 1941, which, given Tokyo’s aversion to surrender, led inexorably to America’s nuclear attacks on Hiroshima and Nagasaki.
Japan benefited from a relatively benign U.S. occupation after the Second World War, which was aimed at setting it back on its feet and at constraining its ability to make war through a new constitution and strong economic links to the United States. After the Korean War (1950–53), in which Canadian troops also fought, the United States left behind significant military forces in Japan, some of which remain, in part as a deterrent and also as an early response mechanism vis-à-vis a resurgent China. Japan, meanwhile, reinvented itself as an industrial power that emerged as the principal global trading rival to the United States by 1980.
Japan’s export-oriented economic strategy (soon mimicked in turn by Taiwan, South Korea, several countries of Southeast Asia, and, of course, China), was short-lived. In the mid-1980s the United States forced an exchange rate realignment, thus bursting Japan’s stock market and real estate bubbles. Arguably, it has never fully recovered, with demographic decline further clouding its socio-economic prospects, leaving the path open in Asia for dominance by a then-low-key but economically fast-expanding China. Today, by some measures, India is overtaking Japan as Asia’s second largest economy after China.
The end of the Cold War in the 1990s brought about a retrenchment of the formidable U.S. capacity to wage war. A view took hold that no serious threat to U.S. security existed anymore.
In particular, Washington perceived no credible threats to its power along the Pacific Rim. Deng Xiaoping’s economic policies after 1979 were to pay off spectacularly for China, but this was not widely predicted in the early 1990s; his injunction to colleagues to maintain a low profile proved remarkably effective. China focused on economic growth, and succeeded brilliantly such that, by 2010 or so, it had emerged as second only to the United States in economic capacity. Meanwhile, the United States exhausted itself militarily and economically in Iraq and Afghanistan after the terrorist shock of 9/11, increasing the anxiety of its electorate.
President Barack Obama’s effort to re-engage Asia was heralded in “America’s Pacific century,” a 2011 widely cited article by then-secretary of state Hillary Clinton, which mentioned a “pivot” toward the region. Her arguments were primarily economic. She cited China, India, and the United States as the “three giants of the Asia-Pacific.” She claimed that Asia’s impressive economic growth had been “long guaranteed by the U.S. military” before mentioning some (rather modest) new U.S. naval and military deployments to the region. This, and negotiations aiming at a trans-Pacific trade partnership, were the cornerstones of the Obama administration’s rebalance toward the Pacific—never a particularly convincing enterprise, given its modest scope.
In retrospect, Obama’s approach to Asia was flawed. The “pivot” was perceived as undiplomatic, the “re-balancing” as bland, and the security-related measures accompanying them as unambitious. TPP negotiations were allowed to drag on too long as Washington and Japan argued over mutual concessions. The delay turned out to have killed any prospect of ratification by the U.S. Senate after the agreement fell hostage to the presidential and congressional elections of 2016. And in January 2017, President Trump withdrew the country from TPP, creating a strong sense that allies and friends were no longer valued.
The president’s chaotic initiative to engage North Korea’s Kim Jong Un in 2018 created some optimism in South Korea, but disquiet elsewhere, notably in Japan and perhaps also in China. In the face of Washington’s unpredictable policy, these two latter countries made serious efforts in 2018 to reconcile with each other.
The Trump administration has not made it a priority to recalibrate progressively its economic relations with China, instead reinforcing threats with tariffs. A brief ceasefire between Washington and Beijing announced following the December 2018 G20 meeting in Buenos Aires may or may not lead to positive substantive results in the bilateral relationship, but a return to the status quo ante seems unlikely.
Some of Washington’s policies have sideswiped India, which is puzzling since it is Washington’s best bet as a potential ally of some geostrategic heft in Asia. As of now, it’s hard to see whether the Indo-Pacific concept touted by Washington and the so-called Quad (consisting of Australia, India, Japan, and the United States) favoured by policy circles inside the Beltway, will develop any traction, particularly in the absence of greater policy coherence.
The Trans-Pacific Partnership, minus U.S. participation, went ahead under Japanese leadership with eleven of its twelve original negotiating partners signing a revised pact in 2018, signalling that traditional U.S. allies in the Asia-Pacific maintain the capacity for a degree of strategic autonomy. Nevertheless, many capitals in Asia will be attracted to joining one or several of China’s flagship regional or global initiatives as well. The so-called “one belt, one road” program, a set of infrastructure initiatives that aim to link various Asian, African, Middle Eastern, and Latin American countries more closely to China and potentially to each other, is so clearly China-centric and designed to China’s advantage (and now increasingly controversial) that it will likely be less attractive to some countries than Beijing’s more sophisticated initiatives such as the well-timed and well-managed Asian International Infrastructure Bank (which Canada, like most significant countries of Asia with the exception of Japan, has joined).
Perhaps most attractive now for several Asian signatories of the eleven-member TPP might be the Regional Comprehensive Economic Partnership (RCEP), which superficially resembles TPP the most, although its actual substantive content is less ambitious. Expressed most positively, its attraction now arises from the fact that RCEP carries little geopolitical baggage. And geostrategically, TPP11 is now much undermined without the United States.
By late 2018, however, both the United States and China, for different reasons, were seen as “on the back foot” at a contentious Asia-Pacific Economic Cooperation (APEC) meeting. Soothing U.S. discourse proffered by Vice-President Mike Pence during the meeting lacked credibility. Meanwhile, China increasingly wrestles with the unpopularity locally of its pattern of deploying Chinese labour to implement its infrastructure initiatives abroad, an issue not just in Asia but also in Africa. And then there is the so-called debt trap that China’s related lending can create for weaker countries, which was much in the news throughout 2018. Embarrassing (if possibly temporary) political setbacks for its political friends in Sri Lanka, Malaysia, and the Maldives point to choppier waters than Beijing may have anticipated.
The Association of Southeast Asian Nations (ASEAN), which first met in 1967 as a grouping of five countries close to the United States, has since expanded to include five more nations. None can afford to alienate China, and, until recently, none has wished to offend the United States. Might it be able to provide a geostrategic bridge between these two global rivals? ASEAN displays real limitations, not least the absence of the necessary political clout to lead its continent or deter from its preferred course any of the world’s geostrategically meaningful powers, even within its own region. But the ASEAN region, now centred on Indonesia, is also the geostrategic linchpin of Asia.
Playing catch-up due to its electoral choices, Washington will now strain to exercise the power and presence necessary to balance Beijing in Southeast Asia. The TPP was designed, in large part, to contain China’s ability to evade the rules of the existing global order (largely dictated by the West since the end of the Cold War) or to set its own rules. Washington, having rashly abandoned that strategy, now finds itself scrambling in Asia and has little to show as a result.
Even fifteen years ago, South Asia might have been left aside in any discussion of geostrategically vital regions of the continent. Because of India’s rise, but also its repositioning as more open to partnership with the United States, this is no longer the case. Nehru-era non-alignment is no longer the principal driver of India’s foreign policy. Now, defence of its economic and security interests in a more predatory world encourages a diplomacy that bobs and weaves, much as ASEAN’s has but with more weight.
Very few of these tectonic shifts have aroused much interest in Canada. Seemingly in part to accommodate its NAFTA renegotiation strategy, Prime Minister Justin Trudeau threw a last-minute spanner into what had been expected to be the signature of TPP11 during a summit meeting in December 2017, somewhat bruising ties with Shinzo Abe, Japan’s internationally prominent prime minister. Eventually, Canada signed on.
Trudeau is covered in the Asian media as a rock star among the contemporary crop of rather grey and uncharismatic world leaders, but this relates more to looks and style than to substance. Canada’s current foreign policy, which focuses on women’s empowerment and the fight against climate change could be a bit more popular in Asia if it was better known. Overall, Canada remains firmly over the horizon, seen as a potential country of refuge, driven by honourable values in a time of knavish geostrategic manoeuvring, but hardly a full Pacific Rim or Asian actor of weight with a discernable strategy focused on the region as a whole. In this, it is a far cry from Australia, which engages energetically with Asia, in spite of Canberra’s embarrassingly colourful domestic politics, recently tinged by nativism and sometimes racism.
No serious Asian student of international relations would fault Canada for focusing on relations with the United States über alles and for subordinating other foreign policy priorities to the goal of protecting its cross-border economic interests. But its indifference to Asia does surprise. Further, any observer of the White House would conclude that a foreign policy focused on the United States, no matter how intelligently and energetically conducted—and Canada is seen internationally as having done well so far on that front—is any longer sufficient.
Recent developments affecting Canada-China relations are a reminder that either Washington or Beijing can take Canada hostage whenever it suits their designs. During the distressing crisis this winter involving Canadian detainees in China, Ottawa looked fairly powerless globally. We were largely ignored by both major powers involved, although some modulated bleats of support from other NATO allies and Australia soon surfaced. Might Canada want to dust off and adapt Pierre Trudeau’s “third option” ideas on foreign policy, notably his advocacy of diversifying our meaningful partnerships? One bright spot: the energy and focus Chrystia Freeland has brought to bear, as Canada’s foreign minister and chief negotiator with Washington on trade, has caught the international eye, not least due to the comedown of her Saudi antagonists in recent months.
But it makes little sense to moan only about government.
Where is Bay Street in this equation? Traders depend on funders—but Canadian banks are notoriously risk-averse. This can and should evolve.
Where are the Canadian philanthropists who might endow valuable bridges to international knowledge? Jim Balsillie set an example with the Centre for International Governance Innovation (CIGI) and the Balsillie School of International Affairs, linked to CIGI and the two Waterloo-based universities; as did Mike Lazaridis, Balsillie’s erstwhile co-CEO at BlackBerry, with the internationally renowned Perimeter Institute of Theoretical Physics.
Where is the Canadian philanthropist willing to vie or partner with Stephen Schwarzman and his expensive, impressive Schwarzman scholars and college project, centred at Tsinghua University in Beijing? The very useful Asia-Pacific Institute, brainchild of former senator Jack Austin, is too lonely an outpost in Vancouver as a window onto the Far East and the Pacific.
Where are the exciting new ideas from Canadians on how Canada’s aid strategies—including its research funding arm, the enviable International Development Research Centre—can create ambitious new waves of programming that will launch a new generation of substantive bridges to Asia?
As citizens and institutional actors across Canada, we can and should do better on all these fronts, offering the government, business, education, and other relevant sectors of our national scene specific projects to champion for the Asia-Pacific region.
Until Canada gets more serious about Asia, overcoming its instinct to indulge mainly in “safe” strategies involving the U.S. and Europe, and largely normative (if admirable) human rights, gender, and environmental issues at the global level, it sells short the country’s potential. The risk of continuing lack of focus on Asia is that Canada’s international profile will wither as the West’s relative importance declines, and that Canada’s capacity to contend in support of its interests in a more turbulent, diverse, and fractious range of nations will erode.