Prime Minister Mark Carney speaks with media at the ASEAN Summit in Kuala Lumpur, Malaysia, Monday.Adrian Wyld/The Canadian Press
Prime Minister Mark Carney says he expects to meet Chinese President Xi Jinping this week at an international summit in South Korea as the two countries attempt to repair a six-year rupture in relations and resolve a punishing trade war.
It’s the first time the Canadian leader, who is seeking to shift trade away from the increasingly protectionist United States under Donald Trump, has confirmed a meeting with Mr. Xi that both sides have been trying to set up for months.
Speaking to reporters in Kuala Lumpur, where he is attending another summit, Mr. Carney wouldn’t rule out relaxing investment restrictions placed in the way of Chinese capital under predecessor Justin Trudeau, saying Canada and China are in the process “of resetting expectations of where the relationship can go.”
He also didn’t dismiss an eventual free trade deal with Beijing or cutting tariffs on Chinese electric vehicles that Canada imposed in 2024 in tandem with the United States. The Prime Minister said he would be in a better position to answer these questions as things evolve with Beijing.
Mr. Carney, who last month praised China as a country “run by engineers,” is attempting a difficult feat of construction himself in the days ahead.
APEC has laid the groundwork for a more connected global economy and led to the establishment of regional and inter-regional trade agreements. But analysts say geopolitical tensions threaten the bloc and its long term agenda.
Reuters
He is trying to rebuild Canada’s ruptured relationship with this emerging Asian superpower while avoiding alienating Mr. Trump, who expects allies to support his tough-on-China agenda.
Mr. Carney said the rapprochement with Beijing is long overdue. “This is our second largest trading partner. This is the second largest economy in the world. This is one of the most influential actors in terms of the global system such as it is, and it is a country with whom we had no senior-level contact for seven years until I met Premier Li in New York,” he said, referring to his meeting with Li Qiang on the margins of the United Nations General Assembly in September.
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The last official and formal meeting between a Canadian prime minister and Mr. Xi was 2017 in Beijing when Mr. Trudeau tried but failed to launch free-trade negotiations with China.
Canada-China relations entered a deep freeze in late 2018 after Ottawa arrested Huawei tech executive Meng Wanzhou on a U.S. extradition request and Beijing subsequently locked up two Canadians – Michael Kovrig and Michael Spavor – in conduct called “hostage diplomacy” by one Trudeau cabinet minister.
Mr. Trudeau later chatted with Mr. Xi on the margins of Group of 20 summits in both 2019, in Osaka, and 2022 in Bali, where a fractious exchange was caught on camera.
Beijing’s retaliation for a 100-per-cent tariff Ottawa imposed on Chinese electric vehicles and a 25-per-cent levy on steel and aluminum from China is causing widespread pain across Canada.
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China in August imposed a 75.8-per-cent duty on Canadian canola seed, a major crop in Alberta, Saskatchewan and Manitoba, as part of its retaliation for Ottawa’s 100-per-cent tariffs on Chinese electric vehicles and 25-per-cent levies on Chinese steel and aluminum in 2024.
Beijing’s move was on top of a 100-per-cent tariff on Canadian canola oil, canola meal and peas imposed in March, and a 25-per-cent tariff on Canadian seafood and pork products.
During the last eight years, Mr. Trudeau’s government has imposed increased restrictions on Chinese investment in Canada, particularly from companies with any connections to the Chinese state. It blocked a takeover of Aecon Group by the China Communications Construction Co. It blocked the sale of critical minerals mines. It banned Chinese tech flagship Huawei from the country’s wireless infrastructure. Former Conservative prime minister Stephen Harper also barred further investment into Canadian oil sands and blocked a takeover of BlackBerry.
Asked if he would revisit these barriers, Mr. Carney said the talk with Mr. Xi is the “start of a broader discussion.” He said restrictions on Chinese investments were imposed because of other factors in the relationship.
He cited “extreme restrictions” on travel between Canada and China as one area to tackle first, saying these do not make sense given the long history of the relationship. Both China and Canada require visas for their citizens to visit each other’s country. “It’s a very obvious example that progress can be made.”
He said, without identifying areas, that there are a lot of ways Canada and China can open up their relationship before efforts hit any red lines. “We’re starting from a very low base, and we can move quite substantially before we start to get to sensitive areas.”
Asked if he would like to cut the tariffs on Chinese EVs, or strike a trade agreement with Beijing, Mr. Carney said he wants to see where the conversation leads.
“I look forward to the discussions with President Xi, and they’re about a much broader set of issues than trade, and I will be in better position to start answering questions like that as the relationship evolves and deepens.”
He said he has no “preset offer” for China.
“This is the difference between relationship and transaction.