Internal docs suggest Trudeau wants China blocked from Pacific Rim trade deal

OTTAWA -

While the Liberals insist a Pacific Rim trade bloc should welcome any country that meets its standards, an internal document suggests Prime Minister Justin Trudeau wants China kept out of the deal.

Trudeau's comments stem from a call he held last fall shortly after the swearing-in of former U.K. prime minister Liz Truss, who has since been replaced by Rishi Sunak.

A Canadian diplomat in London sent Ottawa an "unofficial readout" on Sept. 11, 2022 that summarized their call, which The Canadian Press obtained through the Access to Information Act.

The document states that Truss believed America and the European Union should be part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, also called the CPTPP, a bloc that includes Canada and will soon involve Britain.

"PMLT mused that the U.S. and EU should join CPTPP. PMJT used this opportunity to note that this is exactly why it is so important to have such a high bar for the U.K. getting into the CPTPP -- so it makes it (too) hard for China to get in. PMLT agreed," reads the internal document.

The language seemed abnormally frank to Carleton University economics professor Meredith Lilly, who served as former prime minister Stephen Harper's trade adviser.

"It is certainly unusual to see this, and I don't think that this is something that would be phrased in this way in public dialogue," she said.

Canada has insisted that it has no stance on whether China should be able to join the trade bloc, instead saying that any country can be admitted if it meets criteria set by members of the group, including unionization rights and environmental targets.

Canada's Trade Minister Mary Ng repeated that message when asked directly about Chinese membership in the group last Friday.

"CPTPP is a consensus partnership among all of the trading partners. And we're going to have to work through how we treat the accession requests," she told a conference held by the Canadian Global Affairs Institute.

"Compliance and enforceability around environmental standards, standards for labour, the inclusive nature of it, a track record of being a trading partner that is in compliance with the rules -- those are the kinds of things that (we) have in the conversation."

China applied to enter the trading bloc in September 2021, and could only join with the support of all members in the group. Lilly said Canada is one of the leading voices in CPTPP membership by virtue of being one of the largest economies in the group, along with Japan and Australia.

Australia's Trade Minister Don Farrell said last fall that "I don't believe there's any prospect that China could join," given that Beijing tends to block trade for political reasons. Lilly said she hasn't seen Canada take a similar public stance.

"It's quite important for CPTPP to maintain its open architecture," she said. "But the barriers to entry should be extremely high, in such a fashion that it's quite unlikely that a country like China would qualify."

Lilly said that's because Beijing is unlikely to entertain a series of reforms it would need to undertake. She said that likely includes issues surrounding state-owned enterprises, market access and currency provisions.

"Admission can't just be based on a promise to be better in future, precisely because China in particular has in the past undertaken certain commitments and then has failed to uphold those," she said.

"It's important to stick to rules and ambitious standards, because it does always create the opportunity for a country to change in the future, so it's not just a dogmatic decision that a certain country isn't permitted."

The Chinese Embassy in Ottawa said it has noticed growing interest among Canadian experts in China joining the bloc, noting it would triple its consumer base and give Canada "tremendous" opportunities. The delegation says it's "in close contact" with Ottawaabout membership in the deal.

"China's application to join the CPTPP is one of the major moves to further expand its opening up," a provided statement said.

"It conforms to the interests of China, the interests of all CPTPP members, including Canada, the interests of the Asia-Pacific region, and the interests of the recovery of the global economy."

Lilly also noted that most members in the bloc are smaller economies that have stronger economic ties with Beijing, and many don't want to be seen to be taking a side in the escalating rivalry between the U.S. and China.

Taiwan, a democratic self-governing island China claims as part of its own territory, separately applied to join the trade bloc around the same time as Beijing, and many countries are keeping silent on the merits of either entering the bloc.

Further, she said not having either Washington or Beijing in the bloc gives smaller economies more opportunities to advance their own interests.

In a statement, Global Affairs Canada said CPTPP membership is contingent on countries supporting open markets and high regulatory standards.

"Canada's position on any economy aspiring to accede will always be guided by the best interests and values of Canadians workers and businesses," spokeswoman Charlotte MacLeod wrote in a statement.

This report by The Canadian Press was first published June 6, 2023.

-- With files from Mia Rabson.