Canada's Trudeau Says China Trade Talks to Proceed at 'Proper Pace'

By Paul Vieira Features Dow Jones Newswires

Canadian Prime Minister Justin Trudeau said Monday he was ready to forge ahead with formal talks toward a free-trade deal with China, but at "a proper pace" and with assurances any pact addresses the environment, labor standards and gender rights.

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His comments to Canadian reporters traveling with him in China came after a meeting in Beijing with Chinese Premier Li Keqiang, in which the two leaders said they would continue to explore the feasibility of a bilateral free-trade pact but offered no timeline. They didn't announce a formal launch of free-trade talks, something analysts in Beijing and Canada had widely expected and China's chief envoy in Ottawa had recently suggested was in the offing.

Mr. Trudeau's trip to China, with its heavy emphasis on trade, is being watched closely in light of the problematic state of talks to revamp the North American Free Trade Agreement. U.S. Trade Representative Robert Lighthizer has criticized a "lack of headway" in the talks. The White House wants to make the terms of trade in the 23-year-old treaty more favorable to the U.S. through changes that Mexico and Canada have opposed.

A rapid Canadian move to launch formal trade talks with China would signal to the U.S. that Ottawa has other trading options available should Nafta collapse.

In a statement, Mr. Li said the China-Canada relationship presents "huge potential and broad prospects," expressing hope the two countries would lift bilateral ties "to a new high."

Mr. Trudeau, during an unscheduled press conference late Monday, said Canada was committed to pressing ahead with trade talks "in a responsible way." He said a potential pact would have ramifications for both countries. For Canada, he cited improved market access to the world's second-largest economy, adding that for China such a deal would amount to Beijing's first direct engagement with a Group of Seven economy to liberalize trade.

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"There's a desire to make sure that we get it right," Mr. Trudeau said. The Canadian leader added, however, that talks with China would need to address nontariff measures such as the environment, labor conditions and gender equality.

The Liberal government under Mr. Trudeau has made this so-called progressive agenda a priority in trade talks, including in any revamp of Nafta.

The push to include measures not related to lower tariffs and market access could be a sticking point to getting talks under way, analysts said.

Gordon Houlden, director of the University of Alberta's China Institute, said a Chinese official told him Beijing expected to its existing trade pact with Australia, which doesn't touch on nontariff concerns, as a template for a deal with Canada. "It's not going to work that way," Mr. Houlden said, citing the Liberal government's political agenda and the economic makeup of Canada, which has a more significant manufacturing sector than Australia does.

Mark Warner, a Toronto trade lawyer, said he was skeptical Canada and China would officially launch talks this week because of Beijing's preference for a "limited type agreement" like Australia's. The China-Australia deal reduces tariffs on exports in sectors including agriculture, natural resources, and manufacturing, and reduce barriers for Chinese private investment in Australia.

"The Chinese position is they don't want to see social and political issues attached to treaties meant to facilitate the flow of goods," said Charles Burton, a former Canadian diplomat in China and now a political-science professor at Brock University in St. Catharines, Ontario.

The delay in formally launching trade talks with China gives Canadian officials the opportunity to focus on the Nafta talks, Mr. Warner said, and on the next stage of discussions with Asia-Pacific countries on a revised version of the Trans-Pacific Partnership minus the U.S.

--Sofia McFarland in Beijing contributed to this article.

(END) Dow Jones Newswires

December 04, 2017 16:16 ET (21:16 GMT)