MGM students and CIC explore trade with China

MGM Students and CIC Members Discuss Trade With China

On November 6, the blended cohort of Master of Global Management (MGM) students on campus for their residency joined the full time on-campus MGM students who started in September and about 50 members of the Victoria Branch of the Canadian International Council (CIC) to explore the pros and cons of a trade agreement between Canada and China. The CIC is Canada’s premiere non-partisan organization dedicated to promoting awareness and discussion of Canada’s international role. It has 15 branches across the country and has been active since the 1920s. The Victoria Branch is the second largest in Canada and has an extensive outreach program to local universities.

The debate was led by two Royal Roads School of Business associate faculty members, Dr. Jeff Kucharski and Hugh Stephens. The topic for debate was “Canada and China: Now, Never or Later”. Mr. Stephens argued that now is the time for Canada to engage with China on efforts to establish a closer trading ties, although the recent update of NAFTA has constrained Canada’s ability to conclude a full Free Trade Agreement. Nevertheless, there are opportunities to explore various sectoral arrangements, which will contribute to Canada’s trade diversification. Mr. Stephens referred to public opinion polling that indicated strong support among Canadians for closer economic ties with China, although there were concerns about other aspects of China’s governance and activities. In conclusion, he argued that it is important to engage with China while China is interested in improving trade ties with China, and that there is no advantage in waiting. In fact, waiting will reduce Canada’s leverage.

Dr. Kucharski recognized the important role that China plays in the global economy but argued that now is not the time to engage with China on negotiating a trade agreement. China currently presents a challenge to the “rules-based order” that has prevailed since WWII and its behaviour, including state-sponsored economic and technological espionage, cyber hacking, suppression of religious and ethnic minorities, disregard for United Nations conventions in the South China Sea and other concerns present real risks to Canada’s democratic society and open economy. While it is in Canada’s longer-term interest to forge a free trade agreement with China, the risks of engaging in a trade deal now outweigh the benefits, in the short term at least. The power relationship between Canada and China is highly asymmetric and so Canada should first work in concert with its allies and partners and with global institutions such as the WTO to encourage China to adhere to international norms and to level the playing field for Canadian businesses competing in China. Canada should also develop a domestic strategy to ensure Canada’s sovereignty and security can be assured before further opening Canada’s markets to China, otherwise the Canada could become the weak link in our very important security alliances. In the meantime, Canada can further diversify its markets by fully exploiting FTA’s that are already in place, especially the CETA and CPTPP.

Following the formal debate, CIC members and MGM students were assigned to tables and given a number of questions to consider and discuss related to the topic. After 30 minutes of discussion each table selected a “rapporteur” to provide feedback on the discussions and conclusions that had taken place at each table on the questions posed. It was gratifying to see the interaction between the MGM students, many of whom are recent arrivals to Canada, and the members of CIC, many of whom are retired or semi-retired professionals with wide experience in Canada and abroad. The event provided an opportunity for the students to expand their network and for CIC members to meet with a younger demographic of post-graduate students.

While there was no consensus among the attendees, there was common agreement that Canada needed to diversify its trade relations and that China was an important partner to consider. Whether that should be now or later was the subject of much discussion. This of course was the objective of the evening.

The event was organized by Dr. Charles Krusekopf and the MGM office, with hospitality (pizza and other snacks which were much appreciated by all) provided by the program.