Canada prepared to stall trade deal with China until its behaviour is 'more reasonable'

Canada's ambassador to China says a trade pact with Canada likely won't be reached until China shows flexibility on certain controversial policies.

Federal ministers travelling to Beijing in November to push Canadian trade, business interests

Chinese President Xi Jinping shakes hands with Prime Minister Justin Trudeau during the G20 Summit in Hangzhou, Zhejiang province, China September 4, 2016. (Damir Sagolj/Reuters)

Canada's ambassador to China says a trade pact with Canada likely won't be reached until China shows flexibility on certain controversial policies.

John McCallum says most of the work he is doing in Beijing right now is focused on bridging policy gaps between Canada and China on agricultural market access, wages and gender equity, and on addressing issues with the Asian nation's human rights record.

"We are doing our best to persuade China to behave in what we would regard as the more reasonable way," McCallum told Chris Hall, host of CBC Radio's The House, on Thursday.

Prime Minister Justin Trudeau and members of his cabinet spent time in China in December working toward a free trade agreement, but left empty-handed.

Renewed efforts are now underway. Finance Minister Bill Morneau and Trade Diversification Minister Jim Carr will be attending high-level business meetings in Beijing next month with Chinese political and business leaders.

But those efforts alone won't be enough to make a deal, McCallum said.

The meetings next month should be treated as "building blocks," he said, because even though Canada wants an agreement, it needs to see improvements in China's human rights record before signing any papers.

McCallum added there's potential in the future for China to join the soon-to-be-ratified Comprehensive and Progressive Trans-Pacific Partnership (CP-TPP) trade deal.

Troublesome, uncontrollable

McCallum said he's had conversations with other ambassadors in recent days about the challenges posed by China's approach to human rights and other issues.

This fall, the UN blasted China over "deeply disturbing" allegations of large-scale re-education camps in Xinjiang province, where up to a million ethnic Uighurs have been detained, and a Human Rights Watch report that shed light on the Chinese suppression of Turkic Muslims in that same province.

However upsetting China's actions are, McCallum acknowledged that "at the end of the day, China will do what China wants to do.

"China has to be a very important part of our strategy because China is so huge."

'No one is telling us we can't make deals,' says the Minister of International Trade Diversification of the USMCA's Ch. 32. 7:40

In the absence of a formal free trade deal, McCallum said, the government is touching base with Chinese officials to talk about how Canadian companies can get involved in infrastructure projects in their nation.

After the new United States-Mexico-Canada Agreement (USMCA) was announced, China criticized a clause in the trade deal limiting the leeway given to USMCA nations to negotiate trade deals with China, calling it a political dominance move by the U.S.

Section 32.10 of the USMCA requires the signatory countries to notify each other if they enter into trade talks with a "non-market" economy. Some experts argue the clause gives the Americans veto power to stop Canada from signing a free trade deal with China.

Trudeau has said Canada is open to doing more business with China now that a trade agreement with the United States and Mexico has been finalized.

Listen to the full interview with John McCallum Saturday on The House, at 9 a.m. on CBC Radio One.

With files from The Canadian Press