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China is a missing piece in Canada’s trade puzzle

Jean Charest is former premier of Quebec and a partner in the law firm of McCarthy Tétrault.

Last year, in the days after the election of the new Liberal government of Prime Minister Justin Trudeau, there was much hope and enthusiasm about the future prospects of Canada's relationship with China. There was much talk about a "reset." If anything, the changes we continue to experience globally make a more compelling case for us to intensify our relationship.

The world economy continues to experience slower growth. A big part of that story is the transformation of China toward consumer-led economic growth. The point here for Canada and the world is that whatever happens in China, given the size of its economy and its role as an engine for economic growth, matters to all of us.

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For Canada, a country rich in natural resources – energy, mining, forestry and agri-food in particular – the Chinese transition has had a measurable impact.

It is also obvious that our respective economies compliment each other.

And as the Chinese economy transitions, we become even more so, as Canada offers China opportunities to work together, notably in the area of financial services, education, health, green technology, transport and in the area of culture and entertainment.

Taking into account the global context, it's impossible to ignore the broader political environment and, in particular, the potential effect it will have on vital trade patterns that are the lifeblood of our relationship.

The surprising outcome of the Brexit vote and its impact on the future of Europe, which represents 24 per cent of the world's GDP, will have a yet-to-be-determined effect on the world economy.

Conflicts in Ukraine and Syria continue to have destabilizing effects as the migrant crisis persists. Terrorism is changing the way we manage security, borders, immigration and our day-to-day lives.

The successful outcome of the COP21 meeting in Paris has demonstrated that a co-operative relationship between China and the United States, two of the world's biggest emitters of greenhouse-gas emissions, can allow mankind to make real progress in fighting climate change.

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Technological breakthroughs are going to continue to change our lives, whether through robotics, artificial intelligence or electric and driverless cars.

And to add much colour and entertainment to our lives, there is, of course, the U.S. election campaign.

Canadians are very close observers of our American neighbours – we have to be, since our vital interests are at play. Whatever the outcome of this election, it is safe to assume that the posture of the next U.S. administration on trade issues will be less open and more protectionist than before.

For both our countries, these events and the changes they bring are extremely important. If we choose to develop a shared vision of our common future, the opportunities for both countries are significant.

Canada is not a small country. Although we are only 36 million people, which some might describe as within the margin of error of the Chinese population, we are a member of the Group of Seven (G7) and the G20 and among the 10 biggest economies in the world.

We are blessed with abundant natural resources but, most of all, we are a knowledge-based economy. We are rightfully recognized for our diversity, as 20 per cent of our population is not born in Canada. We have one of the best-educated populations in the world and we host students from all over, including 150,000 from China.

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More importantly, 60 per cent of Canada's GDP is trade-related. We are one of the most trade-dependent countries in the world. We share with China the same ambition of opening new trade routes.

For example, President Xi Jinping's ambitious Silk Road vision stands out as one of the world's most forward-looking trade initiatives.

The creation of the Asian Infrastructure Investment Bank, of which Canada will now become a member, lends support to the broader vision of developing the infrastructure that will support trade and economic development in all of Asia and beyond.

Canada is party to the North American free-trade agreement. Canada is one of 12 countries to have signed on to the TPP. But the best is yet to come, as we expect Europe and Canada will both ratify and implement the Comprehensive Economic and Trade Agreement with Europe within the year. It's the most advanced trade agreement we know of, giving Canada a privileged access to the richest consumer market in the world of 500 million people.

Let's set aside TPP for the moment, given its uncertain future.

For Canada, the combination of NAFTA, CETA and other trade agreements means that we have unfettered access to 60 per cent of the world's economy. Our destiny is to be a world trade hub for goods, services and investment, and for the mobility of people and labour.

But the missing piece to Canada's trade puzzle is Asia, and in particular, China.

For China, the changing European and North American landscape means that more than ever before, a renewed relationship with Canada presents new opportunities – even a counterpoint to what is happening elsewhere in the world, and in particular the United States, with a partner who wants a more open door to China.

Defining that relationship, in the new slower growth economy, will be the challenge for Mr. Trudeau and his Chinese counterparts.

This piece is adapted from Mr. Charest's opening remarks to Thursday's meeting of the Canada-China Business Forum in Shanghai.

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