No tariff relief in sight as Carney re-ups old agreements with Chinese government on energy, lumber

BEIJING — Prime Minister Mark Carney ushered in what he called a “new era” in the Canada-China relationship Thursday by renewing and updating a series of old expired non-binding agreements with the Asian superpower on energy and public safety.

In the regal Great Hall of the People in Beijing, Carney and Chinese Premier Li Qiang — the second most powerful figure in the country — watched as their minister signed over a half-dozen memoranda of understanding (MOU) and letters of intent Thursday afternoon.

The countries also signed a Canada-China economic and trade cooperation “roadmap” that sets the foundation of how both countries plan to reignite trade after years of frigid relations.

“China is prepared to work with Canada to follow through on the important consensus between our leaders and move forward our strategic forward on a trajectory of healthy, steady and sustainable development,” Qiang said through a translator.

“This is indeed a very important meeting and the most auspicious start to the new year and a new era of relations between Canada and China. We are heartened by the leadership of President Xi Jinping,” Carney responded.

China is a key part of Carney’s plan to double non-U.S. exports within 10 years in order to reduce Canada’s dependence on the American market. Industry Minister Mélanie Joly noted Thursday that trade discussions with the Chinese are “more predictable and stable” than with Canada’s southern neighbour.

But there was no sign of tariff relief on Chinese electric vehicles or Canadian canola from either country on the first full day of Carney’s trip.

Canada imposed 100 per cent tariffs on Chinese EVs in 2024, earning a stark rebuke from China in the form of 75 to 100 per cent tariffs on Canadian canola imports and 25 per cent border levies on pork and seafood.

The tariffs on canola have effectively halted all Canadian exports to China, which was the industry’s second biggest international market, dealing it a massive blow.

With Carney and Li them overlooking them, ministers Joly, Anita Anand, Tim Hodgson, Maninder Sidhu and Heath MacDonald as well as Canada’s ambassador to China Jennifer May signed the agreements with their counterparts Thursday.

The six MOUs signed Thursday cover a range of industries such as energy, lumber, policing and public safety, culture and tourism. The two governments also signed a new agreement to facilitate inter-country trade and inspection of pet food and the trade roadmap.

But many of the MOUs were renewals or updates of previous deals that had expired during the years of diplomatic row between China and Canada beginning in 2018.

The energy MOU re-upped a 2017 memorandum on energy cooperation and another on nuclear energy signed in 2014. It aims to deepen cooperation between both countries’ energy sectors by re-establishing formal communication channels between their respective resource ministries. It specifically mentions crude oil, liquefied natural gas and liquefied petroleum gas.

But the agreement does not include purchasing commitments by either country.

“They are very clear that they would like more Canadian energy products,” Energy Minister Tim Hodgson told reporters Thursday evening. He added there would be many more trips to China in the future.

Both governments also renewed a previous deal between the RCMP and China’s Ministry of Public Security to exchange intelligence and evidence in a host of investigations such as counter-terrorism, cybercrime, organized crime and drugs.

One goal of these agreements is to signal to businesses in each country which sectors are primed for new investments.

“If they’re going to invest in our country, they need to make sure that our companies are able to invest and have access to stability and have access to a form of certainty,” Joly told reporters.

She said that she would be meeting with Canadian auto parts company Magna International, Manulife and BMO on Friday.

But the biggest meeting Friday will be Carney’s bilateral with Chinese President Xi Jinping, the first such meeting for a Canadian prime minister in China since 2017.

Before the document signing and dinner with Qiang, Carney and a couple of his ministers met with six major Chinese private and state-run enterprises Thursday.

The companies included e-commerce and investment mastodon Alibaba, state-run giants China National Petroleum Corporation (CNPC) and Industrial & Commercial Bank of China (ICBC), electric vehicle battery and grid storage manufacturer CATL, investment firm Primavera and wind energy company Envision.

Each of those organizations are among the biggest in the world in their respective fields.

The Prime Minister’s Office does not share readouts of Carney’s meetings with businesses.

Speaking to press before a meeting with his Canadian counterpart Anand, Chinese Foreign Minister Wang Yi said in Mandarin that both countries are “doing the right things” diplomatically.

He also described Carney’s visit to China as a “turning point” after years of frigid diplomatic relations.

Much like her successor on Wednesday, Joly refused to say if she still believed China was an “increasingly disruptive” force in the global market, as described in the 2022 Indo-Pacific strategy she spearheaded.

Chinese media’s coverage of Carney’s trip has been relatively muted so far, with a few brief articles from state-run websites noting the prime minister’s arrival.

National Post

cnardi@postmedia.com

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