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HomeCanada’s Role on the Global StageNavigating the US-Canada-China Triangular Relationship

Navigating the US-Canada-China Triangular Relationship

By David Carment

Canada is a participant in a rapidly evolving international economic order in which China’s economy is poised to overtake the US by the end of this decade. At the same time, America is turning inward towards self-sufficiency in order to reduce dependencies, shorten supply chains and shift its economic focus away from globalised interdependence towards domestic consumption and manufacturing. De-globalization carries significant risks for the USA and Canada.

In responding to these transformations, Canada faces two challenges.

The first challenge is recognising that Canadian sovereignty is both strengthened and weakened by being closely tied to the US. Today’s Canada-China-US triangular relationship cuts across economic and security domains: international trade has become increasingly politicised and security strategies have expanded to include instruments of economic coercion

The incentive for small and middle powers like Canada to stay loyal to existing institutional arrangements comes from the fact that great powers are motivated to discipline weaker states who may be looking to change sides. However, many small and most middle power states have some agency. They will, when possible, try to make gains across and not just within geopolitical axes if they believe their interests are best served by doing so. To keep them in line, great powers increase the costs of defection, creating a pernicious feedback loop of increasingly competitive multilateralism. Such actions are counterproductive because they weaken alliances. Even an alliance of values is not robust enough to create sufficient cohesion within geopolitical axes.

Unlike other US allies such as EU member states, Canada has significantly less room for maneuver across geopolitical axes and fewer opportunities to engage the world in areas that are not dominated by the US or directly influenced by the bilateral relationship. To be sure, incompatibilities between Canadian and Chinese political, economic and social institutions will for the foreseeable future constrain the possibilities for Canada’s engagement with China. These incompatibilities are multiple. However, the most prominent feature in the Canada-China relationship over the last decade or so is the extent to which it is now shaped and influenced by the China-US rivalry. China’s rise to significant diplomatic and economic status has elicited a confrontational stance from the US, forcing other nations to reveal their hand. For Canada, that hand-revealing exercise may be as ineffectual as declaring a “diplomatic boycott” or as difficult as supporting China’s entry into a multilateral trade agreement.

The decision by the current Australian government to enter into a controversial nuclear submarine deal with the US and to forge a military alliance with the UK and USA is another example. However, what is important is that the AUKUS deal was done without public debate, which normally would indicate the existence of a broad support for America’s strategic containment of China. The evidence, however, suggests that no such consensus exists within Australian policy circles despite the media’s best efforts to suggest otherwise.

Likewise, despite portraits of a similarly confrontational consensus in Canada toward China, the issue is more the lack of public debate. Fundamental to this debate is the realisation, as unpalatable as it might be, that Canada must not only navigate a world in which it is subservient to US interests, it must also find a way to offset potential harmful US policies that are implemented to advance American interests against China.

Simply put, the increasing presence of economic coercion in American foreign policy is not only a reflection of the inability of international institutions to moderate America’s foreign policy choices, it also brings harm to Canada directly. For example, despite US efforts to damage Huawei’s ability to deliver 5G technology around the world, the multinational has made significant inroads in Asian, South American and even African markets. Only after the 3Ms debacle was resolved did it become clear that the US does not yet have a viable alternative to Huawei’s 5G technology or the broader Belt and Road Initiative that will deliver 5G for that matter. By allowing itself to be pinned down by US extraterritorial overreach on the Huawei file, Canada failed to realise economic benefits from a key driver of technological growth. The Huawei fallout is less about spying and more about American industry being outpaced by a more able competitor.

In examining America’s extraterritorial overreach, the Meng Wanzhou trial, the two Michaels and decisions over 5G are merely the prelude. The Biden administration’s Competition and Innovation Act contains more than 30 specific references to Canada and three sections of legislation devoted solely to Canada. In essence, the Act will bind Canada to a series of policy actions intended to compete with China in the crucial domains of information technology, aerospace, and defence, impinging upon all aspects of academic research, technology transfer and capacity building for Canadian universities. 

If this outcome is problematic it is simply because Canada’s strategic environment is becoming increasingly bifurcated, rendering Canada’s policy choices increasingly incoherent. Overcoming that incoherence is the second challenge. On the one hand, Canada’s defence and security policies on China are hard-line. This is a reality borne from a highly integrated US-Canada security architecture that emerged strongly from 9/11 onward. Few of the defence and security elites (and those bureaucracies they represent) are giving balanced advice on how to engage China, preferring delinking and containment instead. This is not only narrowly constructed advice, it is also often issued in the absence of proper public debate. When debate does occur in the House of Commons or in Special Committees, the ideology and the pandering plainly shine through. 

To be sure, Liberal hedging and the policy ambiguity derived from it has its domestic political advantages. Pressed, in part, by hard-line Conservative opposition that is more sympathetic to US foreign policy objectives, building constructive relations with China has become increasingly difficult. Coupled with an unwillingness to make public, tough decisions, the Liberal government has, like administrations before it, tried to avoid the political fallout generated by the Sino-American rivalry. This is most clearly evident in the joint US-Canada Roadmap for a Renewed Canada-US Partnership which makes only a few pointed references to China directly but provides little room for cooperation with China other than climate change.

There is little doubt that Canada’s defence community shares a world view similar to that of US administrations. Secretary of State Antony Blinken has repeatedly emphasised the protection of American jobs, depicting China as a long-term geopolitical rival capable of achieving international hegemony. Joe Biden’s choice of ambassador to Canada has described China as an “existential threat”. Canada’s former Chief of Defence Staff described China as the biggest cyber threat to Canada. America’s answer, according to Blinken, must be backed by preserving “the world’s most powerful armed forces.” That view has broad bi-partisan support across all levels of government. 

For the time being, China does not seek nor does it necessarily want military allies in the same way that the United States constructed post-WWII security institutions. But that may be changing as China expands its reach of influence overseas and increases its military assistance abroad. For the present, China’s multilateral agenda permeates the economic, financial and commercial spheres of interstate cooperation. Indeed on trade, finance, digitization, e-commerce, infrastructure and investment, China is at the forefront of providing alternative institutional arrangements while avoiding entanglements and commitments that might be obtained from building military alliances.

If there is a way out, it is in understanding that Canada-China relations in commerce, trade and investment are driven by powerful mutual interests creating opportunities for mutual gain and growth. The consequences for Canada of not taking advantage of these opportunities are obvious. Canada is ultimately a trading nation and as a middle power has a degree of agency that should be fully exploited to advance economic opportunities. The desire for a strong, secure Canada need not undermine the country’s competitiveness and productivity both of which are in decline. 

Canada’s commitment to strengthening ties with China was evident well before the Liberals came to power in 2015. However, it was the Liberal government that committed fully to negotiating a trade deal with China. For example, the main priority in Chrystia Freeland’s mandate letter as Minister of Foreign Affairs was to focus on “expanding trade with large fast-growing markets, including China and India, and deepening our trade links with traditional partners.” The letter was extraordinary in that it instructed Freeland to develop a targeted strategy to promote trade and investment with emerging markets – “with particular attention to China [and India].”

Thus, the first order of business is to address the need for improving Canada-China trade relations multilaterally or bilaterally. This will not be easy. From an American perspective, a Canadian free trade agreement with China is seen as a major challenge. From a Canadian perspective, similar Canadian deals – whether achieved or ongoing and be they with the EU, India, South Africa or Brazil, or regional associations such as the Association of Southeast Asian Nations (ASEAN), or even the 12 Pacific Rim countries that are part of the CPTPP – stand unopposed by US administrations.

Trade deals are fine just as long as they don’t advantage China at America’s expense. This became clear when the US entered into phase one of trade talks with China while simultaneously thwarting Canada from doing likewise as a signatory to CUSMA. Ironically, perhaps, Canada’s trade with China has returned to pre pandemic levels and is increasing, suggesting the markets have a solution that is at odds with the prevailing geopolitical rhetoric. 

David Carment is Professor of International Affairs at Carleton University, Editor of Canadian Foreign Policy Journal and Senior Fellow at the Institute for Peace & Diplomacy (IPD).

Panel 4: Pathways to Manage Non-Proliferation in the Middle East (4:30 PM - 5:45 PM ET)

The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement. 

On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. 

This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.  

Panelists:

Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?

At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.

This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.

Panelists:

Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

Panel 2: Arms Race and Terrorism in the Middle East (12:00 PM - 1:15 PM ET)

The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel. 

On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.

 

Panelists:

Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

Panel 1: Future of Diplomacy and Engagement in the Middle East (10:30 AM-11:45 AM ET)

The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. 

In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region. 

Panelists:

Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

Panel 4: Humanitarian Diplomacy: An Underused Foreign Policy Tool in the Middle East (4:30 PM - 5:30 PM ET)

Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.

While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East. 

 

Panelists:

Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

Panel 3: A Review of Canada’s Middle East Engagement and Defense Strategy (3:00 PM - 4:15 PM ET)

In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.

With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.

Panelists:

Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

Panel 2: The Great Power Competition in the Middle East (12:00 PM - 1:15 PM ET)

While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.

As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.

Panelists:

Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

Panel 1: A New Middle East Security Architecture in the Making (10:30 AM -11:45 AM ET)

The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.

 

Panelists:

Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor