Canada’s Engagement in Asia: Standing Committee Foreign Affairs and International Development

House of Commons Standing Committee on Foreign Affairs and International Development
feat. Marius Grinius, Ferry de Kerckhove, and Hugh Stephens
April 17, 2018

MEETING DETAILS | MINUTES | AUDIO ON PARLVU

Marius Grinius

thank you for the invitation
my credentials:
- Asia-Pacific: 5 postings to the region, including as Ambassador to Vietnam and Ambassador to North and South Korea, as well as Director for SE Asia
- Security: Ambassador to the UN (refugees, human rights, humanitarian relief) and to the Conference on Disarmament in Geneva, Department of National Defence: Director-General International Security Policy

within 8 minutes allotted, propose to make a series of observations Canada’s engagement with the Asia-Pacific region
your goal to identify areas where Canada can deepen its engagement in the region is a good one
ensuring that Canada’s engagement is coherent and consistent is the challenge.
note: last extensive FP review of Canada and AP done by Senate Standing Cttee in 1998 (“The Importance of the Asia Pacific Region for Canada”)
Senate SC update on SE Asia in 2015

1. Global Context: the “New Great Game”

being played out between an ascendant China and a US in retreat
arguably the US and China are Canada’s two most important bilateral relationships; but Canada must be prepared for more global turbulence as these two powers compete in trade, hard power and soft power to establish a new modus vivendi and perhaps a new global order
in this “new Great Game” China is being assisted by its junior partner, Russia
[- note enhanced China-Russia military co-op (Pacific, Baltic and Mediterranean Seas)
Xi Jinping stated that he wants a “white water Navy”
the PLA Navy major show of force in the SCS last week
tomorrow they begin a live-fire exercise in the Taiwan Strait]
since your visit to Beijing, and Xi Jinping’s recent constitutional amendment, as The Economist put it, “China stepped from autocracy into dictatorship.” (The Economist March 3, 2018)

2. The “Asian Paradox”

“Asia Paradox” refers to the ironic situation whereby, despite Asia’s growing economic interdependence, the level of political and security cooperation remains low. Despite incentives to encourage even greater prosperity within a predictable and peaceful environment, potential military conflict could jeopardize Asia’s economic successes.
you are aware of the security issues around South China Sea, East China Sea, India-Pakistan, Taiwan, and, most pressing, North Korea
Canadian trade/commercial interests remain at the top the Asia-Pacific Foreign Policy agenda; but, there is a need to pay attention to Asia’s security dimension and for Canada to contribute to a robust AP security architecture, if only out of self-interest
this has to include regular “showing of the flag” in the region and regular high-level political-military talks
perhaps Canada’s Track 2 participation, once vibrant, could be reviewed and resuscitated
Canada could also play a role in the human rights dimension (North Korea, Rohingya, China writ large, extra-judicial killings in the Philippines)

3. North Korea

frenzy of related Summits is about to take place over the next few months
PM Abe meeting President Trump tomorrow; expect NK high on the list
I am in the school that believes Kim Jong-un will not negotiate away his nuclear weapons
there will be no fundamental change in the situation until China admits that NK is a strategic liability to China’s global ambitions
Canada has been a marginal player on NK file, ever since PM Harper’s short-sighted 2010 policy of “controlled engagement”
Trudeau government has allowed that policy drift on NK to continue even as the geo-political landscape is rapidly changing but remains highly unpredictable
on your next mission to Japan and SK, both Strategic Partners for Canada: you will find the Japanese wary of recent developments with NK and the South Koreans perhaps overly optimistic
you may wish to ask both hosts if there is a role for Canada, but you will have to dig beyond the usual politesse to get straight answers
one obvious starting point is for Canada’s Ambassador to Seoul to be once again cross-accredited to Pyongyang

4. Canada and ASEAN

you have already travelled to Indonesia and met with ASEAN Sec-Gen
you know the history: Canada has been an ASEAN Dialogue Partner since 1977 and one of 16 members of the ASEAN Regional Forum (ARF) for political and security issues.
But when ASEAN inaugurated the first East Asia Summit (EAS) in 2005, Canada was not invited. When in 2010 ASEAN invited the EAS Dialogue Partners to participate in the ASEAN Defence Ministers Meeting-Plus (ADMM+). Again, Canada was not there.
Last November in Manila PM Trudeau made a pitch for Canadian membership in the EAS and the ADMM+
ASEAN is still not quite convinced of Canada’s commitment to Southeast Asia, or to Asia. But too polite to say so.
Canada must demonstrate a serious, long-term track record of participation in ASEAN strategic and security priorities.
The Asian way requires frequent and consistent face-time. Personal relationships matter.
ForMin André Ouellet consulted ASEAN ForMins prior to Halifax G7 Summit in 1995
Caveat: ASEAN drifting further into a club of authoritarian regimes. Need to strengthen relations with Indonesia, + Singapore

5. Canada and Asia-Pacific: The Bottom Line

Canada is already a strong economic player in the Asia-Pacific region with deep social, cultural and historic roots there. It must now demonstrate a stronger and more consistent commitment to Asia-Pacific’s stability and security. It is in Canada’s interest to do so.

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Ferry de Kerckhove

Opening remarks to the House of Commons Standing Committee on Foreign Affairs and International Development 17 April 2018

Ferry de Kerckhove, Senior Fellow and part-time lecturer at the Graduate School of Public and International Affairs of the University of Ottawa

Chairperson, Honorable members of the Committee,

It is an honour for me to appear in front of this Committee, often a reference point during my career in foreign affairs.

While I did send in advance a detailed CV, I should start by underlining that on the one hand I have had three postings in Asia – Iran, Pakistan, and Indonesia, as opposed to my three others – NATO, Russia and Egypt –the latter, were it not for ancient geographical prescriptions, probably belongs as much to Asia as to Africa. On the other hand in my six years in policy planning at Foreign Affairs over a period of 13 years, I have been involved pretty much in every aspect of strategic thinking about the place of Canada in the world. So you will not be surprised by a few thoughts on Canadian foreign policy writ large, which in one way or another underpins our engagement in Asia, or lack thereof. You will also understand how much I applaud your efforts in trying to deepen the knowledge of Canadians regarding things Asian.

While I served my country on the international stage to the best of my abilities during my 38 year tenure in Foreign Affairs and International Trade, now GAC, once I left government I allowed myself to comment on international issues and on the Canadian government policies and processes to handle these. I draw your attention to the yearly papers produced in both official languages by the Canadian Defence Associations Institute THE STRATEGIC OUTLOOK FOR CANADA – LES PERSPECTIVES STRATÉGIQUES DU CANADA which I have co-authored in 2013 and 2014 and wrote alone in 2015 and 2016. Indeed, over a span of four years we have been fortunate to be able to assess a series of trends over time and Canada’s adjustments to these changing times. There is a constant in these studies: the lack of a real Canadian policy towards Asia beyond commonplaces along the lines of “an important region for Canada”.

Given the high quality of previous presentations by very informed experts I will focus more on the security dimensions. But I will start with some of the other “commonplaces” we have noted over the last ten years including:

- the greatest “platitude” yet glaring reality is that there is no such thing as a monolithic Asian continent but that the one that matters most positively for Canada borders mostly the Pacific and the China Seas but clearly includes India as well; notwithstanding such important security issues as the Chinese encroachments in the China Seas, the most glaring troubles of the region start west of India, into the extended Middle Eastern linkages;

- a general shift in trade and security to the Asia Pacific region where security is primarily built around a patchwork quilt of bilateral security arrangements rather than the kind of multilateral framework provided by NATO. This is a region in need of a security architecture, even though we know who would dominate it. This is why the decision made by Canada in 2012 to participate in the Trans-pacific Trade association was a major sign of engagement and a positive step which was recently enshrined, be it with a temporary hiccup.

- it is all the more important that in terms of trade with the region, Canada has been lagging far behind our competitors over the past 15 years. This is particularly true of Canada’s exports to China as much in terms of total value as in terms of rate of growth.

- despite claims to the contrary, there has been little movement in anything approximating a strategic shift beyond the strong trade focus and while we claim to be a three ocean nation, our “blue navy” leaves a lot to be desired, particularly if one remembers that at the end of the Second World War, the Canadian Navy was the fifth largest in the world. The region that suffers most from this state of affairs in terms of Canadian maritime presence is the Asia Pacific region. There is no doubt in my mind that your repeated visits in the region will make you strong supporters of the ongoing efforts to rebuild our Navy to be able to play its part in the most important maritime theater in the world.

- the fact that, most likely for lack of adequate preparation, the Prime Minister’s attempt to launch a free trade agreement negotiation with China failed, does not mean the Canadian government will not continue to engage China. But it underscores that a very careful review of Canada’s strategy towards China remains essential, as the key subset of a fully articulated Asia-Pacific strategy. And that strategy must take into account the evolving strategic outlook in the region;

- herein lies my key message: at the broadest level, any review should take into account the impact of the 2008 economic crisis which affected mostly the western world and could be the most significant event of the last 50 years, on par with the fall of the Berlin Wall as it has irreversibly opened two Chinese doors to the World – economic and political.

- Economically, 2008 had many countries in the world starting to look askance at the western version of the capitalist model and its so-called Adam Smith mantra of the invisible hand. Many turned their eyes towards the Chinese version of state capitalism with a far less invisible hand while still allowing winners and losers to battle it out within the ambit of clearly defined state objectives. Todays’ Asian countries all have China as their number one trading partner and they have adopted in large part the same “more effective” economic model. The Belt and Road initiative created a further impetus despite its flaws and uncertainties.

- Politically, in the same vein, contrasting the vagaries of the American presidency to the clear-sighted approach of the Chinese “Emperor” and the “advantages” of an authoritarian regime guiding economic policy, many leaders felt empowered to reduce political freedom and democratic practices, transforming the legacy of Lee Kuan Yew into a permanent virtue of self-preservation. Hence the Dutertre and others in the region.

- Canada cannot ignore these developments and would benefit, at least from a security perspective, to look carefully at the Australians who, as a Canadian scholar said, are “better at conceptualizing their security and defence perspectives, formulating them into strategies and policies and actually spending the capital determined by these guiding documents for defence procurement and renewal.”

- Canada may live in a quieter environment with a powerful ally to the South – although Minister Freeland rightly pointed out that we could not count on the US in any kind of automaticity – but we need to be clear-eyed and ensure that while trading with our Asian partners, we don’t lose sight of their geostrategic ambitions and don’t sacrifice our fundamental values in the process.

- From a security perspective, Canada cannot be content with a Defence Policy Review which is not based on a National Security Concept and accompanying foreign policy.

I agree with my friend and former colleague Stewart Beck, CEO of the Asia Pacific Foundation of Canada that “now is the time for Canada to make decisions, take action, and differentiate itself in the Asia Pacific region…. our country is a beacon and open to flows of people; however, to be successful … Canada needs focus, intensity, consistency and, most importantly, non-incremental change.”^[i] But that policy must be accompanied by a broader political and strategic commitment – what I would call “a full service” policy.

Thank you

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Hugh Stephens

Statement to the House of Commons Standing Committee on Foreign Affairs and International Development regarding Canada’s Engagement with Asia

Hugh Stephens, Fellow, Canadian Global Affairs Institute

Good afternoon. My name is Hugh Stephens. I would like to thank the Committee for this opportunity to discuss the important issue of deepening Canada’s engagement in Asia.

First a brief word about my background. I served for 28 years with what is now the Department of Global Affairs. During that time I was privileged to have had extensive exposure to Asia and to Canada’s role in Asia. As a young officer I was assigned by the then Department of External Affairs to learn Mandarin before taking up an assignment at the Canadian Embassy in Beijing in the late 1970s. I was there at a seminal time for China’s emergence from the turmoil of the Cultural Revolution--and the beginning of its market reforms and economic opening.

Back in Ottawa, I worked on Asia-related issues among other assignments. Subsequent postings in Asia were at the Canadian Embassy (now High Commission) in Islamabad, in the mid-1980s, at the Canadian Embassy in Korea from 1989-92 and finally as Director of Canada’s “unofficial” representation in Taiwan, the Canadian Trade Office in Taipei in the mid to late 1990s.

I was Assistant Deputy Minister for Policy and Communications at Foreign Affairs and International Trade when I decided to leave the public service in 2001 in order to take up an opportunity in the private sector as Senior Vice President for Public Policy (Asia-Pacific), for the US media multinational, Time Warner. I worked for 12 years for Time Warner, most of it at the company’s regional HQ in Hong Kong.

Upon my return to Canada, I became associated--on a voluntary basis--with the Asia Pacific Foundation of Canada. The then CEO, now Senator, Yuen Pau Woo asked if I would serve as an “Executive in Residence” to provide advice to the Foundation on media issues in Asia. I have continued my association with the Foundation and am now a Distinguished Fellow there and concurrently Vice Chair of the Canadian National Committee for Pacific Economic Cooperation. This body represents Canada in PECC (The Pacific Economic Cooperation Council), a non-governmental “Track 2” organisation and is supported by the Foundation, which provides the Secretariat.

By the way, I hasten to add that while I am associated with the Asia Pacific Foundation, I do not speak for it, and today I am presenting only my own personal views.

Since the Committee is considering how Canada should be optimizing its policies toward countries and regional organizations in Asia, I would like highlight briefly the role of PECC because it is, I believe, a regional organization that Canada should continue to use and further develop, as but one element of its presence in the region.

PECC was established in 1980, well prior to the existence of APEC. In fact, you could say that it was the midwife for APEC’s birth.

(I apologize for the acronyms. Just to clarify, APEC, or Asia Pacific Economic Cooperation, is an organization of 21 governments (“economies”) on both sides of the Pacific Ocean, established in 1989.)

Back to PECC. It is composed of experienced practitioners from academia, business and government. (although government officials participate in their “private” capacity). PECC has conducted many studies on issues affecting the Asia Pacific region, with a current focus on sustainable and inclusive growth, trade liberalization and regional integration and connectivity. PECC’s membership is largely synonymous with that of APEC, although there are some minor differences. PECC has a close relationship with APEC and the APEC Secretariat, and is invited as an official observer to all APEC meetings. Given this “special relationship”, PECC focuses its studies and research on issues of relevance to APEC and acts as its unofficial “think-tank”. Canada has participated in PECC since its outset in 1980 and the current PECC Co-chair is Don Campbell, former Deputy Minister of Foreign Affairs and a former Canadian ambassador to Japan.

Another similar unofficial organization is the APEC Business Advisory Council or ABAC. (Apologies, yet another acronym!). Each APEC economy has 3 ABAC members. Canadian members are appointed by the Government of Canada to offer advice to APEC officials in terms of developing policies affecting or impacting the business community. Currently however, Canada has only one member, Mr. Ralph Lutes from Teck Corporation. Delay in appointing members is chronic and it is rare that Canada has a full complement of ABAC Members. This puts a heavy load on those who voluntarily agree to serve on this Council.

As noted, both PECC and ABAC support APEC, which is still the only governmental organization with broad coverage of the Asia Pacific region, even though it is more of a consultative than rule-making body. Canada is a founding member of APEC, but in recent years has tended not to give much priority to APEC activities. The last time Canada hosted an APEC year (and thus the annual APEC summit) was in 1997, in Vancouver. We are well past the time when we should be seeking to host APEC, which would give us an opportunity to help shape the ongoing Asia-Pacific agenda.

In brief, Canada should take greater advantage of the existing platforms in Asia Pacific in which it already participates through PECC, ABAC and APEC. (Contribution of funding toward PECC studies would be a good start; more timely nomination of ABAC members would be another; hosting APEC a third).

In addition to playing a more active role in APEC, I believe that Canada needs to diversify its relationships beyond China, where there is an obvious need for a more structured relationship. In my view, China is an economic and political reality that Canada has to deal with, whether or not we happen to like the path of governance chosen by the current Chinese regime. It is far better to have agreed institutional relationships with China, such as an Economic Partnership Agreement for example, that establishes a rule-based framework to deal with issues and differences, and to build a habit of dialogue, than to try to deal with the rise of China on a case by case reactive basis. But in order to deal with China (which is controversial given divided opinions amongst the Canadian public), it is important for Canada to balance any move toward closer ties with China by simultaneously strengthening our linkages with other parts of Asia.

I am pleased to see that this has been done with Korea and has finally been done with Japan through conclusion of the Comprehensive and Progressive TPP, but there is also a need to reach out to ASEAN.

There are many reasons to pursue closer relations with ASEAN, including helping ASEAN balance China’s growing influence in the region, the existence of a large ethnic community in Canada from at least one major ASEAN country, and potential economic benefits for Canada from securing improved access to this market of almost 600 million people. The Canada-ASEAN trade talks have moved very slowly and cautiously and while it was a positive step for Canada to establish a dedicated Embassy to ASEAN in 2016, it is time to kick this relationship up a notch and embark on negotiating a Free Trade or Economic Partnership Agreement with ASEAN in parallel to whatever we do with China.

I will close my remarks and this point, and look forward to your questions. Thank you.

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