IN THE NEWS ~ 'Catching Up to India' Will Canada's shift to ethical trading leave China behind?

'Catching Up to India'
Will Canada's shift to ethical trading leave China behind?
By Sharda Vaidyanath
Epoch Times Parliament Hill Reporter Mar 23, 2007

Canadian Parliamentary Secretary Minister of International Trade Ted Menzies walks on the concourse of a metro station in New Delhi, March 13, 2007. Menzies lead a Canadian trade mission to India from March 12-16. (Manan Vatsyayana/AFP/Getty Images)

Move over China; India is set to become Canada's next big overseas trading partner.

"It's no longer simply a case of India catching up to the world; it's becoming a case of the world catching up to India," said David Emerson recently, referring to India's burgeoning economy in the lead up to the Conservative's first trade mission there this week. While Emerson's words set the tone for doing business with the world's largest democracy, the trade mission has instigated a debate about the merits of doing more business with democracies like India versus with communist China, which comes with its ever-present baggage of human rights infractions.

Increasingly, experts say, Canadian prosperity will hinge on a sustainable international trade and foreign policy. And that means issues such as human rights and global terrorism must be on the bargaining table.

While a free-trade agreement with India is now in the works, Conservative moves toward a policy of doing global ethical business may have begun much earlier.

Last June in Toronto, Canadian Prime Minister Stephen Harper delivered a lengthy keynote address at an annual awards event at the Indo-Canadian Chamber of Commerce. The chamber's president, Ajit Khanna, says it was the first visit by a Canadian prime minister and a "landmark event in ICCC's 29 years of existence."

Even though it was the Liberals who initiated trading with India, Khanna says that since the Harper government took office, complaints from Indian businessmen regarding Canadian visas have greatly diminished. As well, the interest and momentum among Canadians in doing business with India is growing.

But one of India's greatest challenges is the infrastructure gap, which is taking a heavy toll and slowing the country's growth by 1 to 2%. Khanna says that's where Canada's expertise in engineering, telecommunications and construction can contribute. He says India's middle class is as large as the population of the United States and is ready for more Canadian business investments.

Currently, China is Canada's second largest trading partner after the U.S. According to Statistics Canada, Canada exported only $7.66 billion worth of goods to China in 2006, while imports rose to a whopping $34.47 billion in the same year.

Since taking office, relations between the Harper government and China became strained over several incidents, including an honorary citizenship conferred by the government on Tibet's exiled Dalai Lama, and public comments by Harper about China's industrial espionage in Canada. There has been no resolution in the imprisonment in China of Canadian citizen and Uyghur Muslim Huseyin Celil, despite appeals from Canada for his release.

Harper's statement last November about not selling out "important Canadian values" over the almighty dollar and other comments rattled the Canadian business community and upset Beijing. But his no-holds-barred approach highly delighted others.

David Van Praagh, former Globe and Mail correspondent in India and author of The Greater Game, India's race with Destiny and China , says it's "a detectable shift" in Canada's foreign policy toward China from "the very unfortunate" strategic partnership with China crafted by Paul Martin's Liberal government.

"The Human rights question, the democracy question is definitely a much bigger factor for this government than it was for the Liberals," says Van Praagh. He says despite American and Asian efforts to "engage constructively" with Beijing, the Chinese threat to stability and freedom in Asia and the Pacific is growing. "China appears to be changing for the worse. And there is impressive evidence that India is changing for the better."

David Harris, Legal Counsel and Senior Fellow for national security at the Canadian Council for Democracies, believes increased long-term business with India is sustainable and constructive for Canada.

"You are not going to be fuelling a strategic military threat of an imperialist nature by being involved with India," he says.

Harris says Indian voters have elected a new set of rulers who are interested in raising the economic levels of the Indian people while working constructively with United States and Canada to prevent China's domination of Asia.

Despite having it's own unique challenges, India's 1.1 billion people enjoy a free press, independent judiciary, rule of law and the right to vote—none of which are possible under communism. As well, India has the added advantage of having an already established English speaking business Elite.

The contrast between the two sizzling economies demands a shift from the "comic naivety" of the past to grappling with the multiple weaknesses of the Chinese market, says Harris. He describes China as "the new Gulag" that has replaced the former Soviet Union in the abuse of its citizens, and believes the "going along to get along" approach so many countries adopt with China is misguided.

"When we buy Chinese goods, we are slave masters by remote control," he says. "Money has been the incentive that has bent great many countries and economies to the will of Beijing, unfortunately, the dynamics inherent in capitalism can be turned against us by regimes such as China."

According to the International Trade and Foreign Affairs website, Canadian exports to India reached $1.7 billion last year, a 54 per cent increase over 2005. Canada's imports from India reached $1.9 billion, an increase of 7.4 per cent. India is Canada's 14th largest export market and Canada is India's 22nd largest export market.

"Some major concerns with the Chinese government around organ harvesting means we should not increase trade indiscriminately with countries that aren't improving their human rights record," says NDP International Trade critic Peter Julian, referring to the practice of the illicit harvesting of organs from Falun Gong prisoners of conscience and other prisoners in China.

Currently, eighty per cent of Canada's international trade is with the United States, but Julian says "putting all your economic eggs in one basket is not good." He would like to see more diversification in International trade, not just with India but with other democracies in the Asia-Pacific region.