On Thursday, November 3, 2022, the 4th China-U.S.-Canada Trilateral Relations Roundtable was held in a hybrid format, with some participants joining via Zoom and others gathering at the ICAS office in Washington, DC. Conducted under Chatham House rules, the roundtable consisted of two panels—one on Politics & Security and the other on Trade, Technology & Climate. In each panel, there were two participants each from Canada, the United States and China, each of whom contributed their own expertise on a related topic of their choice. The six panelist presentations were then followed by a moderated group question and discussion time. The event also included introductory and closing remarks by senior officials from the institutions co-sponsoring the roundtable: the National Institute for South China Sea Studies, the Carter Center, and the China Institute, University of Alberta.
PANEL 1: Politics & Security
Panel 1 analyzed the’ new normal’ in trilateral relations between the U.S., China and Canada which have, across the board, worsened over much of the last decade. The panelists agreed that both Canada-China relations and U.S.-China relations are currently in a poor state; a state which is largely perpetuated by a significant lack of trust. There was an overwhelming consensus that it would be naive to think about simply returning to the honeymoon period of the late 20th Century, noting that it will take time for positive relations to be rebuilt.
Given recent and past developments, the panelists generally agreed that the trilateral relationship is at both a point of major transition and a point of low engagement. In Washington, the ‘China question’ has become a bipartisan and executive-legislative consensus, with the Biden administration building coalitions that directly or implicitly contain or isolate China. The newly-released U.S. National Security Strategy was also used by multiple parties to support the idea that the Biden administration views China as the primary threat to the U.S.’ leadership of the rules-based order. Seeing a certain degree of continuity in the China policies of the Trump and the Biden administration, Beijing is suspicious of Washington’s desire and capability to improve the U.S.-China relationship even when the two sides are better off cooperating, especially as the boundaries between competition and cooperation remain unclear. The Chinese side observed that the U.S. needs to act first to reverse the damage done through actions like Nancy Pelosi’s visit to Taiwan; only then, would Beijing be more amenable to talking.
Engagement, communication, and building trust has become even more difficult, especially over the course of the past year. It was noted that efforts to promote engagement with the Chinese side are being increasingly mislabeled as support for China and China’s policies, making it difficult to even host conversations among think tanks and academics. Think tanks have found it increasingly difficult to establish a balance on U.S.-China relations without appearing suspect to one or another side. As a potential way to cope with this conundrum, it was suggested that analyses and news coverage should maintain rationality and actively include perspectives and facts from all sides. The Canadian and American participants, however, expressed deep doubt over how effective such actions could be if politicians only want to work towards their own narrowly-defined goals. Since low and mid-career professionals face much higher career-related risks if they speak with candor, it was suggested that recently retired and senior civil servants and specialists might be in a better position to speak out and balance the narrative with unpopular, but necessary, observations.
Not only is there an absence of mutual trust between the United States and China but the relationship between Canada and China is also on a downhill trajectory, featuring an abundance of caution and reticence. At times, “soft” topics such as environment and public health have become interconnected with security concerns and value-based judgements, making it even more difficult to build trust and find the right balance on any given subject matter related to the trilateral relationship. In addition, there is growing emphasis towards values-based disagreement, rather than interest-based disagreement, which-given its zero-sum character-will inevitably lead to further deterioration of the trilateral relationships. It is essential to recognize this shift if relational improvements are to be made.
Aside from the topic of mutual mistrust, the perceived rise of China’s influence in regions such as the Arctic and the Indo-Pacific was also a matter of deep interest to the roundtable participants. The Canadian speakers in particular noted the extensive policy shift that has been taking shape in the Arctic over the last nine months since the Arctic Council meetings were suspended; a shift to a ‘Democratic Arctic’ that does not include Russia could at one level open opportunities to China. At the same time, there are great opportunities for China to expand its investment in the Russian Arctic, but which would naturally, and indirectly, be of concern to Canada and thereby impact its overall relations with Canada. The future state of Arctic geopolitics appears wide-open at this time.
When discussing the Indo-Pacific, the American speakers noted that China’s increasing military influence has led to a holistic readjustment of U.S. strategy. The United States is re-orienting its naval capabilities towards confronting what it sees is a ‘pacing competitor’, including by increasing its focus on and presence in the Western Pacific. As the two sides’ military capabilities and postures change, there will also be increasing risks, including those related to Taiwan and other regional allies. Chinese panelists emphasized that the situation over the self-governed island had escalated due to the West’s ignorance of the political and legal nuances of the Taiwan question, a lack of consistency in U.S. rhetoric, and the simple U.S. desire for continued hegemony in Asia.
Lastly, the panelists had differing views on the role of third countries within the current landscape of U.S.-China ties. Some suggested that Canada could work as an interlocutor between the U.S. and China to help avoid unintended consequences arising from their strategic competition while others believed third party injection will only over-complicate the bilateral situations. In the security realm, especially as the U.S. and China continue to work on maintaining sufficient communication and crisis management mechanisms, third countries could use bilateral engagements as a buffering mechanism and identify mutual interests in stability and peace. Meanwhile, others argued that coalitions such as the Quad and AUKUS could accentuate the narrative of confrontation between the U.S. and China, and cautioned that third country actions could unintentionally drag the two nations into premature confrontation. One Canadian participant suggested that the country’s defensive position should be concentrated on the Arctic frontier; especially given Russia’s expanding attention to the High North. Finally, in the concluding remarks, it was noted that despite the divergence of views, China, the U.S. and Canada should avoid closing their ears to the opinions and perspectives of others. Failing to do so could lead to the path of catastrophe.
PANEL 2: Trade, Technology & Climate
Panel 2 explored the nature and implications of escalating tensions in the U.S.-China trade, technology and investment relationship, which are intertwined with the prospects of international climate cooperation. The panelists agreed that decoupling is not only occurring, but that it is a burdensome dynamic for all parties involved. In the realm of climate change, despite both countries sharing similar challenges and insights in decarbonizing their energy systems, rising geopolitical tensions have given rise to an atmosphere of distrust. This has shifted discussions in the clean energy sector towards the decoupling of trans-Pacific supply chains-in turn, negatively impacting their inherent cross-border efficiencies. This state of affairs is epitomized in the ‘green industrial policy’ provisions (subsidies, loans, etc.) of the U.S. Inflation Reduction Act.
On a related note, the panelists lamented the fact that Speaker Nancy Pelosi’s trip to Taiwan had triggered the cancellation of several important person-to-person, U.S.-China climate-related discussions that were scheduled in the lead-up to the COP27 climate summit in Egypt. They disagreed, however, as to whether the imperative for U.S.-China climate change cooperation can be adequately separated from the increasingly hostile political backdrop in ties. While all sides agreed that multilateral climate action is necessary, the Chinese panelists stressed that the U.S. must make more effort to repair the damage done by the Pelosi visit before cooperative structures can be re-established, while U.S. and Canadian panelists urged China to take the White House’s climate-friendly statements at face value and put climate change cooperation ahead of politics. The panelists highlighted ongoing efforts to promote cooperation on Blue Carbon as a promising area for win-win climate outcomes if the U.S. and China can mend their ties or put their differences aside.
With regard to the advanced technology sphere, which has now become a defining aspect of U.S.-China strategic competition, substantial concerns were raised by all sides. Roundtable panelists noted that this bilateral and trilateral conflict is particularly critical as it is taking place within the structure of heavily globalized supply chains and provoking unforeseen spillover effects. They agreed that Washington’s latest round of export controls on advanced computing and semiconductors is a telling example of the collateral damage it is engendering, given that it has prompted an outcry as well as financial losses for chip manufacturers in Korea, Japan, and Taiwan. The 20th Party Congress was highlighted as a sounding board of China’s potential response to the recent U.S. actions. President Xi Jinping’s elevation of rhetoric in support of technology resilience and the promotion of several technology specialists to higher positions within the Party suggests that China will likely avoid a policy of self-destructive retaliation or escalation, but that it will pursue domestic high tech innovation more resolutely as the U.S. tries to lock it out of this sphere.
However, the Canadian panelists noted that despite restrictions in key sectors, Canada’s volume of trade with China has increased consistently since 2018. American panelists suggested that these continuing exchanges as well as Canada’s silence on China’s accession request to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) could point to the insulation of some cross-Pacific trade flows from U.S.-China tensions in the area of advanced technologies. However, panelists agreed that Washington’s coordinated efforts to pull third parties into rival, U.S.-led trade initiatives like the Indo-Pacific Economic Framework (IPEF) may signal its desire to cut China off in a number of advanced technology sectors beyond semiconductors. In the area of cross-border data flows, for example, the panelists agreed that the U.S. has no intention to harmonize its data rules with China and is demonstrating a concerted effort to bring more Asian countries—some of which already have digital trade agreements with China—into IPEF’s digital trade pillar. Therefore, for Canada, it is likely that Ottawa will be more inclined to stay with the U.S. on said issues and potentially further decouple with China on emerging technologies and digital trade. From Canada’s perspective, this is even more rational given that more than 70% of Canada’s trade is with the U.S. while China, though being Canada’s second-largest trading partner, only holds 5% of Canada’s international trade.
Across the areas discussed—climate change, advanced technology, and digital trade—the panelists agreed that a lack of trust between the U.S. and China is a crucial factor precluding cooperation at the bilateral and trilateral levels. That spillover effect has also come to impact Canada’s public opinion towards China. Ottawa is becoming increasingly reluctant to accept Chinese involvement in sensitive or nonsensitive areas of cooperation and the Chinese Canadian communities are encouraging rising suspicions over their origins. To make meaningful strides in these areas, the panelists urged thought-leaders, opinion-shapers and specialists to make their voices heard and help their respective governments understand how the sharing of intellectual property, consumer data, and human capital exchanges are necessary for economic growth and meaningful climate action and can still be realized in the tense geo-political environment.
