Let’s see, human rights abuse, Hong Kong, Canadians Imprisoned unjustly, Violation of Intellectual property, just to name a few, but in this blog I will focus on Trade. Simply put, with regards to trade with
China, Canada is getting it royally up the Wazoo and politely asking for more! What the F#@! PM Photo Op?
I can no longer accept the premise that China is a Most Favored Nation (MFN) with regards to trade and that Canada should continue to allow imports from China to come in with no or little Tariffs. China was given MFN trading status back in 2001 as part of joining the World Trade Organization (WTO). The idea of a country having MFN trading status was so developing countries could further industrialize and enjoy increased trade and economic growth for its people.
It started out that way, but China’s economy and dominance grew at an almost exponential rate. MFN is for developing countries and I for one disagree with the idea that China is a developing country. For
example they now have the largest Navy in the world and a military that includes over 200 Nuclear weapons. In addition to this, China has a Space Agency that is planning this year to launch 21 space flights including exploratory missions to Mars and the Moon. So how the f@#$! is China, a developing country given all this?
Here are examples of China’s advantage over us with regards to tariffs. On musical instruments, most coming in from China have zero tariff. (Data Per World Integrated Trade Solution 2018 data and WTO). Instruments going to China from Canada have up to a 17.5% tariff applied. Most of us look at this and think, well how big is trade in musical instruments anyways?
How about autos and parts? There are virtually no Tariffs on parts coming from China into Canada, while parts and vehicles going the other way, Canada to China, have up to a 30% Tariff. Here is a few tariff’s on Canadian products: vehicles 25%, motorcycles 30%, clothing 20%, mechanical parts up to 30% and camera film is 408%.
China ships to Canada approximately $76 billion in mostly finished goods Tariff free per year while we send them roughly $25 billion in mostly raw resources. China has ensured through this MFN, that they only apply Tariff’s to manufactured imports from Canada not raw resources. Both Liberal and Conservative governments have ignored what is going on and continue to do so, but it all started when Canada normalized relations with China under Prime Minister Pierre Trudeau. In any event, this is ridiculous to give China such a deal!
China has used its status as a MFN to lure manufacturing from other countries like us and the United States. Now with so much of what we consume produced there, China has become a Trade Bully
towards Canada. China has no issue flexing its muscle to further its own political and economic goals, often violating the rules of the World Trade Organization(WTO) in the process, but when there are no consequences to them, why would they stop? The ridiculous trade deal favors the Chinese in practically every category. The only places in the agreement where Canada applies any significant tariff’s is with regards to poultry and dairy, the sacred cows of Agriculture, but don’t get me started now on supply side management and quotas, that is another blog.
When people wonder why manufacturing has left and gone to China, it is obvious, cheap labour ( slave labour at times using Uighur Muslims) and no Tariffs on imports to Canada. A total sweet heart deal for companies to move operations to China, enjoy the advantages of cheap labour and not have to worry about Tariff’s into Canada. In short, companies have profited while the rest of us have once again taken it up the Wazoo. With no Tariff’s on imports our domestic manufacturing sector is at a significant disadvantage due to much lower wage costs in China. As I said earlier, vehicles manufactured in China face no tariffs coming into Canada. Our Auto sector which employs 100’s of thousands now has to compete against cheaper products from China in our domestic market. Yet Chinese manufacturers face no such competition from our Auto sector due to Tariff’s of 25%. How is that evenly remotely fair? We
give China unfettered access to our consumer markets and they get to impose Tariff’s on Canadian Goods. How the F#$@! is that fair?
It is not fair, they are practicing protectionism on their markets while benefitting from easy access to our markets.
Want to be truly disgusted by our government’s kiss ass attitude towards China and trade? Up to 2017, the Canadian government and PM Photo Op, even tried to push a Free Trade Agreement (FTA) with
China. Thank god someone could explain to our Government, how bad Australia’s and New Zealand’s experience with free trade with China turned out and Canada left the negotiations.
Years ago, Australia and New Zealand thought it would be good to sign a FTA with China but soon after they realized it was not a FTA with China. All Tariffs on Chinese goods into these countries were
immediately dropped. While there was a slow phase out of Tariff’s on Australian and New Zealand imports to China, some over the next 20 years. Countries thinking they were going to get access to
Chinese markets have found that is not the case at all. A report in 2019 from the Macdonald-Laurier institute said the following;
“Given the Chinese government’s command power over its economy, its persistent violations of World Trade Organization (WTO) rules, and underhanded actions against the interests of its existing Free Trade Agreement (FTA) partners, Canada should not rush headlong into FTA negotiations with China,” said primary author of the report, Duanjie Chen
Free trade with China is not really free trade as it only favours them. They have demonstrated time and again what Bullies and A!s@@#!s they truly are with respect to trade. Covid has shown that the Chinese are not transparent. In the case of protective equipment(PPE) we had become reliant on them for supply, leaving our medical system in near panic for PPE as we had lost most of our domestic manufacturing.
The situation with China has pissed me right off because of how lopsided it has become and how much our government has become a bunch of Pu@$@##!s with respect to China. Just briefly, Meng Wanzhou, CFO of Chinese Telecom Corp Hauwei, sits in a $13 Million dollar Mansion in Vancouver’s posh Shaughnessy neighborhood fighting a US extradition case, while two Canadians (Michael Kovrig and Michael Spavor) rot in a Chinese prison. The two Michaels as they are known were arrested in retaliation for Meng’s detention in Vancouver on request of the US Justice Department.
Meng can shop, dine out, meet her lawyers and spend time with friends and family by the pool while the two Michaels get no access to the Canadian Consulate, Lawyers, friends, family, no one and they
certainly don’t have a pool. The Chinese recently had a trial for each and we have no idea what happened. What are we doing? Throw Meng’s skinny ass in Jail, claim she’s a flight risk and if the
Chinese don’t like it, tough sh#$t! This entire event demonstrates clearly the lengths of Bullying and abuse of human rights the Chinese will go to in furthering their interests and why we need to look at our entire relationship with them.
So what should we do about the lopsided trade deal we have with China? First thing our Federal government should do is to invoke equivalent Tariff’s on all China imports as they have inputted on
Canadian imports, from steel, cars, motorcycles, parts and even washing machines. If the Tariff on imports to China is 25% on vehicles, then it should be levied on imports from China. They truly are not a country that should have MFN status for trade as they really are no more a developing nation than we are.
I know some people will say, if we add Tariff’s things in this country will get more expensive. Yes that very well may occur, but I would think that would be only over the short term as some companies would then relocate operations to true developing countries and those countries would benefit in economic growth. After all, that is what I understand the concept of Most Favored Nation is for.
People need to realize, this is not the same China and Chinese Communist party of the 1960’s wearing Mao Suits and a reverence against capitalism. The members of the Chinese Communist Party today are pure Capitalists, wearing Armani suits and driving Bentleys. We need to start getting tough with them or they will own our ass on Trade and there will be little we can do.
We cannot do this alone however. While many don’t like former President Trump, he was bang on with China and how they are with trade. Where he failed was he should have put a coalition of countries and trading partners together. If they all invoked Tariffs then China would be forced to negotiate as the economic hit would be significant to them. What our policy makers decide to do, I have no idea but China is as much a developing country as I am Captain of the Enterprise.
www.AngryBob.ca 