Excerpts from Remarks to the 2013 Ottawa Conference on Defence and Security, February 21-22, 2013
The rise of Emerging Markets such as China, Brazil, India, Turkey and Indonesia presents major opportunities and challenges for Canadian business and governments over the coming years.
The key economic challenges and opportunities were set out in the Gowlings-sponsored report Winning in a Changing World: Canada and Emerging Markets, presented to the Prime Minister in June of 2012. It made recommendations to government and business leaders on how Canada can best forge winning strategies in this changing environment.
But the rise of these emerging powers also presents serious security and foreign policy challenges to the Canadian government — challenges that the Report did not cover.
What follows are some thoughts about those challenges, and how they are fundamentally linked to our success on the economic front.
Canada needs an emerging powers element in its foreign policy that does three things:
First, helps Canadians extract benefits from the opportunities being created by these new players in a fundamentally changing global economy,
Second, works to bring these increasingly powerful players into responsible global decision-making, and
Third, together with these new players and our traditional friends, ensures we have the most stable and peaceful security environment possible, and that we avoid major conflict.
Achieving these objectives will not be easy. There are four particular challenges or themes that need to be addressed.
The first is the question of how Canada "plays" on the major geopolitical issue of our time: the future relationship between a resurgent China (the main emerging power) and today's one superpower, the United States of America.
Canada's starting point is that the United States will remain our major economic partner and closest ally. Canadians will overwhelmingly want the United States to remain a powerful force for global stability, as well as a leading voice for western values, democratic government, and the open, market based economic model.
But that still leaves room for policy making. For instance:
- how do we use our influence with Washington to help ensure American reactions to China's rise remain reasonable and open to the inevitable changes it will mean for America's relative place in the world
- how to we work on our own and with other countries and groups (such as Australia, Korea, ASEAN) to create a conducive environment, particularly in the Asia Pacific region, in which America and China can keep the inevitable tensions well managed while building further habits of cooperation.
- how do we design and implement our own policies towards China that encourage positive behaviors and reduce tension with the United States. We want the economic benefits from its dynamic economy, but we will at times need to speak "truth to power".
We have a deep understanding of the United States from our long and close relationship with America. Fundamentally, we need to develop a more profound understanding of China.
Our foreign policy approach towards China represents the most important and difficult of all challenges going forward. But let's not despair: on that matter we have much company.
Our second foreign policy challenge is to understand better the main emerging market countries that will be the "giants" of the mid-century global economy, and develop more in-depth and sophisticated interchanges and relationships with them at all levels.
This will best facilitate the successful economic outcomes we wish, while encouraging more responsible engagement on global economic and security affairs.
The list of countries need not be long: China(as mentioned already), India and Brazil at the top of the list, with Mexico, Turkey, Indonesia, Korea, Poland, South Africa, Colombia, Vietnam, and maybe Nigeria and a few others. Focus is key.
Our foreign policy must of course concentrate on completing the economic and trade, investment, double taxation and other agreements so essential to business success. This it now being done by the Canadian government, with the backing of the provinces, and business.
But more is needed. Our foreign policy must also strive to build solid political, people-to-people, educational, and cultural and other components. These components together can create lasting foundations for achieving the high priority economic objectives, and provide the shock absorbers for weathering the inevitable disputes that close economic ties create.
This is especially true for Asia, where these broader elements of long-term beneficial relationships are highly valued. And this is where the bulk of the economic opportunities lie.
Canada's third foreign policy challenge is to re-calibrate our approaches to the management of global economic, political and security tensions and crises, to take into account the approaches and roles of emerging powers.
Emerging powers are changing the dynamics. They are exerting their right to a voice, and are asserting themselves on global and regional issues; such as Turkey has been doing in the Syrian situation and in its neighborhood. Last year Turkey and Brazil surprised everyone with an unsuccessful proposal to try and resolve the Iranian nuclear issue.
Some tensions and crises will be caused by the emerging markets themselves, as they flex their new muscles, promote their interests. China's more robust approach to its traditional claims in the South China Sea and vis-à-vis Japan are the most worrisome examples.
And where should Canada be in these situations? And do we have the capacities to be present and make a difference?
As regards the global economy, the answer is yes on both questions.
Canada's solid fiscal, monetary and regulatory policies (and a bit of luck) have enabled us to punch above our weight in helping the G20 deal with the global financial crisis and its aftermath. The G20 is also putting in place new arrangements and regulatory frameworks that should help prevent its reoccurrence.
This has been good for Canada and our brand. We have gained in reputation and expanded our ability to influence. And we have helped build the G20 as a forum where the emerging powers are being brought into decision-making.
In the security field our major Afghanistan contribution in blood and treasure, joined by the smaller action in Libya, have also enhanced Canada's positive reputation and credibility on international security affairs.
But the road ahead will present many threats to stability and sources of conflict, some of them are different models from what we saw in Afghanistan and Libya.
And some of them, such as insecurity arising within fragile states, will require soft assets — diplomatic engagement and advocacy, development assistance, policing resources, governance capacity building, and so on. While we have lots to offer, we will find our own resources inadequate to meet demand.
Working with others of similar size and interest can help make up part of this shortfall.
Fortunately, we do not have to be everywhere. Canadian foreign policy should ensure that we focus our security efforts in those regions and situations where Canada's interests are most directly affected.
For economic reasons, that would have to include the Asia-Pacific, where we are now relatively absent, and where we are seeing worrisome developments.
Not only should we be there in the interest of Canada's own security, but our Asian partners expect us to be there given our economic stake.
The fourth challenge for Canadian foreign policy is in the domain national security.
The media coverage on February 19 of the Mandiant report regarding alleged Chinese military cyber-attacks on the U.S. and others drives home this point forcefully.
It underlines how important it is that we use all our foreign policy tools, our diplomatic and other resources to protect our country's national security, our people and our businesses.
But foreign policy should also include participation in international efforts to treat the threats to our national security pro-actively at source, before their effects end up on our shores.
In addition to cyber-threats, international crime, human trafficking and corruption are also factors that undermine Canada while de-stabilizing states and governments around the world, and causing conflict, particularly in Africa.
In this new world we have no choice but to engage emerging powers in the solutions, even though some of the problems could have their origin in the actions of these same countries.
As their own stakes in a stable and secure world grow, emerging powers will be increasingly interested in positive outcomes. Canada must be part of the effort to find them, while serving our own interests in the process.
As the Globe and Mail pointed out in an editorial February 20, that should even include working with China on cyber-security.
The report Winning in a Changing World noted that Canada cannot take for granted that emerging powers will always play by the international rules and norms of economic behavior we have helped establish over the past decades.
The same applies in the security domain. Yet while we must remain prepared to look after our national security ourselves, we also must make every effort in our foreign policy to work with these increasingly powerful and influential new players to build a safer and more secure world.
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