Attention, Canada. One of the most important political questions of our time is tucked away in a major bill put forward by the US Congress – and it involves you.The question is: what is the strategy for dealing with China at a time of increasing international tension?
A bill just passed by the US Senate with strong support from both sides would force the Biden administration to make plans to work with its allies on issues related to China.
And there is a long section on Canada.
It is part of a massive 1,400-page bill to prepare the United States for an era of long-term competition with China.
« [This is] something that potentially looks like a new, long-term Cold War strategy, ”said Eric Miller, a Canadian-born trade consultant in Washington.
“This will lay the groundwork for years to come for how the United States plans to work with Canada on the strategy. “
The Canadian portion of The law project, which is called the United States Law on innovation and competition, begins by praising Canada-U.S. ties – applauding Ottawa’s handling of the extradition case against Meng Wanzhou, cadre de Huawei, and denouncing the detention of Canadians Michael Spavor et Michael Kovrig in China.
Then it raises difficult questions.
If passed by the House of Representatives, the bill will become law and require the administration to report on Canada within 90 days.
This report should explain where Canada and the United States agree on the management of relations with China – and where they disagree.
It would focus on commerce, cybersecurity, Huawei and 5G networks, critical mineral resources, defense, the Arctic, global institutions, organized crime, and the spread of authoritarian government.
The bill would then require that US administration, and possibly a future one, to report to Congress at least twice a year for five years on the evolution of strategy.
The report would be accessible to the public, although it may contain a classified part.
The United States has already urged Canada to take a more hawkish stance on some China-related issues, such as Huawei’s ban from the possible 5G network, a move Canada has yet to make.
The bill calls for similar reports on US relations with other entities, such as NATO and the European Union; and with regions such as the Caribbean; and countries like Australia and Japan.
But this is not the part of the legislation that is gaining the most attention in the United States.
What is the context?
The bill’s most important story is economic: the era of free markets is falling out of fashion, replaced by government-mandated industrial policy.
The trend appears to be bipartisan.
The change in attitude began under Donald Trump, whose sales rep Robert Lighthizer wrote in a test this ideal trade policy should not be limited to cheap products and should prioritize domestic manufacturing and working class jobs.
A new strategy document released this week by the White House underscores how much the Biden administration shares this view.
the 250 pages The document proposes to strengthen the domestic manufacturing capacity of key products so that the United States is less dependent on imports from certain other places (the document mentions China 458 times).
These key products include semiconductors, batteries, pharmaceuticals and essential minerals, which the United States also hopes to start importing more from allied countries such as Canada.
The bill put forward by Congress brings this strategy to life.
The legislation would spend $ 250 billion on research and manufacturing, with tax credits and subsidies for products such as artificial intelligence, alternative energy, batteries, medical technology and quantum computing.
It is essentially an American response to China 2025 plan.
Senate Majority Leader Chuck Schumer urged his colleagues to pass the bill, presenting it as part of a crucial contest between the great powers.
“Authoritarian governments all over the world smell blood in the water,” Schumer said.
“They think bickering democracies like ours cannot come together and invest in national priorities like a top-down, centralized, authoritarian government… We cannot – we cannot, we must not – let that happen. “
This week, the bill passed through the Senate in a vote of 68-32, illustrating that rivalry with China is a rare political issue these days that unites American political parties.
The House of Representatives must pass the law in order for it to become law.
The chances of that look good. Any bill that passes the Senate with more than a two-thirds majority has a solid chance in the other chamber.
However, this is not guaranteed.
Democrats run the House and will consider the issue this summer, but some want to make changes; if the bill changed, the Senate would have to pass it again.
The bill sparked complaints from some progressive and the conservatives for what they see as the pork barrel policy in the form of business grants.
Some Canadians, however, see the bill as a compelling reason for Canada to consider accelerating its own industrial strategy.
Robert Asselin, senior vice-president of the Business Council of Canada, said this bill contained elements that Canada could emulate, such as massive investments in research and development in priority areas such as agricultural technology, energy and biotechnology.
“Be realistic about industrial policy,” Asselin said.
« Tome, [this] just shows that the US vs. China is redefining economic competitiveness, and here we are in Canada, thinking it’s business as usual. We always play on the sidelines. “
Eric Miller, the Washington-based business consultant, noted another question mark about Canada-US cooperation.
Despite all the talk about sourcing the United States with essential minerals from untapped Canadian mines to reduce reliance on China, he said no one had settled the funding.
He suggested that governments could provide early funding to open the mines. For example, he said, the Canadian government could fund projects up front in exchange for a long-term purchase commitment from the government. US Defense Logistics Agency with a guaranteed money back.
“A huge opportunity,” Miller said. “But it’s going to take some effort. “