CANADA

TRADING ON TRUST

BRIAN BERGMAN November 28 1994
CANADA

TRADING ON TRUST

BRIAN BERGMAN November 28 1994

TRADING ON TRUST

CANADA

With Prime Minister Jean Chrétien, U.S. President Bill Clinton and 15 other leaders of Pacific and Asian countries arriving in their midst, Indonesia’s repressive regime headed by President Suharto appeared determined to put its best face forward. The government ordered thousands of pedlars off of the main streets of Jakarta, host city last week to a landmark conference on Asia-Pacific trade. The normally teeming and polluted national capital also enjoyed a considerable

make-over, as civic workers planted flowers, painted buildings and swept the streets. But the cosmetic changes could not hide some ugly truths. On the eve of the trade summit, protesters rioted in the capital of East Timor, a former Portuguese colony that Indonesia invaded in 1975 and has ruled with an iron fist ever since. In Jakarta, meanwhile, about 30 Timorese students occupied the U.S. Embassy compound as Indonesian security forces kept journalists from around the world at bay. For Chrétien—who arrived in

Jakarta following a successful six-day trade mission to China—the visit last week to Indonesia and later to Vietnam was designed to further enhance Canada’s trade links in the potentially lucrative markets of southeast Asia. And in that regard, he continued to enjoy considerable success. Still, the Indonesian protests presented a clear challenge. The biggest criticism of his China tour, which resulted in $2.6 billion in firm contracts for Canada, was that in his eagerness to cut a deal, Chrétien had softpedalled criticism of the flagrant human-rights abuses committed by the country’s Communist leaders. In Jakarta, he indicated he had been more forthright— if only behind closed doors. During a private meeting with Suharto at his or-

Canada reaps a business windfall in Asia, but at what price?

nate presidential palace, Chrétien told the 73-yearold dictator that he had seen television footage of the East Timor protests. “It was one of the first things I mentioned to him,” Chrétien later told reporters. “I said we want to have good trade relations but we want, too, the respect of human rights.” Suharto, he recalled, said the riot was instigated by professional agitators from a separatist Timorese movement who took advantage of a trivial dispute at a local market. Responded Chrétien: “Canadians are disturbed and do not like to see violence anywhere.”

Chrétien also confronted human-rights issues during a twoday visit later in the week to Vietnam. In a another closed-door meeting in Hanoi with Vietnamese Prime Minister Vo Van Kiet, Chrétien personally intervened on behalf of a Quebec City businessman, Tran Trieu Quân, who was charged by Vietnamese authorities with fraud six months ago and who is still languishing in jail awaiting trial. Ottawa is asking that he be released and allowed to return to Canada while the investigation continues. Following the meeting, Canadian officials ex-

pressed confidence that Quân would be released in a matter of days. Added one Canadian diplomat: “If we do not succeed, Canadian businessmen of Vietnamese origin will be scared, and we will lose our best trade agents in the country.”

In a further attempt to defuse criticism about Canada’s apparent reluctance to talk publicly about human-rights abuses by its trading partners, Chrétien announced that Canadian Human Rights Commissioner Max Yalden will tour Indonesia and Vietnam next year to hold talks with newly appointed Asian human-rights officials. “When Max Yalden is here,” Chrétien said wryly, “I know he will not talk about the weather.” Still, Chrétien made no apologies for his low-key approach on human rights. “I could have made a big speech,” he told reporters as he stood on the steps of the Official Guest House of the Socialist Republic of Vietnam. “But I say to them, ‘Open up, do trade, let the people come here and come to visit us.’ That’s the way the walls fall and the freedoms come.”

Ironically, even as the Prime Minister made his remarks, a joint Senate-House of Commons committee report was being released in Ottawa that urged the federal government to link international trade and foreign-aid agreements more closely with human-rights concerns. The report said repressive regimes that fail to respect the rights of their own citizens may show a similar lack of respect for the rights of their economic partners. It also said Canada should act “openly in making our views known in a clear and frank way through dialogue” with governments that abuse human rights.

Similar concerns were raised in a 36-page report released by the New York City-based Human Rights Watch on the eve of the Asia-Pacific trade meeting in Jakarta. It rejected the notion—endorsed by Chrétien and several other world leaders— that “economic growth by itself will bring about human-rights improvements.” Added the report: “Many of the 18 countries making up the Asia-Pacific Economic Co-operation (APEC) forum are coming to the 1994 summit in Jakarta with impressive economic growth rates and poor human-rights records.”

Still, business was the order of the day. In Jakarta, the Prime Minister oversaw the signing of about $1 billion worth of new trade and investment links between Indonesia and Canada. The biggest deal: the announcement by Inco Ltd. of Sudbury, Ont., that it will spend $800 million to expand its mining operations in Indonesia. In Hanoi—where he presided over the formal opening of a new Canadian Embassy—Chrétien witnessed the signing of another dozen business deals, most involving Quebec companies, worth nearly $100 million. At the same time, Chrétien and Vo Van Kiet reached a deal under which Canada will give Vietnam $36 million in development aid over the next five years. The two leaders also signed a memorandum of intent that could lead to Vietnam enjoying preferential trade status.

But the centrepiece of last week’s trade efforts was the APEC summit in Jakarta, where Canada joined 17 other nations in laying the groundwork for what could become one of the world’s largest free trade zones (page 56). In supporting the “APEC Economic Leaders’ Declaration of Common Resolve,” Chrétien committed Canada to “complete achievement of free and open trade in Asia Pacific no later than the year 2020.” Under the plan, Canada and other developed nations such as the United States and Japan promise to open their borders to such economically struggling countries as Indonesia, the Philippines and Malaysia by 2010. Within the following decade, the developing countries, in turn, are to drop their own trade barriers.

Well aware of the political flak that Brian Mulroney took in 1985 when he committed Canada to a controversial free-trade deal with the United States without prior public debate, Chrétien promised last week that the House of Commons would have an opportunity to discuss the proposed Asia-Pacific free trade zone later this year. “I look forward to seeing which party will dare oppose Canada being a Pacific nation” Chrétien told reporters in a remark apparently aimed at Bloc Québécois Leader Lucien Bouchard. Indeed, throughout his two-week Asian tour, the Prime Minister began to hone a new federalist argument that is likely to crop up during next year’s referendum campaign on Quebec sovereignty. It is only as part of a united Canada, he said, that Quebecers will reap the benefits of free-trade zones such as the one envisioned by the APEC agreement. Even as he wrapped up the largest foreign trade mission in Canada’s history, Chrétien’s thoughts were already turning to the political headaches at home.

BRIAN BERGMAN

MICHEL VASTEL