Canada's Trudeau says will keep exploring trade deal with China

BEIJING (Reuters) - Canada’s trade minister extended his stay in Beijing on Tuesday in a bid to salvage early talks on a free trade agreement with China, but Canada faces tough choices after the United States threatened to pull out of NAFTA.

Canadian Prime Minister Justin Trudeau and Chinese Premier Li Keqiang shake hands during a news conference meeting at the Great Hall of the People in Beijing, China December 4, 2017. REUTERS/Fred Dufour/Pool

Canadian Prime Minister Justin Trudeau departed Beijing for Guangzhou after meeting with Chinese Premier Li Keqiang on Monday, telling reporters that progress toward free trade talks would not be swift.

The go-slow signal comes as Canada considers whether to launch formal talks on a free trade deal with China, which wants a trade pact similar to the ones it has with Australia and New Zealand.

Trudeau’s Liberal government must weigh domestic unease at closer China ties with pressure from business interests for more access to the Chinese market.

Polls show Canadians are split over the merits of a trade deal, but Canada needs to diversify exports to offset the possible damage done if U.S. President Donald Trump pulls out of the North American Free Trade Agreement.

Speaking to reporters on Tuesday, Trudeau reiterated that a deal with China was not an “overnight process”.

“And once we get to the stage of negotiating a trade agreement, that’s going to take years, as well,” Trudeau said.

Canadian media reported that Trudeau did not win the commitment he wanted from Li on a progressive trade agenda.

Li said China remained open to exploring a deal.

“We have an open attitude toward the process of negotiations, and an open attitude toward their contents,” Li said.

While Trade Minister Francois-Philippe Champagne had originally intended to accompany Trudeau to Guangzhou, a spokesman said the minister had made “good progress” in the last two days, and would continue working in Beijing.

Brock University professor Charles Burton, a former Canadian diplomat who served two tours in China, said that Trudeau “thought he had come up with something that would satisfy both constituencies and the Chinese just would not buy into it.”

“And so we are left with the decision in the months ahead as to whether we want to proceed with free trade or simply continue with the existing arrangements with China, which are leading to a wider and wider trade deficit,” he said.

Trudeau's visit, which began on Sunday, comes as plane maker Bombardier Inc BBDb.TO is eager to win a breakthrough order from Chinese carriers for its CSeries jet, whose fuselage is made in China.

But the chance of sealing such deals has become more cloudy after Canada encouraged Bombardier to sell a controlling stake in the CSeries program to Airbus <SE AIR.PA> rather than a Chinese firm.

Reporting by Michael Martina; editing by Nick Macfie and Rosalba O’Brien