Most Canadians did not give much thought to the Pacific area until after the Second World War, but Canada has had ties to the region for many years. The opening up of the Canadian West and the building of the railway to the Pacific Coast in the 1880s brought many people from China and Japan to Canada. Meanwhile, Canadian missionaries and adventurous traders began to travel to the "mysterious East." The missionaries built churches, schools and hospitals in China, Japan, and Korea. The traders sent silk and other luxury goods back to Vancouver, to be loaded on rail cars for sale in the growing cities of Eastern Canada. Recognizing these growing connections, Canada opened one of its first embassies in Tokyo in 1929. Still, Canada continued to see itself as an Atlantic country, and gave its attention mainly to Britain and Europe.
 

Post-War Diplomacy

After World War II, things began to change. Conflict in Asia became part of the Cold War between the then Soviet Union and the Commonwealth, and as an ally of the United States, Canada had obligations that affected its diplomatic relations with the Pacific region. Faced with a new situation, Canada tried to do three things with its foreign policy: respect its commitment to the goals of the United Nations, promote peace by contributing to a system of collective security, and check the expansion of communism in the world.

As a result, Canadian soldiers soon found themselves on the battlefield once more, this time in Korea. In June 1950, North Korean troops invaded South Korea. This faraway country might seem remote to Canadians, but Prime Minister Louis St. Laurent explained that Canada was taking part in "a police action." To avoid another world war and discourage aggression, he said, "Canada must support the United Nations action." Canadian troops joined those of other allies in defence of South Korea. During the three-year war, 312 Canadians lost their lives.

Meanwhile, Canada was also working with Great Britain, Australia, New Zealand, India, Pakistan, and Ceylon to set up the Colombo Plan. By helping to encourage economic and social progress, the Colombo Plan aimed to create stability in Asian countries that had once been British territories. Like the Korean police action, the Colombo Plan was meant to discourage the spread of communism. Canada hoped that by promoting progress it could show that the West, and not the Soviet Union, offered the best choice to the newly liberated countries ofSoutheast Asia.

Despite its good intentions, Canada often found itself caught in complex situations where it seemed to be able to achieve little. After agreeing in 1954 to participate in the International Control and Supervision Commissions in Vietnam, Laos, and Cambodia, Canadian diplomats struggled to sort out conflicting interests and ancient divisions. Twenty years of effort produced few solutions. China was also a problem. Because China was ruled by the communists under Mao Tse-tung, the Canadian public were not sympathetic to closer ties even though China wanted to buy Canadian wheat. The complexities of the situation in the Far East also led to tensions between Canada and its ally, the United States. In May of 1973, Mitchell Sharp, then Secretary of State for External Affairs, announced that Canada was withdrawing from the Commission which was to monitor the cease-fire in Vietnam.
 

A Fresh Start

Frustrated by the dilemmas of its post-war foreign policy, the federal government announced its intention to change Canada's approach. The new policy, which came to be known as the "Third Option," put Canada's interests first. The White Paper on Canadian Foreign Policy of 1970 pointed to the resources and markets offered by the Pacific region. Canada's trade with all the Asian countries had been growing very rapidly. Exports had more than doubled and imports tripled in just a few years. Canada wanted to take greater advantage of these opportunities. Canada would still act as a mediator and try to encourage peace and stability in the Pacific region, but economic and commercial questions would play a more important role in Canada's relations with its Asian neighbours.

On October 13, 1970, the Canadian government, in a show of independence from the United States, officially recognized the People's Republic of China. Two weeks after diplomatic recognition, Canada negotiated with China what was at the time Canada's largest wheat sale ever. Efforts to pursue Canada's advantage were quickly undertaken. Prime Minister Trudeau made the first official visit to China by a Canadian head of state. After talks with Premier Chou En-lai and Chairman Mao, Mr. Trudeau announced a series of new agreements including the exchange of Most Favoured Nation trading status. Most Favoured Nation status means allowing trade to take place under the best possible terms. Despite high hopes, however, Canada soon realized that it would face stiff competition in China's markets from the United States, Europe and Japan.

Canada also gave special attention to Japan, and tried to persuade the Japanese government to remove obstacles to the export of Canadian-manufactured products. Although trade with Japan was profitable for Canada, the favourable balance depended on sales of agricultural products and natural resources. Through cultural exchanges, political co-operation and economic initiatives, the Canadian government tried to widen and deepen the relationship. Japan soon became Canada's second-largest trading partner, and Canadian exports to Japan continued to grown rapidly.

At the same time, Canada was making efforts to establish better connections with other Southeast Asian countries. The new states of Malaysia and Singapore were associated with Canada as part of the Commonwealth, and had booming economies. Canadian investors were also attracted to Indonesia's mineral riches. Meanwhile, numerous aid programs administered by CIDA (the Canadian International Development Agency) created a Canadian presence not only in Indonesia, but also in Thailand and the Philippines.
 

New Initiatives

n February 1982, Liberal Prime Minister Trudeau announced that trade and promotion activity which had been done by the Department of Industry, Trade and Commerce would be transferred to External Affairs. This reorganization sought to make Canada "speak with a united voice abroad," and placed increased exports at the top of Canada's foreign policy priorities. Meanwhile, numerous business groups, including the Canadian Committee of the Pacific Basin Economic Council, the Canada-Indonesia Business Council, the Canada-Korea Business Council, the Canada-Japan Business Co-operation Committee, the Canada-China Trade Council, and the Canadian-Taiwan Business Association offered the government advice on policy and programs.

The emphasis on increased trade as a primary objective of Canada's foreign policy was, if anything, reinforced by the election of the Progressive Conservatives led by Prime Minister Brian Mulroney. The new government drew much of its support from Canada's western provinces, and was very aware of the need to promote the sale of western goods in the Pacific Basin. Under the Conservatives, the number of trade missions was increased, and government Ministers visited Asia regularly. In an effort to provide support for Canadian business, new consulates were opened in China and Japan. At home, the government reorganized the Foreign Investment Review Agency as Investment Canada, with a mandate to help foreign investors, formed an International Trade Advisory Committee of private businesspeople, and, through the Department of External Affairs, launched the "Pacific 2000" trade initiative to help Canada compete in what was seen as the "Pacific century." 

Canada had been slow to recognize opportunities in Asia, and much of this burst of activity was an attempt to make up for lost time. Arriving late, Canadian business faced stiff competition from American, Australian and Japanese companies which had already worked out trade strategies and made major investments in the region. With an aggressive new approach targeted at specific products and countries, Canada was determined to catch up.
 

Changing Circumstances

hile Canada's policies toward the Pacific region were being rethought, the region itself was changing. The period from 1975 to 1977 was marked by upheaval. Changes in the political structure of Vietnam, Laos and Cambodia together with the death of Chinese leader Mao Tse-tung left Canada marking time until the dust cleared. By the end of the decade, stability began to return to the region, and Canada determined to try once again to share in the benefits of Asian development.

Success in Asia was seen as especially important because Canada was also changing. The oil shocks of the 1970s followed by recession at the end of the decade meant that businesspeople were eager to seek foreign markets for their products. Western Canada in particular had begun to see its future as part of the Pacific trading community. Meanwhile ordinary Canadians became more aware of the growth of Asian economics as automobiles from Japan, clothing from Hong Kong and a variety of other imported goods from the Far East attracted Canadian consumers. This new competition in Canada's domestic market was seen as a threat by some, and the government initially responded with a series of orders which tried to limit the import of Asian-manufactured products. However, these protectionist measures seemed no real long-term solution to changes in the world economic order.

Instead, the Canadian government opted for a much more aggressive trading strategy in its relations with the countries of the Pacific Rim. Speaking in Hong Kong in 1980, Mark MacGuigan, then Secretary of State for External Affairs, talked about Canada as a partner in the new Pacific era: "We want to be a part of this exciting new experience, to contribute to the development of the region, and to share in its benefits." In fact, the beginning of the 1980s marked a renewed determination by the federal government to encourage exports of Canadian goods as a way to expand Canada's economy and create jobs. Policy makers believed Canada could achieve that goal if the federal government, provincial governments, and the business community worked together. 

The strategy was a simple one: government would team up with business to identify Canadian products or services that could be sold to foreign countries. Then a list of specific countries would be made, countries that had large, preferably expanding markets and needed the things Canada had to sell. A marketing plan would be drawn up, and government would co-ordinate its export programs and policies with private business to concentrate efforts on the countries and products with the best potential for bigger sales.
 

Choosing Partners

he National Trade Strategy announced by the Conservative government in the fall of 1985 aimed at improving Canada's status as a trading nation. The Speech from the Throne a year later singled out "Japan and other Pacific Rim countries" for special efforts. By then, Japan had come to be seen as Canada's "New West," an indispensable partner beyond the British Columbia coast. China had already been granted Most Favoured Nation status, and the "Four Dragons" - South Korea, Hong Kong, Taiwan and Singapore - were among the fastest growing economics in the world.

In dealing with Japan, economic matters were always paramount. Canada's exports to Japan had increased rapidly, and Canada enjoyed a positive trade balance. But this apparently happy situation concealed some problems. Nearly all of Canada's sales consisted of raw materials and agricultural products, while most of Canada's imports from Japan were in the form of finished goods. As Canadians bought more Sony Walkmans and Toyotas, Canada lost its advantage and its favourable balance of trade. Still, Japan remains a highly attractive partner for Canada.

In the case of China, Canada faced challenges very different from those experienced with Japan. Before political ties were established, Canada sold China grain and little else. Conversely, very few Chinese goods were imported into Canada. Once Canada recognized China, the two countries were able to work together to resolve the imbalance. After a period of tension in the mid-1970s when China was struggling with problems caused by the "cultural revolution," Canadian-Chinese relations improved. After China opened its doors to the rest of the world and adopted its modernization policies, trade patterns changed abruptly.

In 1979, Canada awarded China a $2 billion line of credit through the Export Development Corporation. Under the terms of the agreement, Canada also granted China Most Favoured Nation status and lowered tariffs on Chinese goods. Preferential treatment continued under the government of Prime Minister Mulroney, who visited Beijing in May, 1986 to announce the doubling of the CIDA contribution to China. Although the trade balance is still very much in Canada's favour, the volume of Chinese exports to Canada has increased steadily. At the same time, a large percentage of Canada's exports to China is now made up of finished, or "value-added" products.

Elsewhere in Asia, the "newly industrializing economies" (NIEs) of South Korea, Hong Kong, Taiwan and Singapore attracted Canada's attention. In 1973, Canada opened its first embassy in South Korea. In a short period of time, trade between Canada and South Korea shot up dramatically. Korea is now Canada's second-largest trading partner in Asia. Paradoxically, this growth is disturbing because it translates into a trade deficit for Canada - a deficit that is difficult to reduce.

Canada has experienced similar problems with two other newly industrialized economies in the region: Taiwan and Hong Kong. Canada now sells quite a lot of manufactured goods to these two countries, but not enough to make up for the large amount of manufactured products we import in turn. The resulting deficit is partly made up for by Royal Canadian Mint sales of gold maple leaf coins, and by a federal program which encourages Hong Kong emigrants to invest large sums of money in Canada. The imbalance in trade, however, remains a serious concern.

Canada has also increased its trade with the Association of South East Asian Nations (ASEAN). Although the member countries -- Malaysia, Thailand, Singapore, Indonesia, Brunei and the Philippines -- possess considerable natural resources and offer a market of 300 million people, ASEAN did not receive special emphasis in Canadian foreign policy until the end of the decade. In order to make up for lost time, Canada signed an economic co-operation agreement with ASEAN in September, 1981. The agreement was intended to improve industrial and commercial relations.

However, despite an encouraging increase in total trade with ASEAN, Canada remains a " newcomer" to the market and is not a major investor in the region, with the exception of Indonesia. That country's mineral wealth and need for roads, bridges and other basic facilities attracted Canadian investors, including the International Nickel Company (INCO), Alcan Aluminum and Bata Shoes. At the same time, the Canadian International Development Agency (CIDA) developed projects to help meet Indonesia's development needs. Although total trade with the ASEAN countries grew substantially during the 1980s, it began to level off in the second half of the decade and remains less significant than that with other parts of Asia.

Canada has also had very good relations with Australia and New Zealand for a long time. Commonwealth associations and a common cultural heritage have helped to sustain the relationships despite the physical distances which separate Canada from these two Pacific partners. On the other hand, in the case of Australia the similarities in their economies means that Canada and Australia often find themselves competing with each other to sell natural resources and agricultural products in Asian markets. Nevertheless Australia remains an important customer for Canadian goods. The same is true of Ncw Zealand, although to a lesser extent.
 

Future Challenges

espite the determination of government and business to expand Canada's connections to countries in the Pacific Basin, the task is not an easy one. Outlooks change very slowly. Canada has traditionally looked first to Europe and the United States as the focus for its trade and diplomacy. To access the Pacific region, Canadians will have to overcome numerous obstacles and challenges. To expand Canada's share of Pacific markets and to reduce the serious trade deficits, production must be diversified in order to export more finished goods. At the same time, much remains to be done to improve mutual understanding between Canadians and the peoples of the Pacific Basin.

In meeting these challenges, the federal government and the business community can draw on the support of provincial governments, which are increasingly active in the region. Five provinces (British Columbia, Alberta, Saskatchewan, Ontario and Quebec) maintain important trade relations with the Pacific region. Canadians have also played active roles in non-governmental institutions such as the Pacific Basin Economic Council, the Pacific Trade and Development Conference, and similar organizations. The federal government also hopes that the North American Free Trade Agreement with the United States and Mexico will encourage Canadian companies to be more productive and thus improve their export performance.

Meanwhile, the increased Asian presence in Canada resulting from recent immigration, the arrival of thousands of students from China, Hong Kong and the ASEAN countries, the growth in exchange programs and language training together with academic links will all no doubt contribute to better understanding. The importance of such understanding led the federal government to create the Asia-Pacific Foundation in 1983. Through its programs, the Foundation seeks to open a Canadian window onto Asia and the Pacific. More recently still, the Prime Minister of Canada and the Prime Minister of Japan established in 1991, a binational group entitled "Canada-Japan Forum 2000 - Partnership Across the Pacific" to review the state of Canada-Japan relations and to propose future orientations for the partnership. The goals of the Forum were to enhance mutual understanding and cooperation between the two countries and to increase joint efforts on pressing world issues such as the environment, trade, human rights, and refugees. The Forum was also to assist in improving investment and trade opportunities.
 

Conclusion

n their efforts to ensure that Canada looks beyond its Pacific coast, successive federal governments have discovered that nothing comes easily in that part of the world. The region is vast, filled with a large number of different countries and different peoples. To meet the Pacific's challenges, Canada must develop approaches that consider the special characteristics of each Canadian partner. Trade has been an important part of Canada's initiatives. At the same time, Canada's involvement with the countries of the region depends on the political situation in those countries. But Canada itself is a Pacific nation, and its future will continue to be closely connected to that of the Pacific region.